<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 24, 1999
-----------------
PSINet Inc.
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(Exact name of registrant as specified in its charter)
New York 0-25812 16-1353600
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
510 Huntmar Park Drive, Herndon, Virginia 20170
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (703) 904-4100
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(Former name or former address, if changed since last report)
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Item 5. Other Events
------------
On December 2, 1999, PSINet Inc. completed the previously announced
offering of $600.0 million aggregate principal amount of 10 1/2% senior notes
due 2006 and Euro 150.0 million aggregate principal amount of 10 1/2% senior
notes due 2006, which we refer to collectively as the notes. The notes were
issued and sold in accordance with Securities and Exchange Commission Rule 144A
and Regulation S and have not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), and may not be offered or sold in the United
States absent registration under the Securities Act or an applicable exemption
from the registration requirements thereof.
The notes are our senior unsecured obligations ranking pari passu in right
of payment with all of our existing and future unsecured and unsubordinated
indebtedness and senior in right of payment to all of our existing and future
subordinated indebtedness.
The notes will mature on December 1, 2006. Interest on the notes will be
payable semi-annually on June 1 and December 1 of each year, commencing June 1,
2000. The notes are not redeemable. Upon the occurrence of certain change of
control events, we will be required to make an offer to purchase the notes at a
purchase price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of repurchase.
The net proceeds of the offering, after deducting underwriting discounts
and commissions and expenses payable by us, were approximately $736.2 million.
We expect to use the net proceeds of the offering to finance capital
expenditures, including the acquisition of additional telecommunications
bandwidth and related facilities and equipment and the construction of Internet
and eCommerce hosting centers, and general corporate purposes. In addition, a
portion of the net proceeds is expected to be used to make strategic investments
in or acquisitions of complementary businesses or assets. The notes were sold to
certain "qualified institutional buyers" (as defined in Rule 144A under the
Securities Act) or to certain eligible persons in "offshore transactions" (as
defined in Regulation S under the Securities Act). The notes have been rated B3
by Moody's Investors Service and B- by Standard & Poor's.
There is no established trading market for the notes and we do not intend
to apply for listing on any securities exchange; however, the notes are eligible
for trading in the Private Offerings, Resale and Trading through Automated
Linkages ("PORTAL") market of the National Association of Securities Dealers,
Inc. and application has been made for listing of the euro notes with the
Luxembourg Stock Exchange.
A press release announcing this offering is filed herewith as Exhibit 99.1
and is incorporated herein by reference.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
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Exhibit 3.1 Certificate of Correction of Restated
Certificate of Incorporation dated as of
December 2, 1999
Exhibit 4.1 Indenture, dated as of December 2, 1999
between PSINet Inc. and Wilmington Trust
Company, as trustee
Exhibit 4.2 Form of unregistered Dollar-denominated 10
1/2% Senior Notes due 2006
Exhibit 4.3 Form of unregistered Euro-denominated 10 1/2%
Senior Notes due 2006
Exhibit 10.1 Registration Rights Agreement, dated as of
December 2, 1999, by and among PSINet Inc.
and Donaldson Lufkin & Jenrette
International, Bear Stearns International
Limited, Merrill Lynch International and
Morgan Stanley & Co. International Limited
Exhibit 99.1 Press Release dated November 24, 1999
<PAGE>
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 2, 1999 PSINET INC.
By: /s/ Edward D. Postal
----------------------------
Edward D. Postal
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
Number Exhibit Name Location
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3.1 Certificate of Correction of Restated Certificate of Filed herewith.
Incorporation dated as of December 2, 1999.
4.1 Indenture, dated as of December 2, 1999, between PSINet Filed herewith.
Inc. and Wilmington Trust Company, as trustee.
4.2 Form of unregistered Dollar-denominated 10 1/2% Senior Filed herewith.
Notes due 2006.
4.3 Form of unregistered Euro-denominated 10 1/2% Senior Filed herewith.
Notes due 2006.
10.1 Registration Rights Agreement, dated as of December 2, Filed herewith.
1999, by and among PSINet Inc. and Donaldson Lufkin &
Jenrette International, Bear Stearns International Limited,
Merrill Lynch International and Morgan Stanley & Co.
International Limited.
99.1 Press Release dated November 24, 1999. Filed herewith.
</TABLE>
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EXHIBIT 3.1
CERTIFICATE OF CORRECTION
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF PSINET INC.
Under Section 105 of the Business Corporation Law
The undersigned, being the Vice Chairman and Executive Vice President of
PSINet Inc. (the "Corporation"), in order to correct the Restated Certificate of
Incorporation of the Corporation dated November 16, 1999, hereby certifies:
FIRST: The name of the Corporation is PSINet Inc.
SECOND: The Restated Certificate of Incorporation of the Corporation being
corrected was filed by the Department of State of the State of New York on
November 16, 1999 (the "Restated Certificate of Incorporation").
THIRD: The Restated Certificate of Incorporation is hereby corrected under
Section 105 of the Business Corporation Law to correct the title of the signing
officer.
FOURTH: The first paragraph of the Restated Certificate of Incorporation
is hereby corrected to read in its entirety as follows:
"The undersigned, being the Vice Chairman and Executive Vice President of
PSINet Inc. (the "Corporation"), in order to restate the Certificate of
Incorporation of the Corporation in accordance with Section 807 of the Business
Corporation Law of New York (the "Business Corporation Law"), hereby verifies:"
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Correction this 3rd day of December, 1999.
/s/ David N. Kunkel
-------------------
David N. Kunkel
Executive Vice President
and Vice Chairman
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EXHIBIT 4.1
PSINET INC.
$600,000,000
10 1/2% SENIOR NOTES DUE 2006
and
EURO 150,000,000
10 1/2% SENIOR NOTES DUE 2006
_______
INDENTURE
Dated As Of December 2, 1999
_______
WILMINGTON TRUST COMPANY
Trustee
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CROSS-REFERENCE TABLE
Reconciliation and tie between Trust Indenture Act of 1939, as
amended, and Indenture, dated as of December 2, 1999.
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
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<S> <C>
310(a)................................... 6.05, 6.09, 6.10, 6.11
(b)...................................... 6.05, 6.08
311(a)................................... 6.05, 6.13
311(b)................................... 6.05, 6.13
312(b)................................... 7.02
(c)...................................... 7.02
313(a)................................... 7.03
(b)(2)................................... 7.03
(c)...................................... 6.02, 7.03, 7.04
314(a)................................... 7.04
(c)(1)................................... 1.03
(c)(2)................................... 1.03
(e)...................................... 1.03
315(a)................................... 5.12, 6.01, 6.03
(b)...................................... 5.12, 6.01, 6.03
(c)...................................... 5.12, 6.01, 6.03
(d)...................................... 5.12, 6.01, 6.03
(e)...................................... 5.14
316(a)(last sentence).................... 1.01("Outstanding")
(a)(1)(A)................................ 5.12
(a)(1)(B)................................ 5.13
(b)...................................... 5.08
(c)...................................... 1.05
317(a)(1)................................ 5.03
(a)(2)................................... 5.04
(b)...................................... 6.05
318(a)................................... 1.08
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TABLE OF CONTENTS
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ARTICLE I Definitions And Other Provisions of General Application ....................... 1
Section 1.01. Construction .............................................................. 1
Section 1.02. Definitions ............................................................... 3
Section 1.03. Compliance Certificates and Opinions ...................................... 30
Section 1.04. Form of Documents Delivered to Trustee .................................... 31
Section 1.05. Acts of Holders ........................................................... 32
Section 1.06. Notices, etc., to the Trustee, the Company and any Guarantor .............. 34
Section 1.07. Notice to Holders; Waiver ................................................. 34
Section 1.08. Conflict with Trust Indenture Act ......................................... 35
Section 1.09. Effect of Headings and Table of Contents .................................. 36
Section 1.10. Successors and Assigns .................................................... 36
Section 1.11. Separability Clause ....................................................... 36
Section 1.12. Benefits of Indenture ..................................................... 36
Section 1.13. Governing Law ............................................................. 36
Section 1.14. Legal Holidays ............................................................ 36
Section 1.15. Independence of Covenants ................................................. 37
Section 1.16. Schedules and Exhibits. ................................................... 37
Section 1.17. Counterparts .............................................................. 37
Section 1.18. No Adverse Interpretation of Other Agreements ............................. 37
Section 1.19. No Recourse against Others ................................................ 37
ARTICLE II The Notes ..................................................................... 38
Section 2.01. Form and Dating ........................................................... 38
Section 2.02. Execution and Authentication .............................................. 39
Section 2.03. Registrar and Paying Agents ............................................... 40
Section 2.04. Holders to Be Treated as Owners; Payments of Interest ..................... 41
Section 2.05. Paying Agent to Hold Money in Trust ....................................... 42
Section 2.06. Noteholder Lists .......................................................... 42
Section 2.07. Transfer and Exchange ..................................................... 42
Section 2.08. Replacement Notes ......................................................... 50
Section 2.09. Outstanding Notes ......................................................... 50
Section 2.10. Treasury Notes ............................................................ 51
Section 2.11. Temporary Notes ........................................................... 51
Section 2.12. Cancellation .............................................................. 51
Section 2.13. Defaulted Interest ........................................................ 52
Section 2.14. CUSIP and ISIN Number; Common Code ........................................ 52
Section 2.15. Deposit of Moneys; Payments by Principal Paying Agent ..................... 52
ARTICLE III Note Forms .................................................................... 53
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ARTICLE IV Defeasance and Covenant Defeasance ............................................ 53
Section 4.01. Company's Option to Effect Defeasance or Covenant Defeasance .............. 53
Section 4.02. Defeasance and Discharge .................................................. 53
Section 4.03. Covenant Defeasance ....................................................... 54
Section 4.04. Conditions to Defeasance or Covenant Defeasance ........................... 54
Section 4.05. Deposited Money and Government Obligations to be Held in Trust; Other
Miscellaneous Provisions .................................................. 57
Section 4.06. Reinstatement ............................................................. 58
ARTICLE V Remedies ...................................................................... 58
Section 5.01. Events of Default ......................................................... 58
Section 5.02. Acceleration of Maturity; Rescission and Annulment ........................ 60
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee ........... 61
Section 5.04. Trustee May File Proofs of Claim ......................................... 62
Section 5.05. Trustee May Enforce Claims without Possession of Notes .................... 63
Section 5.06. Application of Money Collected ............................................ 63
Section 5.07. Limitation on Suits ....................................................... 64
Section 5.09. Restoration of Rights and Remedies ........................................ 65
Section 5.10. Rights and Remedies Cumulative ............................................ 65
Section 5.11. Delay or Omission Not Waiver .............................................. 65
Section 5.12. Control by Holders ........................................................ 66
Section 5.13. Waiver of Past Defaults ................................................... 66
Section 5.14. Undertaking for Costs ..................................................... 66
Section 5.15. Waiver of Stay, Extension or Usury Laws ................................... 67
Section 5.16. Remedies Subject to Applicable Law ........................................ 67
ARTICLE VI The Trustee ................................................................... 67
Section 6.01. Duties of Trustee ......................................................... 67
Section 6.02. Notice of Defaults ........................................................ 69
Section 6.03. Certain Rights of Trustee ................................................. 69
Section 6.04. Trustee Not Responsible for Recitals, Dispositions of Notes or
Application of Proceeds Thereof ........................................... 70
Section 6.05. Trustee and Agents May Hold Notes; Collections; etc ....................... 71
Section 6.06. Money Held in Trust ....................................................... 71
Section 6.07. Compensation and Indemnification of Trustee and Its Prior Claim ........... 71
Section 6.08. Conflicting Interests ..................................................... 73
Section 6.09. Trustee Eligibility ....................................................... 73
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Section 6.10. Resignation and Removal; Appointment of Successor Trustee ................. 73
Section 6.11. Acceptance of Appointment by Successor .................................... 75
Section 6.12. Merger, Conversion, Consolidation or Succession to Business ............... 75
Section 6.13. Preferential Collection of Claims Against Company ......................... 76
ARTICLE VII Holders' Lists and Reports by Trustee and Company ............................. 76
Section 7.01. Company to Furnish Trustee Names and Addresses of Holders ................. 76
Section 7.02. Disclosure of Names and Addresses of Holders .............................. 77
Section 7.03. Reports by Trustee ........................................................ 77
Section 7.04. Reports by Company ........................................................ 77
ARTICLE VIII Consolidation, Merger, Sale of Assets ......................................... 78
Section 8.01. Company and Guarantors May Consolidate, etc., Only on Certain Terms ....... 78
Section 8.02. Successor Substituted ..................................................... 80
ARTICLE IX Supplemental Indentures ....................................................... 80
Section 9.01. Supplemental Indentures and Agreements without Consent of Holders ......... 80
Section 9.02. Supplemental Indentures and Agreements with Consent of Holders ............ 81
Section 9.03. Execution of Supplemental Indentures and Agreements ....................... 82
Section 9.04. Effect of Supplemental Indentures ......................................... 83
Section 9.05. Conformity with Trust Indenture Act ....................................... 83
Section 9.06. Reference in Notes to Supplemental Indentures ............................. 83
Section 9.07. Notice of Supplemental Indentures ......................................... 83
ARTICLE X Covenants ..................................................................... 84
Section 10.01. Payment of Principal, Interest and Indenture Obligations .................. 84
Section 10.02. Maintenance of Office or Agency ........................................... 84
Section 10.03. Money for Note Payments to Be Held in Trust ............................... 84
Section 10.04. Corporate Existence ....................................................... 86
Section 10.05. Payment of Taxes and Other Claims ......................................... 86
Section 10.06. Maintenance of Properties ................................................. 86
Section 10.07. Maintenance of Insurance .................................................. 87
Section 10.08. Limitation on Indebtedness ................................................ 87
Section 10.09. Limitation on Restricted Payments ......................................... 90
Section 10.10. Limitation on Transactions with Affiliates ................................ 94
Section 10.11. Limitation on Liens ...................................................... 95
Section 10.12. Limitation on Sale of Assets ............................................. 95
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Section 10.13. Limitation on Issuances of Guarantees of Indebtedness ..................... 97
Section 10.14. Purchase of Notes upon a Change of Control ................................ 97
Section 10.15. Limitation on Sale-Leaseback Transactions ................................. 101
Section 10.16. Limitation on Issuance and Sale of Subsidiary Capital Stock ............... 101
Section 10.17. Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries .............................................................. 102
Section 10.18. Limitations on Unrestricted Subsidiaries .................................. 103
Section 10.19. Provision of Financial Statements ......................................... 103
Section 10.20. Statement by Officers as to Default ....................................... 104
Section 10.21. Waiver of Certain Covenants ............................................... 104
Section 10.22. Limitation on Business .................................................... 105
ARTICLE XI Satisfaction and Discharge .................................................... 105
Section 11.01. Satisfaction and Discharge of Indenture ................................... 105
Section 11.02. Application of Trust Money ................................................ 106
</TABLE>
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<PAGE>
INDENTURE, dated as of December 2, 1999, between PSINET INC., a New York
corporation ("Company"), and WILMINGTON TRUST COMPANY, a Delaware banking
corporation, as trustee ("Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the issuance, as a single series of
securities (ranking pari passu with each other), of (i) $600,000,000 aggregate
principal amount of its 10 1/2% Senior Notes due 2006 (the "Dollar Notes") and
(ii) Euro 150,000,000 aggregate principal amount of its 10 1/2% Senior Notes due
2006 (the "Euro Notes" and together with the Dollar Notes, the "Notes"), of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act that are required to be part of and to govern
indentures qualified under the Trust Indenture Act.
All acts and things necessary have been done to make the Notes, when
duly issued and executed by the Company and authenticated and delivered
hereunder, the valid obligations of the Company and to make this Indenture a
valid instrument of the Company, in accordance with the terms of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE I
Definitions And Other Provisions of General Application
-------------------------------------------------------
Section 1.01 Construction. For all purposes of this Indenture, except
------------
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
<PAGE>
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to (i) "$," "US$," "dollars," "Dollars" or "United
States dollars" shall refer to the lawful currency of the United States of
America and (ii) "Euro" shall refer to the lawful currency of the member states
of the European Union that adopt the single currency in accordance with the
Treaty establishing the European Communities, as amended;
(f) the Euro Notes and the Dollar Notes are being issued as a single
series of securities ranking pari passu with each other;
(g) "pro rata" means, a determination made on the basis of the
relative proportion of the outstanding aggregate principal amount represented by
the outstanding principal amounts of the Dollar Notes and the United States
Dollar Equivalent of the Euro Notes as of the time of such determination,
calculated in accordance with clause (h) below;
(h) the United States Dollar Equivalent of Euros or any other
determination of a United States Dollar Equivalent for any purpose shall be
determined as of a date of determination as otherwise described in the
definition of "United States Dollar Equivalent" herein and, in any case, no
subsequent change in the United States Dollar Equivalent after the applicable
date of determination shall cause such determination to be modified;
(i) the aggregate principal amount, or any portion thereof, of the
Notes, at any date of determination, shall be the sum of (i) the United States
Dollar Equivalent at such date of determination, of the principal amount, or
portion thereof, as the case may be, of the Euro Notes and (ii) the principal
amount, or portion thereof, as the case may be, of the Dollar Notes, at such
date of determination;
(j) with respect to any matter requiring the consent, waiver,
approval or other action of the holders of a specified percentage of the
principal amount of the Notes, such percentage shall be calculated, on the
relevant date of determination, by dividing (i) the principal amount, as of such
date, of Notes the holders of which have so consented by (ii) the
2
<PAGE>
aggregate principal amount, as of such date, of the Notes then outstanding, in
each case, as determined in accordance with clause (i) above; and
(k) all references herein to particular Sections or Articles refer to
this Indenture unless otherwise so indicated.
Section 1.02 Definitions. Certain terms used principally in Article
-----------
IV are defined in Article IV. Certain other terms are defined elsewhere in the
Indenture.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at
---------------------
the time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from (or merger or consolidation with or into) such
Person, in each case, other than Indebtedness incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary or such acquisition, as the
case may be, provided that Indebtedness of such Person which is redeemed,
defeased, retired or otherwise repaid at the time of, or substantially
contemporaneously with, the consummation of the transactions by which such
Person becomes a Subsidiary or such asset acquisition shall not constitute
Acquired Indebtedness.
"Acquired Person" means, with respect to any specified Person, any
---------------
other Person which merges with or into or becomes a Subsidiary of such specified
Person.
"Acquisition" means (i) any capital contribution (by means of
-----------
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Subsidiary to any other Person, or any acquisition or purchase of Capital Stock
of any other Person by the Company or any Subsidiary, in either case pursuant to
which such Person shall become a Subsidiary or shall be consolidated, merged
with or into the Company or any Subsidiary or (ii) any acquisition by the
Company or any Subsidiary of the assets of any Person which constitute
substantially all of an operating unit or line of business of such Person or
which is otherwise outside of the ordinary course of business of the Company or
such Subsidiary.
"Affiliate" means, with respect to any specified Person, any other
---------
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Applicable Procedures" means, with respect to any transfer, exchange
---------------------
or other transaction involving a Global Note or beneficial interest therein, the
rules and procedures of DTC with respect to the Dollar Global Notes and the
"Operating Procedures
3
<PAGE>
of the Euroclear System," and "Terms and Conditions Governing Use of Euroclear,"
of Euroclear and the "General Terms and Conditions of Cedelbank" and "Customer
Handbook" of Cedelbank with respect to the Euro Global Notes, in each case, to
the extent applicable to such transaction and as in effect at the time of such
transaction.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
----------
other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of: (i) any
Capital Stock of any Subsidiary; (ii) all or substantially all of the properties
and assets of any division or line of business of the Company or its
Subsidiaries; or (iii) any other properties or assets of the Company or any
Subsidiary other than in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" shall not include any transfer of
properties and assets (A) that is governed by the provisions of Section 8.01,
(B) that is by the Company to any Wholly-Owned Subsidiary or by any Wholly-Owned
Subsidiary to the Company or any other Wholly-Owned Subsidiary in a manner that
does not violate the terms of this Indenture, (C) that is of obsolete equipment
in the ordinary course of business, (D) the Fair Market Value of which in the
aggregate does not exceed $5 million in any transaction or series of related
transactions, (E) that is made in accordance with the provisions described in
Section 10.09, (F) which constitutes the granting of any Permitted Lien and (G)
that is transferred in exchange for Telecommunications Assets; provided that if
the Fair Market Value of the assets to be transferred by the Company or such
Subsidiary under this clause (G), plus the Fair Market Value of any other
consideration paid or credited by the Company or such Subsidiary exceeds $10
million, such transaction shall require approval of the Board of Directors of
the Company.
"Average Life to Stated Maturity" means, as of the date of
-------------------------------
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from the date of
determination to the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (b) the amount of each such principal
payment; by (ii) the sum of all such principal payments.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of
--------------
1978, as amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Board of Directors" means the board of directors of the Company or
------------------
any Guarantor, as the case may be, or any duly authorized committee of such
board.
"Board Resolution" means a copy of a resolution certified by the
----------------
Secretary or an Assistant Secretary of the Company or any Guarantor, as the case
may be, to have been
4
<PAGE>
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Book-Entry Depositaries" means the Dollar Book-Entry Depositary and
-----------------------
the Euro Book-Entry Depositary.
"Book-Entry Interests" means the Euro Book-Entry Interests and the
--------------------
Dollar Book-Entry Interests.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
------------
Friday which is not a day on which banking institutions or trust companies in
The City of New York, in Luxembourg, in London, England or in the city in which
the Corporate Trust Office of the Trustee is located are authorized or obligated
by law, regulation or executive order to be closed.
"Capital Lease Obligation" of any Person means any obligation of such
------------------------
Person and its subsidiaries on a Consolidated basis under any capital lease of
real or personal property which, in accordance with GAAP, has been recorded as a
capital lease obligation.
"Capital Stock" means (i) with respect to any Person that is a
-------------
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of common stock and preferred stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"Cash Equivalents" means (i) any evidence of Indebtedness, maturing
----------------
not more than one year after the date of acquisition, (A) issued by the United
States of America, or an instrumentality or agency thereof, and guaranteed fully
as to principal, premium, if any, and interest by the United States of America
or (B) which is denominated in Euros, and is issued by the United Kingdom, the
Federal Republic of Germany or the Federal Republic of France, or any
instrumentality or agency thereof, and guaranteed fully as to principal,
premium, if any, and interest by the issuing government, (ii) any certificate of
deposit, maturing not more than one year after the date of acquisition, issued
by, or time deposit of, (A) a commercial banking institution that is a member of
the Federal Reserve System or (B) a bank or trust company organized under the
laws of any member of the European Union provided that the long-term debt of
such member is rated "A-" or higher according to S&P or "A-3" or higher
according to Moody's, and in the case of clauses (ii)(A) and (ii)(B), such
banking institution, bank or trust company also has (A) combined capital and
surplus and undivided profits of not less than $500 million, and (B) short term
debt with a rating, at the time as of which any investment therein is made, of
"P-1" (or higher) according to Moody's or any successor rating agency or "A-1"
(or higher) according to S&P or any successor rating agency, (iii) commercial
paper, maturing not more than 270 days after the date of acquisition,
5
<PAGE>
issued by a bank or corporation (other than an Affiliate or Subsidiary of the
Company), with a rating, at the time as of which any investment therein is made,
of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P
and which is organized under the laws of (A) the United States of America or (B)
any member of the European Union provided that the long-term debt of such member
is rated "A-" or higher according to S&P or "A-3" or higher according to
Moody's, and (iv) any money market accounts or funds at least 95% of the assets
of which constitute Cash Equivalents of the kinds described in clauses (i), (ii)
or (iii) above.
"Cedelbank" means Cedelbank, societe anonyme, and its successors and
---------
assigns.
"Change of Control" means the occurrence of any of the following
-----------------
events: (i) 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 Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have beneficial ownership of all shares 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
outstanding Voting Stock of the Company; (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election to such board 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 such Board of Directors then in office; (iii)
the Company consolidates with or merges with or into any Person or conveys,
transfers or leases all or substantially all of its assets to any Person, or any
corporation consolidates with or merges into or with the Company in any such
event pursuant to a transaction in which the outstanding Voting Stock of the
Company is changed into or exchanged for cash, securities or other property,
other than any such transaction where the outstanding Voting Stock of the
Company is not changed or exchanged at all (except to the extent necessary to
reflect a change in the jurisdiction of incorporation of the Company or where no
"person" or "group" owns, immediately after such transaction, directly or
indirectly, more than 50% of the total outstanding Voting Stock of the surviving
corporation); or (iv) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution other than in a transaction which complies with the
provisions described under Section 8.01. The good faith determination of the
Board, based upon the advice of outside counsel, of the beneficial ownership of
securities of the Company within the meaning of Rules 13d-3 and 13d-5 under the
Exchange Act shall be conclusive, absent contrary controlling judicial precedent
on contrary written interpretation published by the Commission.
"Code" means the Internal Revenue Code of 1986, as amended.
----
6
<PAGE>
"Commission" means the Securities and Exchange Commission, as from
----------
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act then the
body performing such duties at such time.
"Commodity Price Protection Agreement" means any forward contract,
------------------------------------
commodity swap, commodity option or other similar financial agreement or
arrangement relating to, or the value which is dependent upon, fluctuations in
commodity prices.
"Common Stock" means the common stock, par value $0.01 per share, of
------------
the Company.
"Company" means PSINet Inc., a corporation incorporated under the laws
-------
of New York, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
--------------- -------------
signed in the name of the Company by any one of its Chairman of the Board, its
President, its Chief Executive Officer, its Chief Financial Officer or a Vice
President (regardless of Vice Presidential designation), and by any one of its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Company Rights Agreement" means the Rights Agreement, dated as of May
------------------------
8, 1996, between the Company and First Chicago Trust Company of New York, as in
effect on the date of the Indenture (or as amended, from time to time, to the
extent that such amendment has been determined by the Board of Directors, in
good faith, not to adversely affect the holders of the Notes).
"Consolidated" means consolidated in accordance with GAAP.
------------
"Consolidated Income Tax Expense" of any Person means, for any period,
-------------------------------
the provision for federal, state, local and foreign income taxes of such Person
and its Consolidated subsidiaries for such period as determined in accordance
with GAAP.
"Consolidated Interest Expense" of any Person means, without
-----------------------------
duplication, for any period, the sum of (a) the interest expense of such Person
and its subsidiaries for such period, on a Consolidated basis in accordance with
GAAP, including, without limitation, (i) amortization of debt discount, (ii) the
net costs associated with Interest Rate Agreements, Currency Hedging Agreements
and Commodity Price Protection Agreements (including amortization of discounts),
(iii) the interest portion of any deferred payment obligation and (iv) accrued
interest, plus (b) (i) the interest component of the Capital Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such Person and its
subsidiaries
7
<PAGE>
during such period and (ii) all capitalized interest of such Person and its
subsidiaries plus (c) the interest expense actually paid by such Person under
any Guaranteed Debt of such Person and any subsidiary to the extent not included
under clause (a)(iv) above, plus (d) the aggregate amount for such period of
cash or non-cash dividends on any Redeemable Capital Stock or Preferred Stock of
the Company and its Subsidiaries, in each case as determined on a Consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any period, the net
-----------------------
income of the Company and any Subsidiary for such period determined on a
Consolidated basis in accordance with GAAP, adjusted, to the extent included in
calculating such net income, by excluding, without duplication, (a) all
extraordinary gains or losses for such period, (b) all gains or losses from the
sales or other dispositions of assets out of the ordinary course of business
(net of taxes, fees and expenses relating to the transaction giving rise
thereto) for such period: (c) that portion of such net income derived from or in
respect of investments in Persons other than Subsidiaries, except to the extent
actually received in cash by the Company or any Subsidiary (subject, in the case
of any Subsidiary, to the provisions of clause (f) of this definition); (d) the
portion of such net income (or loss) allocable to minority interests in any
Person (other than a Subsidiary) for such period, except to the extent the
Company's allocation portion of such Person's net income for such period is
actually received in cash by the Company or any Subsidiary (subject, in the case
of any Subsidiary, to the provisions of clause (f) of this definition); (e) the
net income (or loss) of any other Person combined with the Company or any
Subsidiary on a "pooling of interests" basis attributable to any period prior to
the date of combination; and (f) the net income of any Subsidiary to the extent
that the declaration of dividends or similar distributions by that Subsidiary of
that income is not at the time (regardless of any waiver) permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulations
applicable to that Subsidiary or its Capital Stock holders.
"Consolidated Operating Cash Flow" means, with respect to any period,
--------------------------------
Consolidated Net Income for such period increased (without duplication), to the
extent deducted in calculating such Consolidated Net Income, by (a) Consolidated
Income Tax Expense for such period; (b) Consolidated Interest Expense for such
period; and (c) depreciation, amortization and any other non-cash items for such
period (other than any non-cash item which requires the accrual of, or a reserve
for, cash charges for any future period) of the Company and any Subsidiary,
including, without limitation, amortization of capitalized debt issuance costs
for such period, all of the foregoing determined on a consolidated basis in
accordance with GAAP minus non-cash items to the extent they increase
Consolidated Net Income (including the partial or entire reversal of reserves
taken in prior periods) for such period.
8
<PAGE>
"Corporate Trust Office" means the office of the Trustee or an
----------------------
affiliate or agent thereof at which at any particular time the corporate trust
business for the purposes of this Indenture shall be principally administered,
which office at the date of execution of this Indenture is located at Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001.
"Cumulative Operating Cash Flow" means, as at any date of
------------------------------
determination, the positive cumulative Consolidated Operating Cash Flow realized
during the period commencing on April 13, 1998 and ending on the last day of the
most recent fiscal quarter immediately preceding the date of determination for
which consolidated financial information of the Company is available or, if such
cumulative Consolidated Operating Cash Flow for such period is negative, the
negative amount by which cumulative Consolidated Operating Cash Flow is less
than zero.
"Currency Hedging Arrangements" means one or more of the following
-----------------------------
agreements which shall be entered into by one or more financial institutions:
foreign exchange contracts, currency swap agreements or other similar agreements
or arrangements designed to protect against the fluctuations in currency values.
"Debt Securities" means any debt securities issued by the Company in a
---------------
public offering or private placement.
"Debt to Annualized Operating Cash Flow Ratio" means the ratio of (a)
--------------------------------------------
the Total Consolidated Indebtedness as of the date of calculation (the
"Determination Date") to (b) four times the Consolidated Operating Cash Flow for
the latest fiscal quarter for which financial information is available
immediately preceding such Determination Date (the "Measurement Period"). For
purposes of calculating Consolidated Operating Cash Flow for the Measurement
Period immediately prior to the relevant Determination Date, (i) any Person that
is a Subsidiary on the Determination Date (or would become a Subsidiary on such
Determination Date in connection with the transaction that requires the
determination of such Consolidated Operating Cash Flow) will be deemed to have
been a Subsidiary at all times during such Measurement Period, (ii) any Person
that is not a Subsidiary on such Determination Date (or would cease to be a
Subsidiary on such Determination Date in connection with the transaction that
requires the determination of such Consolidated Operating Cash Flow) will be
deemed not to have been a Subsidiary at any time during such Measurement Period,
and (iii) if the Company or any Subsidiary shall have in any manner (x) acquired
(through an Acquisition or the commencement of activities constituting such
operating business) or (y) disposed of (by an Asset Sale or the termination or
discontinuance of activities constituting such operating business) any operating
business during such Measurement Period or after the end of such period and on
or prior to such Determination Date, such calculation will be made on a pro
forma basis in accordance with GAAP as if, in the case of an Acquisition or the
commencement of activities constituting such operating
9
<PAGE>
business, all such transactions had been consummated prior to the first day of
such Measurement Period (it being understood that in calculating Consolidated
Operating Cash Flow the exclusions set forth in clauses (a) through (f) of the
definition of Consolidated Net Income shall apply to an Acquired Person as if it
were a Subsidiary).
"Default" means any event which is, or after notice or passage of any
-------
time or both would be, an Event of Default.
"Definitive Registered Note" means any Note issued in accordance with
--------------------------
Section 2.07(c), the form of which is attached hereto as Exhibit B.
"Depositary" means each of the Dollar Book-Entry Depositary and the
----------
Euro Book-Entry Depositaries.
"Disinterested Director" means, with respect to any transaction or
----------------------
series of related transactions, a member of the Board of Directors of the
Company who does not have any material direct or indirect financial interest in
or with respect to such transaction or series of related transactions.
"Disqualified Stock" means, with respect to any person, any Capital
------------------
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or becomes mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or becomes exchangeable for Indebtedness at the option
of the holder thereof, or becomes redeemable at the option of the holder
thereof, in whole or in part, on or prior to the final maturity date of the
Notes; provided such Capital Stock shall only constitute Disqualified Stock to
the extent it so matures or becomes so redeemable or exchangeable on or prior to
the final maturity date of the Notes; provided, further, that any Capital Stock
that would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require such person to repurchase or redeem such
Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the final maturity date of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in Section 10.12 and Section 10.14
and such Capital Stock specifically provides that such person will not
repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required to be repurchased pursuant to
Section 10.12 and Section 10.14.
"Dollar Book-Entry Depositary" means DTC or any successor book-entry
----------------------------
depositary with respect to the Dollar Notes.
10
<PAGE>
"Dollar Book-Entry Interest" means an indirect beneficial interest in
--------------------------
a Dollar Global Note held on, and transferred only through, records maintained
in book-entry form by DTC or a Dollar Book-Entry Depositary.
"Dollar Definitive Registered Notes" means the Dollar Restricted
----------------------------------
Definitive Registered Notes and the Dollar Unrestricted Definitive Registered
Notes.
"Dollar Global Notes" means the Dollar U.S. Global Note(s), the Dollar
-------------------
International Global Note(s) and, if applicable, the Dollar Unrestricted Global
Notes.
"Dollar International Global Note(s)" means one or more Global Notes
-----------------------------------
bearing the Legends in registered form without coupons that will be issued on
the Issue Date in a principal amount equal to the aggregate principal amount of
the Dollar Notes sold in reliance on Regulation S and deposited with the Dollar
Book-Entry Depositary.
"Dollar Notes" has the meaning stated in the first recital of this
------------
Indenture.
"Dollar Restricted Definitive Registered Note" means a Definitive
--------------------------------------------
Registered Note bearing the Legends issued in registered form without coupons in
a principal amount of $1,000 or integral multiples thereof.
"Dollar Restricted Notes" means the Dollar Restricted Definitive
-----------------------
Registered Notes, the Dollar U.S. Global Notes and the Dollar International
Global Notes.
"Dollar U.S. Global Note(s)" means one or more Global Note(s) bearing
--------------------------
the Legends in registered form without coupons that will be issued on the Issue
Date in a principal amount equal to the aggregate principal amount of the Dollar
Notes sold in reliance on Rule 144A and deposited with the Dollar Book-Entry
Depositary.
"Dollar Unrestricted Definitive Registered Note" means a Definitive
----------------------------------------------
Registered Note not bearing the Legends issued in registered form without
coupons in a principal amount of $1,000 or integral multiples thereof.
"Dollar Unrestricted Global Note(s)" means one or more Global Notes
----------------------------------
not bearing the Legends issued in registered form without coupons in a principal
amount of $1,000 or integral multiples thereof, and deposited with the Dollar
Book-Entry Depositary.
"Dollar Unrestricted Notes" means the Dollar Unrestricted Definitive
-------------------------
Registered Notes and the Dollar Unrestricted Global Note(s).
"DTC" means The Depository Trust Company.
---
11
<PAGE>
"Euro Book-Entry Depositaries" means Euroclear and Cedelbank,
----------------------------
collectively, or any successor Book-Entry Depositary or Depositaries with
respect to the Euro Notes.
"Euro Book-Entry Interest" means an indirect beneficial interest in a
------------------------
Euro Global Note held on, and transferred only through, records maintained in
book-entry form by a Euro Book-Entry Depositary.
"Euro Definitive Registered Notes" means the Euro Restricted
--------------------------------
Definitive Registered Notes and the Euro Unrestricted Definitive Registered
Notes.
"Euro Global Notes" means the Euro U.S. Global Note(s), the Euro
-----------------
International Global Note(s) and, if applicable, the Euro Unrestricted Global
Note.
"Euro International Global Note(s)" means one or more Global Notes
---------------------------------
bearing the Legends in registered form without coupons that will be issued on
the Issue Date in a principal amount equal to the aggregate principal amount of
the Euro Notes sold in reliance on Regulation S and deposited with the Note
Custodian.
"Euro Notes" has the meaning stated in the first recital of this
----------
Indenture.
"Euro Restricted Definitive Registered Note" means a Definitive
------------------------------------------
Registered Note bearing the Legends issued in registered form without coupons in
a principal amount of Euro 1,000 or integral multiples thereof.
"Euro Restricted Global Notes" means the Euro U.S. Global Note(s) and
----------------------------
the Euro International Global Note(s).
