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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) February 1, 2000
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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
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On February 1, 2000, PSINet Inc. completed our previously announced
offering of $700.0 million aggregate principal amount of our 7% Series D
cumulative convertible preferred stock. On February 7, 2000, we completed the
offering of an additional $125.0 million aggregate principal amount of our 7%
Series D cumulative convertible preferred stock pursuant to the initial
purchasers' over-allotment option. The Series D preferred stock was issued and
sold in accordance with Securities and Exchange Commission Rule 144A and has 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 Series D preferred stock was sold to certain
"qualified institutional buyers" (as defined in Rule 144A under the Securities
Act).
After deducting amounts paid by the initial purchasers into a deposit
account, estimated discounts and commissions of the initial purchasers and
expenses payable by us, proceeds of the offering were approximately $738.8
million. We will use net proceeds of the offering for general corporate
purposes, including acquisitions and strategic investments. Pending their use,
we will invest the net proceeds of this offering in short-term, investment grade
and U.S. government securities. We expect to use a portion of the net proceeds
from this offering for possible future investments, acquisitions or strategic
alliances in businesses or assets that are related or complementary to our
existing business.
There is no established trading market for the Series D preferred stock;
however, the Series D preferred stock is eligible for trading in the Private
Offerings, Resale and Trading through Automated Linkages ("PORTAL") market of
the National Association of Securities Dealers, Inc.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
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Exhibit 4.1 Deposit Agreement, dated as of February 1, 2000,
between PSINet Inc. and Wilmington Trust Company,
as deposit agent
Exhibit 4.2 First Amendment to Deposit Agreement dated as of
February 7, 2000 between PSINet Inc. and
Wilmington Trust Company, as deposit agent
Exhibit 4.3 Form of 7% Series D preferred stock certificate
Exhibit 4.4 Form of registered 10 1/2% Senior Notes due 2006
Exhibit 10.1 Registration Rights Agreement, dated as of
February 1, 2000, among PSINet Inc. and
Donaldson, Lufkin & Jenrette Securities
Corporation, Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Inc., Bear, Stearns & Co. Inc.,
<PAGE>
BancBoston Robertson Stephens and Chase
Securities Inc.
Exhibit 10.2 Amendment No. 1 to Registration Rights Agreement
dated February 7, 2000 among PSINet Inc. and
Donaldson, Lufkin & Jenrette Securities
Corporation, Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Inc., Bear, Stearns & Co. Inc.,
BancBoston Robertson Stephens and Chase
Securities Inc.
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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: February , 2000 PSINET INC.
By:
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Edward D. Postal
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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<TABLE>
<CAPTION>
Exhibit
Number Exhibit Name Location
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<C> <S> <C>
4.1 Deposit Agreement, dated as of February 1, 2000, between Filed herewith
PSINet Inc. and Wilmington Trust Company, as deposit agent
4.2 First Amendment to Deposit Agreement dated February 7, 2000 to Filed herewith
Deposit Agreement dated February 1, 2000 between PSINet Inc.
and Wilmington Trust Company, as deposit agent
4.3 Form of 7% Series D Preferred Stock certificate Filed herewith
4.4 Form of registered 10 1/2% Senior Notes due 2006 Filed herewith
10.1 Registration Rights Agreement, dated as of February 1, 2000, Filed herewith
among PSINet Inc. and Donaldson, Lufkin & Jenrette Securities
Corporation, Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. Inc., Bear,
Stearns & Co. Inc., BancBoston Robertson Stephens and Chase
Securities Inc.
10.2 Amendment No.1 to Registration Rights Agreement dated February Filed herewith
7, 2000 among PSINet Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation, Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Inc., Bear, Stearns & Co. Inc., BancBoston Robertson Stephens
and Chase Securities Inc.
</TABLE>
<PAGE>
Exhibit 4.1
PSINET INC.
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of February 1, 2000, by and between PSINet
Inc., a New York corporation (the "Company"), and Wilmington Trust Company (the
"Deposit Agent"), as deposit agent for the benefit of the registered holders
(the "Holders") of the 7% Series D Cumulative Convertible Preferred Stock (the
"Preferred Stock").
This Agreement is made to induce all present and future Holders to
purchase the Preferred Stock by providing a non-interest bearing trust deposit
account (the "Deposit Account") to secure the obligation of the Holders to
acquire from the Company common stock, par value $0.01 per share, of the Company
(the "Common Stock"), on each Deposit Payment Date (as defined below) as
provided herein and to provide for a quarterly cash payment to the Holders in
an amount equal to $0.875 per share of Preferred Stock (the "Quarterly Return
Amount") for each full quarterly period (provided, however, that the Quarterly
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Return Amount shall equal $1.0208 per share for the May 15, 2000 Deposit Payment
Date) in the manner hereinafter provided.
NOW, THEREFORE, the parties hereto agrees as follows:
1. Establishment of Deposit Account.
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(a) The Deposit Account shall be established in connection with the
offering (the "Offering"), of 14,000,000 shares of Preferred Stock and 2,500,000
additional shares of Preferred Stock (the "Over-Allotment Shares") subject to
acquisition in connection with the Offering, and shall be held subject to the
terms and conditions of this Agreement.