"Euro Restricted Notes" means the Euro Restricted Definitive
---------------------
Registered Notes and the Euro Restricted Global Note(s).
"Euro Unrestricted Definitive Registered Note" means a Definitive
--------------------------------------------
Registered Note not bearing the Legends issued in registered form without
coupons in a principal amount of Euro 1,000 or integral multiples thereof.
"Euro Unrestricted Global Note" means one or more Global Note(s) not
-----------------------------
bearing the Legends issued in registered form without coupons in a principal
amount of Euro 1,000 or integral multiples thereof, and deposited with the Note
Custodian.
"Euro Unrestricted Notes" means the Euro Unrestricted Definitive
-----------------------
Registered Notes and the Euro Unrestricted Global Notes.
12
<PAGE>
"Euro U.S. Global Note(s)" means one or more Global Note(s) bearing
------------------------
the Legends in registered form without coupons that will be issued on the Issue
Date in a principal amount equal to the aggregate principal amount of the Euro
Notes sold in reliance on Rule 144A and deposited with the Euro Book-Entry
Depositaries.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
---------
office, as operator of the Euroclear System, and its successors and assigns.
"Event of Default" has the meaning specified in Section 5.01.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
or any successor statute.
"Exchange Offer" means the exchange offer by the Company of
--------------
Unrestricted Notes for Restricted Notes to be effected pursuant to the
Registration Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
-------------------------------------
the Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or property, the
-----------------
sale value that would be reasonably expected to be obtained in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy. Fair Market Value
shall be determined by the Board of Directors of the Company acting in good
faith and shall be evidenced by a Board Resolution.
"Generally Accepted Accounting Principles" or "GAAP" means generally
---------------------------------------- ----
accepted accounting principles in the United States, consistently applied, which
are in effect on the date hereof.
"Global Note(s)" means two or more registered definitive global
--------------
securities without coupons, substantially in the form of Exhibit A attached
hereto, which will represent all of the Notes outstanding at any time unless or
until Definitive Registered Notes are issued in respect of all or any Notes, in
which case the Global Note(s) at any time will represent all those Notes which
are not at such time evidenced by Definitive Registered Notes.
"Government Securities" means, collectively, the European Government
---------------------
Obligations and the U.S. Government Obligations.
"Guarantee" means the guarantee by any Guarantor of the Company's
---------
Indenture Obligations.
13
<PAGE>
"Guaranteed Debt" of any Person means, without duplication, all
---------------
Indebtedness of any other Person guaranteed directly or indirectly in any manner
by such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (v) otherwise to assure a creditor
against loss; provided that the term "guarantee" shall not include endorsements
for collection or deposit, in either case in the ordinary course of business.
"Guarantor" means any Subsidiary which is a guarantor of the Notes,
---------
including any Person that is required after the date hereof to execute a
guarantee of the Notes pursuant to Section 10.13 until a successor replaces such
party pursuant to the applicable provisions of this Indenture and, thereafter,
shall mean such successor.
"Holder" means a Person in whose name a Note is registered in the
------
Register.
"Incur" means, with respect to any Indebtedness or other obligation of
-----
any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence", "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of a Person existing at the time
such Person becomes a Subsidiary or is merged or consolidated with or into the
Company or any Subsidiary shall be deemed to be Incurred at such time.
"Indebtedness" means, with respect to any Person, without duplication,
------------
(i) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, excluding any trade payables and other
accrued current liabilities arising in the ordinary course of business, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (unless the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (iv) all obligations under Interest Rate Agreements, Currency
Hedging Agreements or Commodity Price Protection Agreements of such Person, (v)
all Capital Lease Obligations of such Person, (vi) all Indebtedness referred to
in clauses (i) through (v) above of other Persons and all dividends of other
Persons, the
14
<PAGE>
payment of which is guaranteed by such Person or which is otherwise secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien, upon or with respect to property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not directly assumed or become liable for
the payment of such Indebtedness, (vii) all Redeemable Capital Stock issued by
such Person valued at the greater of its voluntary or involuntary maximum fixed
repurchase price plus accrued and unpaid dividends, and (viii) any refinancing
of any liability of the types referred to in clauses (i) through (vii) above.
For purposes hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Redeemable Capital Stock as if such
Redeemable Capital Stock were purchased on any date on which Indebtedness shall
be required to be determined pursuant to this Indenture, and if such price is
based upon, or measured by, the Fair Market Value of such Redeemable Capital
Stock, such Fair Market Value to be determined in good faith by the Board of
Directors of the issuer of such Redeemable Capital Stock. In no event shall
"Indebtedness" include any trade payable or other current liabilities arising in
the ordinary course of business. The amount of any item of Indebtedness shall be
the amount of such Indebtedness properly classified as a liability on a balance
sheet prepared in accordance with GAAP.
"Indenture" means this instrument as originally executed (including
---------
all exhibits and schedules thereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and any
---------------------
other obligor under this Indenture or under the Notes, including any Guarantor,
to pay principal of, interest, Defaulted Interest, Liquidated Damages, the
Change of Control Purchase Price, and the Offered Price when due and payable,
and all other amounts due or to become due under or in connection with this
Indenture, the Notes and the performance of all other obligations to the Trustee
and the holders under this Indenture and the Notes, according to the respective
terms thereof.
"Indirect Participant" means a Person who holds a Book-Entry Interest
--------------------
through a Participant.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette International,
------------------
Bear Stearns International Limited, Merrill Lynch International and Morgan
Stanley & Co. International Limited.
"Interest Payment Date" means the Stated Maturity of an installment of
---------------------
interest on the Notes.
15
<PAGE>
"Interest Rate Agreements" means one or more of the following
------------------------
agreements which shall be entered into by one or more financial institutions:
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements) and/or other types of
interest rate hedging agreements from time to time.
"International Global Note(s)" means the Euro International Global
----------------------------
Note(s) and the Dollar International Global Note(s).
"Investment" means, with respect to any Person, directly or
----------
indirectly, any advance, loan (including guarantees), or other extension of
credit or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase, acquisition or ownership by such Person of any
Capital Stock, bonds, notes, debentures or other securities issued or owned by
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP.
"Issue Date" means the date on which the Notes are originally issued
----------
under this Indenture.
"IXC" means IXC Internet Services, Inc., a Delaware corporation, and
---
any successors or assigns under the IXC Agreement.
"IXC Agreement" means the IRU and Stock Purchase Agreement, dated as
-------------
of July 22, 1997, between the Company and IXC, as amended, pursuant to which the
Company acquired from IXC 20-year noncancellable indefeasible rights of use, as
in effect on the date of the Indenture (or as further amended, from time to
time, to the extent that such amendment has been determined by the Board of
Directors, in good faith, not to adversely affect the Holders of the Notes).
"Legends" means any of the restrictive legends pursuant to the
-------
Securities Act initially set forth on the Restricted Notes attached hereto as
Exhibits A and B.
"Lien" means any mortgage or deed of trust, pledge, lien (statutory or
----
otherwise), security interest, hypothecation, or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired. A Person shall be deemed to own subject to a Lien
any property which such Person has acquired or holds subject to the interest of
a vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement, other than (i) any lease properly classified as an
operating lease under GAAP, (ii) intellectual property licensing arrangements,
or (iii) cancellation or termination rights or provisions contained in
agreements governing any indefeasible rights of use or similar property rights
which do not
16
<PAGE>
materially impair the use of the property or interest which is the subject of
such cancellation or termination rights or provisions.
"Liquidated Damages" has the meaning provided in Section 5 of the
------------------
Registration Rights Agreement.
"Maturity" means, when used with respect to the Notes, the date on
--------
which the principal of the Notes becomes due and payable as therein provided or
as provided in this Indenture, whether at Stated Maturity or the Offer Date and
whether by declaration of acceleration, Offer in respect of Excess Proceeds,
Change of Control Offer in respect of a Change of Control or otherwise.
"Moody's" means Moody's Investors Service, Inc., or any successor
-------
rating agency.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any
-----------------
Person, the proceeds thereof (without duplication in respect of all Asset Sales)
in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of, or stock or other
assets when disposed of for, cash or Cash Equivalents (except to the extent that
such obligations are financed or sold with recourse to the Company or any
Wholly-Owned Subsidiary) net of (i) brokerage commissions and other fees and
expenses (including fees and expenses of counsel and investment bankers) related
to such Asset Sale, (ii) provisions for all taxes payable as a result of such
Asset Sale, (iii) payments made to retire Indebtedness where payment of such
Indebtedness is secured by the assets or properties the subject of such Asset
Sale, (iv) amounts required to be paid to any Person (other than the Company or
any Subsidiary) owning a beneficial interest in the assets subject to the Asset
Sale and (v) amounts contractually required to be deposited into escrow or
similar trust arrangements and other appropriate amounts to be provided by the
Company or any Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
the Company or any Subsidiary, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale or reimbursement
obligations related to letters of credit issued against liabilities associated
therewith, all as reflected in an officers' certificate delivered to the Trustee
(which amounts shall become Net Cash Proceeds only at such time as they are
released from escrow or such trust arrangements or otherwise cease to be
reserved or subject to other obligations to third parties) and (b) with respect
to any issuance or sale of Capital Stock or options, warrants or rights to
purchase Capital Stock, or debt securities or Capital Stock that have been
converted into or exchanged for Capital Stock as referred to in Section 10.09,
the proceeds of such issuance or sale in the form of cash or Cash Equivalents
including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed of for, cash
17
<PAGE>
or Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Subsidiary), net of attorney's fees,
accountant's fees and brokerage, consultation, underwriting and other fees and
expenses actually incurred in connection with such issuance or sale (or
conversion in the case of debt securities or Capital Stock that have been
converted) and net of taxes paid or payable as a result thereof.
"Non-U.S. Person" means a Person that is not a "U.S. Person" as
---------------
defined in Regulation S under the Securities Act.
"Note Custodian" means Kredietbank S.A. Luxembourgeoise, and its
--------------
successors and assigns, in its capacity as common depositary of the Euro Global
Notes on behalf of the Euro Book-Entry Depositaries.
"Noteholder" means any Holder of Notes.
----------
"Notes" has the meaning stated in the first recital of this Indenture.
-----
"Officers' Certificate" means a certificate signed by the Chairman of
---------------------
the Board, the President, the Chief Executive Officer, the Chief Financial
Officer or a Vice President (regardless of Vice Presidential designation), and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company or any Guarantor, as the case may be, and in form and
substance reasonably satisfactory to, and delivered to, the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
------------------
counsel for the Company, any Guarantor or the Trustee, unless an Opinion of
Independent Counsel is required pursuant to the terms of this Indenture, and who
shall be reasonably acceptable to the Trustee, and which opinion shall be in
form and substance reasonably satisfactory to the Trustee.
"Opinion of Independent Counsel" means a written opinion of counsel,
------------------------------
who may be regular outside counsel for the Company, but which is issued by a
Person who is not an employee or consultant (other than non-employee legal
counsel) of the Company, or any Guarantor and who shall be reasonably acceptable
to the Trustee, and which opinion shall be in form and substance reasonably
satisfactory to the Trustee.
"Outstanding" when used with respect to Notes means, as of the date of
-----------
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
18
<PAGE>
(b) Notes, or portions thereof, for whose payment money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent in trust or set aside for the Holders of such Notes;
(c) Notes, except to the extent provided in Sections 4.02 and 4.03,
with respect to which the Company has effected defeasance or covenant defeasance
as provided in Article IV; and
(d) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture, other than any such
Notes in respect of which there shall have been presented to the Trustee and the
Company proof reasonably satisfactory to each of them that such Notes are held
by a bona fide purchaser in whose hands the Notes are valid obligations of the
Company; provided, however, that in determining whether the Holders of the
requisite principal amount of Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company, any Guarantor, or any other obligor upon the Notes or any Affiliate
of the Company, any Guarantor or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which the Trustee knows to be
so owned shall be so disregarded. Notes so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
reasonable satisfaction of the Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Company, any Guarantor or
any other obligor upon the Notes or any Affiliate of the Company, any Guarantor
or such other obligor.
"Pari Passu Indebtedness" means (a) any Indebtedness of the Company
-----------------------
which ranks pari passu in right of payment to the Notes and (b) with respect to
any Guarantee, Indebtedness which ranks pari passu in right of payment to such
Guarantee.
"Participant" means, with respect to DTC, Euroclear or Cedelbank,
-----------
Persons who have accounts with DTC, Euroclear or Cedelbank, respectively (and
with respect to DTC, shall include Euroclear and Cedelbank acting through their
agents, The Chase Manhattan Bank and Citibank, N.A., respectively, or such
agents' respective successors and assigns).
"Permitted Credit Facility" means any unsubordinated commercial term
-------------------------
loan and/or revolving credit facility entered into principally with commercial
banks and/or other financial institutions typically party to commercial loan
agreements and any refinancing thereof.
"Permitted Investment" means (i) Investments in any Wholly-Owned
--------------------
Subsidiary or any Person which, as a result of, or in connection with, such
Investment, (a)
19
<PAGE>
becomes a Wholly-Owned Subsidiary or (b) is merged or consolidated with or into,
or transfers or conveys all or substantially all of its assets to, or is
liquidated into, the Company or any Wholly-Owned Subsidiary; (ii) Indebtedness
of the Company or a Subsidiary described under clauses (iv) and (vii) of
paragraph (b) of Section 10.08; (iii) Investments in any of the Notes; (iv)
Investments in Cash Equivalents; (v) Investments acquired by the Company or any
Subsidiary in connection with an Asset Sale permitted under Section 10.12 to the
extent such Investments are non-cash proceeds as permitted under such covenant;
(vi) Investments in existence or contractually committed to on or after April
13, 1998 and any extension, modification or renewal of any such Investment that
does not increase the amount of such Investment; (vii) guarantees of
Indebtedness of a Wholly-Owned Subsidiary given by the Company or another
Wholly-Owned Subsidiary and guarantees of Indebtedness of the Company given by
any Subsidiary, in each case, not otherwise in violation of the terms of the
Indenture; (viii) advances to employees or officers of the Company in the
ordinary course of business so long as the aggregate amount of such advances
shall not exceed $2 million outstanding at any one time; (ix) any Investment in
the Company by any Subsidiary of the Company; provided, that any such Investment
in the form of Indebtedness shall be Subordinated Indebtedness; (x) accounts
receivable created or acquired in the ordinary course of business of the Company
or any Subsidiary and Investments arising from transactions by the Company or
any Subsidiary with trade creditors or customers in the ordinary course of
business (including any such Investment received pursuant to any plan of
reorganization or similar arrangement pursuant to the bankruptcy or insolvency
of such trade creditors or customers or otherwise in settlement of a claim);
(xi) loans in the ordinary course of business to employees, officers or
directors of the Company or a Subsidiary to purchase Capital Stock of the
Company pursuant to the terms of stock benefit plans; (xii) Investments the
consideration of which is Capital Stock of the Company; (xiii) Investments in or
acquisitions of Capital Stock or other obligations, property or securities of
Persons (other than Affiliates) received in the bankruptcy or reorganization of
or by such Person or otherwise taken in settlement or satisfaction of claims,
disputes or judgments, and, in each case, extensions, modifications and renewals
thereof; (xiv) Investments in prepaid expenses, negotiable instruments held for
collection, and lease, utility and workers' compensation, performance and other
similar deposits; (xv) Investments, not to exceed, in the aggregate, $100
million at any one time outstanding, to obtain noncancellable indefeasible
rights of use to, or capacity in, fiber-based bandwidth (or similar network
bandwidth), related equipment and/or other Telecommunications Assets in the
ordinary course of the Company's business or in the Capital Stock of a Person
engaged in a Telecommunications Business; and (xvi) any other Investments in an
aggregate amount not to exceed $50 million at any one time outstanding. In
connection with any assets or property contributed or transferred to any Person
as an Investment, such property and assets shall be equal to the Fair Market
Value (as determined by the Company's Board of Directors) at the time of such
Investment.
20
<PAGE>
"Permitted Joint Venture" means a corporation, partnership or other
-----------------------
Person engaged in a Telecommunications Business over which the Company has,
directly or indirectly, the power to direct the policies, management and affairs
in all material respects.
"Permitted Lien" means:
--------------
(a) any Lien existing as of the date of this Indenture;
(b) any Lien arising by reason of (I) any judgment, decree or order
of any court, so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of such
judgment, decree or order shall not have been finally terminated or the period
within which such proceedings may be initiated shall not have expired; (II)
taxes not yet delinquent or which are being contested in good faith; (III)
security for payment of workers' compensation or other insurance or arising
under worker's compensation laws or similar legislation; (IV) good faith
deposits in connection with bids, tenders, leases, contracts (other than
contracts evidencing Indebtedness); (V) zoning restrictions, easements,
licenses, reservations, title defects, rights of others for rights of way,
utilities, sewers, electric lines, telephone or telegraph lines, and other
similar purposes, provisions, covenants, conditions, waivers, restrictions on
the use of property or irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under a
landlord or owner of the leased property, with or without consent of the
lessee), none of which materially impairs the use of any parcel of property
material to the operation of the business of the Company or any Subsidiary or
the value of such property for the purpose of such business; (VI) deposits to
secure public or statutory obligations, or in lieu of surety or appeal bonds; or
(VII) operation of law in favor of landlords, carriers, warehousemen, bankers,
mechanics, materialmen, laborers, employees or suppliers, incurred in the
ordinary course of business for sums which are not yet delinquent or are being
contested in good faith by negotiations or by appropriate proceedings which
suspend the collection thereof;
(c) any Lien to secure the performance bids, trade contracts, leases
(including, without limitation, statutory and common law landlord's liens),
statutory obligations, surety and appeal bonds, letters of credit and other
obligations of a like nature and incurred in the ordinary course of business of
the Company or any Subsidiary;
(d) any Lien securing obligations in connection with Indebtedness
permitted under clause (i) of paragraph (b) of Section 10.08 which attaches
within 180 days of the incurrence of such indebtedness or the date of delivery
of such property or asset; provided that such Liens only extend to such
acquired, developed or constructed property and any accessories, accessions,
additions, replacements and proceeds thereof;
21
<PAGE>
(e) any Lien arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;
(f) any Lien securing obligations in connection with Indebtedness
permitted in clauses (ii), (iv) or (viii) of paragraph (b) of Section 10.08;
(g) any Lien in favor of the Company or any Wholly-Owned Subsidiary;
(h) any Lien securing obligations in connection with Acquired
Indebtedness; provided that any such Lien does not extend to or cover any
property or assets of the Company or any of its Subsidiaries other than the
property or assets of the Acquired Person covered thereby or the property assets
so acquired;
(i) any Lien in favor of the Trustee for the benefit of the Holders or
the Trustee arising under the provisions in the Indenture;
(j) any Lien encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual or warranty requirements of the Company
or any Subsidiary if and to the extent arising in the ordinary course of
business, including rights of offset and set-off;
(k) any Lien in favor of customs or revenue authorities to secure
payment of customs duties in connection with the importation of goods in the
ordinary course of business;
(l) leases, subleases, licenses or other similar rights granted to
third Persons not interfering with the ordinary course of business of the
Company or its Subsidiaries;
(m) any Lien securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to such
letters of credit; and
(n) any Lien securing any refinancing, in whole or in part, of any
obligation or Indebtedness described in the foregoing clauses (a) through (d)
and (f) through (m) so long as no additional collateral is granted as security
thereby.
"Person" means any individual, corporation, limited liability company,
------
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Note" of any particular Note means every previous Note
----------------
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and,
22
<PAGE>
for the purposes of this definition, any Note authenticated and delivered under
Section 2.08 in exchange for a mutilated Note or in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Note.
"Preferred Stock" means, with respect to any Person, any Capital Stock
---------------
of any class or classes (however designated) which is preferred as to the
payment of dividends or distributions, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such Person, over the
Capital Stock of any other class in such Person.
"Prospectus" means the prospectus included in a Registration
----------
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Notes covered by a Shelf Registration Statement, and by all other
amendments and supplements to a prospectus, including post-effective amendments,
and in each case including all material incorporated by reference therein.
"Public Equity Offering" means an underwritten offering of Capital
----------------------
Stock (other than Disqualified Stock) of the Company with gross proceeds to the
Company of at least $25 million pursuant to a registration statement that has
been declared effective by the Commission pursuant to the Securities Act (other
than a registration statement on Form S-8 or otherwise relating to equity
securities issuable under any employee benefit plan of the Company).
"Purchase Money Obligation" means any Indebtedness secured by a Lien
-------------------------
on assets related to the business of the Company and any additions,
replacements, modifications and accessions thereto, which are purchased by the
Company at any time after the Notes are issued; provided that (i) the security
agreement or conditional sales or other title retention contract pursuant to
which the Lien on such assets is created (collectively a "Purchase Money
Security Agreement") shall be entered into within 180 days after the purchase or
substantial completion of the construction of such assets and shall at all times
be confined solely to the assets so purchased or acquired, any additions,
replacements, modifications and accessions thereto and any proceeds and products
therefrom, (ii) at no time shall the aggregate principal amount of the
outstanding Indebtedness secured thereby be increased, except in connection with
the purchase of additions and accessions thereto and except in respect of fees
and other obligations in respect of such Indebtedness and (iii) (A) the
aggregate outstanding principal amount of Indebtedness secured thereby
(determined on a per asset basis in the case of any additions and accessions)
shall not at the time such Purchase Money Security Agreement is entered into
exceed 100% of the purchase price to the Company of the assets subject thereto
or (B) the Indebtedness secured thereby shall be with recourse solely to the
assets so purchased or acquired, any additions, replacements, modifications and
accessions thereto and any proceeds and products therefrom.
23
<PAGE>
"QIB" means a "Qualified Institutional Buyer" under Rule 144A under
---
the Securities Act.
"Qualified Capital Stock" of any Person means any and all Capital
-----------------------
Stock of such Person other than Redeemable Capital Stock.
"Redeemable Capital Stock" means any Capital Stock that, either by its
------------------------
terms or by the terms of any security into which it is convertible or
exchangeable or otherwise, is or upon the happening of an event or passage of
time would be, required to be redeemed prior to the Stated Maturity of the
principal of the Notes or is redeemable at the option of the holder thereof at
any time prior to any such Stated Maturity, or is convertible into or
exchangeable for debt securities at any time prior to any such Stated Maturity
at the option of the holder thereof.
"Registration Default" has the meaning provided in Section 5 of the
--------------------
Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
-----------------------------
Agreement, dated as of December 2, 1999, between the Company and the Initial
Purchasers.
"Registration Statement" has the meaning set forth in the Registration
----------------------
Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
-------------------
Date means the November 15 or May 15 (whether or not a Business Day) next
preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act, as amended
------------
from time to time.
"Responsible Officer" when used with respect to the Trustee means the
-------------------
Chairman of the Board, the President or any other officer or employee assigned
to the Corporate Trust Office or any agent of the Trustee appointed hereunder,
including any vice president, assistant vice president, secretary, assistant
secretary, or any other officer or assistant officer of the Trustee or any agent
of the Trustee appointed hereunder to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Restricted Definitive Registered Notes" means the Euro Restricted
--------------------------------------
Definitive Registered Notes and the Dollar Restricted Definitive Registered
Notes.
24
<PAGE>
"Restricted Global Notes" means the U.S. Global Note(s) and the
-----------------------
International Global Note(s).
"Restricted Notes" means the Restricted Global Note(s) and the
----------------
Restricted Definitive Registered Notes.
"Rule 144A" means Rule 144A under the Securities Act, as amended from
---------
time to time.
"Sale-Leaseback Transaction" means any transaction or series of
--------------------------
related transactions pursuant to which the Company or a Subsidiary sells or
transfers any property or asset in connection with the leasing, or the resale
against installment payments, of such property or asset to the seller or
transferor.
"S&P" means Standard & Poor's Rating Group, a division of McGraw Hill,
---
Inc. or any successor rating agency.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
successor statute.
"Shelf Registration Statement" has the meaning set forth in Section 4
----------------------------
of the Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest means
-------------------
a date fixed by the Trustee in the manner set forth in Section 2.13 hereof.
"Stated Maturity" means, when used with respect to any Indebtedness or
---------------
any installment of interest thereon, the dates specified in such Indebtedness as
the fixed date on which the principal of such Indebtedness or such installment
of interest, as the case may be, is due and payable.
"Strategic Investor" means any Person which is (or a controlled
------------------
Affiliate of any Person which is or a controlled Affiliate of which is) engaged
principally in the Telecommunications Business and which has a Total Market
Capitalization of at least $500 million.
"Subordinated Indebtedness" means Indebtedness of the Company or a
-------------------------
Guarantor expressly subordinated by its terms in right of payment to the Notes
or the Guarantee of such Guarantor, as the case may be.
"subsidiary" means, with respect to any Person, a corporation,
----------
association or other business entity (i) of which outstanding Capital Stock
having at least the majority of the votes entitled to be cast in the election of
directors is owned, directly or indirectly, by
25
<PAGE>
such Person and/or any one or more subsidiaries of such Person, or (ii) of which
at least a majority of voting interest is owned, directly or indirectly, by such
Person and/or one or more subsidiaries of such Person.
"Subsidiary" means any subsidiary of the Company other than an
----------
Unrestricted Subsidiary.
"Successor Note" of any particular Note means every Note issued after,
--------------
and evidencing all or a portion of the same debt as that evidenced by, such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.08 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"Telecommunications Assets" means all assets (including Capital
-------------------------
Stock), rights (contractual or otherwise) and properties, real or personal,
whether tangible or intangible, used or intended for use in connection with a
Telecommunications Business.
"Telecommunications Business" means, when used in reference to any
---------------------------
Person, that such Person is engaged primarily in (i) the business of
transmitting or providing services relating to the transmission of, voice, video
or data through owned or leased transmission facilities, (ii) the business of
creating, developing or marketing communications related network equipment or
services or computer-based information or (iii) businesses reasonably related
thereto, which determination shall, in any such case, be made in good faith by
the Board of Directors.
"Total Consolidated Indebtedness" means, as at any date of
-------------------------------
determination, an amount equal to the aggregate amount of all Indebtedness of
the Company and any Subsidiary, on a Consolidated basis in accordance with GAAP,
outstanding as of such date of determination, after giving effect to any
Incurrence of Indebtedness and the application of the proceeds therefrom giving
rise to such determination.
"Total Market Capitalization" of any Person means, as of any day of
---------------------------
determination, the sum of (a) the consolidated Indebtedness of such Person and
any Subsidiaries on such day, plus (b) the product of (i) the aggregate number
of outstanding shares of common stock of such Person on such day (which shall
not include any options or warrants on, or securities convertible or
exchangeable into, shares of common stock of such Person) and (ii) the average
closing price of such common stock over the ten consecutive Trading Days ending
not earlier than ten Trading Days immediately prior to such date of
determination, plus (c) the liquidation value of any outstanding shares of
preferred stock of such Person on such day. If no such closing price exists
with respect to shares of any such class, the value of such shares for purposes
of clause (b) of the preceding sentence shall be determined by the Board of
Directors in good faith and evidenced by a Board Resolution
26
<PAGE>
filed with the Trustee. Notwithstanding the foregoing, unless the Person's
Common Stock is listed on any national securities exchange or on the NASDAQ
National Market, the "Total Market Capitalization" of the Person shall mean, as
of any day of determination, the enterprise value (without duplication) of the
Person and any subsidiaries (including the Fair Market Value of their debt and
equity), as determined by an independent banking firm of national standing with
experience in such valuations and evidenced by a written opinion in customary
form filed with the Trustee; provided that for purposes of any such
determination, the enterprise value of the Person shall be calculated as if the
Person were a publicly held corporation without a controlling stockholder. For
purposes of any such determination, such banking firm's written opinion may
state that such Fair Market Value is no less than a specified amount and such
opinion may be as of a date no earlier than 90 days prior to the date of such
determination.
"Trading Day" with respect to a securities exchange or automated
-----------
quotation system means a day on which such exchange or system is open for a full
day of trading.
"Trustee" means the Person named as the Trustee in the first paragraph
-------
of this Indenture, until a successor trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor trustee.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
------------------- ---
as amended, or any successor statute.
"U.S. Global Note(s)" means the Euro U.S. Global Note(s) and the
-------------------
Dollar U.S. Global Note(s).
"United States Dollar Equivalent" means, with respect to any monetary
-------------------------------
amount in a currency other than the Dollar, at or as of any time for the
determination thereof, the amount of Dollars obtained by converting such foreign
currency involved in such computation into Dollars at the spot rate for the
purchase of Dollars with the applicable foreign currency as quoted by Reuters
(or, if Reuters ceases to provide such spot quotations, by any other reputable
service as is providing such spot quotations, as selected by the Company) at
approximately 11:00 a.m. (New York City time) on the date not more than two
Business Days prior to such determination. For purposes of determining whether
any Indebtedness can be incurred, any Investment can be made or any transaction
described in Section 10.10 can be undertaken (a "Tested Transaction"), or for
any other purpose hereunder including the purchase of any Notes, the United
States Dollar Equivalent of such Indebtedness, Investment or transaction
described in Section 10.10 or any other determination of the United States
Dollar Equivalent of Euros for any other purpose shall be determined as of the
date incurred, made or undertaken or otherwise as described herein and, in each
case, no subsequent change in the United States Dollar Equivalent after such
date of
27
<PAGE>
determination shall cause such Tested Transaction or such other action to have
been incurred, made or undertaken in violation of this Indenture.
"Unrestricted Definitive Registered Note" means one or more Definitive
---------------------------------------
Registered Notes that do not and are not required to bear the Legend.
"Unrestricted Global Note" means one or more Global Notes that do not
------------------------
and are not required to bear the Legend.
"Unrestricted Notes" means one or more Notes that do not and are not
------------------
required to bear the Legends.
"Unrestricted Subsidiary" means (i) any subsidiary of the Company that
-----------------------
at the time of determination shall be an Unrestricted Subsidiary (as designated
by the Board of Directors of the Company, as provided below) and (ii) any
subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company
may designate any subsidiary of the Company (including any newly acquired or
newly formed subsidiary) to be an Unrestricted Subsidiary if all of the
following conditions apply: (a) neither the Company nor any of its Subsidiaries
provides credit support for Indebtedness of such subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness), (b) such
subsidiary is not liable, directly or indirectly, with respect to any
Indebtedness other than Unrestricted Subsidiary Indebtedness, (c) any Investment
in such subsidiary made as a result of designating such subsidiary an
Unrestricted Subsidiary shall not violate the provisions of Section 10.18 and
such Unrestricted Subsidiary is not party to any agreement, contract,
arrangement or understanding at such time with the Company or any Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; and (v) such Unrestricted Subsidiary does not own any Capital Stock in
any subsidiary of the Company which is not simultaneously being designated an
Unrestricted Subsidiary. Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by filing with the Trustee a board
resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complies with the foregoing conditions and
shall be deemed a Restricted Payment on the date of designation in an amount
equal to the greater of (a) the net book value of such Investment or (b) the
fair market value of such Investment as determined in good faith by the
Company's Board of Directors. The Board of Directors of the Company may
designate any Unrestricted Subsidiary as a Subsidiary; provided that (i)
immediately after giving effect to such designation, the Company could incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 10.08(a) and (ii) all Indebtedness of such subsidiary shall be deemed to
be incurred on the date such Unrestricted Subsidiary becomes a subsidiary.
28
<PAGE>
"Unrestricted Subsidiary Indebtedness" of any Unrestricted Subsidiary
------------------------------------
means Indebtedness of such Unrestricted Subsidiary (i) as to which neither the
Company nor any Subsidiary is directly or indirectly liable (by virtue of the
Company or any such Subsidiary being the primary obligor on, guarantor of, or
otherwise liable in any respect to, such Indebtedness), except Guaranteed Debt
of the Company or any Subsidiary to any Affiliate, in which case (unless the
incurrence of such Guaranteed Debt resulted in a Restricted Payment at the time
of incurrence) the Company shall be deemed to have made a Restricted Payment
equal to the principal amount of any such Indebtedness to the extent guaranteed
at the time such Affiliate is designated an Unrestricted Subsidiary and (ii)
which, upon the occurrence of a default with respect thereto, does not result
in, or permit any holder of any Indebtedness of the Company or any Subsidiary to
declare, a default on such Indebtedness of the Company or any Subsidiary or
cause the payment thereof to be accelerated or payable prior to its Stated
Maturity.
"Voting Stock" means Capital Stock of the class or classes pursuant to
------------
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the Board of Directors, managers
or trustees of a corporation (irrespective of whether or not at the time Capital
Stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means a Subsidiary all the Capital Stock of
-----------------------
which is owned by the Company or another Wholly-Owned Subsidiary. For the
purposes of this definition, any director qualifying shares or investments by
foreign nationals mandated by or required to maintain its limited liability
status under, applicable law shall be disregarded in determining the ownership
of a Subsidiary.
Other Definitions.
------------------
<TABLE>
<CAPTION>
Term Defined in Section
- ----
<S> <C>
"Act" .................................................... 1.05
"Agent Members"........................................... 2.07
"Change of Control Offer"................................. 10.14
"Change of Control Purchase Date"......................... 10.14
"Change of Control Purchase Notice"....................... 10.14
"Change of Control Purchase Price"........................ 10.14
"Covenant Defeasance"..................................... 4.03
"Defaulted Interest"...................................... 2.13
"Defeasance".............................................. 4.02
"Defeasance Redemption Date".............................. 4.04
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
Term Defined in Section
- ----
<S> <C>
"Defeased Notes"........................................... 4.01
"Dollars".................................................. 1.01(e)
"Euro"..................................................... 1.01(e)
"European Government Obligations".......................... 4.04
"Excess Proceeds".......................................... 10.12
"Note Amount".............................................. 10.12
"Offer".................................................... 10.12
"Offer Date"............................................... 10.12
"Offered Price"............................................ 10.12
"Pari Passu Debt Amount"................................... 10.12
"Pari Passu Offer"......................................... 10.12
"Paying Agent"............................................. 2.03
"Permitted Indebtedness"................................... 10.08
"Permitted Payment"........................................ 10.09
"Principal Paying Agent"................................... 2.03
"pro rata"................................................. 1.01(g)
"Refinancing".............................................. 10.08
"Register"................................................. 2.03
"Registrar"................................................ 2.03
"Required Filing Date"..................................... 10.19
"Restricted Payments"...................................... 10.09
"Special Payment Date"..................................... 2.13
"Surviving Entity"......................................... 8.01
"Tested Transaction"....................................... 1.02
"Transfer Agent"........................................... 2.03
"U.S. Government Obligations".............................. 4.04
</TABLE>
Section 1.03. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company and any Guarantor
(if applicable) and any other obligor on the Notes (if applicable) shall furnish
to the Trustee an Officers' Certificate in a form and substance reasonably
acceptable to the Trustee stating that all conditions precedent, if any,
provided for in this Indenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with, and an Opinion of Counsel in a form and substance reasonably
30
<PAGE>
acceptable to the Trustee stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such
certificates or opinions is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:
(a) a statement that each individual signing such certificate or
individual or firm signing such opinion has read and understands such covenant
or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual or such
firm, he or it has made such examination or investigation as is necessary to
enable him or it to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual
or such firm, such condition or covenant has been complied with.
Section 1.04. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate of an officer of the Company, any Guarantor or other
obligor on the Notes may be based, insofar as it relates to legal matters, upon
a certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his or her
certificate or opinion is based are erroneous. Any such certificate or opinion
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company, any
Guarantor or other obligor on the Notes stating that the information with
respect to such factual matters is in the
31
<PAGE>
possession of the Company, any Guarantor or other obligor on the Notes, unless
such officer or counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Opinions of Counsel required to be delivered to the
Trustee may have qualifications customary for opinions of the type required and
counsel delivering such Opinions of Counsel may rely on certificates of the
Company or government or other officials customary for opinions of the type
required, including certificates certifying as to matters of fact, including
that various financial covenants have been complied with.
Any certificate or opinion of an officer of the Company, any Guarantor
or other obligor on the Notes may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of, or representations by, an accountant
or firm of accountants in the employ of the Company, unless such officer knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the accounting matters upon which his
certificate or opinion may be based are erroneous. Any certificate or opinion of
any independent firm of public accountants filed with the Trustee shall contain
a statement that such firm is independent with respect to the Company.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.05. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" or "act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section 1.05.
(b) The ownership of Notes shall be proved by the Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act by the Holder of any Note shall bind every future Holder of
the same Note or the Holder of every Note issued upon the transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, suffered or
omitted to be done by the Trustee, any
32
<PAGE>
Paying Agent or the Company, any Guarantor or any other obligor of the Notes in
reliance thereon, whether or not notation of such action is made upon such Note.
(d) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of such Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding Trust Indenture Act
Section 316(c), any such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not more than 30 days
prior to the first solicitation of Holders generally in connection therewith and
no later than the date such first solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for purposes of determining
whether Holders of the requisite proportion of Notes then Outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for this purpose the Notes
then Outstanding shall be computed as of such record date; provided that no such
request, demand, authorization, direction, notice, consent, waiver or other Act
by the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after such record date.