(b) Simultaneously with each closing in respect of the Offering, the
Initial Purchasers of the Offering shall deliver, at the request of the
purchasers of the Preferred Stock and on their behalf, an amount in cash equal
to approximately 7.25% of the purchase price of the Preferred Stock (or
approximately $3.65 of the $48.375 purchase price) payable by the Initial
Purchasers pursuant to that certain Purchase Agreement, dated January 26, 2000
in respect of the Offering (the "Purchase Agreement"), plus a ratable amount to
be deposited in respect of any Over-Allotment Shares purchased by the Initial
Purchasers, sufficient to pay, together with the earnings thereon, any Quarterly
Return Amount from the Deposit Account required to be made hereunder prior to
the Deposit Expiration Date, as defined below (such amount together with any
earnings, interest and other proceeds of investments are referred to as the
"Deposit Fund"), to the Deposit Agent against the Deposit Agent's written
acknowledgment and receipt of such amount, in the form attached hereto as
Exhibit A, which amount the Deposit Agent will deposit into the Deposit Account
and hold pursuant to the terms of this Agreement. Funds placed in the Deposit
Account will be the property of the Holders, and not of the Company. The
Deposit Account will secure the obligation of the Holders to acquire from the
Company shares of its Common Stock at the election of the Company on each
Deposit Payment Date, as set forth herein. The Deposit Fund shall be invested
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as provided on Exhibit B to be attached at the closing of the Offering (and
which may be amended by delivery by the Company of a revised Exhibit B in the
event of the issuance of the Over-Allotment Shares), which investment will
provide sufficient funds, without any further investment, to equal the aggregate
Quarterly Return Amount due on the outstanding Preferred Stock, as such
Quarterly Return Amount becomes due, on each Deposit Payment Date. The Deposit
Agent shall have no responsibility for determining whether funds held in the
Deposit Account shall have been invested in a such a manner so as to comply with
the requirements of this Section 1(b). This Agreement may be amended in
connection with the deposit of additional monies in respect of the purchase of
Over-Allotment Shares.
2. Distribution, Reduction and Termination of Deposit Account.
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(a) Unless on or prior to the Notice Date (as defined in Section
2(h)), the Company shall have delivered to the Deposit Agent a Direction Notice
(as defined in Section 2(h)) in respect of a Deposit Payment Date or the Deposit
Expiration Date), the Deposit Agent shall deliver to each Holder of Record (as
defined in Section 3) appearing on the list provided to the Deposit Agent in
accordance with Section 3, the Quarterly Return Amount on February 15, May 15,
August 15 and November 15 of each year (each such date being a "Deposit Payment
Date"), commencing May 15, 2000 and continuing until the earlier of (i) February
15, 2001 (the "Deposit Expiration Date") and (ii) such earlier time as the
Deposit Account is terminated in accordance with Section 2(f) below. The sole
source of funds for each Quarterly Return Amount delivered to Holders of Record
by the Deposit Agent in accordance herewith shall be the Deposit Account and the
Deposit Agent shall have no liability in respect of any deficiency thereof
(subject to Section 6(d)).
(b) If the Company shall have delivered a Direction Notice to the
Deposit Agent on or prior to the Notice Date relating to a Deposit Payment Date
or the Deposit Expiration Date, the Deposit Agent shall, as instructed by the
Company in such Direction Notice, purchase, on behalf of the Holders of Record,
from the Company, with funds from the Deposit Account, that number of whole
shares of Common Stock as is determined by the Company (as set forth in the
Direction Notice) by dividing all or such portion of the Quarterly Return Amount
as set forth in the Direction Notice (the "Share Consideration") as the Company
shall direct by (a) if on the date of such payment a registration statement
covering the shares of Common Stock so issued is effective, 97% of the Market
Value of the Common Stock on the record date, and (b) if on the date of such
payment a registration statement covering the shares of Common Stock so issued
is not effective, 93% of the Market Value of the Common Stock on the record
date. "Market Value" shall have the meaning set forth in Section 2(h). The
Deposit Agent shall pay the Share Consideration from the Deposit Account to the
Company in consideration for such purchase of shares and the Deposit Agent, or
the Company upon the written request of the Deposit Agent, shall transfer such
shares of Common Stock on such Deposit Payment Date or Deposit Expiration Date
to Holders of Record appearing on the list provided to the Deposit Agent in
accordance with Section 3, each such Holder of Record to receive the number of
such shares of Common Stock as is directed by the Company in writing. The
Deposit Agent shall transfer to Holders of Record on the next Deposit Payment
Date or Deposit Expiration Date any portion of such Quarterly Return Amount as
is not utilized to purchase Common Stock from the Company. The Deposit Agent's
obligation hereunder to cause shares of Common Stock to be purchased by the
Deposit Account from the Company shall be secured by, and limited
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to, the funds in the Deposit Account, and the Deposit Agent shall have no
liability to the Company, the Holders (or any other holder of Preferred Stock)
or any other person to the extent that there are not sufficient funds in the
Deposit Account to make any purchase, payment or transfer required under this
Agreement.