(f) For purposes of this Indenture, any action by the Holders which
may be taken in writing may be taken by electronic means or as otherwise
reasonably acceptable to the Trustee.
33
<PAGE>
Section 1.06. Notices, etc., to the Trustee, the Company and
----------------------------------------------
any Guarantor.
-------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any Guarantor or
any other obligor on the Notes shall be sufficient for every purpose (except as
provided in Section 5.01(c)) hereunder if in writing and mailed, first-class
postage prepaid, or delivered by recognized overnight courier, to or with the
Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration, or at any other address previously furnished in writing to the
Holders or the Company, any Guarantor or any other obligor on the Notes by the
Trustee; or
(b) the Company or any Guarantor by the Trustee or any Holder shall be
sufficient for every purpose (except as provided in Section 5.01(c)) hereunder
if in writing and mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to the Company or such Guarantor addressed to
PSINet Inc., 510 Huntmar Park Drive, Herndon, VA 20170-5100, Attention: Chief
Financial Officer, with a copy to Nixon Peabody LLP, 437 Madison Avenue, New
York, NY 10022, Attention: Richard F. Langan, Jr., Esq., or at any other address
previously furnished in writing to the Trustee by the Company or such Guarantor.
Section 1.07. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
(i) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at its address as it appears in the Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice and (ii) by publication in accordance with the rules and
regulations of the Luxembourg Stock Exchange which shall initially be in the
Luxembourger Wort for so long as the Euro Notes are listed on the Luxembourg
Stock Exchange or, if the Euro Notes are not listed on the Luxembourg Stock
Exchange, in a leading daily English-language newspaper having general
circulation in Europe approved by the Trustee. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when mailed
to a Holder in the aforesaid manner shall be conclusively deemed to have been
received by such Holder whether or not actually received by such Holder. Any
notice pursuant to clause (ii) above shall be deemed to have been given on the
date of such publication or, if published more than once or on different dates,
on the first date on which publication is made in the manner required above.
Where this Indenture provides for notice in any manner, such notice may
34
<PAGE>
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
To the extent that the Notes may be listed on the Luxembourg Stock
Exchange and the rules and regulations of the Luxembourg Stock Exchange so
require, the Company shall, once in each year in which there has been a partial
repurchase of Notes pursuant to an Excess Proceeds Offer under Section 10.12 or
a Change of Control Offer under Section 10.14 of any of the notes, cause to be
published in a leading daily newspaper of general circulation in Luxembourg
(initially expected to be the Luxembourger Wort) a notice specifying the
aggregate principal amount of Notes outstanding and a list of the Notes
repurchased pursuant to such Excess Proceeds Offer or Change of Control Offer.
Section 1.08. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision shall be deemed incorporated by reference in and made a part
of this Indenture. The following Trust Indenture Act terms used in this
Indenture have the following meanings:
(a) "Commission" means the Securities and Exchange Commission;
(b) "indenture securities" means the Notes;
(c) "indenture security holder" means a Holder or Noteholder;
(d) "indenture to be qualified" means this Indenture;
(e) "indenture trustee" or "institutional trustee" means the Trustee;
and
35
<PAGE>
(f) "obligor" on the indenture securities means the Company and any
other obligor on the Notes.
All other Trust Indenture Act terms used in this Indenture that
are defined by the Trust Indenture Act, defined in the Trust Indenture Act by
reference to another statute or defined by Commission rule and not otherwise
defined herein have the meanings so assigned to them therein.
Section 1.09. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.10. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company, the
Guarantors, if any, and the Trustee shall bind their respective successors and
assigns, whether so expressed or not.
Section 1.11. Separability Clause.
-------------------
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.12. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent and the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 1.13. Governing Law.
-------------
THIS INDENTURE, THE NOTES AND ANY GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
Section 1.14. Legal Holidays.
--------------
In any case where any Interest Payment Date, Maturity or Stated
Maturity of any Note shall not be a Business Day, then (notwithstanding any
other provision of this
36
<PAGE>
Indenture or of the Notes) payment of interest or principal need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on such Interest Payment Date, or at the Maturity or
Stated Maturity and no interest shall accrue with respect to such payment for
the period from and after such Interest Payment Date, Maturity or Stated
Maturity, as the case may be, to the next succeeding Business Day.
Section 1.15. Independence of Covenants.
-------------------------
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenants, the fact that it would be permitted by an exception to,
or be otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 1.16. Schedules and Exhibits.
----------------------
All schedules and exhibits attached hereto are by this reference made
a part hereof with the same effect as if herein set forth in full.
Section 1.17. Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of
which shall be deemed an original; but all such counterparts shall together
constitute but one and the same instrument.
Section 1.18. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement or instrument of the Company or a Subsidiary. Any such indenture,
loan or debt agreement or instrument may not be used to interpret this
Indenture.
Section 1.19. No Recourse against Others.
--------------------------
A director, officer, employee or shareholder, as such, of the Company
or any Guarantor shall not have any liability for any obligations of the Company
or any Guarantor under the Notes, any Guarantee or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation; provided, however, that the foregoing shall not relieve the Company
from any of its liabilities or obligations under the Notes or this Indenture.
Each Holder by accepting any of the Notes and Guarantees waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Notes and Guarantees.
37
<PAGE>
ARTICLE II
The Notes
Section 2.01. Form and Dating.
---------------
(a) Global Notes.
Euro Notes offered and sold to QIBs in reliance on Rule 144A shall be
issued initially in the form of one Euro U.S. Global Note, which shall be
deposited with the Euro Book-Entry Depositaries on behalf of the purchasers of
the Euro Notes represented thereby, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. Euro Notes offered and
sold in reliance on Regulation S shall be issued initially in the form of one
Euro International Global Note, which shall be deposited with the Euro Book-
Entry Depositaries on behalf of the purchasers of the Euro Notes represented
thereby, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. If and when permitted under the Securities Act, one or
more Euro Unrestricted Global Notes may be issued from time to time in exchange
for Euro Restricted Global Notes representing a corresponding aggregate
principal amount of Euro Notes in accordance with the provisions of this Article
II and shall be deposited with the Euro Book-Entry Depositaries on behalf of the
Holders of the Euro Notes represented thereby, duly executed by the Company and
authenticated by the Trustee as hereinafter provided.
Dollar Notes offered and sold to QIBs in reliance on Rule 144A shall
be issued initially in the form of three Dollar U.S. Global Notes, which shall
be deposited with the Dollar Book-Entry Depositary on behalf of the purchasers
of the Dollar Notes represented thereby, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. Dollar Notes offered and
sold in reliance on Regulation S shall be issued initially in the form of one
Dollar International Global Note, which shall be deposited with the Dollar Book-
Entry Depositary on behalf of the purchasers of the Dollar Notes represented
thereby, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. If and when permitted under the Securities Act, one or
more Dollar Unrestricted Global Notes shall be issued from time to time in
exchange for Dollar Restricted Global Notes representing a corresponding
aggregate principal amount of Dollar Notes in accordance with the provisions of
this Article II and shall be deposited with the Dollar Book-Entry Depositary on
behalf of the Holders of the Dollar Notes represented thereby, duly executed by
the Company and authenticated by the Trustee as hereinafter provided.
Except as set forth in Section 2.07(a) hereof, the Dollar Global Notes
may be transferred, in whole and not in part, only to a successor of the Dollar
Book-Entry Depositary or its nominee and the Euro Global Notes may be
transferred, in whole and not in part, only to a successor of the Euro Book-
Entry Depositaries, the Note Custodian or their respective nominees.
38
<PAGE>
(b) Definitive Registered Notes.
Definitive Registered Notes issued upon transfer of a Book-Entry
Interest or a Definitive Registered Note, or in exchange for a Book-Entry
Interest or a Definitive Registered Note, shall be issued in accordance with
this Indenture, duly executed by the Company and authenticated by the Trustee as
hereinafter provided.
(c) Book-Entry Provisions.
Neither the Depositaries nor the Participants shall have any rights
either under this Indenture or under any Global Note with respect to such Global
Note held on their behalf by the Dollar Book-Entry Depositary's nominee, in the
case of the Dollar Global Notes, or by the Note Custodian, in the case of the
Euro Global Notes. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy, consent, authorization, approval, or
other writing furnished by a Book-Entry Depositary or impair, as between the
Book-Entry Depositaries and their respective Participants, the operation of
customary practices of such Depositaries governing the exercise of the rights of
an owner of a beneficial interest in any Global Note.
(d) Dating.
Each Note shall be dated the date of its authentication.
Section 2.02. Execution and Authentication.
----------------------------
An Officer shall execute the Notes on behalf of the Company by manual
or facsimile signature. The Company's seal may but need not be impressed,
affixed, imprinted or reproduced on the Notes.
If the Officer whose signature is on a Note no longer holds that
office at the time the Trustee authenticates the Note or at any time thereafter,
the Note shall be valid nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. Such signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate Euro Notes on the Issue Date in an
aggregate principal amount not to exceed Euro 150 million, upon receipt of an
Officers' Certificate and a Company Order directing the Trustee to authenticate
the Euro Notes. The aggregate
39
<PAGE>
principal amount of Euro Notes Outstanding at any time may not exceed Euro 150
million except as provided in Section 2.08.
The Trustee shall authenticate Dollar Notes on the Issue Date in an
aggregate principal amount not to exceed $600 million, upon receipt of an
Officers' Certificate and a Company Order signed by an Officer directing the
Trustee to authenticate the Dollar Notes. The aggregate principal amount of
Dollar Notes Outstanding at any time may not exceed $600 million except as
provided in Section 2.08.
The Trustee may appoint one or more authenticating agents acceptable
to the Company to authenticate Notes. Unless limited by the terms of such
appointment, any such authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by any such agent. Such authenticating agent
shall have the same rights as the Trustee in any dealings hereunder with the
Company or with any of the Company's Affiliates.
Section 2.03. Registrar and Paying Agents.
---------------------------
The Company shall maintain (i) an office or agency (the "Registrar"
and "Transfer Agent") in the Borough of Manhattan in the City of New York, State
of New York where Notes may be presented for registration of transfer and
exchange (subject to Section 2.07) and, so long as Euro Notes are listed on the
Luxembourg Stock Exchange, a co-transfer agent in Luxembourg where the Euro
Notes may be presented for registration of transfer and exchange (subject to
Section 2.07) and (ii) an office or agency in the Borough of Manhattan in the
City of New York, State of New York where Notes may be presented for payment
(the "Principal Paying Agent") and, so long as Euro Notes are outstanding, an
additional paying agent in Luxembourg where Euro Notes may be presented for
payment and (iii) an office or agency, which initially shall be the office of
the Principal Paying Agent and, so long as the Euro Notes are listed on, and it
is required by the rules of, the Luxembourg Stock Exchange, an office or agency
in Luxembourg where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Registrar shall keep a register (the
"Register") of the Notes and of their transfer and exchange and each Transfer
Agent shall promptly inform the Registrar of its registration for transfer or
exchange of any Notes.
The Company, with the consent of the Trustee, may appoint one or more
co-transfer agents and one or more additional paying agents, provided that in no
event may the Company or any Affiliate of the Company act as Paying Agent. The
term "Paying Agent" shall include the Principal Paying Agent and any such
additional paying agent and the term "Transfer Agent" shall include the Transfer
Agent and any additional transfer agent or co-transfer agent. The Company may
change a Paying Agent, Registrar or Transfer Agent without prior notice to any
Holder or beneficial owner of Notes. The Company shall enter
40
<PAGE>
into an appropriate agency agreement with any agent not a party to this
Indenture, and such agreement shall incorporate the provisions of the Trust
Indenture Act and implement the provisions of this Indenture (including the
incorporation of the Trust Indenture Act) that relate to such agent. The Company
shall notify the Trustee of the name and address of any such agent. If the
Company fails to maintain a Registrar, Transfer Agent or Paying Agent or fails
to give the foregoing notice, the Trustee shall act as such and shall be
entitled to appropriate compensation in accordance with Section 6.07.
The Company hereby appoints (i) the Corporate Trust Office of the
Trustee located at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890 as Registrar and Transfer Agent, (ii) the corporate trust office
of the Trustee, c/o Wilmington Trust FSB, 520 Madison Avenue, 33/rd/ Floor, New
York, New York 10022 as Principal Paying Agent and (iii) Kredietbank S.A.
Luxembourgeoise, 43, Boulevard Royal, L-2955 Luxembourg as Paying Agent and
Transfer Agent in Luxembourg.
Section 2.04. Holders to Be Treated as Owners; Payments of Interest.
-----------------------------------------------------
(a) The Company, any Guarantor, the Paying Agents, the Transfer
Agents, the Registrar, the Trustee and any agent of the Company, any Guarantor,
the Paying Agents, the Transfer Agents, the Registrar or the Trustee may deem
and treat the Person in whose name any Note is registered as the absolute owner
of such Note for the purpose of receiving payment of or on account of the
principal of and, subject to the provisions of this Indenture, interest and
Liquidated Damages on such Note and for all other purposes whether or not such
Note is overdue; and neither the Company, any Guarantor, any Paying Agent, any
Transfer Agent, the Registrar, the Trustee nor any agent of the Company, any
Guarantor, any Paying Agent, any Transfer Agent, the Registrar or the Trustee
shall be affected by any notice to the contrary. All such payments so made to
any such Person, or upon his order, shall be valid, and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for moneys
payable upon any Note.
(b) The Person in whose name any Note is registered at the close of
business on any Regular Record Date with respect to any Interest Payment Date
shall be entitled to receive the interest and Liquidated Damages, if any,
payable on such Interest Payment Date notwithstanding any transfer or exchange
of such Note subsequent to such Regular Record Date and prior to such Interest
Payment Date, except if and to the extent that the Company shall default in the
payment of the interest or Liquidated Damages due on such Interest Payment Date,
in which case such Defaulted Interest or Liquidated Damages shall be paid in
accordance with Section 2.13. All payments of principal, interest and Liquidated
Damages by the Company on the Notes will be made without withholding or
deductions for, or on account of, any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed or levied by or
on behalf of the United States or any political subdivision thereof or any
authority therein or thereof having power to tax unless the
41
<PAGE>
withholding or deduction of such taxes, duties, assessments or governmental
charges is required by applicable law, rule or regulation (and if such
withholding or deduction is required, the Company will not be obligated to pay
any additional amounts in respect of such withholding or deduction).
Section 2.05. Paying Agent to Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit of the Holders
all money held by such Paying Agent for the payment of principal of or interest
or Liquidated Damages, if any, on the Notes, and the Company and the Paying
Agents shall notify the Trustee of any default by the Company in making any such
payment. Money held in trust by any Paying Agent need not be segregated except
as required by law and in no event shall any Paying Agent be liable for any
interest on any money received by it hereunder. The Company at any time may
require any Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed and the Trustee may at any time during the
continuance of any Event of Default specified in Sections 5.01(a) or (b) upon
written request to any Paying Agent, require such Paying Agent to pay forthwith
all money so held by it to the Trustee and to account for any funds disbursed.
Upon making such payment, a Paying Agent shall have no further liability for the
money delivered to the Trustee.
Section 2.06. Noteholder Lists.
----------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it from the Registrar of the names
and addresses of the Holders of Notes. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee and each Paying Agent at least five
Business Days before each Interest Payment Date, and at such other times as they
may request in writing, a list in such form and as of such date as they may
reasonably require of the names and addresses of the Holders of Notes.
Section 2.07 Transfer and Exchange.
---------------------
Transfers and exchanges of Notes and beneficial interests in Notes of
the kinds specified in this Section 2.07 shall be made only in accordance with
this Section 2.07.
(a) U.S. Global Note to International Global Note.
(i) Subject to paragraph (d) below, if the owner of a beneficial
interest in the Dollar U.S. Global Note wishes at any time to transfer such
interest to a Person who wishes to acquire the same in the form of a beneficial
interest in the Dollar International Global Note, such transfer may be effected
only in accordance with the provisions of this clause (a)(i) and subject to the
Applicable Procedures. Upon receipt by the Registrar of (A) an order given by
the Dollar Book-Entry Depositary or its authorized representative directing
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that a beneficial interest in the Dollar International Global Note in a
specified principal amount be credited to a specified Participant's account and
that a beneficial interest in the Dollar U.S. Global Note in an equal principal
amount be debited from a specified Participant's account and (B) if such
transfer is to occur with respect to a Restricted Note, a Regulation S
Certificate in the form attached hereto as Exhibit C, satisfactory to the
Trustee and duly executed by the owner of such beneficial interest in the Dollar
U.S. Global Note or his attorney duly authorized in writing, then the Registrar
shall reduce the principal amount of the Dollar U.S. Global Note and increase
the principal amount of the Dollar International Global Note by such specified
principal amount as provided in clause (d)(v) below.
(ii) Subject to paragraph (d) below, if the owner of a beneficial
interest in the Euro U.S. Global Note wishes at any time to transfer such
interest to a Person who wishes to acquire the same in the form of a beneficial
interest in the Euro International Global Note, such transfer may be effected
only in accordance with the provisions of this clause (a)(ii) and subject to the
Applicable Procedures. Upon receipt by the Transfer Agent of (A) an order given
by the relevant Euro Book-Entry Depositary or its authorized representative
directing that a beneficial interest in the Euro International Global Note in a
specified principal amount be credited to a specified Participant's account and
that a beneficial interest in the Euro U.S. Global Note in an equal principal
amount be debited from a specified Participant's account and (B) if such
transfer is to occur with respect to a Restricted Note, a Regulation S
Certificate in the form attached hereto as Exhibit C, satisfactory to the
Trustee and duly executed by the owner of such beneficial interest in the Euro
U.S. Global Note or his attorney duly authorized in writing, then the Transfer
Agent shall reduce the principal amount of the Euro U.S. Global Note and
increase the principal amount of the Euro International Global Note by such
specified principal amount as provided in clause (d)(v) below.
(b) International Global Note to U.S. Global Note.
(i) Subject to paragraph (d) below, if the owner of a beneficial
interest in the Dollar International Global Note wishes at any time to transfer
such interest to a Person who wishes to acquire the same in the form of a
beneficial interest in the Dollar U.S. Global Note, such transfer may be
effected only in accordance with this clause (b)(i) and subject to the
Applicable Procedures. Upon receipt by the Registrar of (A) an order given by
the Dollar Book-Entry Depositary or its authorized representative directing that
a beneficial interest in the Dollar U.S. Global Note in a specified principal
amount be credited to a specified Participant's account and that a beneficial
interest in the Dollar International Global Note in an equal principal amount be
debited from a specified Participant's account and (B) if such transfer is to
occur with respect to a Restricted Note, a Rule 144A Certificate in the form
attached hereto as Exhibit D, satisfactory to the Trustee and duly executed by
the owner of such beneficial interest in the Dollar International Global Note or
his attorney duly authorized in writing, then the Registrar shall reduce the
principal amount of the Dollar
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International Global Note and increase the principal amount of the Dollar U.S.
Global Note by such specified principal amount as provided in clause (d)(v)
below; provided that, prior to 40 days after the date hereof, Dollar
International Global Notes may only be transferred to Non-U.S. Persons or in
accordance with Rule 144A.
(ii) Subject to paragraph (d) below, if the owner of a beneficial
interest in the Euro International Global Note wishes at any time to transfer
such interest to a Person who wishes to acquire the same in the form of a
beneficial interest in the Euro U.S. Global Note, such transfer may be effected
only in accordance with this clause (b)(ii) and subject to the Applicable
Procedures. Upon receipt by the Transfer Agent of (A) an order given by the
relevant Euro Book-Entry Depositary or its authorized representative directing
that a beneficial interest in the Euro U.S. Global Note in a specified principal
amount be credited to a specified Participant's account and that a beneficial
interest in the Euro International Global Note in an equal principal amount be
debited from a specified Participant's account and (B) if such transfer is to
occur with respect to a Restricted Note, a Rule 144A Certificate in the form
attached hereto as Exhibit D, satisfactory to the Trustee and duly executed by
the owner of such beneficial interest in the Euro International Global Note or
his attorney duly authorized in writing, then the Transfer Agent shall reduce
the principal amount of the Euro International Global Note and increase the
principal amount of the Euro U.S. Global Note by such specified principal amount
as provided in clause (d)(v) below; provided, that prior to 40 days after the
date hereof, Euro International Global Notes may only be transferred to Non-U.S.
Persons or in accordance with Rule 144A.
(c) Global Note to Definitive Note. Subject to paragraph (d) below, a
beneficial interest in a Global Note may be exchanged for one or more Definitive
Notes denominated in the same currency, provided, that if such interest is a
beneficial interest in a U.S. Global Note, or if such interest is a beneficial
interest in an International Global Note and such exchange is to occur with
respect to a Restricted Note, then such Definitive Note(s) shall bear the
Legends (subject in each case to paragraph (e) below); provided further that:
(i) Euro Global Notes will be exchanged by the Company for Euro
Definitive Notes bearing such Legends, if any, as are borne by the Notes
exchanged therefor if and only if (i) either Euro Book-Entry Depositary notifies
the Company that it is unwilling or unable to continue to act as a Depositary
and a successor Euro Book-Entry Depositary is not appointed by the Company
within 120 days; (ii) either Euro Book-Entry Depositary so requests following an
Event of Default; (iii) the Company in its sole discretion determines that the
Euro Global Notes should be exchanged (in whole but not in part) for Euro
Definitive Notes; or (iv) the owner of a Euro Book Entry Interest requests such
exchange in writing delivered through either Euroclear or Cedelbank following an
Event of Default. Upon the occurrence of any of the preceding events, Euro
Definitive Notes shall be issued in such names as the Euro Book-Entry Depositary
shall instruct the Registrar; and
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(ii) Dollar Global Notes will be exchanged by the Company for
Dollar Definitive Notes bearing such Legends, if any, as are borne by the Notes
exchanged therefor if and only if (i) the Dollar Book-Entry Depositary notifies
the Company that it is unwilling or unable to continue to act as Dollar
Book-Entry Depositary or ceases to be a clearing agency registered under the
Exchange Act and, in either case, a successor Dollar Book-Entry Depositary
registered as a clearing agency under the Exchange Act is not appointed by the
Company within 120 days; (ii) the Dollar Book-Entry Depositary so requests
following an Event of Default; (iii) the Company in its sole discretion
determines that the Dollar Global Notes should be exchanged (in whole but not in
part) for Dollar Definitive Notes; or (iv) the owner of a Dollar Book-Entry
Interest requests such exchange in writing delivered through the Dollar
Book-Entry Depositary (including following an Event of Default under this
Indenture). Upon the occurrence of any of the preceding events, Dollar
Definitive Notes shall be issued in such names as the Dollar Book-Entry
Depositary shall instruct the Registrar.
(d) Certain Restrictions; Transfer Mechanics.
(i) Global Notes may also be exchanged or replaced, in whole
or in part, as provided in Sections 2.08 and 2.11. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to Section 2.08 or 2.11 hereof, shall be authenticated and delivered in
the form of, and shall be, a Global Note bearing such Legends, if any, as are
borne by the Note exchanged therefor or replaced thereby. A Global Note may not
be exchanged for another Note other than as provided in this Section 2.07.
(ii) Notwithstanding any other provision herein to the
contrary, including, without limitation, paragraphs (a) and (b) of this Section
2.07, Book-Entry Interests in a Euro Global Note cannot be exchanged for, or
transferred to a Person who takes delivery thereof in the form of, a Book-Entry
Interest in a Dollar Global Note or a Dollar Definitive Registered Note and
Book-Entry Interests in a Dollar Global Note cannot be exchanged for, or
transferred to a Person who takes delivery thereof in the form of, a Book-Entry
Interest in a Euro Global Note or a Euro Definitive Registered Note.
(iii) Each Global Note initially shall (A) be registered in the
name of the nominee of the relevant Depositary, (B) be deposited with, or on
behalf of, the relevant Depositary or with the Trustee or the Note Custodian for
such Depositary, and (C) bear the Legends. Participants in any Depositary shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by such Depositary, the Trustee, or the Note Custodian, or under
such Global Note, and the Holder may be treated by the Company, the Trustee or
the Note Custodian and any agent of the Company, the Trustee or the Note
Custodian as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any
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agent of the Company, the Trustee or the Note Custodian from giving effect to
any written certification, proxy, consent, approval, or other authorization
furnished by any such Depositary or shall impair, as between such Depositary and
its Participants the operation of customary practices governing the exercise of
the rights of a holder of any Note.
(iv) Interests of beneficial owners in a Global Note may be
transferred in accordance with the Applicable Procedures of the relevant
Depositary and the provisions of this Section 2.07. No such transfer shall be
effective unless the transferor or his attorney duly authorized in writing shall
have executed and delivered a Regulation S Certificate in the form attached
hereto as Exhibit C or a Rule 144A Certificate in the form attached hereto as
Exhibit D; provided, however, that, prior to 40 days after the date hereof,
interests in Dollar International Global Notes and Euro International Global
Notes may only be transferred to Non-U.S. Persons, who shall acquire interests
in such Dollar International Global Notes or Euro International Global Notes,
respectively. Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to such Depositary, its successors or
their respective nominees, except as otherwise provided in this Section 2.07.
(v) If any Global Note is to be exchanged for other Notes or
canceled in whole, it shall be surrendered by or on behalf of the relevant
Depositary or its nominee to the Registrar for exchange or cancellation as
provided in this Article II. If any Global Note is to be exchanged for other
Notes or canceled in part, or if another Note is to be exchanged in whole or in
part for a beneficial interest in any Global Note, then either (i) such Global
Note shall be so surrendered for exchange or cancellation as provided in this
Article II or (ii) the principal amount thereof shall be reduced or increased by
an amount equal to the portion thereof to be so exchanged or canceled, or equal
to the principal amount of such other Note to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment made
on the records of the Registrar, whereupon the Registrar shall instruct the
relevant Depositary or its authorized representative to make a corresponding
adjustment to its records. Upon any such surrender or adjustment of a Global
Note, the Trustee shall, subject to this clause (d)(v) and as otherwise provided
in this Article II, authenticate and deliver any Notes issuable in exchange for
such Global Note (or any portion thereof) to or upon the order of, and
registered in such names as may be directed by, the relevant Depositary or its
authorized representative. Upon the request of the Trustee in connection with
the occurrence of any of the events specified in this paragraph, the Company
shall promptly make available to the Trustee a reasonable supply of Notes that
are not in the form of Global Notes. The Trustee shall be entitled to rely upon
any order, direction or request of the relevant Depositary or its authorized
representative which is given or made pursuant to this Article II.
(vi) Every certificated Note authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Note or
any portion thereof, whether pursuant to this Article II or otherwise, shall be
authenticated and delivered
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in the form of, and shall be, a Global Note, unless such certificated Note is
registered in the name of a Person other than the relevant Depositary for such
Global Note or a nominee thereof.
(vii) Any Depositary or its nominee, as registered owner of a
Global Note, shall be the Holder of such Global Note for all purposes under this
Indenture and the Notes, and owners of beneficial interests in a Global Note
shall hold such interests pursuant to the Applicable Procedures. Accordingly,
any such owner's beneficial interest in a Global Note will be shown only on, and
the transfer of such interest shall be effected only through, records maintained
by the relevant Depositary or its nominee or its Participants.
(viii) At such time as all Book-Entry Interests therein have
been exchanged for Definitive Registered Notes, a Global Note shall be returned
to or retained and canceled by the Trustee in accordance with Section 2.12
hereof. No such transfer shall be effective unless the transferor or his
attorney duly authorized in writing shall have executed and delivered a
Regulation S Certificate in the form attached hereto as Exhibit C or a Rule 144A
Certificate in the form attached hereto as Exhibit D; provided, however, that,
prior to 40 days after the date hereof, interests in Dollar International Global
Notes and Euro International Global Notes may only be transferred to Non-U.S.
Persons, who shall acquire interests in such Dollar International Global Notes
or Euro International Global Notes, respectively.
(ix) To permit registrations of transfers and exchanges, the
Company shall execute and, upon receipt of a Company Order and an Officers'
Certificate, the Trustee shall authenticate Global Notes at the request of any
Paying Agent and the Registrar, and Definitive Registered Notes at the
Registrar's request.
(x) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require the Holder to
furnish appropriate endorsements and transfer documents and to pay a sum
sufficient to cover any stamp or transfer tax, duty or governmental charge
payable in connection therewith (other than any such stamp or transfer taxes,
duties or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.11, 9.06, 10.12 and 10.14 hereof).
(xi) All Global Notes and Definitive Registered Notes issued
upon any registration of transfer or exchange of Global Notes or Definitive
Registered Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Registered Notes surrendered upon such registration of
transfer or exchange.
(xii) None of the Company, the Trustee or the Registrar shall
be required to register the transfer of or to exchange any Note (A) during a
period beginning on
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a Regular Record Date or Special Record Date, as the case may be, and ending at
the close of business on the next succeeding Interest Payment Date or Special
Payment Date, as the case may be, or (B) which the Holder has tendered (and not
withdrawn) for repurchase in connection with a Change of Control Offer or an
Excess Proceeds Offer.
(xiii) Prior to due presentment for the registration of transfer
of any Note, each of the Trustee, the Paying Agents, the Registrar, the Transfer
Agents, any Guarantor and the Company and any of their respective agents may
deem and treat the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of and
interest on such Note and for all other purposes, whether or not such Note is
overdue, and none of the Trustee, the Paying Agents, the Registrar, the Transfer
Agents, any Guarantor, the Company nor any of their respective agents shall be
affected by notice to the contrary.
(xiv) In the event of a transfer or exchange of a portion only
of a Definitive Registered Note, a new Definitive Registered Note shall be
issued to the transferee in respect of the principal amount of the portion so
transferred or exchanged, and a further new Definitive Registered Note in
respect of the balance of the principal amount not so transferred or exchanged
shall be issued to the transferor or to the Holder making the transfer or
exchange in each case in principal amounts of $1,000 or Euro 1,000, as
applicable, and integral multiples thereof.
(e) The U.S. Global Notes and their Successor Notes and the
International Global Notes and their Successor Notes shall bear the Legends, as
set forth on Exhibit A and Exhibit B attached hereto, subject to the following:
(i) subject to the following clauses of this paragraph (e), a
Note or any portion thereof which is exchanged, upon transfer or otherwise, for
a Global Note or any portion thereof shall bear the Legends borne by such Global
Note while represented thereby;
(ii) subject to the following clauses of this paragraph (e), a
new Note which is not a Global Note and is issued in exchange for another Note
(including a Global Note) or any portion thereof, upon transfer or otherwise,
shall bear the Legends borne by such other Note;
(iii) Notes sold or otherwise disposed of pursuant to an
effective registration statement under the Securities Act, together with their
respective Successor Notes, shall not bear the Legends;
(iv) at any time after the Notes may be freely transferred
without registration under the Securities Act or without being subject to
transfer restrictions pursuant
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to the Securities Act, a new Note which does not bear the Legends may be issued
in exchange for or in lieu of a Note (other than a Global Note) or any portion
thereof which bears such Legends if the Trustee has received an Unrestricted
Notes certificate substantially in the form of Exhibit E hereto, satisfactory to
the Trustee and duly executed by the Holder of such legended Note or his
attorney duly authorized in writing, and after such date and receipt of such
certificate, the Trustee shall authenticate and deliver such a new Note in
exchange for or in lieu of such other Note as provided in this Article II;
(v) a new Note which does not bear the Legends may be issued in
exchange for or in lieu of a Note (other than a Global Note) or any portion
thereof which bears such Legends if, in the Company's judgment, placing such
Legends upon such new Note is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at the
direction of the Company by a Company Order and upon receipt of an Officer's
Certificate, shall authenticate and deliver such a new Note as provided in this
Article II; and
(vi) notwithstanding the foregoing provisions of this clause
(e), a Successor Note of a Note that does not bear a particular form of Legends
shall not bear such form of Legends unless the Company has reasonable cause to
believe that such Successor Note is a "restricted security" within the meaning
of Rule 144 under the Securities Act, in which case the Trustee, upon receipt of
a Company Order and Officers' Certificate, shall authenticate and deliver a new
Note bearing the Legends in exchange for such Successor Note as provided in this
Article II. By its acceptance of any Note bearing the Legends, each Holder of
such a Note acknowledges the restrictions on transfer of such Note set forth in
this Indenture and in the Legends and agrees that it will transfer such Note
only as provided in this Indenture.
(f) The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to this Section 2.07. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
(g) In the event that Regulation S is amended during the term of this
Indenture to alter the applicable holding period, all references in this
Indenture to a holding period for Non-U.S. Persons will be deemed to include
such amendment.
(h) In addition to the Legends required by this Section 2.07, Notes
shall bear any legends required by the relevant Book-Entry Depositary.
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Section 2.08. Replacement Notes.
-----------------
If (a) any mutilated Note is surrendered to the Trustee, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and there is delivered to the Company,
any Guarantor or the Trustee, such security or indemnity, in each case, as may
be required by it to hold it harmless, then, in the absence of notice to the
Company, any Guarantor or the Trustee that such Note has been acquired by a bona
fide purchaser, the Company shall execute and upon a Company Request and
Officers' Certificate, the Trustee shall authenticate and make available for
delivery though any Transfer Agent, in exchange for any such mutilated Note or
in lieu of any such destroyed, lost or stolen Note, a replacement Note of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a replacement Note, pay such Note.
Upon the issuance of any replacement Notes under this Section, the
Company may require the Holder to furnish appropriate endorsements and transfer
documents and to pay a sum sufficient to pay all documentary, stamp or similar
issue or transfer taxes or other governmental charges that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company and any Guarantor, whether or not the
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.09. Outstanding Notes.
-----------------
The Notes outstanding at any time are all Notes that have been
authenticated by the Trustee except for (a) those canceled by it, (b) those
delivered to it for cancellation, (c) to the extent set forth in Sections 4.02
and 4.03, on or after the date on which the conditions set forth in Section 4.04
have been satisfied, those Notes theretofore authenticated and delivered by the
Trustee hereunder and (d) those described in this Section 2.09 as not
outstanding. Subject to Section 2.10, a Note does not cease to be outstanding
because the Company or one of its Affiliates holds the Note.
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If a Note is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser in whose hands such Note is a
legal, valid and binding obligation of the Company.
If the principal amount of any Note is considered to be paid under
Article XI, it ceases to be outstanding and interest thereon shall cease to
accrue.
Section 2.10. Treasury Notes.
--------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any declaration of acceleration or notice of default or
direction, waiver or consent or any amendment, modification or other change to
this Indenture, Notes owned by the Company or an Affiliate of the Company shall
be disregarded as though they were not outstanding, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent or any amendment, modification or other change to
this Indenture, only Notes that the Trustee actually knows are so owned shall be
so disregarded.
Section 2.11. Temporary Notes.
---------------
Until Definitive Registered Notes are prepared and ready for delivery,
the Company may prepare and the Trustee, upon receipt of a Company Order and
Officers' Certificate, shall authenticate temporary Notes. Temporary Notes shall
be substantially in the form of Definitive Registered Notes but may have
variations that the Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee, upon receipt of a
Company Order and Officers' Certificate, shall authenticate Definitive
Registered Notes in exchange for temporary Notes. Until such exchange, temporary
Notes shall be entitled to the same rights, benefits and privileges as
Definitive Registered Notes.
Section 2.12. Cancellation.
------------
All Notes surrendered for payment, purchase, repurchase, registration
of transfer or exchange shall be delivered to the Trustee and, if not already
canceled, shall, upon receipt of a Company Order and Officers' Certificate, be
promptly canceled by it. The Company and any Guarantor may at any time deliver
to the Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company or such Guarantor may have acquired in any manner
whatsoever, and all Notes so delivered shall, upon receipt of a Company Order
and Officers' Certificate, be promptly canceled by the Trustee. No Notes shall
be authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section 2.12, except as expressly permitted by this Indenture. All
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canceled Notes held by the Trustee shall, at the option of the Trustee, be (a)
returned to the Company or (b) destroyed, in which case the Trustee shall
provide a certificate to the Company identifying the Notes that have been
destroyed. The Trustee shall provide the Company a list of all Notes that have
been canceled from time to time as requested by the Company.
Section 2.13. Defaulted Interest.
------------------
If the Company defaults on a payment of interest or Liquidated Damages
on the Notes, it shall pay the defaulted interest or Liquidated Damages, plus
(to the extent permitted by law) any interest payable on the defaulted interest
(such defaulted interest and interest thereon herein collectively called
"Defaulted Interest"), in accordance with the terms hereof, to (a) the Persons
who are Holders of Definitive Registered Notes, if any, on a subsequent record
date (the "Special Record Date"), which date shall be at least five Business
Days prior to the payment date for such Defaulted Interest or Liquidated Damages
(the "Special Payment Date"), and (b) if a Global Note is still outstanding, to
the Holder of such Global Note on such Special Payment Date. The Company shall
fix such Special Record Date and Special Payment Date and shall provide for the
payment of such Defaulted Interest or Liquidated Damages, if any, in each case,
in a manner satisfactory to the Trustee. At least 15 days before such Special
Record Date, the Company shall mail to each Holder of Definitive Registered
Notes, if any, and if any Global Note is still outstanding, to the relevant
Depositary, a notice that states the Special Record Date, the Special Payment
Date and the amount of Defaulted Interest or Liquidated Damages, if any, to be
paid.