(c) In the event of any conversion of the Preferred Stock into shares
of Common Stock prior to the Deposit Expiration Date, and provided that, at the
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time of such conversion, the Company has not delivered a redemption notice,
then, in those circumstances, the Company will be paid any funds remaining in
the Deposit Account allocable to those shares of Preferred Stock so converted
(and as a result, holders of Preferred Stock will not receive any partial
payment from the Deposit Account if they convert their shares prior to receipt
of a full Quarterly Return Amount). If, however, the Company has delivered a
redemption notice, and a Holder converts its Preferred Stock into shares of
Common Stock between the date of the redemption notice and the second day
preceding the redemption date (and, in any case, prior to the Deposit Expiration
Date or the termination of the Deposit Account), then, in those circumstances,
any funds remaining in the Deposit Account allocable to those shares of
Preferred Stock converted in the circumstances described in this sentence will
be paid to the Holders of Record of shares that have been converted. The Company
will deliver a statement and written directions to the Deposit Agent setting
forth the allocation of funds pro rata based upon the number of shares of
Preferred Stock so converted and directions regarding the payment of such funds.
(d) In the event of any redemption of Preferred Stock (written notice
of which shall be provided to the Deposit Agent by the Company) prior to the
earlier of (i) the Deposit Expiration Date and (ii) such earlier time as the
Deposit Account is terminated in accordance with Section 2(f) below, the Deposit
Agent shall, at the written direction of the Company, make a payment to the
Holders whose shares of Preferred Stock have been redeemed of any funds
remaining in the Deposit Account allocable to such Holders' shares so redeemed
(to the extent that the Deposit Account has not been terminated as described in
clause (g) hereof). The Company shall give such notice promptly after any such
redemption and shall include in its written direction (i) the Holders whose
shares have been so redeemed, (ii) the number of shares registered in the name
of each such Holder that have been so redeemed, and (iii) the amount of the
payment per share redeemed to be made to each such Holder.
(e) On the Deposit Expiration Date, the Deposit Agent shall deliver
to the Holders of Record appearing on the list provided to the Deposit Agent in
accordance with Section 3, on a pro rata basis, any cash remaining in the
Deposit Account on such date unless, prior thereto, the Company delivers a
Direction Notice to the Deposit Agent requiring the Deposit Agent to purchase
with funds from the Deposit Account from the Company for transfer to Holders of
Record that number of whole shares of Common Stock determined by dividing the
Share Consideration by (a) if on the date of such payment a registration
statement covering the shares of Common Stock so issued is effective, 97% of the
Market Value of the Common Stock on the record date, and (b) if on the date of
such payment a registration statement covering the shares of Common Stock so
issued is not effective, 93% of the Market Value of the Common Stock on the
record date. "Market Value" shall have the meaning set forth in Section 2(h).
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(f) Notwithstanding any provision herein to the contrary, if (A) the
Company obtains any required amendments to the covenants under its various debt
obligations that would permit the Company to pay cash dividends on the Preferred
Stock prior to the Deposit Expiration Date and (B) at the time the Company
obtains such amendments or at any time thereafter (so long as the amendments
remain effective), the trading price, on any date, for the Preferred Stock
equals or exceeds the liquidation preference in respect thereof, then, in such
event, the Company may thereafter, upon notice to the Holders, elect to exchange
the Deposit Account for an obligation to accrue dividends on the Preferred Stock
from the Deposit Payment Date immediately preceding the date of such election by
instructing the Deposit Agent in writing to distribute the remaining balance of
the Deposit Account to the Company in accordance with this clause (f). If the
Company elects to so terminate the Deposit Account, the Preferred Stock will
begin to accrue dividends from the last Deposit Payment Date preceding such
election.
(g) Upon the final resolution (including the final resolution of all
appeals or rights to appeal in any court) of any voluntary or involuntary
dissolution, liquidation or winding up of the Company, the Deposit Agent shall,
upon the written direction of the Company, return to the Holders any funds at
the time remaining in the Deposit Account.
(h) For purposes of this Agreement: (i) the term "Notice Date" means
the tenth day prior to the applicable Deposit Payment Date or Deposit Expiration
Date, as the case may be; (ii) the term "Market Value" means, as of any date,
the average of the daily closing price for the five consecutive trading days
ending on such date; the closing price for each day shall be the last sales
price or, in case no such reported sales take place on such day, the average of
the last reported bid and asked price, in either case on the principal national
securities exchange on which the shares of the Common Stock are admitted to
trading or listed, or if not listed or admitted to trading on such exchange, the
representative closing bid price as reported by the Nasdaq National Market, or
other similar organization if the Nasdaq National Market is no longer reporting
such information, or if not so available, the fair market price as determined,
in good faith, by the Board of Directors of the Company and (iii) the term
"Direction Notice" means a notice from the Company, in the form attached as
Exhibit C, delivered to the Deposit Agent directing the Deposit Agent to use
funds from the Deposit Account to purchase Common Stock from the