Section 2.14. CUSIP and ISIN Number; Common Code.
----------------------------------
The Company in issuing the Dollar Notes shall use "CUSIP" numbers and,
in issuing the Euro Notes, shall use "ISIN" numbers and common codes, and such
CUSIP or ISIN numbers and common codes shall be included in notices of
repurchase or exchange as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the correctness or
accuracy of CUSIP or ISIN numbers or common codes printed in the notice or on
the Notes, and that reliance may be placed only on the other identification
numbers printed on the Notes. The Company will promptly notify the Trustee, each
Paying Agent and the Registrar of any change in any CUSIP or ISIN number or
common code.
Section 2.15. Deposit of Moneys; Payments by Principal Paying Agent.
-----------------------------------------------------
Prior to 10:00 a.m., Luxembourg time, with respect to the Euro Notes,
and 12:00 noon, New York City time, with respect to the Dollar Notes, on each
Interest Payment Date and on the Maturity Date, the Company shall deposit with
the Principal Paying Agent
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in immediately available funds United States Dollars, with respect to the Dollar
Notes, and Euros, with respect to the Euro Notes, sufficient to make cash
payments, if any, due on such Interest Payment Date or Maturity Date.
Payments of principal will be made against presentation and surrender
(or, in the case of a partial payment, endorsement) of the Notes at the office
of the relevant Paying Agent. Payments in respect of Dollar Notes will be made
by U.S. dollar check drawn on, or by transfer from a U.S. dollar account
maintained by the Company and payments in respect of Euro Notes will be made by
Euro check drawn on, or by transfer from a Euro account maintained by the
Company.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
ARTICLE III
Note Forms
The provisions of the form of Notes contained in Exhibits A and B
hereto are incorporated herein by reference. The Notes shall be issued only in
registered form. The Notes shall be issued without coupons. The Euro Notes shall
be issued only in denominations of Euro 1,000 principal amount and the Dollar
Notes shall be issued only in denominations of $1,000 principal amount or, in
each case, any integral multiple thereof.
ARTICLE IV
Defeasance and Covenant Defeasance
Section 4.01. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
- ----------
The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 4.02 or Section 4.03 be
applied to all of the Outstanding Notes (the "Defeased Notes"), upon compliance
with the conditions set forth below in this Article IV.
Section 4.02. Defeasance and Discharge.
------------------------
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.02, the Company, each Guarantor and any other
obligor upon the Notes, if any, shall be deemed to have been discharged from its
obligations with respect to the Defeased Notes on the date the conditions set
forth in Section 4.04 below are satisfied (hereinafter, "defeasance"). For this
purpose, such defeasance means that the Company, each Guarantor
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and any other obligor upon the Notes shall be deemed to have paid and discharged
the entire Indebtedness represented by the Defeased Notes, which shall
thereafter be deemed to be "Outstanding" only for the purposes of Section 4.05
and the other Sections of this Indenture referred to in (a) and (b) below, and
to have satisfied all its other obligations under such Notes and this Indenture
insofar as such Notes are concerned (and the Trustee, at the expense of the
Company and upon Company Request, shall execute proper instruments acknowledging
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of Defeased Notes
to receive, solely from the trust fund described in Section 4.04 and as more
fully set forth in such Section, payments in respect of the principal of and
interest on, such Notes, when such payments are due, (b) the Company's
obligations with respect to such Defeased Notes under Sections 2.07, 2.08, 2.11,
10.02 and 10.03, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, including, without limitation, the Trustee's rights under
Section 6.07, and (d) this Article IV. Subject to compliance with this Article
IV, the Company may exercise its option under this Section 4.02 notwithstanding
the prior exercise of its option under Section 4.03 with respect to the Notes.
Section 4.03. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.03, the Company and each Guarantor shall be
released from its obligations under any covenant or provision contained or
referred to in Sections 10.05 through 10.22, inclusive, and the provisions of
clauses (iii) and (v) of Section 8.01(a) with respect to the Defeased Notes on
and after the date the conditions set forth in Section 4.04 below are satisfied
(hereinafter, "covenant defeasance"), and the Defeased Notes shall thereafter be
deemed to be not "Outstanding" for the purposes of any direction, waiver,
consent or declaration or Act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to the Defeased Notes, the Company and each Guarantor
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 5.01(c) but, except as specified above, the
remainder of this Indenture and such Defeased Notes shall be unaffected thereby.
Section 4.04. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section
4.02 or Section 4.03 to the Defeased Notes:
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(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Notes, (1) in the case of the Euro Notes,
an amount in Euros or Government Securities of the United Kingdom, the Federal
Republic of Germany or the Republic of France denominated in Euros or a
combination thereof (collectively, the "European Government Obligations") and
(2) in the case of Dollar Notes, an amount in United States dollars or U.S.
Government Obligations, (as defined below) or a combination thereof, in the case
of each of clauses (1) and (2) above, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants or
a nationally recognized investment banking firm expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee to pay and discharge, the principal of and
interest on, the Defeased Notes, on the Stated Maturity of such principal or
interest (such date being referred to as the "Defeasance Redemption Date"), if
at or prior to electing to exercise either its option applicable to Section 4.02
or its option applicable to Section 4.03, the Company has delivered to the
Trustee an irrevocable notice to redeem the Defeased Notes on the Defeasance
Redemption Date. For this purpose, "U.S. Government Obligations" means
securities that are (I) direct obligations of the United States of America for
the timely payment of which its full faith and credit is pledged or (II)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian
with respect to any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt;
(b) In the case of an election under Section 4.02, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States stating that (1) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (2) since the date
hereof, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Independent
Counsel in the United States shall confirm that, the Holders of the Outstanding
Notes will not recognize income, gain or loss for federal income tax purposes as
a result of such defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred;
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(c) In the case of an election under Section 4.03, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States to the effect that the Holders of the Outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred;
(d) No Default or Event of Default (other than a Default or Event of
Default under this Indenture resulting from the borrowing of funds to be applied
to such deposit) shall have occurred and be continuing on the date of such
deposit or insofar as Section 5.01(h) or (i) is concerned, at any time during
the period ending on the 91st day after the date of deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of such
period);
(e) Such defeasance or covenant defeasance shall not cause the
Trustee for the Notes to have a conflicting interest for purposes of the Trust
Indenture Act with respect to any other securities of the Company or any
Guarantor;
(f) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default under, this Indenture or any
other material agreement or instrument to which the Company, any Guarantor or
any Subsidiary is a party or by which it is bound;
(g) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder;
(h) The Company shall have delivered to the Trustee an Opinion of
Independent Counsel in the United States to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(i) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the holders of the Notes or any Guarantee over the other creditors
of the Company or any Guarantor with the intent of defeating, hindering,
delaying or defrauding creditors of the Company, any Guarantor or others;
(j) No event or condition shall exist that would prevent the Company
from making payments of the principal of and interest on the Notes on the date
of such deposit or at any time ending on the 91st day after the date of such
deposit; and
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(k) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each stating that all
conditions precedent provided for relating to either the defeasance under
Section 4.02 or the covenant defeasance under Section 4.03 (as the case may be)
have been complied with. Opinions of Counsel or Opinions of Independent Counsel
required to be delivered under this Section shall be in form and substance
reasonably satisfactory to the Trustee and may have qualifications customary for
opinions of the type required and counsel delivering such opinions may rely on
certificates of the Company or government or other officials customary for
opinions of the type required, which certificates shall be limited as to matters
of fact, including that various financial covenants have been complied with.
Section 4.05. Deposited Money and Government Obligations to be Held
-----------------------------------------------------
in Trust; Other Miscellaneous Provisions.
- ----------------------------------------
Subject to the provisions of the last paragraph of Section 10.03, all
United States dollars and U.S. Government Obligations (including the proceeds
thereof), in the case of the Dollar Notes, and all European Government
Obligations, in the case of the Euro Notes, deposited with the Trustee pursuant
to Section 4.04 in respect of the Defeased Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(excluding the Company or any of its Affiliates acting as Paying Agent), as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal and interest, but such money need not
be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Securities
deposited pursuant to Section 4.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
imposed, assessed or for the account of the Holders of the Defeased Notes.
Anything in this Article IV to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any United States dollars or U.S. Government Obligations, in the case of
the Dollar Notes, or European Government Obligations, in the case of the Euro
Notes, held by it as provided in Section 4.04 which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect defeasance
or covenant defeasance.
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Section 4.06. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations, in the case of the Dollar Notes, or
European Government Obligations, in the case of the Euro Notes, in accordance
with Section 4.02 or 4.03, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Notes and any Guarantor's obligations under any Guarantee
shall be revived and reinstated, with present and prospective effect, as though
no deposit had occurred pursuant to Section 4.02 or 4.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
United States dollars or U.S. Government Obligations, in the case of the Dollar
Notes, or European Government Obligations, in the case of the Euro Notes, in
accordance with Section 4.02 or 4.03, as the case may be; provided, however,
that if the Company makes any payment to the Trustee or Paying Agent of
principal of or interest on any Note following the reinstatement of its
obligations, the Trustee or Paying Agent shall promptly pay any such amount to
the Holders of the Notes and the Company shall be subrogated to the rights of
the Holders of such Notes to receive such payment from the United States dollars
and U.S. Government Obligations, in the case of the Dollar Notes, or European
Government Obligations, in the case of the Euro Notes, held by the Trustee or
Paying Agent.
ARTICLE V
Remedies
Section 5.01. Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) there shall be a default in the payment of any interest on any
Note when it becomes due and payable, and such default shall continue for a
period of 30 days;
(b) there shall be a default in the payment of the principal of any
Note at its Maturity (upon acceleration, required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or breach, of
any covenant or agreement of the Company or any Guarantor under this Indenture,
the Registration Rights Agreement or any Guarantee (other than a default in the
performance, or breach, of a covenant or agreement which is specifically dealt
with in clause (a), (b) or in
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clause (ii), (iii) or (iv) of this clause (c)) and such default or breach shall
continue for a period of 30 days after written notice has been given, by
certified mail, (x) to the Company by the Trustee or (y) to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
outstanding Notes; (ii) there shall be a default in the performance or breach of
the provisions of Article VIII; (iii) the Company shall have failed to make or
consummate an Offer in accordance with the provisions of Section 10.12; or (iv)
the Company shall have failed to make or consummate a Change of Control Offer in
accordance with the provisions of Section 10.14;
(d) (i) any default by the Company or any Subsidiary in the payment
of the principal, premium, if any, or interest has occurred with respect to
amounts in excess of $10 million under any agreement, indenture or instrument
evidencing Indebtedness when the same shall become due and payable in full and
such default shall have continued after any applicable grace period and shall
not have been cured or waived and, if not already matured at its final maturity
in accordance with its terms, the holder of such Indebtedness shall have the
right to accelerate such Indebtedness or (ii) any event of default as defined in
any agreement, indenture or instrument of the Company evidencing Indebtedness in
excess of $10 million shall have occurred and the Indebtedness thereunder, if
not already matured at its final maturity in accordance with its terms, shall
have been accelerated;
(e) any Guarantee shall for any reason cease to be, or shall for any
reason be asserted in writing by any Guarantor or the Company not to be, in full
force and effect and enforceable in accordance with its terms, except to the
extent contemplated by this Indenture and any such Guarantee;
(f) one or more judgments, orders or decrees for the payment of money
in excess of $10 million, either individually or in the aggregate, shall be
rendered against the Company not paid or covered by financially sound
third-party insurers, or any Subsidiary or any of their respective properties
and is not discharged and there shall have been a period of 60 consecutive days
during which a stay of enforcement of such judgment or order, by reason of an
appeal or otherwise, shall not be in effect;
(g) any holder or holders of at least $10 million in aggregate
principal amount of Indebtedness of the Company or any Subsidiary after a
default under such Indebtedness shall notify the Trustee of its commencement of
proceedings to foreclose on any assets of the Company or any Subsidiary that
have been pledged to or for the benefit of such holder or holders to secure such
Indebtedness or shall commence proceedings, or take any action (including by way
of set-off), to retain in satisfaction of such Indebtedness or to collect on,
seize, dispose of or apply in satisfaction of Indebtedness, assets of the
Company or any Subsidiary (including funds on deposit or held pursuant to
lock-box and other similar arrangements);
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(h) there shall have been the entry by a court of competent
jurisdiction of (i) a decree or order for relief in respect of the Company or
any Significant Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or (ii) a decree or order adjudging the Company or any
Significant Subsidiary bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable federal or state law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or any Significant Subsidiary or of any
substantial part of their respective properties, or ordering the winding up or
liquidation of their respective affairs, and any such decree or order for relief
shall continue to be in effect, or any such other decree or order shall be
unstayed and in effect, for a period of 60 consecutive days; or
(i) (i) the Company or any Significant Subsidiary commences a
voluntary case or proceeding under any applicable Bankruptcy Law or any other
case or proceeding to be adjudicated bankrupt or insolvent, (ii) the Company or
any Significant Subsidiary consents to the entry of a decree or order for relief
in respect of the Company or such Significant Subsidiary in an involuntary case
or proceeding under any applicable Bankruptcy Law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, (iii) the Company or any
Significant Subsidiary files a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, (iv) the
Company or any Significant Subsidiary (1) consents to the filing of such
petition or the appointment of, or taking possession by, a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the Company
or such Significant Subsidiary or of any substantial part of the Company's
Consolidated properties, (2) makes an assignment for the benefit of creditors or
(3) admits in writing its inability to pay its debts generally as they become
due or (v) the Company or any Significant Subsidiary takes any corporate action
in furtherance of any such actions in this paragraph (i).
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
(a) If an Event of Default (other than an Event of Default specified
in Sections 5.01(h) and (i) with respect to the Company) shall occur and be
continuing with respect to this Indenture, the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Notes then Outstanding may,
and the Trustee at the request of such Holders shall, declare all unpaid
principal of, and accrued interest on all Notes to be due and payable, by a
notice in writing to the Company (and to the Trustee if given by the Holders of
the Notes) and upon any such declaration, such principal and interest shall
become due and payable immediately. If an Event of Default specified in clause
(h) or (i) of Section 5.01 occurs with respect to the Company and is continuing,
then all the Notes shall ipso facto become and be due and payable immediately in
an amount equal to the principal amount of the Notes, together with accrued and
unpaid interest, if any, to the date the Notes become due and payable, without
any declaration or other act on the part of the Trustee or any Holder.
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Thereupon, the Trustee may, at its discretion, proceed to protect and enforce
the rights of the Holders of the Notes by appropriate judicial proceedings.
(b) After a declaration of acceleration with respect to the Notes,
but before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of a
majority in aggregate principal amount of the Notes then Outstanding, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if:
(i) the Company has paid or deposited with the Trustee sums (in
Euros and U.S. Dollars) sufficient to pay:
(1) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel,
(2) all overdue interest on all Outstanding Notes,
(3) the principal of any Outstanding Notes which have
become due otherwise than by such declaration of acceleration and interest
thereon at a rate borne by the Notes, and
(4) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Notes; and
(ii) all Events of Default, other than the non-payment of
principal of the Notes which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13. No such
rescission shall affect any subsequent Default or impair any right consequent
thereon.
(c) The Company shall notify the Trustee within 30 days of the
occurrence of any Default unless such Default shall have been cured. The
Company shall deliver to the Trustee, on or before a date not more than 60 days
after the end of each fiscal quarter and not more than 120 days after the end of
each fiscal year, a written statement as to compliance with the Indenture,
including whether or not any default has occurred that is not cured.
Section 5.03. Collection of Indebtedness and Suits for Enforcement
----------------------------------------------------
by Trustee.
----------
The Company and each Guarantor covenant that if:
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(a) default is made in the payment of any interest on any Note when
such interest becomes due and payable and such default continues for a period of
30 days, or
(b) default is made in the payment of the principal of any Note at
the Stated Maturity thereof, then in either case the Company and such Guarantor
will, upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Notes, the whole amount then due and payable on such Notes for principal
and interest, with interest upon the overdue principal and, to the extent that
payment of such interest shall be legally enforceable, upon overdue installments
of interest, at the rate borne by the Notes; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company or any Guarantor, as the case may be, fails to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Company or any Guarantor or
any other obligor upon the Notes and collect the moneys adjudged or decreed to
be payable in the manner provided by law out of the property of the Company, any
Guarantor or any other obligor upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or any Guarantee by such appropriate private or
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce such rights, including seeking recourse against any Guarantor pursuant
to the terms of any Guarantee, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein or therein, or to enforce any other proper remedy, including,
without limitation, seeking recourse against any Guarantor pursuant to the terms
of a Guarantee, or to enforce any other proper remedy, subject however to
Section 5.12. No recovery of any such judgment upon any property of the Company
or any Guarantor shall affect or impair any rights, powers or remedies of the
Trustee or the Holders.
Section 5.04 Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including any
Guarantor, upon the Notes or the property of the Company or of such other
obligor or their creditors, the Trustee
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(irrespective of whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or similar official in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay the Trustee any amount
due it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 5.05. Trustee May Enforce Claims without Possession of Notes.
------------------------------------------------------
All rights of action and claims under this Indenture, the Notes or the
Guarantees may be prosecuted and enforced by the Trustee without the possession
of any of the Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name and as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.
Section 5.06. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article or
otherwise on behalf of the Holders or the Trustee pursuant to this Article or
through any proceeding or any arrangement or restructuring in anticipation or in
lieu of any proceeding contemplated by this
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Article shall be applied, subject to applicable law, in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal, or interest upon presentation of the Notes and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due to the Trustee under Section
6.07;
SECOND: To the payment of the amounts then due and unpaid upon the
Notes for principal and interest, in respect of which or for the benefit of
which such money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Notes for principal
and interest; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto, including the Company, provided that all sums due and owing to the
Holders and the Trustee have been paid in full as required by this Indenture.
Section 5.07. Limitation on Suits.
-------------------
No Holder of any Notes shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default and
(b) the Holders of not less than 25% in principal amount of the
Outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as trustee
hereunder;
(c) such Holder or Holders have offered to the Trustee an indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 30 days after its receipt of such notice, request
and offer (and if requested, provision) of indemnity has failed to institute any
such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 30-day period by the Holders of a majority in
principal amount of the Outstanding Notes; it being understood and intended that
no one or more Holders shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture, any Note or any Guarantee to
affect, disturb or prejudice the rights of any other
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Holders, or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, any Note or any Guarantee,
except in the manner provided in this Indenture and for the equal and ratable
benefit of all the Holders.
Section 5.8. Unconditional Right of Holders to Receive Principal
---------------------------------------------------
and Interest.
- ------------
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right based on the terms stated herein, which is
absolute and unconditional, to receive payment of the principal and (subject to
Section 3.09) interest on such Note on the respective Stated Maturities
expressed in such Note (or, in the case of repurchase, on the repurchase date)
and to institute suit for the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
Section 5.09. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or any Guarantee and such proceeding
has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case the
Company, any Guarantor, any other obligor on the Notes, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
------------------------------
No right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
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Section 5.12. Control by Holders.
------------------
The Holders of not less than a majority in aggregate principal amount
of the then Outstanding Notes shall have the right to direct the time, method
and place of conducting any proceeding for exercising any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, provided
that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture (including, without limitation, Section 5.07) or any
Guarantee, expose the Trustee to liability, or be unduly prejudicial to Holders
not joining therein; and
(b) subject to the provisions of Section 315 of the Trust Indenture
Act, the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.
Section 5.13. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in aggregate principal amount
of the then Outstanding Notes may on behalf of the Holders of all Outstanding
Notes waive any past Default hereunder and its consequences, except a Default:
(a) in the payment of the principal of, or interest on, any Note; or
(b) in respect of a covenant or a provision hereof which under this
Indenture cannot be modified or amended without the consent of the Holder of
each Note Outstanding affected by such modification or amendment.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Note by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not
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apply to any suit instituted by the Trustee, to any suit instituted by any
Holder or group of Holders holding in the aggregate more than 10% in principal
amount of the Outstanding Notes, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or interest on, any Note on or
after the respective Stated Maturities expressed in such Note.
Section 5.15. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and the Guarantors, if any, covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury or other law wherever enacted, now or at
any time hereafter in force, which would prohibit or forgive the Company or any
Guarantor from paying all or any portion of the principal of, or interest on,
the Notes contemplated herein or in the Notes or which may affect the covenants
or the performance of this Indenture; and each of the Company and the
Guarantors, if any (to the extent that it may lawfully do so), hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 5.16. Remedies Subject to Applicable Law.
----------------------------------
All rights, remedies and powers provided by this Article V may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law in the premises, and all the provisions of this
Indenture are intended to be subject to all applicable mandatory provisions of
law which may be controlling in the premises and to be limited to the extent
necessary so that they will not render this Indenture invalid, unenforceable or
not entitled to be recorded, registered or filed under the provisions of any
applicable law.
ARTICLE VI
The Trustee
Section 6.01. Duties of Trustee.
-----------------
Subject to the provisions of Trust Indenture Act Sections 315(a)
through 315(d):
(a) if an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree
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of care and skill in its exercise thereof as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs;
(b) except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or obligations shall
be implied in this Indenture that are adverse to the Trustee; and
(2) in the absence of bad faith or willful misconduct on its
part, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to determine
whether or not they conform on their face to the requirements of this Indenture;
(c) the Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this Subsection (c) does not limit the effect of Subsection
(b) of this Section 6.01;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith, in accordance with a direction of the
Holders of a majority in principal amount of Outstanding Notes relating to the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or for exercising any trust or power conferred upon the Trustee;
(d) the Trustee may refuse to follow any direction that conflicts
with law or this Indenture;
(e) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any liability. The Trustee shall
be under no obligation to exercise any of its rights or powers, or to perform
any duty under this Indenture at the request of any Holders unless such Holders
shall have offered to the Trustee security and indemnity, satisfactory to the
Trustee, against any loss, liability or expense;
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(f) whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
Subsections (a), (b), (c), (d) and (f) of this Section 6.01; and
(g) the Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
Section 6.02. Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing and is known
to the Trustee, the Trustee shall give notice of such Default or Event of
Default within 90 days after the occurrence thereof to each Holder in the manner
and to the extent provided in Section 313(c) of the TIA. Except in the case of
a Default or Event of Default in payment of principal of or interest (including
Liquidated Damages) on any Note the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
the withholding of such notice is in the interests of the Holders.
Section 6.03 Certain Rights of Trustee
-------------------------
Subject to the provisions of Section 6.01 hereof and Trust Indenture
Act Sections 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon receipt by it of any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of Indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties, and the Trustee need not investigate any fact or
matter stated therein;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its selection, and any advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon in accordance with such advice or Opinion of Counsel;
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(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which might be incurred by it thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture or
automatically provided for by the Trust Indenture Act other than any liabilities
arising out of the negligence, bad faith or willful misconduct of the Trustee;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document
unless requested in writing to do so by the Holders of not less than a majority
in aggregate principal amount of the Notes then Outstanding; provided that, if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation so requested by
the Holders of not less than a majority in aggregate principal amount of the
Notes Outstanding shall be paid by the Company or, if paid by the Trustee or any
predecessor Trustee, shall be repaid by the Company upon demand; provided,
further, the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney; provided, further, that no permissive power, right or
remedy conferred upon the Trustee under this Indenture shall be construed to
impose a duty to exercise such power, right or remedy; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it.
Section 6.04. Trustee Not Responsible for Recitals, Dispositions of
-----------------------------------------------------
Notes or Application of Proceeds Thereof.
- ----------------------------------------
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the
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Trustee assumes no responsibility for their correctness. The Trustee
shall not be responsible for and makes no representations as to the validity or
sufficiency of this Indenture or of the Notes, and it shall not be responsible
for any statement or recital in this Indenture or any statement in the Notes or
any other document executed in connection with the sale of the Notes or pursuant
to this Indenture, except that the Trustee represents that it is duly authorized
to execute and deliver this Indenture, authenticate the Notes and perform its
obligations hereunder and that the statements made by it in any Statement of
Eligibility and Qualification on Form T-1 supplied to the Company are true and
accurate subject to the qualifications set forth therein. The Trustee shall not
be accountable for the use or application by the Company of Notes or the
proceeds thereof.
Section 6.05. Trustee and Agents May Hold Notes; Collections; etc.
----------------------------------------------------
The Trustee, any Paying Agent, Registrar, Transfer Agent or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Notes, with the same rights it would have if it were not the
Trustee, Paying Agent, Registrar or such other agent and, subject to Trust
Indenture Act Sections 310 and 311, may otherwise deal with the Company and
receive, collect, hold and retain collections from the Company with the same
rights it would have if it were not the Trustee, Paying Agent, Registrar or such
other agent. Any Paying Agent, other than the Trustee, holding funds or
securities in trust for the benefit of the Holders or the Trustee shall give to
the Trustee notice of any default by any obligor upon the Notes in the making of
any such payment.
Section 6.06. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Article IV, the Trustee shall be required to invest all
moneys received by the Trustee, until used or applied as herein provided, in
Cash Equivalents in accordance with the directions of the Company; provided,
however, that nothing herein shall be deemed to require the Trustee or any other
Person acting as Paying Agent to invest or pay interest on funds held for the
payment of any Notes after the Maturity thereof. The Trustee shall not be
liable for any gain or loss on funds or securities deposited with the Trustee
and invested or maintained by the Trustee in accordance with the directions of
the Company.
Section 6.07. Compensation and Indemnification of Trustee and Its
---------------------------------------------------
Prior Claim.
-----------
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as the parties
shall agree in writing
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from time to time for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Company covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf
of the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all agents and other persons not regularly in its employ) except
any such expense, disbursement or advance as may arise from its negligence, bad
faith or willful misconduct.
The Company also covenants and agrees to indemnify the Trustee and
each predecessor Trustee, and their respective officers, directors, agents and
employees, for, and to hold it harmless against, any claim, loss, liability,
tax, assessment or other governmental charge (other than taxes applicable to the
Trustee's compensation hereunder) or expense incurred without negligence, bad
faith or willful misconduct on its part, arising out of or in connection with
the acceptance or administration of this Indenture or the trusts hereunder and
its duties hereunder, including enforcement of this Section 6.07, and also
including any liability which the Trustee may incur as a result of failure to
withhold, pay or report any tax, assessment or other governmental charge, and
the costs and expenses of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
If, in the opinion of the Trustee's counsel, the Trustee has an
interest adverse to the Company or a potential conflict of interest exists
between the Trustee and the Company, the Trustee may have separate counsel and
the Company shall pay the reasonable fees and expenses of such counsel.
The obligations of the Company under this Section 6.07 to compensate
and indemnify the Trustee and each predecessor Trustee and to pay or reimburse
the Trustee and each predecessor Trustee for reasonable expenses, disbursements
and advances shall constitute an additional obligation hereunder and shall
survive the satisfaction and discharge of this Indenture and the resignation or
removal of the Trustee and each predecessor Trustee. As security for the
performance of the obligations of the Company under this Section 6.07, the
Trustee shall have a lien prior to the Notes upon all property and funds held or
collected by the Trustee, except property or funds held in trust to pay
principal of and interest on, or Liquidated Damages on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.01(i) occurs, the expenses and the compensation
for the services (including the fees and expenses of its agents and counsel) are
intended to constitute administrative expenses under any Bankruptcy Law without
any need to demonstrate substantial contribution under Bankruptcy Law.
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Section 6.08. Conflicting Interests.
---------------------
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act.
Section 6.09. Trustee Eligibility.
-------------------
There shall at all times be a Trustee hereunder which shall be
eligible to act as trustee under Trust Indenture Act Section 310(a) and which
shall have a combined capital and surplus of at least $100,000,000, to the
extent there is an institution eligible and willing to serve. If the Trustee
does not have a Corporate Trust Office in The City of New York, the Trustee may
appoint an agent in The City of New York reasonably acceptable to the Company to
conduct any activities which the Trustee may be required under this Indenture to
conduct in The City of New York. If such Trustee publishes reports of condition
at least annually, pursuant to law or to the requirements of federal, state,
territorial or District of Columbia supervising or examining authority, then for
the purposes of this Section 6.09, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
6.09, the Trustee shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 6.10. Resignation and Removal; Appointment of Successor
-------------------------------------------------
Trustee.
-------
(a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor trustee under Section 6.11.
(b) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign and be discharged from the trust hereby created by giving
written notice thereof to the Company. Upon receiving such notice or
resignation, the Company shall promptly appoint a successor trustee by written
instrument executed by authority of the Board of Directors of the Company, a
copy of which shall be delivered to the resigning Trustee and a copy to the
successor trustee. If an instrument of acceptance by a successor trustee shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may, or any Holder who has been a
bona fide Holder of a Note for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper, appoint and prescribe a successor
trustee.
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(c) The Trustee may be removed at any time for any cause or for no
cause by an Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes, delivered to the Trustee and to the
Company in writing.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
Trust Indenture Act Section 310(b) after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Note for at least six
months,
(2) the Trustee shall cease to be eligible under Section 6.09
and shall fail to resign after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any case, (i) the Company by a Board
Resolution may remove the Trustee, or (ii) subject to Section 5.14, the Holder
of any Note who has been a bona fide Holder of a Note for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor trustee and
shall comply with the applicable requirements of Section 6.11. If, within 60
days after such resignation, removal or incapability, or the occurrence of such
vacancy, the Company has not appointed a successor Trustee, a successor trustee
shall be appointed by the Act of the Holders of a majority in principal amount
of the Outstanding Notes delivered to the Company and the retiring Trustee. Such
successor trustee so appointed shall forthwith upon its acceptance of such
appointment become the successor trustee and supersede the successor trustee
appointed by the Company. If no successor trustee shall have been so appointed
by the Company or the Holders of the Notes and accepted appointment in the
manner hereinafter provided, the Trustee or the Holder of any Note who has been
a bona fide Holder for at least six months may, subject to Section 5.14, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor trustee.
The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor trustee by mailing written
notice of such event
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by first-class mail, postage prepaid, to the Holders of Notes as their names and
addresses appear in the Register. Each notice shall include the name of the
successor trustee and the address of its Corporate Trust Office or agent
hereunder.
Section 6.11. Acceptance of Appointment by Successor.
--------------------------------------
Every successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee a written
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee as if originally named
as Trustee hereunder; but, nevertheless, on the written request of the Company
or the successor trustee, upon payment of its charges pursuant to Section 6.07
then unpaid, such retiring Trustee shall pay over to the successor trustee all
moneys at the time held by it hereunder and shall execute and deliver an
instrument transferring to such successor trustee all such rights, powers,
duties and obligations. Upon request of any such successor trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor trustee all such rights and powers.
No successor trustee with respect to the Notes shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Trust Indenture Act Section 310(a) and this Article VI and shall
have a combined capital and surplus of at least $100,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 6.09.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the Company shall give notice thereof to the Holders of the
Notes, by mailing such notice to such Holders at their addresses as they shall
appear on the Register. If the acceptance of appointment is substantially
contemporaneous with the appointment, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 6.10.
If the Company fails to give such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Company.
Section 6.12. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee (including the trust created by this Indenture) shall be
the successor of the Trustee hereunder, provided that such corporation shall be
eligible under Trust Indenture Act Section 310(a) and this Article VI and
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shall have a combined capital and surplus of at least $100,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 6.09,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
In case at the time such successor or successors to the Trustee shall
succeed to the trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such Notes
so authenticated; and, in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor
trustee; and in all such cases such certificate shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate
of the Trustee shall have; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Notes in the name
of any predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
Section 6.13. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company
(or other obligor under the Notes), the Trustee shall be subject to the
provisions of Section 311(a) of the Trust Indenture Act regarding the collection
of claims against the Company (or any such other obligor), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to Trust Indenture Act Section 311(a) to the
extent indicated therein.
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
Section 7.01. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders. The Company will furnish or cause to be furnished to the Trustee:
- -------
(a) semiannually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request, a list
of similar form and content to that in subsection (a) hereof as of a date not
more than 15 days prior to the time such list is furnished; provided, however,
that if and so long as the Trustee shall be the Registrar, no such list need be
furnished.
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Section 7.02. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Holders may communicate pursuant to Trust Indenture Act Section 312(b)
with other Holders with respect to their rights under this Indenture or the
Notes, and the Trustee shall comply with Trust Indenture Act Section 312(b).
The Company, the Trustee, the Registrar and any other Person shall have the
protection of Trust Indenture Act Section 312(c). Further, every Holder of
Notes, by receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee or any agent of either of them
shall be held accountable by reason of the disclosure of any information as to
the names and addresses of the Holders in accordance with Trust Indenture Act
Section 312, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under Trust Indenture Act Section 312.
Section 7.03 Reports by Trustee.
------------------
(a) Within 60 days after May 15 of each year commencing with the
first May 15 after the issuance of Notes, the Trustee, if so required under the
Trust Indenture Act, shall transmit by mail to all Holders, in the manner and to
the extent provided in Trust Indenture Act Section 313(c), a brief report dated
as of such May 15 in accordance with and with respect to the matters required by
Trust Indenture Act Section 313(a). The Trustee shall also transmit by mail to
all Holders, in the manner and to the extent provided in Trust Indenture Act
Section 313(c), a brief report in accordance with and with respect to the
matters required by Trust Indenture Act Section 313(b)(2).
(b) A copy of each report transmitted to Holders pursuant to this
Section 7.03 shall, at the time of such transmission, be mailed to the Company
and filed with each stock exchange, if any, upon which the Notes are listed and
also with the Commission. The Company will notify the Trustee promptly if the
Notes are listed on any stock exchange.
Section 7.04 Reports by Company.
------------------
The Company and any Guarantor, as the case may be, shall:
(a) file with the Trustee, within 15 days after the Company or any
Guarantor, as the case may be, is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company or any
Guarantor may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company or any Guarantor, as the
case may be, is not required to file information, documents or reports pursuant
to either of said Sections, then it shall (i) deliver to the Trustee
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annual audited financial statements of the Company and its Subsidiaries,
prepared on a consolidated basis in conformity with GAAP, within 120 days after
the end of each fiscal year of the Company, and (ii) file with the Trustee and,
to the extent permitted by law, the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company or any Guarantor, as the case may be, with the conditions and covenants
of this Indenture as are required from time to time by such rules and
regulations (including such information, documents and reports referred to in
Trust Indenture Act Section 314(a));
(c) within 15 days after the filing thereof with the Trustee,
transmit by mail to all Holders in the manner and to the extent provided in
Trust Indenture Act Section 313(c), such summaries of any information, documents
and reports required to be filed by the Company or any Guarantor, as the case
may be, pursuant to Section 10.20 hereunder and subsections (a) and (b) of this
Section as are required by rules and regulations prescribed from time to time by
the Commission.
ARTICLE VII
Consolidation, Merger, Sale of Assets
Section 8.01. Company and Guarantors May Consolidate, etc., Only
---------------------------------------------------
on Certain Terms.
- ----------------
(a) The Company will not, in a single transaction or through a series
of related transactions, consolidate with or merge with or into any other Person
or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or group of
affiliated Persons, or permit any of its Subsidiaries to enter into any such
transaction or series of related transactions if such transaction or series of
related transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Company and its Subsidiaries on a Consolidated
basis to any other Person or group of affiliated Persons, unless at the time and
after giving effect thereto:
(i) either (a) the Company will be the continuing corporation in
the case of a consolidation or merger involving the Company or (b) the Person
(if other than
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the Company) formed by such consolidation or into which the Company is merged or
the Person which acquires by sale, assignment, conveyance, transfer, lease or
disposition all or substantially all of the properties and assets of the Company
and its Subsidiaries on a Consolidated basis (the "Surviving Entity") will be a
corporation duly organized and validly existing under the laws of the United
States of America, any state thereof or the District of Columbia and such Person
expressly assumes, by a supplemental indenture, in a form reasonably
satisfactory to the Trustee, all the obligations of the Company under the Notes,
this Indenture and the Registration Rights Agreement, as the case may be, and
the Notes, this Indenture and the Registration Rights Agreement will remain in
full force and effect as so supplemented;
(ii) immediately after giving effect to such transaction on a
pro forma basis (and treating any Indebtedness not previously an obligation of
the Company or any of its Subsidiaries which becomes the obligation of the
Company or any of its Subsidiaries as a result of such transaction as having
been incurred at the time of such transaction), no Default or Event of Default
will have occurred and be continuing;
(ii) immediately after giving effect to such transaction on a
pro forma basis, the Company (or the Surviving Entity if the Company is not the
continuing obligor hereunder) could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 10.08(a);
(iv) at the time of the transaction, each Guarantor, if any,
unless it is the other party to the transactions described above, will have by
supplemental indenture confirmed that its Guarantee shall apply to such Person's
obligations under this Indenture and under the Notes; and
(v) at the time of the transaction the Company or the Surviving
Entity will have delivered, or caused to be delivered, to the Trustee, in form
and substance reasonably satisfactory to the Trustee, an Officers' Certificate
and an Opinion of Counsel, each to the effect that such consolidation, merger,
sale, assignment, conveyance, transfer, lease or other transaction and the
supplemental indenture in respect thereof comply with this Indenture.
(b) Notwithstanding the foregoing, the provisions of Section 8.01(a)
shall not apply to (i) a merger or consolidation between or among the Company
and any one or more of its Wholly-Owned Subsidiaries, and (ii) a merger or
consolidation of the Company into any Person in a transaction designed solely
for the purpose of effecting a change in the jurisdiction of incorporation of
the Company within the United States of America.
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Section 8.02. Successor Substituted.
---------------------
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in Section 8.01 in which the Company is not
the Surviving Person, such Surviving Person shall succeed to, and be substituted
for, and may exercise every right and power of, the Company and the Company
shall be discharged from all obligations and covenants under this Indenture, the
Notes and the Registration Rights Agreement.
ARTICLE IX
Supplemental Indentures
Section 9.01. Supplemental Indentures and Agreements without Consent
------------------------------------------------------
of Holders.
- ----------
Without the consent of any Holders, the Company, the Guarantors, if
any, and any other obligor under the Notes when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto or agreements or other instruments
with respect to any Guarantee, in form and substance satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company or a
Guarantor and the assumption by any such successor of the covenants of the
Company or such Guarantor herein and in the Notes, the Registration Rights
Agreement and in any Guarantee in accordance with Article VIII;
(b) to add to the covenants, undertakings or obligations of the
Company, any Guarantor or any other obligor upon the Notes for the benefit of
the Holders, or to surrender any right or power conferred upon the Company or
any Guarantor or any other obligor upon the Notes, as applicable, herein, in the
Notes or in any Guarantee;
(c) to cure any ambiguity, or to correct or supplement any provision
herein or in any supplemental indenture, the Notes or any Guarantee which may be
defective or inconsistent with any other provision herein or any supplemental
indenture or in the Notes or any Guarantee or to make any other provisions with
respect to matters or questions arising under this Indenture, any supplemental
indenture, the Notes or any Guarantee; provided that, in each case, such
provisions shall not adversely affect the interest of the Holders;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act, as contemplated by Section 9.05 or otherwise;
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(e) to add a Guarantor pursuant to the requirements of Section 10.13;
(f) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder; or
(g) to mortgage, pledge, hypothecate or grant a security interest in
favor of the Trustee for the benefit of the Holders as additional security for
the payment and performance of the Company's or any Guarantor's Indenture
Obligations, in any property, or assets, including any of which are required to
be mortgaged, pledged or hypothecated, or in which a security interest is
required to be granted to the Trustee pursuant to this Indenture or otherwise.
Section 9.02 Supplemental Indentures and Agreements with Consent of
------------------------------------------------------
Holders.
- -------
Except as permitted by Section 9.01, with the consent of the Holders
of at least a majority in aggregate principal amount of the Outstanding Notes,
by act of said Holders delivered to the Company, each Guarantor, if any, and the
Trustee, the Company and each Guarantor (if a party thereto) when authorized by
Board Resolutions, and the Trustee may (i) enter into an indenture or indentures
supplemental hereto or agreements or other instruments with respect to any
Guarantee in form and substance satisfactory to the Trustee, for the purpose of
adding any provisions to or amending, modifying or changing in any manner or
eliminating any of the provisions of this Indenture, the Notes or any Guarantee
(including but not limited to, for the purpose of modifying in any manner the
rights of the Holders under this Indenture, the Notes or any Guarantee) or (ii)
waive compliance with any provision in this Indenture, the Notes or any
Guarantee (other than waivers of past Defaults covered by Section 5.13 and
waivers of covenants which are covered by Section 10.21); provided, however,
that no such supplemental indenture, agreement or instrument shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, or waive a default in the payment of the principal
or interest on, any such Note or reduce the principal amount thereof or the rate
of interest thereon, or the price payable upon the purchase thereof pursuant to
Section 10.12 or Section 10.14, or change the coin or currency in which the
principal of any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof;
(b) amend, change or modify the obligation of the Company to make and
consummate an Offer with respect to any Asset Sale or Asset Sales in accordance
with Section 10.12 or the obligation of the Company to make and consummate a
Change of Control Offer in the event of a Change of Control in accordance with
Section 10.14,
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including, in each case, amending, changing or modifying any definitions
relating thereto so as to amend, change or modify any such obligation;
(c) reduce the percentage in principal amount of the Outstanding
Notes, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver or
compliance with certain provisions of this Indenture;
(d) modify any of the provisions of this Section 9.02 or Section 5.13
or 10.21, except to increase the percentage of such Outstanding Notes required
for any such actions or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
such Note affected thereby;
(e) except as otherwise permitted under Article VIII, consent to the
assignment or transfer by the Company or any Guarantor of any of its rights and
obligations hereunder; or
(f) amend or modify any of the provisions of this Indenture in any
manner which subordinates the Notes issued hereunder in right of payment to any
other Indebtedness of the Company or which subordinates any Guarantee in right
of payment to any other Indebtedness of the Guarantor issuing such Guarantee.
Upon the written request of the Company and each Guarantor, if any,
accompanied by a copy of Board Resolutions authorizing the execution of any such
supplemental indenture or Guarantee, and upon the filing with the Trustee of
evidence of the consent of Holders as aforesaid, the Trustee shall join with the
Company and each Guarantor in the execution of such supplemental indenture or
Guarantee.
It shall not be necessary for any act of Holders under this Section
9.02 to approve the particular form of any proposed supplemental indenture or
Guarantee or agreement or instrument relating to any Guarantee, but it shall be
sufficient if such act shall approve the substance thereof.
Section 9.03. Execution of Supplemental Indentures and Agreements.
---------------------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article IX or the modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Trust Indenture Act
Sections 315(a) through 315(d) and Section 6.03 hereof) shall be fully protected
in relying upon, an Opinion of Counsel and an Officers' Certificate stating that
the execution of such supplemental indenture, agreement or instrument is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any
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such supplemental indenture, agreement or instrument which affects the Trustee's
own rights, duties or immunities under this Indenture, any Guarantee or
otherwise.
Section 9.04. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
Section 9.05. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.06. Reference in Notes to Supplemental Indentures.
---------------------------------------------
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the Board
of Directors, to any such supplemental indenture may be prepared and executed by
the Company and each Guarantor and authenticated and delivered by.
Section 9.07. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company, any Guarantor and the
Trustee of any supplemental indenture pursuant to the provisions of Section
9.02, the Company shall give notice thereof to the Holders of each Outstanding
Note affected, in the manner provided for in Section 1.06, setting forth in
general terms the substance of such supplemental indenture. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
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ARTICLE X
Covenants
Section 10.01. Payment of Principal, Interest and Indenture
--------------------------------------------
Obligations.
- -----------
The Company shall duly and punctually pay the principal of, interest
on and other Indenture Obligations, if any, on the Notes in accordance with the
terms of the Notes and this Indenture.
Section 10.02. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain an office or agency where Notes may be
presented or surrendered for payment in accordance with the terms and conditions
set forth in Section 2.03 hereof. The Company will give prompt written notice to
the Trustee of the location and any change in the location of any such offices
or agencies. If at any time the Company shall fail to maintain any such required
offices or agencies or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the office of the Trustee and the Company hereby appoints the Trustee
such agent as its agent to receive all such presentations, surrenders, notices
and demands.
The Company may from time to time designate one or more other offices
or agencies (in or outside of The City of New York and Luxembourg) where the
Notes may be presented or surrendered for any or all such purposes, and may from
time to time rescind such designation. The Company will give prompt written
notice to the Trustee of any such designation or rescission and any change in
the location of any such office or agency.
Section 10.03. Money for Note Payments to Be Held in Trust.
-------------------------------------------
The Company will, on or before each due date of the principal of,
interest or other Indenture Obligations on any of the Notes, deposit with a
Paying Agent a sum in same day funds sufficient to pay the principal, interest
or other Indenture Obligations so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal or interest, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of such action or any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
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(a) hold all sums held by it for the payment of the principal of or
interest on the Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided;
(b) give the Trustee notice of any Default by the Company or any
Guarantor (or any other obligor upon the Notes) in the making of any payment of
principal, or interest on the Notes;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Note and remaining unclaimed for two years after such principal or interest has
become due and payable shall promptly be paid to the Company on Company Request,
net of any amounts due the Trustee or such Paying Agent, as the case may be, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times, The Wall Street Journal (national edition) and a leading daily newspaper
with general circulation in Luxembourg (initially expected to be the
Luxembourger Wort) (or, if Notes are not listed on the Luxembourg Stock Exchange
and it is not practicable to so publish, in a leading daily English language
newspaper having general circulation in Europe previously approved by the
Trustee), and mail to each such Holder, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such
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notification, publication and mailing, any unclaimed balance of such money then
remaining will promptly be repaid to the Company.
Section 10.04. Corporate Existence.
-------------------
Subject to Article VIII, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and related rights and franchises (charter and statutory) of the
Company and each Subsidiary; provided, however, that the Company shall not be
required to preserve any such right or franchise or the corporate existence of
any such Subsidiary if the Board of Directors of the Company shall determine
that the preservation thereof is no longer necessary or desirable in the conduct
of the business of the Company and its Subsidiaries as a whole; and provided,
further, however, that the foregoing shall not prohibit a sale, transfer or
conveyance of a Subsidiary or any of the assets of the Company or any Subsidiary
not in violation of the terms of this Indenture.
Section 10.05. Payment of Taxes and Other Claims.
----------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
on or before the date the same shall become due and payable, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
of its Subsidiaries shown to be due on any return of the Company or any of its
Subsidiaries or otherwise assessed or upon the income, profits or property of
the Company or any of its Subsidiaries if failure to pay or discharge the same
could reasonably be expected to have a material adverse effect on the ability of
the Company or any Guarantor to perform its obligations hereunder and (b) all
lawful claims for labor, materials and supplies, which, if unpaid, would by law
become a Lien upon the property of the Company or any of its Subsidiaries,
except for any Lien permitted to be incurred under Section 10.11, if failure to
pay or discharge the same could reasonably be expected to have a material
adverse effect on the ability of the Company or any Guarantor to perform its
obligations hereunder; provided, however, that the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings properly instituted and diligently
conducted and in respect of which appropriate reserves (in the good faith
judgment of management of the Company) are being maintained in accordance with
GAAP.
Section 10.06. Maintenance of Properties.
-------------------------
The Company shall cause all material properties owned by the Company
or any of its Subsidiaries or used or held for use in the conduct of its
business or the business of any of its Subsidiaries to be maintained and kept in
good condition, repair and working order (ordinary wear and tear excepted) and
supplied with all necessary equipment and will
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cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the reasonable judgment of the Company may be
consistent with sound business practice and necessary so that the business
carried on in connection therewith may be properly conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the maintenance of any of such properties if such discontinuance
is, in the reasonable judgment of the Company, desirable in the conduct of its
business or the business of any of its Subsidiaries; and provided, further,
however, that the foregoing shall not prohibit a sale, transfer or conveyance of
a Subsidiary or any of its properties or assets in compliance with the terms of
this Indenture.
Section 10.07. Maintenance of Insurance.
------------------------
The Company shall at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company in good faith to be financially sound and responsible, against loss
or damage to the extent that property of similar character is usually so insured
by corporations similarly situated and owning like properties in the same
general geographic areas in which the Company and its Subsidiaries operate,
except where the failure to do so could not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), earnings,
business affairs or prospects of the Company and its Subsidiaries, taken as a
whole.
Section 10.08. Limitation on Indebtedness.
--------------------------
(a) The Company shall not, and shall not cause or permit any
Subsidiary to, directly or indirectly, Incur any Indebtedness (other than the
Notes); provided, however, that the Company may Incur Indebtedness, and the
Company or any Subsidiary may Incur Acquired Indebtedness, if, at the time of
such Incurrence, the Debt to Annualized Operating Cash Flow Ratio would be less
than or equal to 6.0 to 1.0 prior to April 1, 2001, or less than or equal to 5.5
to 1.0 on or after April 1, 2001.
(b) The foregoing limitations of paragraph (a) of this Section 10.08
will not apply to any of the following (collectively, "Permitted Indebtedness"),
each of which shall be given independent effect:
(i) the Incurrence by the Company or any of its Subsidiaries
of Indebtedness incurred for the purpose of financing all or any part of the (A)
purchase price, cost of design, development, acquisition, construction or
improvement of real or personal property (including, without limitation,
indefeasible rights of use or similar rights), tangible or intangible, used or
to be used in connection with the Telecommunications Business, provided that
such Indebtedness (exclusive of the interest portion thereof and reasonable
costs of financing) does not exceed the lesser of Fair Market Value or the
purchase price and related costs of design, development, acquisition,
construction or improvement of such assets
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or property at the time of such Incurrence or (B) purchase price or acquisition
of Capital Stock of a Person engaged in the Telecommunications Business;
(ii) the Incurrence by the Company or any of its Subsidiaries
of any Indebtedness, and any refinancings (as defined below) of such
Indebtedness, so long as the aggregate principal amount of such Indebtedness
shall not exceed $100 million at any one time outstanding;
(iii) the Incurrence by the Company of Indebtedness in an
aggregate principal amount not to exceed two (2.0) times the sum of the Net Cash
Proceeds received by the Company after April 13, 1998 in connection with any
Public Equity Offerings or sale of Capital Stock to any Strategic Investor
(other than from the issuance of Disqualified Stock in any case) but only to the
extent that such Net Cash Proceeds have not been used pursuant to clause (a)(3)
or (b)(vii) of Section 10.09; provided that such Indebtedness does not mature
prior to the Stated Maturity of the Notes or has an Average Life to Stated
Maturity at least equal to the Notes;
(iv) the Incurrence by the Company or any Subsidiary of any
Indebtedness entered into in the ordinary course of business (a) pursuant to
Interest Rate Agreements entered into to protect the Company or any Subsidiary
against fluctuations in interest rates in respect of Indebtedness of the Company
or any Subsidiary as long as the notional principal amount of such Interest Rate
Agreements does not exceed the aggregate principal amount of such Indebtedness
then outstanding, (b) under any Currency Hedging Arrangements entered into to
protect the Company or any Subsidiary against fluctuations in the value of any
currency or (c) under any Commodity Price Protection Agreements entered into to
protect the Company or any Subsidiary against fluctuations in the price of any
commodity;
(v) the Incurrence by the Company or any of its Subsidiaries
of Indebtedness in respect of bid, performance or advance payment bonds, standby
letters of credit and appeal or surety bonds entered into in the ordinary course
of business and not in connection with the borrowing of money;
(vi) Indebtedness outstanding under the Notes or the Indenture
(or Guarantees of the Notes issued under the Indenture) or other Indebtedness
existing on the date of this Indenture (other than Indebtedness incurred
pursuant to clause (viii) below);
(vii) the Incurrence of (a) Indebtedness of any Subsidiary owed
to and held by the Company or another Subsidiary and (b) Indebtedness of the
Company owed to and held by any Subsidiary or represented by a guarantee of
Indebtedness of any Subsidiary which such Subsidiary is otherwise permitted to
Incur under the Indenture; provided that upon either (i) the transfer or other
disposition by a Subsidiary or the Company
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of any Indebtedness so permitted to a Person other than the Company or a
Subsidiary or (ii) the issuance, sale, transfer or other disposition of Capital
Stock (including by amalgamation, consolidation or merger) of a Subsidiary (such
that upon such sale, transfer or other disposition such Subsidiary would no
longer meet the definition of a Subsidiary) to a Person other than the Company
or a Subsidiary, the provisions of this clause (vii) shall no longer be
applicable to such Indebtedness and such Indebtedness shall be deemed to have
been Incurred at the time of such issue, sale, transfer or other disposition;
(viii) Indebtedness incurred by the Company or any Subsidiary
under a Permitted Credit Facility or Debt Securities, provided that the
aggregate principal amount at any time outstanding under this clause (viii)
(including any amounts pursuant to this clause (viii) that may be, or have been,
refinanced pursuant to this or any other clause or provision) does not exceed
$350 million; and
(ix) any amendments, supplements, modifications, deferrals,
renewals, extensions, substitutions, refundings, refinancings or replacements
(collectively, a "refinancing") of any Indebtedness described in clauses (i),
(ii), (iii), (vi), (vii) and (viii) above, and this clause (ix), including any
successive refinancings so long as the borrower under such refinancing is the
Company or, if not the Company, the same as the borrower (or its successor) of
the Indebtedness being refinanced and the aggregate principal amount of
Indebtedness and accrued interest represented thereby (or the accreted value
thereof as of the date of refinancing) is not increased by such refinancing plus
the lesser of (I) the stated amount of any premium or other payment required to
be paid in connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced or (II) the amount of premium or other payment
actually paid at such time to refinance the Indebtedness, plus, in either case,
the amount of expenses of the Company or such borrower incurred in connection
with such refinancing and, in the case of any refinancing of Indebtedness that
is Subordinated Indebtedness, such new Indebtedness is made subordinated to the
Notes at least to the same extent as the Indebtedness being refinanced and such
refinancing does not reduce the Average Life to Stated Maturity or the Stated
Maturity of such Subordinated Indebtedness.
(c) For purposes of determining any particular amount of Indebtedness
under this covenant, Guarantees, Liens or obligations with respect to letters of
credit supporting Indebtedness otherwise included in the determination of such
particular amount shall not be included; provided, however, that the foregoing
shall not in any way be deemed to limit the provisions of Section 10.13.
(d) For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness may be Incurred through the first paragraph
of this covenant or by meeting the criteria of one or more of the types of
Indebtedness described in the second paragraph of this covenant (or the
definitions of the terms used therein), the Company, in its sole discretion, (i)
may classify such item of Indebtedness under and comply
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with either of such paragraphs (or any of such definitions), as applicable, (ii)
may classify and divide such item of Indebtedness into more than one of such
paragraphs (or definitions), as applicable, and (iii) may elect to comply with
such paragraphs (or definitions), as applicable, in any order.
Section 10.09. Limitation on Restricted Payments.
---------------------------------
(a) The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly:
(i) declare or pay any dividend on, or make any distribution
on any shares of the Company's Capital Stock (other than dividends or
distributions payable solely in shares of its Qualified Capital Stock or in
options, warrants or other rights to acquire shares of such Qualified Capital
Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, the Company's Capital Stock or any Capital Stock of any
Affiliate of the Company (other than Capital Stock of any Wholly-Owned
Subsidiary of the Company) or options, warrants or other rights to acquire such
Capital Stock;
(iii) make any principal payment on, or repurchase, redeem,
defease, retire or otherwise acquire for value, prior to any scheduled principal
payment, sinking fund payment or maturity, any Subordinated Indebtedness;
(iv) declare or pay any dividend or distribution on any Capital
Stock of any Subsidiary to any Person (other than (a) to the Company or any of
its Wholly-Owned Subsidiaries or (b) to all holders of any class, series or the
same type of Capital Stock of such Subsidiary on a pro rata basis; provided that
in the case of this clause (b) such dividend or distribution shall not
constitute Indebtedness or Disqualified Stock);
(v) make any Investment in any Person (other than any
Permitted Investments) (any of the foregoing actions described in clauses (i)
through (v), other than any such action that is a Permitted Payment (as defined
below), collectively, "Restricted Payments") (the amount of any such Restricted
Payment, if other than cash, as determined, in good faith, by the Board of
Directors of the Company, whose determination shall be conclusive and evidenced
by a board resolution),
unless (1) immediately before and immediately after giving effect to such
- ------
proposed Restricted Payment on a pro forma basis, no Default or Event of Default
shall have occurred and be continuing; (2) immediately before and immediately
after giving effect to such Restricted Payment on a pro forma basis, the Company
could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness)
under the provisions described in Section
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10.08(a); and (3) after giving effect to the proposed Restricted Payment, the
aggregate amount of all such Restricted Payments declared or made after April
13, 1998, does not exceed the sum of the following:
(A) (i) the Cumulative Operating Cash Flow determined at
the time of such Restricted Payment less (ii) 150% of cumulative Consolidated
Interest Expense determined for the period (treated as one accounting period)
commencing on April 13, 1998 and ending on the last day of the most recent
fiscal quarter immediately preceding the date of such Restricted Payment for
which consolidated financial information of the Company is required to be
available;
(B) the aggregate Net Cash Proceeds received after April
13, 1998 by the Company from the issuance or sale (other than to any of its
Subsidiaries) of Qualified Capital Stock of the Company or any options, warrants
or rights to purchase such Qualified Capital Stock of the Company (except to the
extent such proceeds are used to purchase, redeem or otherwise retire Capital
Stock or Subordinated Indebtedness as set forth below in clause (ii) or (iii) of
paragraph (b) below);
(C) the aggregate Net Cash Proceeds received after April
13, 1998 by the Company (other than from any of its Subsidiaries) upon the
exercise of any options, warrants or rights to purchase Qualified Capital Stock
of the Company;
(D) the aggregate Net Cash Proceeds received after April
13, 1998 by the Company from the conversion or exchange, if any, of debt
securities or Redeemable Capital Stock of the Company or its Subsidiaries into
or for Qualified Capital Stock of the Company plus, to the extent such debt
securities or Redeemable Capital Stock were issued after April 13, 1998, the
aggregate of Net Cash Proceeds from their original issuance; and
(E) in the case of the disposition or repayment of any
Investment constituting a Restricted Payment, an amount equal to the lesser of
(x) the cash return of capital with respect to such Investment (less the cost of
disposition and taxes, if any) and (y) the initial amount of such Investment.
(b) Notwithstanding the foregoing, and in the case of clauses (ii)
through (vi) below, so long as there is no Default or Event of Default
continuing, the foregoing provisions shall not prohibit the following actions
(each of clauses (i) through (x) being referred to as a "Permitted Payment"):
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at such date of declaration such payment was
permitted by the
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provisions of paragraph (a) of this Section and such payment shall have been
deemed to have been paid on such date of declaration;
(ii) the repurchase, redemption, or other acquisition or
retirement for value of any shares of any class of Capital Stock of the Company
in exchange for (including any such exchange pursuant to the exercise of a
conversion right or privilege in connection with which cash is paid in lieu of
the issuance of fractional shares or scrip), or out of the Net Cash Proceeds of
a substantially concurrent issuance and sale for cash (other than to a
Subsidiary) of, other shares of Qualified Capital Stock of the Company; provided
that the Net Cash Proceeds from the issuance of such shares of Qualified Capital
Stock are excluded from clause (3)(B) of paragraph (a) of this Section 10.09;
(iii) the repurchase, redemption, defeasance, retirement or
acquisition for value or payment of principal of any Subordinated Indebtedness
or Redeemable Capital Stock in exchange for, or in an amount not in excess of
the Net Cash Proceeds of, a substantially concurrent issuance and sale for cash
(other than to any Subsidiary of the Company) of any Qualified Capital Stock of
the Company, provided that the Net Cash Proceeds from the issuance of such
shares of Qualified Capital Stock are excluded from clause (3)(B) of paragraph
(a) of this Section 10.09;
(iv) the repurchase, redemption, defeasance, retirement,
refinancing, acquisition for value or payment of principal of any Subordinated
Indebtedness (other than Redeemable Capital Stock) through the substantially
concurrent issuance of new Subordinated Indebtedness of the Company, provided
that any such new Subordinated Indebtedness (1) shall be in a principal amount
that does not exceed the principal amount and accrued interest thereon so
refinanced or the accreted value thereof as of the date of refinancing (or, if
such Subordinated Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of acceleration thereof,
then such lesser amount as of the date of determination), plus the lesser of (I)
the stated amount of any premium or other payment required to be paid in
connection with such a refinancing pursuant to the terms of the Indebtedness
being refinanced or (II) the amount of premium or other payment actually paid at
such time to refinance the Indebtedness, plus, in either case, the amount of
expenses of the Company incurred in connection with such refinancing; (2) has an
Average Life to Stated Maturity greater than the remaining Average Life to
Stated Maturity of the Notes; (3) has a Stated Maturity for its final scheduled
principal payment later than the Stated Maturity for the final scheduled
principal payment of the Notes; and (4) is expressly subordinated in right of
payment to the Notes at least to the same extent as the Subordinated
Indebtedness to be refinanced;
(v) the repurchase, redemption, defeasance, retirement,
refinancing, acquisition for value or payment of any Redeemable Capital Stock
through the substantially concurrent issuance of new Redeemable Capital Stock of
the Company,
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provided, that any such new Redeemable Capital Stock (1) shall have an aggregate
liquidation preference that does not exceed the aggregate liquidation preference
of the amount so refinanced; (2) has an Average Life to Stated Maturity greater
than the remaining Average Life to Stated Maturity of the Notes; and (3) has a
Stated Maturity later than the Stated Maturity for the final scheduled principal
payment of the Notes;
(vi) the repurchase of shares of, or options to purchase shares
of, common stock of the Company or any of its Subsidiaries from employees,
officers, consultants or directors or any former employees, officers,
consultants or directors of the Company or any of its Subsidiaries (or permitted
transferees of such employees, officers, consultants or directors or former
employees, officers, consultants or directors), pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments thereto) or
other arrangements or transactions approved by the Board of Directors under
which such individuals purchase or sell or are granted the option to purchase or
sell, shares of such common stock; provided, however, that the aggregate amount
of such repurchases in any calendar year shall not exceed $1 million and $3
million in the aggregate pursuant to this clause (vi);
(vii) Investments in any Person engaged principally in the
Telecommunications Business on the date of such Investments; provided that the
aggregate amount of any such Investments made pursuant to this clause (vii) does
not exceed the sum of (A) the amount of the Net Cash Proceeds received by the
Company after April 13, 1998 as a capital contribution or from the sale of its
Capital Stock (other than Disqualified Stock) to a Person who is not a
Subsidiary of the Company, except to the extent that such Net Cash Proceeds are
used to Incur Indebtedness pursuant to Section 10.08(b)(iii) or to make
Restricted Payments pursuant to Section 10.09(a)(3), or Section 10.09(b) (ii),
(iii) or (iv) plus (B) the net reduction in Investments made pursuant to this
clause (vii) resulting from distributions on or repayments of such Investments
or from the Net Cash Proceeds from the sale of any such Investments (except in
each case to the extent any such payments or proceeds are included in the
calculation of Consolidated Net Income) or from such Person becoming a Wholly-
Owned Subsidiary (valued in each case as provided in the definition of
"Permitted Investments");
(viii) the payment or declaration of any dividend or the making
of any distribution on or the redemption of rights or any securities issued
pursuant to the Company Rights Agreement;
(ix) the payment of cash in lieu of the issuance of fractional
shares pursuant to any agreement, warrant or option and any repurchase or other
acquisition of fractional shares from time to time; and
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(x) the acquisition of Capital Stock of the Company by the
Company in connection with the cashless exercise of any options, warrants or
similar rights issued by the Company on or prior to January 1, 1998.
In determining the amount of Restricted Payments permissible under
this covenant, amounts expended pursuant to clauses (i), (vi), (vii), (viii),
and (ix) shall be included, without duplication, as Restricted Payments and
shall not be deemed a Permitted Payment for purposes of the calculation required
by paragraph (a) of this Section 10.09.
Section 10.10. Limitation on Transactions with Affiliates.
------------------------------------------
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into any transaction or series of related
transactions (including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with or for the benefit of any Affiliate
of the Company (other than the Company or a Wholly-Owned Subsidiary) unless such
transaction or series of related transactions is entered into in good faith and
in writing and (a) such transaction or series of related transactions is on
terms that are no less favorable to the Company or such Subsidiary, as the case
may be, than those that would be reasonably expected to be available in a
comparable transaction in arm's-length dealings with an unrelated third party,
(b) with respect to any transaction or series of related transactions involving
aggregate value in excess of $5 million, the Company delivers an Officers'
Certificate to the Trustee certifying that such transaction or series of related
transactions complies with clause (a) above, and (c) with respect to any
transaction or series of related transactions involving aggregate value in
excess of $10 million, either (A) such transaction or series of related
transactions has been approved by a majority of the Disinterested Directors of
the Company, or in the event there is only one Disinterested Director, by such
Disinterested Director, or (B) the Company delivers to the Trustee a written
opinion of an investment banking firm of national standing or other recognized
independent expert with experience appraising the terms and conditions of the
type of transaction or series of related transactions for which an opinion is
required stating that the transactions or series of related transactions is fair
to the Company or such Subsidiary from a financial point of view; provided,
however, that this covenant shall not apply to: (a) compensation, severance and
employee benefit arrangements with any officer, director or employee of the
Company, including under any stock option or stock incentive plans, in the
ordinary course of business; (b) any transaction solely between or among the
Company and/or any Subsidiaries, if such transaction otherwise does not violate
the terms of the Indenture; (c) any transaction otherwise permitted by Section
10.09; (d) the execution and delivery of or payments made under any tax sharing
agreement between or among any of the Company and any Subsidiary; (e) licensing
or sublicensing of use of any intellectual property by the Company or any
Subsidiary to the Company any other Subsidiary of the Company or to any
Permitted Joint Venture; provided that the licensor shall continue to have
access to such intellectual property to the extent necessary for the conduct of
its business and, in the case of any Permitted Joint
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Venture, that the terms of any such arrangement are fair and reasonable to the
Company or any such Subsidiary as determined in good faith by the Board of
Directors; (f) arrangements between the Company and any Subsidiary of the
Company for the purpose of providing services or employees to such Subsidiary;
and (g) transactions undertaken pursuant to the IXC Agreement and other
agreements entered into in connection therewith and in effect on or after April
13, 1998 (or as such other agreements may be amended, from time to time, to the
extent that any such amendment has been determined by the Board of Directors, in
good faith, not to adversely affect the holders of the Notes).
Section 10.11. Limitation on Liens.
-------------------
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, create, incur or affirm any Lien of any kind upon any
property or assets (including any intercompany notes) of the Company or any
Subsidiary owned on April 13, 1998, or acquired after April 13, 1998, or any
income or profits therefrom, unless the Notes are directly secured equally and
ratably with (or, in the case of Subordinated Indebtedness, prior or senior
thereto, with the same relative priority as the Notes shall have with respect to
such Subordinated Indebtedness) the obligation or liability secured by such Lien
except for any Permitted Liens.
Section 10.12. Limitation on Sale of Assets.
----------------------------
(a) The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, consummate an Asset Sale unless (i) at least 75% of
the consideration from such Asset Sale is received in cash or other comparable
consideration (as described below), and (ii) the Company or such Subsidiary
receives consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the shares or assets subject to such Asset Sale (as determined
by the Board of Directors of the Company and evidenced in a Board Resolution).
The following types of consideration shall be deemed "comparable consideration"
for the purposes of this covenant: (A) Cash Equivalents, (B) liabilities
(contingent or otherwise) of the Company or a Subsidiary assumed by the
transferee (or its designee) such that the Company or such Subsidiary has no
further liability therefor, and (C) any securities, notes or other obligations
received by the Company or any such Subsidiary from such transferee that within
60 days after receipt, are converted by the Company or such Subsidiary into
cash.
(b) The Company or a Subsidiary may, within 365 days of the Asset
Sale, invest the Net Cash Proceeds thereof in Telecommunications Assets or to
repay any Pari Passu Indebtedness of the Company or any Subsidiary (including
the repurchase of Notes). The amount of such Net Cash Proceeds not used or
invested within 365 days of the Asset Sale as set forth in this paragraph
constitutes "Excess Proceeds."
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(c) When the aggregate amount of Excess Proceeds exceeds $10 million,
the Company will apply the Excess Proceeds to the repayment of the Notes and any
other Pari Passu Indebtedness outstanding with similar provisions requiring the
Company to make an offer to purchase such Indebtedness with the proceeds from
any Asset Sale as follows: (A) the Company will make an offer to purchase (an
"Offer") from all Holders, on a pro rata basis, the maximum principal amount
(expressed as a multiple of $1,000 or Euro 1,000, as applicable) of Notes, in
each case determined as of the second Business Day preceding the making of such
offer, that may be purchased out of an amount (the "Note Amount") equal to the
product of such Excess Proceeds multiplied by a fraction, the numerator of which
is the outstanding principal amount of the Notes, and the denominator of which
is the sum of the outstanding principal amount of the Notes and such Pari Passu
Indebtedness (subject to proration in the event such amount is less than the
aggregate Offered Price (as defined herein) of all Notes tendered) and (B) to
the extent required by such Pari Passu Indebtedness to permanently reduce the
principal amount of such Pari Passu Indebtedness, the Company will make an offer
to purchase or otherwise repurchase or redeem Pari Passu Indebtedness (a "Pari
Passu Offer") in an amount (the "Pari Passu Debt Amount") equal to the excess of
the Excess Proceeds over the Note Amount; provided that in no event will the
Company be required to make a Pari Passu Offer in a Pari Passu Debt Amount
exceeding the principal amount of such Pari Passu Indebtedness plus the amount
of any premium required to be paid to repurchase such Pari Passu Indebtedness.
The offer price for the Notes will be payable in cash in an amount equal to 100%
of the principal amount of the Notes plus accrued and unpaid interest, if any,
to the date (the "Offer Date") such Offer is consummated (the "Offered Price"),
in accordance with the procedures set forth herein. To the extent that the
aggregate Offered Price of the Notes tendered pursuant to the Offer is less than
the Note Amount relating thereto or the aggregate amount of Pari Passu
Indebtedness that is purchased in a Pari Passu Offer is less than the Pari Passu
Debt Amount, the Company will use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes and Pari Passu
Indebtedness surrendered by holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes to be purchased on a pro rata
basis. Upon the completion of the purchase of all the Notes tendered pursuant to
an Offer and the completion of a Pari Passu Offer, the amount of Excess
Proceeds, if any, shall be reset at zero.
(d) If the Company becomes obligated to make an Offer pursuant to
clause (c) above, the Notes and the Pari Passu Indebtedness shall be purchased
by the Company, at the option of the holders thereof, in whole or in part in
integral multiples of Euro 1,000 or $1,000, as applicable, on a date that is not
earlier than 30 days and not later than 60 days from the date the notice of the
Offer is given to holders, or such later date as may be necessary for the
Company to comply with the requirements under the Exchange Act.
(e) The Company will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or
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regulations in connection with an Offer, including those regulations that may be
imposed by any securities exchange on which the Notes may then be listed for
trading.
Section 10.13. Limitation on Issuances of Guarantees of Indebtedness.
-----------------------------------------------------
(a) The Company will not permit any Subsidiary, directly or
indirectly, to guarantee, assume or in any other manner become liable with
respect to any Pari Passu Indebtedness or Subordinated Indebtedness of the
Company unless such Subsidiary simultaneously executes and delivers a
supplemental indenture to this Indenture providing for a Guarantee of the Notes
on the same terms as the guarantee of such Indebtedness except that (A) such
guarantee need not be secured unless required pursuant to Section 10.11 and (B)
if such Indebtedness is by its terms expressly subordinated to the Notes, any
such assumption, guarantee or other liability of such Subsidiary with respect to
such Indebtedness shall be subordinated to such Subsidiary's Guarantee of the
Notes at least to the same extent as such Indebtedness is subordinated to the
Notes; provided that this paragraph shall not apply to any guarantee or
assumption of liability of Indebtedness permitted under clauses (i), (ii), (iv),
(v), (vii) and (viii) of subsection (b) of Section 10.08.
(b) Notwithstanding the foregoing, any Guarantee by a Subsidiary of
the Notes shall provide by its terms that it (and all Liens securing the same)
shall be automatically and unconditionally released and discharged upon any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company's Capital Stock in, or all or substantially all the assets
of, such Subsidiary, which transaction is in compliance with the terms of this
Indenture and pursuant to which transaction such Subsidiary is released from all
guarantees, if any, by it of other Indebtedness of the Company or any
Subsidiaries.
Section 10.14. Purchase of Notes upon a Change of Control.
------------------------------------------
(a) If a Change of Control shall occur at any time, then each Holder
shall have the right to require that the Company purchase all such Holder's
Notes in whole or in part in integral multiples of $1,000 or Euro 1,000, as the
case may be, at a purchase price (the "Change of Control Purchase Price") in
relevant currencies in cash, in an amount equal to 101% of the principal amount
of such Notes or portion thereof, plus accrued and unpaid interest, if any, to
the date of purchase (the "Change of Control Purchase Date"), pursuant to the
offer described below in this Section 10.14 (the "Change of Control Offer") and
in accordance with the other procedures set forth in subsections (b), (c), (d)
and (e) of this Section 10.14.
(b) Within 30 days of any Change of Control, the Company shall notify
the Trustee thereof and give notice (a "Change of Control Purchase Notice") of
such Change
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of Control to each Holder, determined as of the second Business Day preceding
the date of such notice stating among other things:
(1) that a Change of Control has occurred, the date of such
event, and that such Holder has the right to require the Company to repurchase
such Holder's Notes at the Change of Control Purchase Price;
(2) the circumstances and relevant facts regarding such Change
of Control;
(3) that the Change of Control Offer is being made pursuant to
this Section 10.14 and that all Notes properly tendered pursuant to the Change
of Control Offer will be accepted for payment at the Change of Control Purchase
Price;
(4) the Change of Control Purchase Date, which shall be a
Business Day no earlier than 30 days and not later than 60 days from the date
such notice is mailed, or such later date as is necessary to comply with
requirements under the Exchange Act or any securities exchange on which the
Notes are listed for trading;
(5) the Change of Control Purchase Price;
(6) the names and addresses of the relevant Paying Agents and
the offices or agencies referred to in Section 2.03;
(7) that Notes must be surrendered on or prior to the Change of
Control Purchase Date to the relevant Paying Agent at the office of such Paying
Agent or to an office or agency referred to in Section 2.03 to collect payment;
(8) that the Change of Control Purchase Price for any Note which
has been properly tendered and not withdrawn will be paid promptly following the
Change of Control Offer Purchase Date;
(9) the procedures that a Holder must follow to accept a Change
of Control Offer or to withdraw such acceptance;
(10) that any Note not tendered will continue to accrue interest;
and
(11) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date.
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(c) Upon receipt by the Company of the proper tender of Notes, the
Holder of the Note in respect of which such proper tender was made shall (unless
the tender of such Note is properly withdrawn) thereafter be entitled to receive
solely the Change of Control Purchase Price with respect to such Note. Upon
surrender of any such Note for purchase in accordance with the foregoing
provisions, such Note shall be paid by the Company at the Change of Control
Purchase Price; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Change of Control Purchase Date shall be payable
to the Holders of such Notes, or one or more Predecessor Notes, registered as
such on the relevant Regular Record Dates according to the terms and the
provisions of Section 2.13. If any Note tendered for purchase in accordance with
the provisions of this Section 10.14 shall not be so paid upon surrender
thereof, the principal thereof shall, until paid, bear interest from the Change
of Control Purchase Date at the rate borne by such Note. Holders electing to
have Notes purchased will be required to surrender such Notes to the relevant
Paying Agent at the address specified in the Change of Control Purchase Notice
prior to 5:00 p.m. (New York time) at least one Business Day prior to the Change
of Control Purchase Date. Any Note that is to be purchased only in part shall be
surrendered to the relevant Paying Agent at the office of such Paying Agent
(with, if the Company, the Registrar or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Registrar or the Trustee, as the case may be, duly executed by the Holder
thereof or such Holder's attorney duly authorized in writing), and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note, without service charge to the Holder, one or more new Notes,
denominated in the same currency as such Note, of any authorized denomination as
requested by such Holder in an aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Note so surrendered
that is not purchased.
(d) The Company shall (i) not later than the Change of Control
Purchase Date, accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer, (ii) not later than 12:00 a.m. (New York time) on
the Change of Control Purchase Date, deposit with the Trustee or with a Paying
Agent an amount of money in same day funds (or next day funds for value on or
prior to the Change of Control Purchase Date) sufficient to pay the aggregate
Change of Control Purchase Price of all the Notes or portions thereof which are
to be purchased as of the Change of Control Purchase Date and (iii) not later
than 12:00 a.m. (New York time) on the Change of Control Purchase Date, deliver
to the Paying Agents an Officers' Certificate stating the aggregate principal
amount of Notes or portions thereof being purchased by the Company. The Paying
Agents shall promptly mail or deliver to Holders of Notes so accepted payment in
an amount equal to the Change of Control Purchase Price of the Notes purchased
from each such Holder, and the Company shall execute and the Trustee shall
promptly authenticate and mail or deliver to such Holders a new Note equal in
principal amount to any unpurchased portion of the Note surrendered. Any Notes
not so accepted shall be promptly mailed or delivered by the Paying Agents at
the
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Company's expense to the Holder thereof. The Company will publicly announce the
results of the Change of Control Offer on the Change of Control Purchase Date.
(e) A tender made in response to a Change of Control Purchase Notice
may be withdrawn if the Company or its agent receives, not later than 5:00 p.m.
(New York time) one Business Day prior to the Change of Control Purchase Date, a
signed letter, delivered to the address specified in the change of Control
Purchase Notice specifying, as applicable:
(1) the name of the Holder;
(2) the certificate number of the Note in respect of which
such notice of withdrawal is being submitted;
(3) the principal amount of the Note (which shall be $1,000
or Euro 1,000, as applicable, or integral multiples thereof) delivered for
purchase by the Holder as to which such notice of withdrawal is being submitted;
(4) a statement that such Holder is withdrawing his
election to have such principal amount of such Note purchased; and
(5) the principal amount, if any, of such Note (which shall
be $1,000 or Euro 1,000, as applicable, or an integral multiple thereof) that
remains subject to the original Change of Control Purchase Notice and that has
been or will be delivered for purchase by the Company.
(f) Subject to applicable escheat laws, the Trustee and the Paying
Agents shall return to the Company any cash that remains unclaimed, together
with interest or dividends, if any, thereon, held by them for the payment of the
Change of Control Purchase Price; provided, however, that, (x) to the extent
that the aggregate amount of cash deposited by the Company pursuant to clause
(ii) of paragraph (d) above exceeds the aggregate Change of Control Purchase
Price of the Notes or portions thereof to be purchased, then the Trustee shall
hold such excess for the Company and (y) unless otherwise directed by the
Company in writing, promptly after the Business Day following the Change of
Control Purchase Date the Trustee shall return any such excess to the Company
together with interest, if any, thereon.
(g) The Company shall comply, to the extent applicable, with the
applicable tender offer rules, including Rule 14e-1 under the Exchange Act, and
any other applicable securities laws or regulations in connection with a Change
of Control Offer, including those regulations that may be imposed by any
securities exchange on which the Notes may then be listed for trading.
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Notwithstanding the foregoing, the Company will not be required to
make a Change of Control Offer if a third party makes the Change of Control
Offer, in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company and purchases all the Notes validly tendered and not
withdrawn under such Change of Control Offer.
Section 10.15. Limitation on Sale-Leaseback Transactions.
-----------------------------------------
(a) The Company will not, and will not permit any Subsidiary of the
Company to, directly or indirectly, enter into any Sale-Leaseback Transaction
with respect to any property or assets (whether now owned or hereafter
acquired), unless (i) the sale or transfer of such property or assets to be
leased is treated as an Asset Sale and complies with the provisions of Section
10.12 and (ii) the Company or such Subsidiary would be entitled under Section
10.08 to incur any Indebtedness (with the lease obligations being treated as
Indebtedness for purposes of ascertaining compliance with this covenant unless
such lease is properly classified as an operating lease under GAAP) in respect
of such Sale-Leaseback Transaction.
(b) The foregoing restriction does not apply to any Sale-Leaseback
Transaction if (i) the lease is for a period, including renewal rights, not in
excess of three years; (ii) the transaction is solely between the Company and
any Wholly Owned Subsidiary or any Wholly-Owned Subsidiary and any other Wholly-
Owned Subsidiary; and (iii) the transaction is consummated within 180 days of
the acquisition by the Company or its Subsidiary of the property or assets
subject to such sale-leaseback or entered into within 180 days after the
purchase or substantial completion of the construction of such property or
assets (or 270 days in the event that the only condition delaying such
consummation is the receipt of applicable regulatory approvals).
Section 10.16. Limitation on Issuance and Sale of Subsidiary Capital
-----------------------------------------------------
Stock.
- -----
The Company will not permit (a) any Subsidiary of the Company to issue
any Capital Stock, except for (i) Capital Stock issued or sold to, held by or
transferred to the Company or a Wholly-Owned Subsidiary, and (ii) Capital Stock
issued by a Person prior to the time (A) such Person becomes a Subsidiary, (B)
such Person merges with or into a Subsidiary or (C) a Subsidiary merges with or
into such Person; provided that such Capital Stock was not issued or incurred by
such Person in anticipation of the type of transaction contemplated by subclause
(A), (B) or (C) (excluding for purposes of this proviso, shares of Capital Stock
issued in connection with customary accelerated vesting provisions contained in
option or similar plans or agreements which are accelerated as a result of a
change of control of such Person and which option or similar plans were not
adopted or implemented solely in anticipation of or in connection with such
transaction) or (b) any Person (other than the Company or a Wholly-Owned
Subsidiary) to acquire Capital Stock of any Subsidiary
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from the Company or any Subsidiary, except, in the case of clause (a) or (b),
(1) upon the acquisition of all the outstanding Capital Stock of such Subsidiary
in accordance with the terms hereof, (2) if, immediately after giving effect to
such issuance or sale, such Subsidiary would no longer constitute a Subsidiary,
and any Investment in such Person remaining after giving effect to such issuance
or sale would have been permitted to be made under the provisions of Section
10.09 if made on the date of such issuance or sale, (3) issuances of director's
qualifying shares, or sales to foreign nationals of shares of Capital Stock of
foreign Subsidiaries, to the extent required by applicable law or to maintain
the limited liability status of such foreign Subsidiaries or (4) issuances or
sales of common stock of a Subsidiary, provided that the Company or such
Subsidiary applies the Net Cash Proceeds, if any, in a manner which does not
violate the provisions of this Indenture to the extent applicable (excluding for
purposes of this proviso, shares of Capital Stock issued in connection with
customary accelerated vesting provisions contained in option or similar plans or
agreements which are accelerated as a result of a change of control of such
Person and which option or similar plans were not adopted or implemented solely
in anticipation of or in connection with such transaction).
Section 10.17. Limitation on Dividends and Other Payment Restrictions
------------------------------------------------------
Affecting Subsidiaries.
- ----------------------
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to (i)
pay dividends or make any other distribution on its Capital Stock, (ii) pay any
Indebtedness owed to the Company or any other Subsidiary, (iii) make any
Investment in the Company or any other Subsidiary or (iv) transfer any of its
properties or assets to the Company or any other Subsidiary, except for:
(a) any encumbrance or restriction, with respect to a Subsidiary that
was not a Subsidiary of the Company on April 13, 1998, in existence at the time
such Person becomes a Subsidiary of the Company and not incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary;
(b) encumbrances or restrictions
(i) by reason of applicable law,
(ii) under this Indenture, or
(iii) in any agreement, instrument or indenture governing or
relating to Indebtedness in respect of any Permitted Credit Facility;
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(c) customary non-assignment provisions of any contract or lease of
any Subsidiary entered into in the ordinary course of business;
(d) encumbrances or restrictions imposed pursuant to Indebtedness or
contracts entered into in connection with Permitted Liens, but solely to the
extent such encumbrances or restrictions affect property or assets subject to
such Permitted Lien;
(e) any encumbrance or restriction imposed pursuant to contracts for
the sale of assets with respect to the assets to be sold pursuant to such
contract; and
(f) any encumbrance or restriction existing under any agreement that
extends, renews, refunds refinances or replaces the agreements containing the
encumbrances or restrictions in the foregoing clauses (a) through (e), or in
this clause (f), provided that the terms and conditions of any such encumbrances
or restrictions are no more restrictive in any material respect than those under
or pursuant to the agreement evidencing the Indebtedness so extended, renewed,
refinanced or replaced.
Section 10.18. Limitations on Unrestricted Subsidiaries.
----------------------------------------
The Company will not make, and will not permit its Subsidiaries to
make, any Investment in Unrestricted Subsidiaries if, at the time thereof, the
aggregate amount of such Investments would exceed the amount of Restricted
Payments then permitted to be made pursuant to Section 10.09. Any Investments
in Unrestricted Subsidiaries permitted to be made pursuant to this covenant will
be treated as a Restricted Payment in calculating the amount of Restricted
Payments made by the Company.
Section 10.19. Provision of Financial Statements.
---------------------------------
The Company will, to the extent permitted under the Exchange Act, file
with the Commission the annual reports, quarterly reports and other documents
which the Company would be required to file with the Commission pursuant to
Sections 13(a) or 15(d) of the Exchange Act if the Company were so subject, such
documents to be filed with the Commission on or prior to the date (the "Required
Filing Date") by which the Company would have been required so to file such
documents if the Company were so subject. The Company will also in any event
(x) within 15 days of each Required Filing Date (i) transmit by mail to all
Holders, as their names and addresses appear in the Register, without cost to
such Holders and (ii) file with the Trustee and the Paying Agents copies (which
shall be available to Holders upon request to any of the Company, the Trustees
or a Paying Agent) of the annual reports, quarterly reports and other documents
which the Company would have been required to file with the Commission pursuant
to Sections 13(a) or 15(d) of the Exchange Act if the Company were subject to
either of such Sections and (y) if filing such documents by the Company with the
Commission is not permitted under the Exchange Act,
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promptly upon written request and payment of the reasonable cost of duplication
and delivery, supply copies of such documents to any prospective Holder at the
Company's cost. If any Guarantor's financial statements would be required to be
included in the financial statements filed or delivered pursuant to this
Indenture if the Company were subject to Section 13(a) or 15(d) of the Exchange
Act, the Company shall include such Guarantor's financial statements in any
filing or delivery pursuant to the Indenture. In addition, so long as any of the
Notes remain outstanding, the Company will make available to any prospective
purchaser of Notes or beneficial owner of Notes in connection with any sale
thereof the information required by Rule 144A(d)(4) under the Securities Act,
until the earlier of such time as the Company has completed its Exchange Offer
or such time as the Holders thereof have disposed of such Notes pursuant to an
effective registration statement under the Securities Act.
Section 10.20. Statement by Officers as to Default.
-----------------------------------
(a) The Company will deliver to the Trustee, on or before a date not
more than 120 days after the end of each fiscal year of the Company ending after
the date hereof, and 60 days after the end of each fiscal quarter ending after
the date hereof, a written statement signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company in
his or her capacity as an officer of the Company, as to compliance herewith,
including whether or not, after a review of the activities of the Company during
such year and of the Company's performance and the performance of each
Guarantor, if any, under this Indenture, to the best knowledge (based on such
review) of the signers thereof, the Company and each Guarantor, if any, have
fulfilled all of their respective obligations and are in compliance with all
conditions and covenants under this Indenture throughout such year and, if there
has been a Default specifying each Default and the nature and status thereof and
any actions being taken by the Company with respect thereto.
(b) When any Default or Event of Default has occurred and is
continuing, or if the Trustee or any Holder or the trustee for or the holder of
any other evidence of Indebtedness of the Company or any Subsidiary gives any
notice or takes any other action with respect to a claimed default, the Company
shall deliver to the Trustee by registered or certified mail or facsimile
transmission followed by an originally executed copy of an Officers' Certificate
specifying such Default, Event of Default, notice or other action, the status
thereof and what actions the Company is taking or proposes to take with respect
thereto, within five Business Days after the occurrence of such Default or Event
of Default.
Section 10.21. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 10.06 through 10.11, 10.12(a),
10.13, 10.15 through 10.20 and 10.22, if, before or after the time for such
compliance, the Holders of not
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less than a majority in aggregate principal amount of the Notes at the time
Outstanding shall, by Act of such Holders, waive such compliance in such
instance with such covenant or provision, but no such waiver shall extend to or
affect such covenant or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such covenant or condition shall remain
in full force and effect.
Section 10.22. Limitation on Business.
----------------------
The Company will not, and will not permit any of the Subsidiaries to,
engage in a business which is not substantially a Telecommunications Business.
ARTICLE XI
Satisfaction and Discharge
Section 11.01. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall be discharged and shall cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Notes as expressly provided for herein) as to all Outstanding Notes hereunder,
and the Trustee, upon Company Request and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(a) either (1) all the Notes theretofore authenticated and
delivered (other than (i) lost, stolen or destroyed Notes which have been
replaced or paid as provided in Section 2.08 or (ii) all Notes whose payment has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust as
provided in Section 10.03) have been delivered to the Trustee for cancellation;
or
(2) all such Notes not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, or (ii) will become
due and payable at their Stated Maturity within one year; and the Company or any
Guarantor has irrevocably deposited or caused to be deposited with the Trustee
as trust funds in trust (A) in the case of the Euro Notes, an amount in Euros or
European Governmental Obligations and (B) in the case of the Dollar Notes, an
amount in United States dollars or United States Government Securities, in each
case sufficient to pay and discharge the entire Indebtedness on such Notes, as
applicable, not theretofore delivered to the Trustee for cancellation, including
the principal of and accrued interest on, such Notes at such Maturity or Stated
Maturity;
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(b) the Company or any Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company and any Guarantor; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Independent Counsel, in form and substance reasonably
satisfactory to the Trustee, each stating that (i) all conditions precedent
herein relating to the satisfaction and discharge hereof have been complied with
and (ii) such satisfaction and discharge will not result in a breach or
violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Company, any Guarantor or any
Subsidiary is a party or by which the Company, any Guarantor or any Subsidiary
is bound.
Notwithstanding the satisfaction and discharge hereof, the obligations
of the Company to the Trustee under Section 6.06 and, if United States dollars
or United States Government Securities in the case of the Dollar Notes and Euros
or Government Securities of the United Kingdom, the Federal Republic of Germany
or the Republic of France denominated in Euros in the case of Euro Notes shall
have been deposited with the Trustee pursuant to subclause (2) of subsection (a)
of this Section 11.01, the obligations of the Trustee under Section 11.02 and
the last paragraph of Section 10.03 shall survive.
Section 11.02. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 10.03, all
U.S. dollars, United States Government Securities, Euros and European
Governmental Obligations deposited with the Trustee pursuant to Section 11.01
shall be held in trust and applied by it, in accordance with the provisions of
the Notes and this Indenture, to the payment, either directly or through any
Paying Agent as the Trustee may determine, to the Persons entitled thereto, of
the principal of, interest on, or other Indenture Obligations on the Notes for
whose payment such U.S. dollars, United States Government Securities, Euros or
Euro-denominated Government Securities, as the case may be, have been deposited
with the Trustee.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
PSINET INC.
By:
/s/ Edward D. Postal
-----------------------------------
Name: Edward D. Postal
Title: Executive Vice President and
Chief Financial Officer
WILMINGTON TRUST COMPANY
By:
/s/ Bruce L. Bisson
-----------------------------------
Name: Bruce L. Bisson
Title: Vice President
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EXHIBIT A
FORM OF GLOBAL NOTE
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS TO NOMINEES OF [CEDE & CO./KREDIETBANK S.A.
LUXEMBOURGEOISE] OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN SECTION 2.07 OF THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF [THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC")/EUROCLEAR SYSTEM OR
CEDELBANK], TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER OR
EXCHANGE, OR FOR PAYMENT AND ANY SUCH CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF [CEDE & CO./KREDIETBANK S.A. LUXEMBOURGEOISE] OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF [DTC/EUROCLEAR SYSTEM OR
CEDELBANK] (AND ANY PAYMENT IS MADE TO [CEDE & CO./KREDIETBANK S.A.
LUXEMBOURGEOISE] OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF [DTC/EUROCLEAR SYSTEM OR CEDELBANK]), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, [CEDE & CO./KREDIETBANK S.A. LUXEMBOURGEOISE],
HAS AN INTEREST HEREIN.
PSINET INC.
[FOR RESTRICTED NOTES ONLY] THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
UNITED STATES PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
A-1
<PAGE>
(1) REPRESENTS THAT (A) (I) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (II) IT IS NOT A UNITED
STATES PERSON AND HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT AND (B) IT IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT.
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
___________________
A-2
<PAGE>
10 1/2% SENIOR NOTE DUE 2006
[CUSIP No(s). / ISIN No(s). / Common Code No(s).]
No. __________ [$/EURO ]_________________
PSINet Inc., a New York corporation (herein called the "Company",
which term includes any successor Person under the Indenture), for value
received, hereby promises to pay to _______________ or registered assigns, the
principal sum of _____________ [United States Dollars/Euros] on December 1,
2006, at the office or agency of the Company referred to below, and to pay
interest thereon from December 2, 1999, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semiannually on June
1 and December 1, in each year, commencing June 1, 2000 at the rate of 10 1/2%
per annum, subject to adjustments as described in the second following
paragraph, in [United States Dollars/Euros], until the principal hereof is paid
or duly provided for. Interest shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
[NOT FOR EXCHANGE NOTES] The Holder of this Note is entitled to the
benefits of the Registration Rights Agreement between the Company and the
Initial Purchasers, dated as of December 2, 1999, pursuant to which, subject to
the terms and conditions thereof, the Company is obligated to consummate the
Exchange Offer pursuant to which the Holder of this Note shall have the right to
exchange this Note for a new 10 1/2% Senior Note due 2006 in like principal
amount as provided therein.
[NOT FOR EXCHANGE NOTES] In the event that (a) the Exchange Offer
Registration Statement is not filed with the Commission on or prior to the date
specified in the Registration Rights Agreement, (b) the Exchange Offer
Registration Statement is not declared effective on or prior to the date
specified in the Registration Rights Agreement, (c) the Exchange Offer is not
consummated on or prior to the date specified in the Registration Rights
Agreement, (d) if obligated to file the Shelf Registration Statement, the
Company fails to file the Shelf Registration Statement with the Commission on or
prior to the date specified in the Registration Rights Agreement, (e) if
obligated to file the Shelf Registration Statement, the Shelf Registration
Statement is not declared effective on or prior to the date specified in the
Registration Rights Agreement, or (f) the Shelf Registration Statement or the
Exchange Offer Registration Statement is declared effective but thereafter
ceases to be effective or usable in connection with resales of the Restricted
Notes during the periods specified in the Registration Rights Agreement (each
such event referred to in clauses (a) through (f) above, a "Registration
Default"), the Company agrees to pay to each Holder of Restricted Notes
liquidated damages ("Liquidated Damages") in an amount equal to 0.25% per annum
per [$1,000/Euro 1,000] in principal amount of the Restricted Notes held
A-3
<PAGE>
by such Holder for the first 90 day period immediately following the occurrence
of such Registration Default. The amount of Liquidated Damages shall increase by
an additional 0.25% per annum per [$1,000/Euro 1,000] in principal amount of the
Restricted Notes with respect to each subsequent 90 day period until all
Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of 1.50% per annum per [$1,000/Euro 1,000] in principal amount of the
Notes. The Company shall not be required to pay Liquidated Damages for more than
one Registration Default at any given time. Following the cure of all
Registration Defaults, the accrual of Liquidated Damages shall cease. All
accrued Liquidated Damages shall be paid by the Company to Holders entitled
thereto in the manner provided for the payment of interest in the Indenture and
herein, on each Interest Payment Date, as more fully set forth in the Indenture
and herein.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note (or any Predecessor Note) is registered at the
close of business on the "Regular Record Date" for such interest, which shall be
the November 15 or May 15 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid, or duly provided for, and interest on such Defaulted Interest at the
interest rate borne by the Notes, to the extent lawful, shall, as provided in
the Indenture, be paid to the Person in whose name this Note (or any Predecessor
Notes) is registered at the close of business on the "Special Record Date" for
such Defaulted Interest, such date to be fixed by the Company in a manner
satisfactory to the Trustee, notice whereof shall be given to Holders of Notes
not less than 15 days prior to such Special Record Date.
Payment of the principal of and interest on, this Note, and exchange
or transfer of the Note, will be made at the office or agency of the Company in
[the City of New York/Luxembourg] maintained for that purpose (which initially
will be [the Trustee c/o Harris Trust Company of New York, 77 Water Street, New
York, NY 10005/Kredietbank S.A. Luxembourgeoise, 43 Boulevard Royal, L-2955
Luxembourg]), or at such other office or agency as may be maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Register, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of [the United States of America in
the case of Notes issued in U.S. Dollars/ the European Union in the case of
Notes issued in Euros] as at the time of payment is legal tender for payment of
public and private debts.
A-4
<PAGE>
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Note shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.
[Signature Page Follows]
A-5
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
PSINET INC.
By:________________________________
Title:
Attest:
____________________________
Authorized Officer
A-6
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 10 1/2% Senior Notes due 2006 referred to in the
within-mentioned Indenture.
WILMINGTON TRUST COMPANY,
as Trustee
By: _________________________________
Authorized Signer
Dated:_______________
A-7
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 10.12 or Section 10.14, as applicable, of the Indenture, check the Box:
[_].
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.12 or Section 10.14, as applicable, of the Indenture,
state the amount (in original principal amount): [$/Euro] _______________.
Date: ___________________
Your Signature: ________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: ________________________________________
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15]
A-8
<PAGE>
[REVERSE SIDE OF NOTE]
PSINET INC.
10 1/2% Senior Note due 2006
This Note is one of a duly authorized issue of Notes of the Company
designated as its 10 1/2% Senior Notes due 2006 (herein called the "Notes"),
limited (except as otherwise provided in the Indenture referred to below) in
aggregate principal amount to [$600,000,000/Euro 150,000,000], issued under,
entitled to the benefits of and subject to the terms of an indenture (herein
called the "Indenture") dated as of December 2, 1999, between the Company and
Wilmington Trust Company, as trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, any Guarantors, the Trustee and the Holders of the
Notes, and of the terms upon which the Notes are, and are to be, authenticated
and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Notes and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
Upon the occurrence of a Change of Control, subject to the terms of
the Indenture, each Holder may require the Company to purchase such Holder's
Notes in whole or in part in integral multiples of [$1,000/Euro 1,000], at a
purchase price in cash in an amount equal to 101% of the principal amount of
such Notes or portion thereof, plus accrued and unpaid interest, if any, to the
date of purchase, pursuant to a Change of Control Offer in accordance with the
procedures set forth in the Indenture.
Under certain circumstances, subject to the terms of the Indenture, in
the event the Net Cash Proceeds received by the Company from any Asset Sale,
which proceeds are not used to repay any Pari Passu Indebtedness of the Company
or any Subsidiary (including the repurchase of Notes) or which will be invested
in Telecommunications Assets, exceeds a specified amount, the Company will be
required to apply such proceeds by making an offer to purchase Notes and certain
Indebtedness ranking pari passu in right of payment to the Notes.
If an Event of Default shall occur and be continuing, the principal
amount of all the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.
A-9
<PAGE>
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain amendments
which require the consent of all the Holders) as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
any Guarantors and the rights of the Holders under the Indenture and the Notes
and any Guarantees at any time by the Company and the Trustee with the consent
of the Holders of at least a majority in aggregate principal amount of the Notes
at the time Outstanding. The Indenture also contains provisions permitting the
Holders of at least a majority in aggregate principal amount of the Notes (100%
of the Holders in certain circumstances) at the time Outstanding, on behalf of
the Holders of all the Notes, to waive compliance by the Company and any
Guarantors with certain provisions of the Indenture and the Notes and any
Guarantees and certain past Defaults under the Indenture and the Notes and any
Guarantees and their consequences. Any such consent or waiver by or on behalf
of the Holder of this Note shall be conclusive and binding upon such Holder and
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Notes (in the event such Guarantor or such
other obligor is obligated to make payments in respect of the Notes), which is
absolute and unconditional, to pay the principal of and interest on, this Note
at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company in the Borough of Manhattan, The City of New York or in
Luxembourg, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Registrar duly executed by, the
Holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Notes, denominated in the same currency, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
Certificated securities shall be transferred to all beneficial holders
in exchange for their beneficial interests in the U.S. Global Notes or the
International Global Notes, as the case may be, if, among other things, (a) the
Depositary notifies the Company that it is unwilling or unable to continue as
depository for such Global Note and a successor depository is not appointed by
the Company within 120 days or (b) there shall have occurred and be continuing
an Event of Default and the Registrar has received a request from the relevant
Depositary. Upon any such issuance, the Trustee is required to register such
certificated Notes in the name of, and cause the same to be delivered to, such
Person or
A-10
<PAGE>
Persons (or the nominee of any thereof). All such certificated Notes would be
required to include the Legend.
Notes in certificated form are issuable only in registered form
without coupons in denominations of [$1,000/Euro 1,000] and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes of a differing authorized denomination, as requested
by the Holder surrendering the same.
At any time when the Company is not subject to Sections 13 or 15(d) of
the Exchange Act, upon the written request of a Holder of a Restricted Note, the
Company will promptly furnish or cause to be furnished such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act to such Holder or
to a prospective purchaser of such Note who such Holder informs the Company is
reasonably believed to be a "Qualified Institutional Buyer" within the meaning
of Rule 144A under the Securities Act, as the case may be, in order to permit
compliance by such Holder with Rule 144A under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of this Note, except for any tax or other governmental charge that may
be imposed in connection therewith, other than certain exchanges not involving a
transfer as more fully set forth in the Indenture.
Prior to due presentment of this Note for registration of transfer,
the Company, any Guarantor, the Paying Agents, the Transfer Agents, the
Registrar, the Trustee and any agent of the Company, any Guarantor, the Paying
Agents, the Transfer Agents, the Registrar or the Trustee may deem and treat the
Person in whose name this Note is registered as the absolute owner of that Note
for all purposes, whether or not this Note is overdue, and neither the Company,
any Guarantor, the Paying Agents, the Transfer Agents, the Registrant or the
Trustee nor any such agent shall be affected by notice to the contrary.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAW PRINCIPLES THEREOF.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
A-11
<PAGE>
APPENDIX I
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No. ____________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
__________________________________________________________________________ the
within Note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________________________________________
attorney to transfer such Note on the books of the Company with full power of
substitution in the premises. [THE FOLLOWING PROVISION TO BE INCLUDED ON ALL
CERTIFICATES FOR RESTRICTED NOTES]. In connection with any transfer of this
Note occurring prior to the date which is the earlier of the date of an
effective Registration Statement or December 2, 2000, the undersigned confirms
that without utilizing any general solicitation or general advertising that:
[Check One]
[_] (a) this Note is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder or
[_] (b) this Note is being transferred other than in accordance with
clause (a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture. If none of the
foregoing boxes is checked, the Trustee or other Registrar shall not be
obligated to register this Note in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.07 of the Indenture shall have been satisfied.
Date: ________________________________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
<PAGE>
Signature Guarantee:
________________________
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15.]
TO BE COMPLETED BY PURCHASER IF CLAUSE (a) ABOVE IS CHECKED. The undersigned
represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:________________________________________________________________
NOTICE: To be executed by an authorized signatory
2
<PAGE>
APPENDIX II
FORM OF TRANSFEREE CERTIFICATE
I or we assign and transfer this Note to:
Please insert social security or other identifying number of assignee
________________________________________________________________
Print or type name, address and zip code of assignee
________________________________________________________________
and irrevocably appoint __________________________________________________
[Agent], to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
Dated __________________________
Signed _________________________
(Sign exactly as name appears on the other side of this Note)
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17 Ad-15]
<PAGE>
EXHIBIT B
FORM OF DEFINITIVE REGISTERED NOTE
PSINET INC.
[FOR RESTRICTED NOTES ONLY] THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
UNITED STATES PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) (I) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (II) IT IS NOT A UNITED
STATES PERSON AND HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT AND (B) IT IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT.
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
B-1
<PAGE>
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
___________________
10 1/2% SENIOR NOTE DUE 2006
[CUSIP No(s). / ISIN No(s). / Common Code No(s).]
No. __________ [$/EURO]_________________
PSINET INC., a New York corporation (herein called the "Company,"
which term includes any successor Person under the Indenture), for value
received, hereby promises to pay to _____________ or registered assigns, the
principal sum of _______________ [United States Dollars/Euros] on December 1,
2006, at the office or agency of the Company referred to below, and to pay
interest thereon from December 2, 1999, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semiannually on June
1 and December 1 in each year, commencing June 1, 2000 at the rate of 10 1/2%
per annum, in [United States Dollars/EURO], until the principal hereof is paid
or duly provided for; provided that to the extent interest has not been paid or
duly provided for with respect to the Note exchanged for this Note, interest on
this Note shall accrue from the most recent Interest Payment Date to which
interest on the Initial Note which was exchanged for this Initial Note has been
paid or duly provided for. Interest shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note (or any Predecessor Note) is registered at the
close of business on the "Regular Record Date" for such interest, which shall be
the November 15 or May 15 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid, or duly provided for, and interest on such Defaulted Interest at the
interest rate borne by this Note, to the extent lawful, shall, as provided in
the Indenture, be paid to the Person in whose name this Note (or any Predecessor
Notes) is registered at the close of business on the "Special Record Date" for
such Defaulted Interest, such date to be fixed by the Company in a manner
satisfactory to the Trustee, notice whereof shall be given to Holders of Notes
not less than 15 days prior to such Special Record Date.
B-2
<PAGE>
Payment of the principal of, and interest on, this Note, and exchange
or transfer of the Note, will be made at the office or agency of the Company in
[the City of New York/Luxembourg] maintained for such purpose (which initially
will be [the Trustee Harris Trust Company of New York, 77 Water Street, New
York, NY 10005/Kredietbank S.A. Luxembourgeoise, 43, Boulevard Royal, L-2955
Luxembourg]), or at such other office or agency as may be maintained for such
purpose, or at such other office or agency as may be maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Register, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in [such coin or currency of the United States of America/the
European Union] as at the time of payment is legal tender for payment of public
and private debts.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Note shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.
[Signature Page Follows]
B-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
PSINET INC.
By:____________________________________
Title:_________________________________
Attest:
____________________________
Authorized Officer
B-4
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 10 1/2% Senior Notes due 2006 referred to in the
within-mentioned Indenture.
WILMINGTON TRUST COMPANY
as Trustee
By: ________________________________
Authorized Signer
Dated:
B-5
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 10.12 or Section 10.14, as applicable, of the Indenture, check the Box:
[_].
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.12 or Section 10.14, as applicable, of the Indenture,
state the amount (in original principal amount): [$/Euro] _______________.
Date: ______________________ Your Signature: ___________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: __________________________________
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15]
B-6
<PAGE>
[REVERSE SIDE OF NOTE]
PSINET INC.
10 1/2% Senior Note due 2006
This Note is one of a duly authorized issue of Notes of the Company
designated as its 10 1/2% Senior Notes due 2006 (herein called the "Notes"),
limited (except as otherwise provided in the Indenture referred to below) in
aggregate principal amount to [$600,000,000/Euro 150,000,000], issued under,
entitled to the benefits of and subject to the terms of an indenture (herein
called the "Indenture") dated as of December 2, 1999, between the Company and
Wilmington Trust Company, as trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, any Guarantors, the Trustee and the Holders of the
Notes, and of the terms upon which the Notes are, and are to be, authenticated
and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Notes and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
Upon the occurrence of a Change of Control, subject to the terms of
the Indenture, each Holder may require the Company to purchase such Holder's
Notes in whole or in part in integral multiples of [$1,000/Euro 1,000], at a
purchase price in cash in an amount equal to 101% of the principal amount of
such Notes or portion thereof, plus accrued and unpaid interest if any, to the
date of purchase, pursuant to Change of Control Offer and in accordance with the
procedures set forth in the Indenture.
Under certain circumstances, subject to the terms of the Indenture, in
the event the Net Cash Proceeds received by the Company from any Asset Sale,
which proceeds are not used to repay any Pari Passu Indebtedness of the Company
or any Subsidiary (including the repurchase of Notes) or which will be invested
in Telecommunications Assets, exceeds a specified amount, the Company will be
required to apply such proceeds by making an offer to purchase Notes and certain
Indebtedness ranking pari passu in right of payment to the Notes.
If an Event of Default shall occur and be continuing, the principal
amount of all the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.
B-7
<PAGE>
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain amendments
which required the consent of all of the Holders) as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and any Guarantors and the rights of the Holders under the Indenture and
the Notes and any Guarantees at any time by the Company and the Trustee with the
consent of the Holders of at least a majority in aggregate principal amount of
the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of at least a majority in aggregate principal amount of
the Notes (100% of the Holders in certain circumstances) at the time
Outstanding, on behalf of the Holders of all the Notes, to waive compliance by
the Company and any Guarantors with certain provisions of the Indenture and the
Notes and any Guarantees and certain past Defaults under the Indenture and the
Notes and any Guarantees and their consequences. Any such consent or waiver by
or on behalf of the Holder of this Note shall be conclusive and binding upon
such Holder and upon all future Holders of this Note and of any Note issued upon
the registration of transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Notes (in the event such Guarantor or such
other obligor is obligated to make payments in respect of the Notes), which is
absolute and unconditional, to pay the principal of and interest on, this Note
at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company in the Borough of Manhattan, The City of New York or in
Luxembourg, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Registrar duly executed by, the
Holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Notes, denominated in the same currency of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
Certificated securities shall be transferred to all beneficial holders
in exchange for their beneficial interest in the U.S. Global Notes as the case
may be, if, among other things, (a) the Depositary notifies the Company that it
is unwilling or unable to continue as depository for such Global Note and a
successor depository is not appointed by the Company within 120 days or (b)
there shall have occurred and be continuing an Event of Default and the
Registrar has received a request from the relevant Depositary. Upon any such
issuance, the Trustee is required to register such certificated Notes in the
name of, and cause the same to be delivered to, such Person or Persons (or the
nominee of any thereof).
B-8
<PAGE>
Notes in certificated form are issuable only in registered form
without coupons in denominations of [$1,000/Euro 1,000] and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes of a differing authorized denomination, as requested
by the Holder surrendering the same.
At any time when the Company is not subject to Sections 13 or 15(d) of
the Exchange Act, upon the written request of a Holder of a Restricted Note, the
Company will promptly furnish or cause to be furnished such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act to such Holder or
to a prospective purchaser of such Note who such Holder informs the Company is
reasonably believed to be a "Qualified Institutional Buyer" within the meaning
of Rule 144A under the Securities Act, as the case may be, in order to permit
compliance by such Holder with Rule 144A under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of this note, except for any tax or other governmental charge that may
be imposed in connection therewith, other than certain exchanges not involving a
transfer as more fully set forth in the Indenture.
Prior to due presentment of this Note for registration of transfer,
the Company, any Guarantor, the Paying Agents, the Transfer Agents, the
Registrar, the Trustee and any agent of the Company, the Paying Agents, the
Transfer Agents, the Registrar, any Guarantor or the Trustee may deem and treat
the Person in whose name this Note is registered as the absolute owner of that
note for all purposes, whether or not this Note is overdue, and neither the
Company, any Guarantor, the Paying Agents, the Transfer Agents, the Registrar or
the Trustee nor any such agent shall be affected by notice to the contrary.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
B-9
<PAGE>
APPENDIX I
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No. ____________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
________________________________________________________________________________
attorney to transfer such Note on the books of the Company with full power of
substitution in the premises. [THE FOLLOWING PROVISION TO BE INCLUDED ON ALL
CERTIFICATES FOR RESTRICTED NOTES]. In connection with any transfer of this
Note occurring prior to the date which is the earlier of the date of an
effective Registration Statement or December 2, 2000, the undersigned confirms
that without utilizing any general solicitation or general advertising that:
[Check One]
[_] (a) this Note is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder or
[_] (b) this Note is being transferred other than in accordance with
clause (a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture. If none of the
foregoing boxes is checked, the Trustee or other Registrar shall not be
obligated to register this Note in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.07 of the Indenture shall have been satisfied.
Date: ________________________________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
<PAGE>
Signature Guarantee:
________________________
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15.]
TO BE COMPLETED BY PURCHASER IF CLAUSE (a) ABOVE IS CHECKED. The undersigned
represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:________________________________________________________________
NOTICE: To be executed by an authorized signatory
2
<PAGE>
APPENDIX II
FORM OF TRANSFEREE CERTIFICATE
I or we assign and transfer this Note to:
Please insert social security or other identifying number of assignee
_______________________________________________________
Print or type name, address and zip code of assignee
_______________________________________________________
and irrevocably appoint __________________________________________________
[Agent], to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
Dated __________________________
Signed _________________________
(Sign exactly as name appears on the other side of this Note)
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17 Ad-15]
<PAGE>
EXHIBIT C
REGULATION S CERTIFICATE
(For transfers pursuant to Section 2.07(a) of the Indenture)
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Re: 10 1/2% Senior Notes due 2006 of PSINet Inc. (the "Notes")
Reference is made to the Indenture, dated as of December 2, 1999 (the
"Indenture"), between PSINet Inc. (the "Company") and Wilmington Trust Company,
as Trustee. Terms used herein and defined in the Indenture or in Regulation S
or Rule 144 under the U.S. Securities Act of 1933 (the "Securities Act") are
used herein as so defined. This certificate relates to [US$/EURO]____________
principal amount of Notes, which are evidenced by the following certificate(s)
(the "Specified Notes"):
CUSIP No(s)._____________________________
ISIN No(s). _____________________________
CERTIFICATE No(s). ______________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Notes or (ii) it is acting on behalf of all the beneficial
owners of the Specified Notes and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
The Specified Notes are represented by a Global Note and are held through the
Depositary or an agent member of such Depositary in the name of the Undersigned,
as or on behalf of the Owner. The Owner has requested that the Specified Notes
be transferred to a person (the "Transferee") who will take delivery in the form
of an International Global Note. In connection with such transfer, the Owner
hereby certifies that, unless such transfer is being effected pursuant to an
effective registration statement under the Securities Act, it is being effected
in accordance with Rule 904 or Rule 144 under the Securities Act and with all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:
C-1
<PAGE>
(1) Rule 904 Transfers. If the transfer is being effected in
------------------
accordance with Rule 904:
(A) the Owner is not a distributor of the Specified Notes, an
affiliate of the Company or any such distributor or a person acting on behalf of
any of the foregoing;
(B) the offer of the Specified Notes was not made to a person in
the United States;
(C) either
(i) at the time the buy order was originated, the
Transferee was outside the United States or the Owner and any person acting on
its behalf reasonably believed that the Transferee was outside the United
States, or
(ii) the transaction is being executed in, on or through
the facilities of the Eurobond market, as regulated by the Association of
International Bond Dealers, or another designated offshore securities market
described in Rule 902(a) of Regulation S and neither the Owner nor any person
acting on its behalf knows that the transaction has been prearranged with a
buyer in the United States;
(D) no "directed selling efforts" within the meaning of Rule
902(b) of Regulation S have been made in the United States by or on behalf of
the Owner or any affiliate thereof;
(E) if the Owner is a dealer in securities, as defined in
Section 2(12) of the Securities Act, or has received a selling concession, fee
or other remuneration in respect of the Specified Notes, and the transfer is to
occur during the restricted period, then:
(i) neither the Owner nor any person acting on behalf of
the Owner knows that the Transferee of the Specified Notes is a U.S. person; and
(ii) if the Owner or any person acting on the Owner's
behalf knows that the Transferee is a dealer, as defined in Section 2(12) of the
Securities Act, or is a person receiving a selling concession, fee or other
remuneration in respect of the Specified Notes, the Owner or a person acting on
the Owner's behalf has sent to the Transferee a confirmation or other notice
stating that the Specified Notes may be offered and sold during the Restricted
Period only: (x) in accordance with Regulation S; (y) pursuant to registration
of the Specified Notes under the Securities Act; or (z) pursuant to an available
exemption from the registration requirements of the Securities Act; and
C-2
<PAGE>
(iii) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected pursuant to
------------------
Rule 144:
(A) the transfer is occurring after a holding period of at least
one year (computed in accordance with paragraph (d) of Rule 144) has elapsed
since the Specified Notes were acquired by the Owner, and is being effected in
accordance with the applicable amount, manner of sale and notice requirements of
Rule 144; or
(B) the transfer is occurring after a holding period of at least
two years has elapsed since the Specified Notes were acquired by the Owner and
the Owner is not, and during the preceding three months has not been, an
affiliate of the Company.
[Signature Page Follows]
C-3
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated: __________________
(Print the name of the Undersigned, as such term is defined in the
third paragraph of this certificate.)
BY: _______________________________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the
title of the person signing on behalf of the Undersigned must be stated.)
C-4
<PAGE>
EXHIBIT D
RULE 144A CERTIFICATE
(For transfers pursuant to Section 2.07(b) of the Indenture)
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Re: 10 1/2% Senior Notes due 2006 of PSINet Inc. (the "Notes")
Reference is made to the Indenture, dated as of December 2, 1999 (the
"Indenture"), between PSINet Inc. (the "Company") and Wilmington Trust Company,
as Trustee. Terms used herein and defined in the Indenture or in Rule 144A or
Rule 144 under the U.S. Securities Act of 1933 (the "Securities Act") are used
herein as so defined. This certificate relates to [US$/Euro] _____________
principal amount of Notes, which are evidenced by the following certificate(s)
(the "Specified Notes"):
CUSIP No(s). ___________________________
ISIN No(s)._____________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Notes or (ii) it is acting on behalf of all the beneficial
owners of the Specified Notes and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
The Specified Notes are represented by a Global Note and are held through the
Depositary or an agent member of such Depositary in the name of the Undersigned,
as or on behalf of the Owner. The Owner has requested that the Specified Notes
be transferred to a person (the "Transferee") who will take delivery in the form
of a Restricted Note. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 144A or Rule 144 under the Securities Act and with all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:
(1) Rule 144A Transfers. If the transfer is being effected in
-------------------
accordance with Rule 144A:
D-1
<PAGE>
(A) the Specified Notes are being transferred to a person that
the Owner and any person acting on its behalf reasonably believe is a "qualified
institutional buyer" within the meaning of Rule 144A, acquiring for its own
account or for the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner may be
relying on Rule 144A in connection with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected pursuant
------------------
to Rule 144:
(A) the transfer is occurring after a holding period of at least
one year (computed in accordance with paragraph (d) of Rule 144) has elapsed
since the Specified Notes were acquired by the Owner and is being effected in
accordance with the applicable amount, manner of sale and notice requirements of
Rule 144; or
(B) the transfer is occurring after a holding period of at least
two years has elapsed since the Specified Notes were acquired by the Owner, and
the Owner is not, and during the preceding three months has not been, an
affiliate of the Company.
[Signature Page Follows]
D-2
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated:
____________________
(Print the name of the Undersigned, as such term is defined in the
third paragraph of this certificate.)
By:_____________________________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the
title of the person signing on behalf of the Undersigned must be stated.)
D-3
<PAGE>
EXHIBIT E
UNRESTRICTED NOTES CERTIFICATE
(For removal of Securities Act Legends pursuant to Section 2.07(e) of the
Indenture)
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Re: 10 1/2% Senior Notes due 2006 of PSINet Inc. (the "Notes")
Reference is made to the Indenture, dated as of December 2, 1999 (the
"Indenture"), between PSINet Inc. (the "Company") and Wilmington Trust Company,
as Trustee. Terms used herein and defined in the Indenture or in Rule 144
under the U.S. Securities Act of 1933 (the "Securities Act") are used herein as
so defined. This certificate relates to [US$/Euro] _____________ principal
amount of Notes, which are evidenced by the following certificate(s) (the
"Specified Notes"):
CUSIP No(s). __________________________
ISIN No(S). ___________________________
CERTIFICATE No(s). ____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Notes or (ii) it is acting on behalf of all the beneficial
owners of the Specified Notes and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
If the Specified Notes are represented by a Global Note, they are held through
the Depositary or an agent member of such Depositary in the name of the
Undersigned, as or on behalf of the Owner. If the Specified Notes are not
represented by a Global Note, they are registered in the name of the
Undersigned, as or on behalf of the Owner. The Owner has requested that the
Specified Notes be exchanged for Notes bearing no Legends pursuant to Section
2.07(e) of the Indenture. In connection with such exchange, the Owner hereby
certifies that the exchange is occurring after a holding period of at least two
years (computed in accordance with paragraph (d) of Rule 144) has elapsed since
the Specified Notes were acquired by the Owner, and the Owner is not, and
during the preceding three months has not been, an affiliate of the Company.
The Owner also acknowledges that any future transfers of the Specified Notes
must comply with all applicable securities laws of the states of the United
States and other jurisdictions.
E-1
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated: _________________
(Print the name of the Undersigned, as such term is defined in the
third paragraph of this certificate.)
By:____________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the
title of the person signing on behalf of the Undersigned must be stated.)
E-2
<PAGE>
EXHIBIT 4.2
DOLLAR U.S. GLOBAL NOTE
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.07 OF THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER OR EXCHANGE, OR FOR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
PSINET INC.
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS, EXCEPT AS SET FORTH IN
THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) (I) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (II) IT IS NOT A UNITED
STATES PERSON AND HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT AND (B) IT IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT.
<PAGE>
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
___________________
-2-
<PAGE>
10 1/2% SENIOR NOTE DUE 2006
CUSIP No. 74437CAE1 (Dollar U.S. Note)
No. ______ ____________
PSINet Inc., a New York corporation (herein called the "Company,"
which term includes any successor Person under the Indenture), for value
received, hereby promises to pay to _________. or registered assigns, the
principal sum of ___________________ United States Dollars on December 1, 2006,
at the office or agency of the Company referred to below, and to pay interest
thereon from December 2, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semiannually on June 1 and December
1, in each year, commencing June 1, 2000 at the rate of 10 1/2% per annum,
subject to adjustments as described in the second following paragraph, in United
States Dollars, until the principal hereof is paid or duly provided for.
Interest shall be computed on the basis of a 360-day year comprised of twelve
30-day months.
The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement between the Company and the Initial Purchasers,
dated as of December 2, 1999, pursuant to which, subject to the terms and
conditions thereof, the Company is obligated to consummate the Exchange Offer
pursuant to which the Holder of this Note shall have the right to exchange this
Note for a new 10 1/2% Senior Note due 2006 in like principal amount as provided
therein.
In the event that (a) the Exchange Offer Registration Statement is not
filed with the Commission on or prior to the date specified in the Registration
Rights Agreement, (b) the Exchange Offer Registration Statement is not declared
effective on or prior to the date specified in the Registration Rights
Agreement, (c) the Exchange Offer is not consummated on or prior to the date
specified in the Registration Rights Agreement, (d) if obligated to file the
Shelf Registration Statement, the Company fails to file the Shelf Registration
Statement with the Commission on or prior to the date specified in the
Registration Rights Agreement, (e) if obligated to file the Shelf Registration
Statement, the Shelf Registration Statement is not declared effective on or
prior to the date specified in the Registration Rights Agreement, or (f) the
Shelf Registration Statement or the Exchange Offer Registration Statement is
declared effective but thereafter ceases to be effective or usable in connection
with resales of the Restricted Notes during the periods specified in the
Registration Rights Agreement (each such event referred to in clauses (a)
through (f) above, a "Registration Default"), the Company agrees to pay to each
Holder of Restricted Notes liquidated damages ("Liquidated Damages") in an
amount equal to 0.25% per annum per $1,000 in principal amount of the Restricted
Notes held by such Holder for the first 90 day period immediately following the
occurrence of such Registration Default. The amount of Liquidated Damages shall
increase by an additional 0.25% per annum per $1,000 in principal amount of the
-3-
<PAGE>
Restricted Notes with respect to each subsequent 90 day period until all
Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of 1.50% per annum per $1,000 in principal amount of the Notes. The
Company shall not be required to pay Liquidated Damages for more than one
Registration Default at any given time. Following the cure of all Registration
Defaults, the accrual of Liquidated Damages shall cease. All accrued Liquidated
Damages shall be paid by the Company to Holders entitled thereto in the manner
provided for the payment of interest in the Indenture and herein, on each
Interest Payment Date, as more fully set forth in the Indenture and herein.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note (or any Predecessor Note) is registered at the
close of business on the "Regular Record Date" for such interest, which shall be
the November 15 or May 15 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid, or duly provided for, and interest on such defaulted interest at the
interest rate borne by the Notes, to the extent lawful, shall, as provided in
the Indenture, be paid to the Person in whose name this Note (or any Predecessor
Notes) is registered at the close of business on the "Special Record Date" for
such defaulted interest, such date to be fixed by the Company in a manner
satisfactory to the Trustee, notice whereof shall be given to Holders of Notes
not less than 15 days prior to such Special Record Date.
Payment of the principal of, and interest on, this Note, and exchange
or transfer of the Note, will be made at the office or agency of the Company in
the City of New York maintained for that purpose (which initially will be the
Trustee c/o Harris Trust Company of New York, 77 Water Street, New York, NY
10005), or at such other office or agency as may be maintained for such purpose,
or, at the option of the Company, payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear on the Register, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Note shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
PSINET INC.
By:
___________________________
Title:
Attest:
____________________________
Authorized Officer
-5-
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 10 1/2% Senior Notes due 2006 referred to in the
within-mentioned Indenture.
WILMINGTON TRUST COMPANY,
as Trustee
By:
------------------------------
Title:
Dated:
--------------
-6-
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 10.12 or Section 10.14, as applicable, of the Indenture, check the Box:
[ ].
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.12 or Section 10.14, as applicable, of the Indenture,
state the amount (in original principal amount): $ _______________.
Date: ___________________
Your Signature: _____________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: __________________________________
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15]
-7-
<PAGE>
[REVERSE SIDE OF NOTE]
PSINET INC.
10 1/2% Senior Note due 2006
This Note is one of a duly authorized issue of Notes of the Company
designated as its 10 1/2% Senior Notes due 2006 (herein called the "Notes"),
limited (except as otherwise provided in the Indenture referred to below) in
aggregate principal amount to $600,000,000, issued under, entitled to the
benefits of and subject to the terms of an indenture (herein called the
"Indenture") dated as of December 2, 1999, between the Company and Wilmington
Trust Company, as trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, any Guarantors, the Trustee and the Holders of the Notes, and of
the terms upon which the Notes are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Notes and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
Upon the occurrence of a Change of Control, subject to the terms of
the Indenture, each Holder may require the Company to purchase such Holder's
Notes in whole or in part in integral multiples of $1,000, at a purchase price
in cash in an amount equal to 101% of the principal amount of such Notes or
portion thereof, plus accrued and unpaid interest, if any, to the date of
purchase, pursuant to a Change of Control Offer in accordance with the
procedures set forth in the Indenture.
Under certain circumstances, subject to the terms of the Indenture, in
the event the Net Cash Proceeds received by the Company from any Asset Sale,
which proceeds are not used to repay any Pari Passu Indebtedness of the Company
or any Subsidiary (including the repurchase of Notes) or which will be invested
in Telecommunications Assets, exceeds a specified amount, the Company will be
required to apply such proceeds by making an offer to purchase Notes and certain
Indebtedness ranking pari passu in right of payment to the Notes.
If an Event of Default shall occur and be continuing, the principal
amount of all the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain amendments
which require the consent of all the Holders) as therein provided, the amendment
thereof and the modification of the rights and obligations of the
-8-
<PAGE>
Company and any Guarantors and the rights of the Holders under the Indenture and
the Notes and any Guarantees at any time by the Company and the Trustee with the
consent of the Holders of at least a majority in aggregate principal amount of
the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of at least a majority in aggregate principal amount of
the Notes (100% of the Holders in certain circumstances) at the time
Outstanding, on behalf of the Holders of all the Notes, to waive compliance by
the Company and any Guarantors with certain provisions of the Indenture and the
Notes and any Guarantees and certain past Defaults under the Indenture and the
Notes and any Guarantees and their consequences. Any such consent or waiver by
or on behalf of the Holder of this Note shall be conclusive and binding upon
such Holder and upon all future Holders of this Note and of any Note issued upon
the registration of transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Notes (in the event such Guarantor or such
other obligor is obligated to make payments in respect of the Notes), which is
absolute and unconditional, to pay the principal of, and interest on, this Note
at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company in the Borough of Manhattan, The City of New York or in
Luxembourg, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Registrar duly executed by, the
Holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Notes, denominated in the same currency, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
Certificated securities shall be transferred to all beneficial holders
in exchange for their beneficial interests in the U.S. Global Notes or the
International Global Notes, as the case may be, if, among other things, (a) the
Depositary notifies the Company that it is unwilling or unable to continue as
depository for such Global Note and a successor depository is not appointed by
the Company within 120 days or (b) there shall have occurred and be continuing
an Event of Default and the Registrar has received a request from the relevant
Depositary. Upon any such issuance, the Trustee is required to register such
certificated Notes in the name of, and cause the same to be delivered to, such
Person or Persons (or the nominee of any thereof). All such certificated Notes
would be required to include the Legend.
Notes in certificated form are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, the Notes are exchangeable for a like aggregate principal amount of Notes
of a differing authorized denomination, as requested by the Holder surrendering
the same.
-9-
<PAGE>
At any time when the Company is not subject to Sections 13 or 15(d) of
the Exchange Act, upon the written request of a Holder of a Restricted Note, the
Company will promptly furnish or cause to be furnished such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act to such Holder or
to a prospective purchaser of such Note who such Holder informs the Company is
reasonably believed to be a "Qualified Institutional Buyer" within the meaning
of Rule 144A under the Securities Act, as the case may be, in order to permit
compliance by such Holder with Rule 144A under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of this Note, except for any tax or other governmental charge that may
be imposed in connection therewith, other than certain exchanges not involving a
transfer as more fully set forth in the Indenture.
Prior to due presentment of this Note for registration of transfer,
the Company, any Guarantor, the Paying Agents, the Transfer Agents, the
Registrar, the Trustee and any agent of the Company, any Guarantor, the Paying
Agents, the Transfer Agents, the Registrar or the Trustee may deem and treat the
Person in whose name this Note is registered as the absolute owner of that Note
for all purposes, whether or not this Note is overdue, and neither the Company,
any Guarantor, the Paying Agents, the Transfer Agents, the Registrant or the
Trustee nor any such agent shall be affected by notice to the contrary.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAW PRINCIPLES THEREOF.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
-10-
<PAGE>
APPENDIX I
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.______________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
____________________________________________________________________________ the
within Note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________________________________________
attorney to transfer such Note on the books of the Company with full
power of substitution in the premises. [THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES FOR RESTRICTED NOTES]. In connection with any transfer of
this Note occurring prior to the date which is the earlier of the date of an
effective Registration Statement or December 2, 2000, the undersigned confirms
that without utilizing any general solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder or
[ ] (b) this Note is being transferred other than in accordance with
clause (a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture. If none of the
foregoing boxes is checked, the Trustee or other Note Registrar shall not be
obligated to register this Note in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.07 of the Indenture shall have been satisfied.
Date: ________________________________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
-11-
<PAGE>
Signature Guarantee:
________________________
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15.]
TO BE COMPLETED BY PURCHASER IF CLAUSE (a) ABOVE IS CHECKED. The undersigned
represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:________________________________________________________________
NOTICE: To be executed by an authorized signatory
-12-
<PAGE>
APPENDIX II
FORM OF TRANSFEREE CERTIFICATE
I or we assign and transfer this Note to:
Please insert social security or other identifying number of assignee
_____________________________________________________________________
Print or type name, address and zip code of assignee
_____________________________________________________________________
and irrevocably appoint __________________________________________________
[Agent], to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
Dated __________________________
Signed _________________________
(Sign exactly as name appears on the other side of this Note)
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17 Ad-15]
-13-
<PAGE>
EXHIBIT 4.3
EURO U.S. GLOBAL NOTE
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS TO NOMINEES OF KREDIETBANK S.A. LUXEMBOURGEOISE OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.07 OF THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
EUROCLEAR SYSTEM OR CEDELBANK TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER OR EXCHANGE, OR FOR PAYMENT AND ANY SUCH CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF KREDIETBANK S.A. LUXEMBOURGEOISE OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR SYSTEM OR CEDELBANK
(AND ANY PAYMENT IS MADE TO KREDIETBANK S.A. LUXEMBOURGEOISE OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR SYSTEM OR
CEDELBANK), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
KREDIETBANK S.A. LUXEMBOURGEOISE, HAS AN INTEREST HEREIN.
PSINET INC.
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS, EXCEPT AS SET FORTH IN
THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) (I) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (II) IT IS NOT A UNITED
STATES PERSON AND HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT AND (B) IT IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON
<PAGE>
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT.
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
___________________
-2-
<PAGE>
10 1/2% SENIOR NOTE DUE 2006
ISIN No. XS0104913123/Common Code No. 010491312
No. _____ EURO _________
PSINet Inc., a New York corporation (herein called the "Company",
which term includes any successor Person under the Indenture), for value
received, hereby promises to pay to ________________________ or registered
assigns, the principal sum of __________________ Euros on December 1, 2006, at
the office or agency of the Company referred to below, and to pay interest
thereon from December 2, 1999, or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semiannually on June 1 and
December 1, in each year, commencing June 1, 2000 at the rate of 10 1/2% per
annum, subject to adjustments as described in the second following paragraph, in
Euros, until the principal hereof is paid or duly provided for. Interest shall
be computed on the basis of a 360-day year comprised of twelve 30-day months.
The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement between the Company and the Initial Purchasers,
dated as of December 2, 1999, pursuant to which, subject to the terms and
conditions thereof, the Company is obligated to consummate the Exchange Offer
pursuant to which the Holder of this Note shall have the right to exchange this
Note for a new 10 1/2% Senior Note due 2006 in like principal amount as provided
therein.
In the event that (a) the Exchange Offer Registration Statement is not
filed with the Commission on or prior to the date specified in the Registration
Rights Agreement, (b) the Exchange Offer Registration Statement is not declared
effective on or prior to the date specified in the Registration Rights
Agreement, (c) the Exchange Offer is not consummated on or prior to the date
specified in the Registration Rights Agreement, (d) if obligated to file the
Shelf Registration Statement, the Company fails to file the Shelf Registration
Statement with the Commission on or prior to the date specified in the
Registration Rights Agreement, (e) if obligated to file the Shelf Registration
Statement, the Shelf Registration Statement is not declared effective on or
prior to the date specified in the Registration Rights Agreement, or (f) the
Shelf Registration Statement or the Exchange Offer Registration Statement is
declared effective but thereafter ceases to be effective or usable in connection
with resales of the Restricted Notes during the periods specified in the
Registration Rights Agreement (each such event referred to in clauses (a)
through (f) above, a "Registration Default"), the Company agrees to pay to each
Holder of Restricted Notes liquidated damages ("Liquidated Damages") in an
amount equal to 0.25% per annum per Euro 1,000 in principal amount of the
Restricted Notes held by such Holder for the first 90 day period immediately
following the occurrence of such Registration Default. The amount of Liquidated
Damages shall increase by an additional 0.25% per annum per Euro 1,000 in
principal amount of the Restricted Notes with respect to each subsequent 90 day
period until all Registration Defaults
-3-
<PAGE>
have been cured, up to a maximum amount of Liquidated Damages of 1.50% per annum
per Euro 1,000 in principal amount of the Notes. The Company shall not be
required to pay Liquidated Damages for more than one Registration Default at any
given time. Following the cure of all Registration Defaults, the accrual of
Liquidated Damages shall cease. All accrued Liquidated Damages shall be paid by
the Company to Holders entitled thereto in the manner provided for the payment
of interest in the Indenture and herein, on each Interest Payment Date, as more
fully set forth in the Indenture and herein.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note (or any Predecessor Note) is registered at the
close of business on the "Regular Record Date" for such interest, which shall be
the November 15 or May 15 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid, or duly provided for, and interest on such defaulted interest at the
interest rate borne by the Notes, to the extent lawful, shall, as provided in
the Indenture, be paid to the Person in whose name this Note (or any Predecessor
Notes) is registered at the close of business on the "Special Record Date" for
such defaulted interest, such date to be fixed by the Company in a manner
satisfactory to the Trustee, notice whereof shall be given to Holders of Notes
not less than 15 days prior to such Special Record Date.
Payment of the principal of, premium, if any, and interest on, this
Note, and exchange or transfer of the Note, will be made at the office or agency
of the Company in Luxembourg maintained for that purpose (which initially will
be Kredietbank S.A. Luxembourgeoise, 43 Boulevard Royal, L-2955 Luxembourg), or
at such other office or agency as may be maintained for such purpose, or, at the
option of the Company, payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Register, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest on all Global
Notes and all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the European Union as at the time of payment is legal tender
for payment of public and private debts.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Note shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
PSINET INC.
By:
---------------------------------
Title:
Attest:
____________________________
Authorized Officer
-5-
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 10 1/2% Senior Notes due 2006 referred to in the
within-mentioned Indenture.
WILMINGTON TRUST COMPANY,
as Trustee
By:
_____________________________
Title:
Dated:__________
-6-
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 10.12 or Section 10.14, as applicable, of the Indenture, check the Box:
[_].
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.12 or Section 10.14 as applicable, of the Indenture,
state the amount (in original principal amount): Euro _______________.
Date: ___________________
Your Signature: ____________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: __________________________________
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15]
-7-
<PAGE>
[REVERSE SIDE OF NOTE]
PSINET INC.
10 1/2% Senior Note due 2006
This Note is one of a duly authorized issue of Notes of the Company
designated as its 10 1/2% Senior Notes due 2006 (herein called the "Notes"),
limited (except as otherwise provided in the Indenture referred to below) in
aggregate principal amount to Euro 150,000,000, issued under, entitled to the
benefits of and subject to the terms of an indenture (herein called the
"Indenture") dated as of December 2, 1999, between the Company and Wilmington
Trust Company, as trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, any Guarantors, the Trustee and the Holders of the Notes, and of
the terms upon which the Notes are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Notes and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
Upon the occurrence of a Change of Control, subject to the terms of
the Indenture, each Holder may require the Company to purchase such Holder's
Notes in whole or in part in integral multiples of Euro 1,000, at a purchase
price in cash in an amount equal to 101% of the principal amount of such Notes
or portion thereof, plus accrued and unpaid interest, if any, to the date of
purchase, pursuant to a Change of Control Offer in accordance with the
procedures set forth in the Indenture.
Under certain circumstances, subject to the terms of the Indenture, in
the event the Net Cash Proceeds received by the Company from any Asset Sale,
which proceeds are not used to repay any Pari Passu Indebtedness of the Company
or any Subsidiary (including the repurchase of Notes) or which will be invested
in Telecommunications Assets, exceeds a specified amount, the Company will be
required to apply such proceeds by making an offer to purchase Notes and certain
Indebtedness ranking pari passu in right of payment to the Notes.
If an Event of Default shall occur and be continuing, the principal
amount of all the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain amendments
which require the consent
-8-
<PAGE>
of all the Holders) as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and any Guarantors and
the rights of the Holders under the Indenture and the Notes and any Guarantees
at any time by the Company and the Trustee with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of at
least a majority in aggregate principal amount of the Notes (100% of the Holders
in certain circumstances) at the time Outstanding, on behalf of the Holders of
all the Notes, to waive compliance by the Company and any Guarantors with
certain provisions of the Indenture and the Notes and any Guarantees and certain
past Defaults under the Indenture and the Notes and any Guarantees and their
consequences. Any such consent or waiver by or on behalf of the Holder of this
Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Notes (in the event such Guarantor or such
other obligor is obligated to make payments in respect of the Notes), which is
absolute and unconditional, to pay the principal of and interest on, this Note
at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company in the Borough of Manhattan, The City of New York or in
Luxembourg, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Registrar duly executed by, the
Holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Notes, denominated in the same currency, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
Certificated securities shall be transferred to all beneficial holders
in exchange for their beneficial interests in the U.S. Global Notes or the
International Global Notes, as the case may be, if, among other things, (a) the
Depositary notifies the Company that it is unwilling or unable to continue as
depository for such Global Note and a successor depository is not appointed by
the Company within 120 days or (b) there shall have occurred and be continuing
an Event of Default and the Registrar has received a request from the relevant
Depositary. Upon any such issuance, the Trustee is required to register such
certificated Notes in the name of, and cause the same to be delivered to, such
Person or Persons (or the nominee of any thereof). All such certificated Notes
would be required to include the Legend.
Notes in certificated form are issuable only in registered form
without coupons in denominations of Euro 1,000 and any integral multiple
thereof. As provided in the Indenture and
-9-
<PAGE>
subject to certain limitations therein set forth, the Notes are exchangeable for
a like aggregate principal amount of Notes of a differing authorized
denomination, as requested by the Holder surrendering the same.
At any time when the Company is not subject to Sections 13 or 15(d) of
the Exchange Act, upon the written request of a Holder of a Restricted Note, the
Company will promptly furnish or cause to be furnished such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act to such Holder or
to a prospective purchaser of such Note who such Holder informs the Company is
reasonably believed to be a "Qualified Institutional Buyer" within the meaning
of Rule 144A under the Securities Act, as the case may be, in order to permit
compliance by such Holder with Rule 144A under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of this Note, except for any tax or other governmental charge that may
be imposed in connection therewith, other than certain exchanges not involving a
transfer as more fully set forth in the Indenture.
Prior to due presentment of this Note for registration of transfer,
the Company, any Guarantor, the Paying Agents, the Transfer Agents, the
Registrar, the Trustee and any agent of the Company, any Guarantor, the Paying
Agents, the Transfer Agents, the Registrar or the Trustee may deem and treat the
Person in whose name this Note is registered as the absolute owner of that Note
for all purposes, whether or not this Note is overdue, and neither the Company,
any Guarantor, the Paying Agents, the Transfer Agents, the Registrant or the
Trustee nor any such agent shall be affected by notice to the contrary.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAW PRINCIPLES THEREOF.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
-10-
<PAGE>
APPENDIX I
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No. ___________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
_______________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ____________________________________________________________________
attorney to transfer such Note on the books of the Company with full
power of substitution in the premises. [THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES FOR RESTRICTED NOTES]. In connection with any transfer of
this Note occurring prior to the date which is the earlier of the date of an
effective Registration Statement or December 2, 2000, the undersigned confirms
that without utilizing any general solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder or
[ ] (b) this Note is being transferred other than in accordance with
clause (a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture. If none of the
foregoing boxes is checked, the Trustee or other Note Registrar shall not be
obligated to register this Note in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.07 of the Indenture shall have been satisfied.
Date: ________________________________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
-11-
<PAGE>
Signature Guarantee:
________________________
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15.]
TO BE COMPLETED BY PURCHASER IF CLAUSE (a) ABOVE IS CHECKED. The undersigned
represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:________________________________________________________________
NOTICE: To be executed by an authorized signatory
-12-
<PAGE>
APPENDIX II
FORM OF TRANSFEREE CERTIFICATE
I or we assign and transfer this Note to:
Please insert social security or other identifying number of assignee
_____________________________________________________________________
Print or type name, address and zip code of assignee
_____________________________________________________________________
and irrevocably appoint ________________________________________________________
[Agent], to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
Dated __________________________
Signed _________________________
(Sign exactly as name appears on the other side of this Note)
[If applicable, signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan associations and credit
unions) with membership in an approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17 Ad-15]
-13-
<PAGE>
Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
Dated as of December 2, 1999
by and among
PSINet Inc.
and
Donaldson, Lufkin & Jenrette International
Bear Stearns International Limited
Merrill Lynch International
Morgan Stanley & Co. International Limited
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
---------
entered into as of December 2, 1999, by and among PSINet Inc., a New York
corporation (the "Company"), and Donaldson, Lufkin & Jenrette International,
-------
Bear Stearns International Limited, Merrill Lynch International and Morgan
Stanley & Co. International Limited (each an "Initial Purchaser" and,
-----------------
collectively, the "Initial Purchasers"), each of whom (or their respective
------------------
affiliates) has agreed to purchase the Company's $600,000,000 10 1/2% Senior
Notes due 2006 (the "Dollar Notes") and Euro 150,000,000 10 1/2% Senior Notes
------------
due 2006 (the "Euro Notes" and, together with the Dollar Notes, the "Notes")
---------- -----
pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
November 24, 1999 (the "Purchase Agreement"), by and among the Company and the
------------------
Initial Purchasers. In order to induce the Initial Purchasers to purchase the
Notes, the Company has agreed to provide the registration rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition to
the obligations of the Initial Purchasers set forth in Section 3 of the Purchase
Agreement. Capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the Indenture, dated as of December 2, 1999
between the Company and Wilmington Trust Company, as Trustee, relating to the
Notes and the Exchange Notes (as defined below) (the "Indenture").
---------
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
---
Affiliate: As defined in Rule 144 of the Commission under the Act.
---------
Affiliated Market Maker: A Broker-Dealer who is deemed to be an
-----------------------
Affiliate of the Company.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
-------------
Business Day: A day other than Saturday, Sunday or a day on which
------------
banking institutions located in New York City, Luxembourg, London, England or in
the place in which the Company maintains its principal office are authorized or
obligated by law, regulation or executive order to be closed.
Certificated Securities: Definitive Registered Notes, as defined in
-----------------------
the Indenture.
Closing Date: The date hereof.
------------
Commission: The Securities and Exchange Commission.
----------
<PAGE>
Consummate: An Exchange Offer shall be deemed "Consummated" for
---------- -----------
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b) the
maintenance of the continuing effectiveness of such Exchange Offer Registration
Statement and the keeping of the Exchange Offer open for a period not less than
the period required pursuant to Section 3(b) hereof and (c) the delivery by the
Company to the Registrar under the Indenture of Exchange Notes in the same
aggregate principal amount as the aggregate principal amount of Notes validly
tendered by Holders thereof pursuant to the Exchange Offer. The term
"Consummation" shall have a correlative meaning.
------------
Consummation Deadline: As defined in Section 3(b) hereof.
---------------------
Effectiveness Deadline: As defined in Sections 3(a) and 4(a) hereof.
----------------------
Exchange Act: The Securities Exchange Act of 1934, as amended.
------------
Exchange Notes: The Company's 10 1/2% Senior Notes due 2006 to be
--------------
issued pursuant to the Indenture: (i) in the Exchange Offer or (ii) as
contemplated by Section 4 hereof.
Exchange Offer: The exchange and issuance by the Company of an
--------------
aggregate principal amount of Exchange Notes (which shall be registered pursuant
to the Exchange Offer Registration Statement) equal to the outstanding aggregate
principal amount of Notes that are tendered by such Holders in connection with
such exchange and issuance.
Exchange Offer Registration Statement: The Registration Statement
-------------------------------------
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
--------------
propose to resell the Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act and pursuant to Regulation S under
the Act.
Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.
---------------
Holders: As defined in Section 2 hereof.
-------
Person: Any individual, corporation, limited liability company,
------
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement at the
----------
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such prospectus.
Recommencement Date: As defined in Section 6(d) hereof.
-------------------
2
<PAGE>
Registration Default: As defined in Section 5 hereof.
--------------------
Registration Statement: Any registration statement of the Company
----------------------
relating to (a) an offering of Exchange Notes pursuant to the Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, in each case, (i) that is filed pursuant to
the provisions of this Agreement and (ii) including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
Regulation S: Regulation S promulgated under the Act.
------------
Shelf Registration Statement: As defined in Section 4 hereof.
----------------------------
Suspension Notice: As defined in Section 6(d) hereof.
-----------------
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
---
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to occur
------------------------------
of (a) the date on which such Note is exchanged in the Exchange Offer for a
Exchange Note which is entitled to be resold to the public by the Holder thereof
without complying with the prospectus delivery requirements of the Act, (b) the
date on which such Note has been disposed of in accordance with a Shelf
Registration Statement (and the purchasers thereof have been issued Exchange
Notes), or (c) the date on which such Note is entitled to be distributed to the
public pursuant to Rule 144 under the Act (and purchasers thereof have been
issued Exchange Notes), and each Exchange Note until the date on which such
Exchange Note is disposed of by a Broker-Dealer pursuant to the "Plan of
Distribution" contemplated by the Exchange Offer Registration Statement
(including the delivery of the Prospectus contained therein).
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities.
------
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Company shall (i) cause the Exchange Offer Registration
Statement to be filed with the Commission as soon as practicable after the
Closing Date, but in no event later than 75 days after the Closing Date (such
75th day being the "Filing Deadline"), (ii) use its best efforts to cause such
---------------
Exchange Offer Registration Statement to become effective at the earliest
possible time (consistent with existing contractual obligations of the Company),
but
3
<PAGE>
in no event later than 150 days after the Closing Date (such 150th day being
the "Effectiveness Deadline"), (iii) in connection with the foregoing, (A) file
----------------------
all pre-effective amendments to such Exchange Offer Registration Statement as
may be necessary in order to cause it to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
Exchange Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Exchange Offer Registration Statement, commence and
Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate
form permitting (i) registration of the Exchange Notes to be offered in exchange
for the Notes that are Transfer Restricted Securities and (ii) resales of
Exchange Notes by Broker-Dealers that tendered into the Exchange Offer the Notes
that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Notes acquired
directly from the Company or any of its Affiliates) as contemplated by Section
3(c) below.
(b) The Company shall use its best efforts to cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer;
provided, however, that, in no event shall such period be less than 20 Business
- --------
Days. The Company shall cause the Exchange Offer to comply with all applicable
federal and state securities laws, and, if applicable, the rules and regulations
of the Luxembourg Stock Exchange. No securities other than the Exchange Notes
shall be included in the Exchange Offer Registration Statement. The Company
shall use its best efforts to cause the Exchange Offer to be Consummated on the
earliest practicable date after the Exchange Offer Registration Statement has
become effective, but in no event later than 30 Business Days thereafter (such
30/th/ day being the "Consummation Deadline").
---------------------
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Notes acquired directly from
the Company or any Affiliate of the Company), may exchange such Transfer
Restricted Securities pursuant to the Exchange Offer; however, such Broker-
Dealer may be deemed to be an "underwriter" within the meaning of the Act and
must, therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the Exchange Notes received by such Broker-Dealer
in the Exchange Offer, which prospectus delivery requirement may be satisfied by
the delivery by such Broker-Dealer of the Prospectus contained in the Exchange
Offer Registration Statement. Such "Plan of Distribution" section shall also
contain all other information with respect to such sales by such Broker-Dealers
that the Commission may require in order to permit such sales pursuant thereto,
but such "Plan of Distribution" shall not name any such Broker-Dealer or
disclose the amount of Transfer Restricted Securities held by any such Broker-
Dealer, except to the extent required by the Commission as a result of a change
in policy, rules or regulations after the date of this Agreement. The letter of
transmittal or similar documentation to be executed by a Holder in order to
participate in the Exchange Offer will include, among other things, a provision
to the effect that, if the Holder is a Broker-Dealer holding Notes acquired for
its own account as a result of market-making activities or other trading
activities, such Holder acknowledges that it will deliver a prospectus meeting
the requirements of the Act in connection with any resale of Exchange Notes
received in respect of Notes pursuant to the Exchange Offer.
4
<PAGE>
Because such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Exchange
Notes received by such Broker-Dealer in the Exchange Offer, the Company shall
permit the use of the Prospectus contained in the Exchange Offer Registration
Statement by such Broker-Dealer to satisfy such prospectus delivery requirement.
To the extent necessary to ensure that the prospectus contained in the Exchange
Offer Registration Statement is available for sales of Exchange Notes by Broker-
Dealers, the Company agrees to use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented, amended and current
as required by and subject to the provisions of Section 6(a) and (c) hereof and
in conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of one year from the Consummation Deadline or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Registration
Statement have been sold pursuant thereto. The Company shall provide sufficient
copies of the latest version of such Prospectus to such Broker-Dealers, promptly
upon request, and in no event later than two Business Days after such request,
at any time during such period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted by
------------------
applicable law (after the Company has complied with the procedures set forth in
Section 6(a)(i) below) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company within 20 Business Days following the Consummation
Deadline that (A) such Holder was prohibited by law or Commission policy from
participating in the Exchange Offer, (B) such Holder may not resell the Exchange
Notes acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or (C)
such Holder is a Broker-Dealer and holds Notes acquired directly from the
Company or any of its Affiliates, then the Company shall:
(x) cause to be filed, on or prior to 30 days after the earlier of
(i) the date on which the Company determines that the Exchange Offer
Registration Statement cannot be filed as a result of clause (a)(i) above or
(ii) the date on which the Company receives the notice specified in clause
(a)(ii) above (such earlier date, the "Filing Deadline"), a shelf
---------------
registration statement pursuant to Rule 415 under the Act (which may be an
amendment to the Exchange Offer Registration statement (the "Shelf
-----
Registration Statement")), relating to all Transfer Restricted Securities,
----------------------
the Holders of which shall have provided the information required pursuant
to Section 4(b) hereof, and
(y) use its best efforts to cause such Shelf Registration Statement
to become effective on or prior to 60 days after the filing of the Shelf
Registration Statement (or such longer period, not to exceed 150 days after
the filing of the Shelf Registration Statement as may be necessary to avoid
conflicts with existing contractual obligations of the Company) (such 60th
day or longer period the "Effectiveness Deadline").
----------------------
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law (i.e.,
----
clause (a)(i)
5
<PAGE>
above), then the filing of the Exchange Offer Registration Statement shall be
deemed to satisfy the requirements of clause (x) above; provided, that, in such
--------
event, the Company shall remain obligated to meet the Effectiveness Deadline set
forth in clause (y) above.
To the extent necessary to ensure that the Shelf Registration Statement
is available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company shall
use its best efforts to keep any Shelf Registration Statement required by this
Section 4(a) continuously effective, supplemented, amended and current as
required by and subject to the provisions of Sections 6(b) and (c) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of at least two years (as extended pursuant to Section 6(c)(i)) following
the Closing Date, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Shelf Registration Statement have been
sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection with the
------------------------------------------------------------------
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
- ----------------------------
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 10 Business Days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
prospectus included therein, including, without limitation, the information
specified in Item 507 or 508 of Regulation S-K, as applicable, under the Act for
use in connection with any Shelf Registration Statement or Prospectus or
preliminary prospectus included therein. No Holder of Transfer Restricted
Securities shall be entitled to liquidated damages pursuant to Section 5 hereof
unless and until such Holder shall have provided all such information. Each
selling Holder as to which any Shelf Registration Statement is being effected
agrees to notify the Company as promptly as practicable of any inaccuracy or
change in information previously furnished by such Holder to the Company or the
happening of any event, in either case as a result of which the Shelf
Registration Statement contains any untrue statement of a material fact
regarding such Holder or the distribution of Transfer Restricted Securities or
omits to state any material fact regarding such Holder or the distribution of
such Transfer Restricted Securities required to be stated therein or necessary
to make the statement therein, in light of the circumstances under which it is
made, not misleading or any Prospectus relating to such Shelf Registration
Statement contains any untrue statement of a material fact regarding such Holder
or the distribution of such Transfer Restricted Securities or omits to state any
material fact regarding such Holder or the distribution of such Transfer
Restricted Securities necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and to furnish
promptly to the Company any additional information (i) required to correct and
update any previously furnished information or (ii) required so that the Shelf
Registration Statement or any Prospectus shall not contain any such untrue
statement of a material fact or any such omission to state a material fact.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared
6
<PAGE>
effective by the Commission on or prior to the applicable Effectiveness
Deadline, (iii) the Exchange Offer has not been Consummated on or prior to the
Consummation Deadline, or (iv) any Registration Statement required by this
Agreement is filed and declared effective but shall thereafter cease to be
effective or fail to be usable for its intended purpose without being succeeded
immediately (subject to the terms of this Agreement) by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself declared effective immediately (each such event referred to in clauses
(i) through (iv), a "Registration Default"), then the Company hereby agrees to
--------------------
pay to each Holder of Transfer Restricted Securities affected thereby liquidated
damages in an amount equal to 0.25% per annum per $1,000 or Euro 1000, as the
case may be, in principal amount of Transfer Restricted Securities held by such
Holder for each year or portion thereof that the Registration Default continues
for the first 90-day period immediately following the occurrence of such
Registration Default. The amount of the liquidated damages shall increase by an
additional 0.25% per annum per $1,000 or Euro 1000, as the case may be, in
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages of 1.50% per annum per $1,000 or Euro
1000, as the case may be, in principal amount of Transfer Restricted Securities;
provided, that, the Company shall in no event be required to pay liquidated
- --------
damages for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein, (1) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of clause (i) above, (2) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of clause (ii) above,
(3) upon Consummation of the Exchange Offer, in the case of clause (iii) above,
or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made usable in the case of clause (iv) above,
the liquidated damages payable with respect to the Transfer Restricted
Securities as a result of such clause (i), (ii), (iii) or (iv), as applicable,
shall cease.
All accrued liquidated damages shall be paid to the Holder entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Company to pay liquidated damages with respect to such securities outstanding
prior to the time such securities ceased to be Transfer Restricted Securities
shall survive until such time as such obligations with respect to such
securities shall have been satisfied in full.
In the event any Notes or Exchange Notes are listed on the Luxembourg
Stock Exchange, the Company shall (i) notify the Luxembourg Stock Exchange of
the amount of any liquidated damages payable with respect to listed Notes in
accordance with this Section 5 and (ii) arrange to have a notice of the amount
of any such liquidated damages with respect to listed Notes published in a
newspaper having a general circulation in Luxembourg in accordance with the
rules and regulations of the Luxembourg Stock Exchange, which initially shall be
Luxembourger Wort.
7
<PAGE>
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
-------------------------------------
Exchange Offer, the Company shall (x) comply with all applicable provisions of
Section 6(c) below, (y) use its best efforts to effect such exchange and to
permit the resale of Exchange Notes by Broker-Dealers that tendered in the
Exchange Offer Notes that such Broker-Dealer acquired for its own account as a
result of its market making activities or other trading activities (other than
Notes acquired directly from the Company or any of its Affiliates) being sold in
accordance with the intended method or methods of distribution thereof, and (z)
comply with all of the following provisions:
(i) If, following the date hereof there has been announced a change
in Commission policy with respect to exchange offers such as the Exchange
Offer that in the reasonable opinion of counsel to the Company raises a
substantial question as to whether the Exchange Offer is permitted by
applicable federal law, the Company hereby agrees to seek a no-action letter
or other favorable decision from the Commission allowing the Company to
Consummate an Exchange Offer for such Transfer Restricted Securities. The
Company hereby agrees to pursue the issuance of such a decision to the
Commission staff level. In connection with and subject to the foregoing,
the Company hereby agrees to take all such other actions as may be
reasonably requested by the Commission or otherwise required in connection
with the issuance of such decision, including, without limitation, (A)
participating in telephonic conferences with the Commission, (B) delivering
to the Commission staff an analysis prepared by counsel to the Company
setting forth the legal bases, if any, upon which such counsel has concluded
that such an Exchange Offer should be permitted and (C) diligently pursuing
a resolution (which need not be favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange Offer,
each Holder of Transfer Restricted Securities (including, without
limitation, any Holder who is a Broker-Dealer) shall furnish, upon the
request of the Company, prior to the Consummation of the Exchange Offer, a
written representation to the Company (which may be contained in the letter
of transmittal contemplated by the Exchange Offer Registration Statement) to
the effect that (A) it is not an Affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring
the Exchange Notes in its ordinary course of business. In addition, all such
Holders of Transfer Restricted Securities shall otherwise reasonably
cooperate to the extent necessary in the Company's preparations for the
Exchange Offer. Each Holder using the Exchange Offer to participate in a
distribution of the Exchange Notes hereby acknowledges and agrees that, if
the resales are of Exchange Notes obtained by such Holder in exchange for
Notes acquired directly from the Company or an Affiliate thereof, it (1)
could not, under Commission policy as in effect on the date of this
Agreement, rely on the position of the Commission enunciated in Morgan
------
Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
--------------------- ----------------------
Corporation (available May 13, 1988), as interpreted in the Commission's
-----------
letter to Shearman & Sterling dated July 2, 1993, and similar no-action
-------------------
letters (including, if applicable, any no-action letter obtained pursuant to
clause (i) above), and (2) must comply with the registration and prospectus
delivery requirements of the Act in connection with a secondary resale
transaction and that such a secondary resale
8
<PAGE>
transaction must be covered by an effective registration statement
containing the selling security holder information required by Item 507 or
508, as applicable, of Regulation S-K under the Act.
(iii) Prior to the effectiveness of the Exchange Offer
Registration Statement, the Company shall provide a supplemental letter to
the Commission (A) stating that the Company is registering the Exchange
Offer in reliance on the position of the Commission enunciated in Exxon
-----
Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and
---------------------------- ------------------
Co., Inc. (available June 5, 1991) as interpreted in the Commission's letter
---------
to Shearman & Sterling dated July 2, 1993, and, if applicable, any no-action
-------------------
letter obtained pursuant to clause (i) above, (B) including a representation
that the Company has not entered into any arrangement or understanding with
any Person to distribute the Exchange Notes to be received in the Exchange
Offer, and to the extent that the Company is capable of so representing, to
the best of the Company's information and belief, each Holder participating
in the Exchange Offer is acquiring the Exchange Notes in its ordinary course
of business and has no arrangement or understanding with any Person to
participate in the distribution of the Exchange Notes received in the
Exchange Offer and (C) including any other undertaking or representation
required by the Commission as set forth in any no-action letter obtained
pursuant to clause (i) above, if applicable.
(b) Shelf Registration Statement. In connection with the Shelf
----------------------------
Registration Statement, the Company shall (i) (x) comply with all the provisions
of Section 6(c) below and (y) use its best efforts to effect such registration
to permit the sale of the Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof (as
indicated in the information furnished to the Company pursuant to Section 4(b)
hereof), and pursuant thereto the Company will prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof; and (ii) issue, upon the request of any
Holder or purchaser of Notes covered by any Shelf Registration Statement
contemplated by this Agreement, Exchange Notes having an aggregate principal
amount equal to the aggregate principal amount of Notes sold pursuant to the
Shelf Registration Statement and surrendered to the Company for cancellation;
the Company shall register Exchange Notes on the Shelf Registration Statement
for this purpose and issue the Exchange Notes to the purchaser(s) of securities
subject to the Shelf Registration Statement in the names as such purchaser(s)
shall designate.
(c) General Provisions. In connection with any Registration Statement
------------------
and any related Prospectus required by this Agreement, the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for
the period specified in Section 3 or 4 of this Agreement, as applicable.
Upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain an untrue
statement of material fact or omit to state any material fact necessary to
make the statements therein not misleading or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period
required by this Agreement, the Company shall file promptly an appropriate
amendment to such Registration
9
<PAGE>
Statement curing such defect, and, if Commission review is required, use its
best efforts to cause such amendment to be declared effective as soon as
practicable.
(ii) prepare and file with the Commission such amendments and post-
effective amendments to the applicable Registration Statement as may be
necessary to keep such Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as the case may be; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the Act, and to
comply fully with the applicable provisions of Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with the provisions
of the Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth
in such Registration Statement or supplement to the Prospectus;
(iii) advise each Holder and each Initial Purchaser who is required
to deliver a prospectus in connection with sales or market making activities
(as further defined in Section 1 hereof an "Affiliated Market Maker")
-----------------------
promptly and, if requested by such Holder or Person, confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or post-
effective amendment has been filed, and, with respect to any applicable
Registration Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, (D) of the existence of
any fact or the happening of any event that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes
in the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes in
the Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If at any time
the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under
state securities or Blue Sky laws or if the Euro Notes are listed on the LSE
and, at any time, the Luxembourg Stock Exchange orders a suspension of
trading of the Euro Notes, the Company shall use its best efforts to obtain
the withdrawal or lifting of such order at the earliest practical time;
(iv) subject to Section 6(c)(i) above, if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact
10
<PAGE>
or omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
(v) furnish to each Holder and each Affiliated Market Maker in
connection with such exchange or sale, if any, before filing with the
Commission, copies of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such Registration Statement
or Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders in connection with such
sale, if any, for a period of at least five Business Days, and the Company
will not file any such Registration Statement or Prospectus or any amendment
or supplement to any such Registration Statement or Prospectus (including
all such documents incorporated by reference) to which such Holders shall
reasonably object within five Business Days after the receipt thereof. A
Holder shall be deemed to have reasonably objected to such filing if such
Registration Statement, amendment, Prospectus or supplement, as applicable,
as proposed to be filed, contains an untrue statement of a material fact or
omits to state any material fact necessary to make the statements therein
not misleading or fails to comply with the applicable requirements of the
Act which has been specifically identified by such Holder or Affiliated
Market Maker;
(vi) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to each Holder and each Affiliated Market
Maker in connection with such exchange or sale, if any, make the Company's
representatives available at reasonable times for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such Holders may
reasonably request;
(vii) make available, at reasonable times, for inspection by each
Holder and each Affiliated Market Maker and any attorney or accountant
retained by such Holders all financial and other records, pertinent
corporate documents of the Company and cause the Company's officers,
directors and employees to supply all information reasonably requested by
any such Holder or attorney or accountant in connection with such
Registration Statement or any post-effective amendment thereto subsequent to
the filing thereof and prior to its effectiveness; provided, however, that
--------
such Persons shall first agree in writing with the Company that any
information that is reasonably and in good faith designated by the Company
in writing as confidential at the time of delivery of such information shall
be kept confidential by such Persons, unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements
pursuant to federal securities laws in connection with the filing of such
Registration Statement or the use of any Prospectus), (iii) such information
becomes generally available to the public other than as a result of a
disclosure or failure to safeguard such information by such Person or (iv)
such information becomes available to such Person from a source other than
the Company and its subsidiaries and such source is not known, after due
inquiry, by such Person to be bound by a confidentiality agreement; provided
--------
further, that the foregoing investigation shall be coordinated on behalf of
-------
such Persons by one representative designated by and on behalf of such
Persons and any such confidential information shall be available from such
representative to such Persons so long as any Person agrees to be bound by
such confidentiality agreement;
11
<PAGE>
(viii) if requested by any Holders in connection with such exchange
or sale or any Affiliated Market Maker, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such Holders may reasonably
request to have included therein, including, without limitation, information
relating to the "Plan of Distribution" of the Transfer Restricted Securities
and the use of the Registration Statement or Prospectus for market making
activities, except to the extent that the Company, upon receipt of an
opinion of counsel, reasonably believes that the inclusion of such
information could result in a violation of federal or state securities laws;
and make all required filings of such Prospectus supplement or post-
effective amendment as soon as practicable after the Company is notified of
the matters to be included in such Prospectus supplement or post-effective
amendment;
(ix) furnish to each Holder in connection with such exchange or
sale and each Affiliated Market Maker, without charge, at least one copy of
the Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein
and all exhibits (including exhibits incorporated therein by reference);
(x) deliver to each Holder and each Affiliated Market Maker,
without charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons
reasonably may request; the Company hereby consents to the use (in
accordance with law) of the Prospectus and any amendment or supplement
thereto by each selling Holder in connection with the offering and the sale
of the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto and all market making activities of such
Affiliated Market Maker, as the case may be;
(xi) upon the request of any Holder, enter into such agreements
(including underwriting agreements) and make such representations and
warranties as are customarily made by issuers to underwriters in primary
underwritten offerings and take all such other actions in connection
therewith in order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to any applicable Registration Statement
contemplated by this Agreement as may be reasonably requested by any Holder
in connection with any sale or resale pursuant to any applicable
Registration Statement. In such connection, and also in connection with
market making activities by any Affiliated Market Maker, the Company shall:
(A) upon request of any Holder furnish (or in the case of
paragraphs (2) and (3) below, use its best efforts to cause to be
furnished) to each Holder upon Consummation of the Exchange Offer or
upon the effectiveness of the Shelf Registration Statement, in such
substance and scope and as are customarily made by issuers to
underwriters in primary underwritten offerings, as the case may be:
(1) a certificate, dated such date, signed on behalf of the
Company by (x) the President or any Vice President and (y) a
principal financial or accounting officer of the Company,
confirming, as of the date thereof, the matters set forth in
Sections 9(a) and 9(b) of the Purchase Agreement and such other
similar matters as such Holders may reasonably request;
12
<PAGE>
(2) an opinion, dated the date of Consummation of the Exchange
Offer or the date of effectiveness of the Shelf Registration
Statement, as the case may be, of counsel for the Company covering
matters similar to those set forth in Section 9(e) of the Purchase
Agreement and such other matters as such Holder may reasonably
request, and in any event including a statement to the effect that
such counsel has participated in conferences with officers and
other representatives of the Company, representatives of the
independent public accountants for the Company, the underwriters'
representatives and the underwriters' counsel in connection with
the preparation of such Registration Statement and the related
Prospectus, and have considered the matters required to be stated
therein and the statements contained therein, although such counsel
has not independently verified the accuracy, completeness or
fairness of such statements; and that such counsel advises that, on
the basis of the foregoing (relying as to materiality to the extent
such counsel deems appropriate upon the statements of officers and
other representatives of the Company and without independent check
or verification), no facts came to such counsel's attention that
caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any post-
effective amendment thereto became effective and, in the case of
the Exchange Offer Registration Statement, as of the date of
Consummation of the Exchange Offer, contained an untrue statement
of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such Registration
Statement as of its date and, in the case of the opinion dated the
date of Consummation of the Exchange Offer, as of the date of
Consummation, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. Without limiting the foregoing,
such counsel may state further that such counsel assumes no direct
or indirect responsibility, explicitly or implicitly, for, and has
not independently verified, the accuracy, completeness or fairness
of the financial statements (including, without limitation, pro
forma financial statements), notes and schedules and other
financial, numerical, statistical and accounting information and
data included in any Registration Statement contemplated by this
Agreement or the related Prospectus; and
(3) a customary comfort letter, dated the date of Consummation
of the Exchange Offer, or as of the date of effectiveness of the
Shelf Registration Statement, as the case may be, from the
Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort letters
to underwriters in connection with underwritten offerings, and
affirming the matters set forth in the comfort letters delivered
pursuant to Section 9(g) of the Purchase Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders or such Persons to evidence
compliance with the matters covered in
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<PAGE>
clause (A) above and with any customary conditions contained in the
underwriting or other agreement entered into by the Company pursuant to
this clause (xi);
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; provided, however, that the Company shall
--------
not be required to register or qualify as a foreign corporation where it is
not now so qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction
where it is not now so subject;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to
register such Transfer Restricted Securities in such denominations and such
names as the selling Holders may request at least two Business Days prior to
such sale of Transfer Restricted Securities;
(xiv) use its best efforts to cause the disposition of the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may
be necessary to enable the seller or sellers thereof to consummate the
disposition of such Transfer Restricted Securities, subject to the proviso
contained in clause (xii) above;
(xv) provide (A) CUSIP numbers, ISIN numbers and common codes, as
applicable, for all Transfer Restricted Securities not later than the
effective date of a Registration Statement covering such Transfer Restricted
Securities and provide the Trustee under the Indenture with printed
certificates for the Transfer Restricted Securities which are in a form
eligible for deposit with The Depository Trust Company and, to the extent
necessary or appropriate, a common depositary for the Euroclear System or
Cedelbank, as the case may be;
(xvi) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders with regard to any applicable Registration Statement, as
soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) covering a twelve-month
period beginning after the effective date of the Registration Statement (as
such term is defined in paragraph (c) of Rule 158 under the Act);
(xvii) use its best efforts to cause the Indenture to be qualified
under the TIA not later than the effective date of the first Registration
Statement required by this Agreement and, in connection therewith, cooperate
with the Trustee and the Holders to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance with the
terms of the TIA; and execute and use its best efforts to cause the Trustee
to execute, all documents that may
14
<PAGE>
be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner;
(xviii) provide promptly to each Holder and Affiliated Market
Maker, upon request, each document filed with the Commission pursuant to the
requirements of Section 13 or Section 15(d) of the Exchange Act; and
(xix) in the event any Notes are listed on the Luxembourg Stock
Exchange (A) make an application for an equal principal amount of Exchange
Notes to be listed on the Luxembourg Stock Exchange and (B) use its
reasonable best efforts to make available for inspection all documents
prepared in connection with the Exchange Offer at the office of Kredietbank
S.A. Luxembourgeoise, as common depositary, in Luxembourg.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
-----------------------
Transfer Restricted Security and each Affiliated Market Maker agrees that, upon
receipt of the notice referred to in Section 6(c)(iii)(C) hereof or any notice
from the Company of the existence of any fact of the kind described in Section
6(c)(iii)(D) hereof (in each case, a "Suspension Notice"), such Holder or Person
-----------------
will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until (i) such Holder or
Person has received copies of the supplemented or amended Prospectus
contemplated by Section 6(c)(iv) hereof, or (ii) such Holder or Person is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "Recommencement
--------------
Date"). Each Holder or Person receiving a Suspension Notice hereby agrees that
- ----
it will either (i) destroy any Prospectuses, other than permanent file copies,
then in such Holder's or Person's possession which have been replaced by the
Company with more recently dated Prospectuses or (ii) deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such Holder's Person's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the Suspension
Notice. The time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by a number of days equal to the number of days in the period from and including
the date of delivery of the Suspension Notice to the date of delivery of the
Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses; (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing certificates for the Exchange Notes
to be issued in the Exchange Offer and printing of Prospectuses whether for
exchanges, sales, market making or otherwise), messenger and delivery services
and telephone; (iv) all fees and disbursements of counsel for the Company and
one counsel for the Holders of Transfer Restricted Securities as provided in
Section 7(b) below; (v) all application and filing fees in connection with
listing the Exchange Notes on a national securities exchange or automated
quotation system pursuant to the requirements hereof; (vi) all application and
filing fees in connection with listing any Exchange Notes on the
15
<PAGE>
Luxembourg Stock Exchange; and (vii) all fees and disbursements of independent
certified public accountants of the Company (including the expenses of any
special audit and comfort letters required by or incident to such performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities who are
tendering Notes in the Exchange Offer and/or selling or reselling Notes or
Exchange Notes pursuant to the "Plan of Distribution" contained in the Exchange
Offer Registration Statement or the Shelf Registration Statement, as applicable,
for the reasonable fees and disbursements of not more than one counsel, who
shall be Paul, Hastings, Janofsky & Walker LLP, unless another firm shall be
chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.
SECTION 8. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder, its
directors, officers and each Person, if any, who controls such Holder (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from
and against any and all losses, claims, damages, liabilities or judgments
(including without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or Prospectus
(or any amendment or supplement thereto) provided by the Company to any Holder
or any prospective purchaser of Exchange Notes or registered Notes, 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, liabilities or judgments are
caused by (i) an untrue statement or omission or alleged untrue statement or
omission that is based upon information relating to any of the Holders furnished
in writing to the Company by any of the Holders or (ii) an untrue statement or
alleged untrue statement or omission or alleged omission in any preliminary
prospectus that was corrected by the Prospectus and such Holder failed to comply
with such Prospectus delivery requirements as are applicable to it and such
loss, claim, damage, liability or judgment would not have arisen if such
Prospectus had been so delivered.
(b) Each Holder of Transfer Restricted agrees, severally and not
jointly, to indemnify and hold harmless the Company and its directors and
officers, and each Person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Company, to the same extent
as the foregoing indemnity from the Company set forth in clause (a) above, but
only (i) with reference to information relating to such Holder furnished in
writing to the Company by such Holder expressly for use in any Registration
Statement or (ii) if an untrue statement or alleged untrue statement or omission
or alleged
16
<PAGE>
omission in any preliminary prospectus was corrected by the Prospectus and such
Holder failed to comply with such Prospectus delivery requirements as are
applicable to it and such loss, claim, damage, liability or judgment would not
have arisen if such Prospectus had been so delivered. In no event shall any
Holder, its directors, officers or any Person who controls such Holder be liable
or responsible for any amount in excess of the amount by which the total amount
received by such Holder with respect to its sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages that such Holder, its directors, officers or any Person who controls
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission or failure to comply
with such Prospectus delivery requirements as are applicable to it.
(c) In case any action shall be commenced involving any Person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) hereof
(the "indemnified party"), the indemnified party shall promptly notify the
-----------------
person against whom such indemnity may be sought (the "indemnifying person") in
-------------------
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b) hereof, a Holder shall not be
required to assume the defense of such action pursuant to this Section 8(c), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by a majority of the Holders, in the case of the parties
indemnified pursuant to Section 8(a) hereof, and by the Company in the case of
parties indemnified pursuant to Section 8(b) hereof. The indemnifying party
shall indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than 20
Business Days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in
17
<PAGE>
respect of which the indemnified party is or could have been a party and
indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section
8 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Holders, on the other hand, from their sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and of the Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and of the Holder, on the other hand, 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 (A)
information supplied by the Company on the one hand, or by the Holder, on the
other hand, or (B) an untrue statement or alleged untrue statement or omission
or alleged omission therein that was corrected by the Prospectus and any Holder
failed to comply with such Prospectus delivery requirements as are applicable to
it and such loss, claim, damage, liability or judgment would not have arisen if
such Prospectus had been so delivered, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and judgments referred to above shall be
deemed to include, subject to the limitations set forth in the second paragraph
of Section 8(a), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments 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 matter. Notwithstanding
the provisions of this Section 8, no Holder, its directors, its officers or any
Person, if any, who controls such Holder shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total amount received
by such Holder with respect to the sale of Transfer Restricted Securities
pursuant to a Registration Statement exceeds (i) the amount paid by such Holder
for such Transfer Restricted Securities and (ii) the amount of any damages which
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission or failure to comply
with such Prospectus delivery requirements as are applicable to it. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to
18
<PAGE>
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 8(c) are several in proportion to the respective principal amount of
Transfer Restricted Securities held by each Holder hereunder and not joint.
(e) The Company agrees that the indemnity and contribution provisions
of this Section 8 shall apply to Affiliated Market Makers to the same extent, on
the same conditions, as it applies to Holders.
SECTION 9. RULE 144A AND RULE 144
The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company (i) is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder, to such Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A, and (ii) is subject to Section 13 or 15(d) of the
Exchange Act, to make all filings required thereby in a timely manner in order
to permit resales of such Transfer Restricted Securities pursuant to Rule 144.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company acknowledges and agrees that any failure by
--------
it to comply with its obligations under Sections 3 and 4 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders or
Affiliated Market Makers for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that, in
the event of any such failure, the Initial Purchasers or any Holder or
Affiliated Market Makers may obtain such relief as may be required to
specifically enforce the Company's obligations under Sections 3 and 4 hereof.
The Company further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or after the
--------------------------
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as set forth on Schedule
A attached hereto, there are no agreements between the Company and any Person
granting such Person any registration rights with respect to its securities.
Except as set forth on Schedule A attached hereto, the rights granted to the
Holders hereunder do not conflict with the rights granted to the holders of the
Company's securities under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not
----------------------
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof
19
<PAGE>
that relates exclusively to the rights of Holders whose Transfer Restricted
Securities are being tendered pursuant to the Exchange Offer, and that does not
affect directly or indirectly the rights of other Holders whose Transfer
Restricted Securities are not being tendered pursuant to such Exchange Offer,
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities subject to such Exchange Offer.
(d) Third Party Beneficiary. The Holders and Affiliated Market Makers
-----------------------
shall be third party beneficiaries to the agreements made hereunder between the
Company, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders and Affiliated Market Makers hereunder.
(e) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; an d
(ii) if to the Company:
PSINet Inc.
510 Huntmar Park Drive
Herndon, VA 20170-5100
Telecopier No.: (703) 904-9527
Attention: Kathleen B. Horne
Senior Vice President and General Counsel
With a copy to:
Nixon Peabody LLP
437 Madison Avenue
New York, NY 10022
Telecopier No.: (212) 940-3111
Attention: Richard F. Langan, Jr.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
20
<PAGE>
Upon the date of filing of the Exchange Offer or a Shelf Registration
Statement, as the case may be, notice shall be delivered to Donaldson, Lufkin &
Jenrette International on behalf of the Initial Purchasers (in the form attached
hereto as Exhibit A) and shall be addressed to: Attention: (Compliance
Department), 99 Bishopsgate, London, EC2M 3XD, England, with a copy to Donaldson
Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York, NY 10172,
Attention: Syndicate Department.
(f) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of each of the parties,
including, without limitation and without the need for an express assignment,
subsequent Holders; provided, that nothing herein shall be deemed to permit any
--------
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms hereof or of the Purchase Agreement or the Indenture. If
any transferee of any Holder shall acquire Transfer Restricted Securities in any
manner permitted by this Agreement, the Purchase Agreement and the Indenture,
whether by operation of law or otherwise, such Transfer Restricted Securities
shall be held subject to all of the terms of this Agreement, the Purchase
Agreement and the Indenture, and by taking and holding such Transfer Restricted
Securities, such Person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement, the
Purchase Agreement and the Indenture, including the restrictions on resale set
forth in this Agreement, the Purchase Agreement and the Indenture, and such
Person shall be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
THE CONFLICTS OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
21
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PSINET INC.
By: /s/ Edward D. Postal
-----------------------------------
Name: Edward D. Postal
Title: Executive Vice President and
Chief Financial Financial Officer
DONALDSON, LUFKIN & JENRETTE
INTERNATIONAL
By: /s/ A.P. Vracas
-----------------------
Name: A.P. Vracas
Title: Treasurer
BEAR STEARNS INTERNATIONAL LIMITED
By: /s/ L. Alletto
-------------------------
Name: L. Alletto
Title: Senior Managing Director
MERRILL LYNCH INTERNATIONAL
By: /s/ Charles A. Wickham III
-------------------------
Name: Charles A. Wickham III
Title: Managing Director
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
By: /s/ Jeffrey Gelles
-----------------------
Name: Jeffrey Gelles
Title: Vice President
22
<PAGE>
EXHIBIT A
NOTICE OF FILING OF
EXCHANGE OFFER REGISTRATION STATEMENT
To: Donaldson, Lufkin & Jenrette International
99 Bishopsgate
London, EC2M 3YH
England
Facsimile: 011-44-171-655-7903
From: PSINet Inc.
10 1/2% Senior Notes due 2006
Date: __, __
For your information only (NO ACTION REQUIRED):
Today, ______, __, we filed [an Exchange Registration Statement/a
Shelf Registration Statement] with the Securities and Exchange Commission. We
currently expect this registration statement to be declared effective within ___
business days of the date hereof.
23
<PAGE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Media Contact: Analyst Contact:
Reid Walker David Lerch
703-375-1103 703-375-1577
[email protected] [email protected]
PSINet ANNOUNCES $750 MILLION RULE 144A OFFERING
Herndon, VA, November 24, 1999 -- PSINet Inc. (NASDAQ: PSIX) today announced
that it has sold $750 million aggregate principal amount of 10-1/2% Senior
Notes due 2006, consisting of $600 million aggregate principal amount of
10-1/2% Senior Notes due 2006 and Euro 150 million 10-1/2% Senior Notes due
2006, in accordance with Securities and Exchange Commission Rule 144A. The
net proceeds of the offering are expected to be used to finance capital
expenditures including the acquisition of additional telecommunications
bandwidth, related facilities, and equipment; the construction of Internet
data centers; corporate acquisitions and general corporate purposes. The
notes have not been registered under the Securities Act of 1933 and may not
be offered or sold in the United States absent registration under such Act
or an applicable exemption from registration requirements.
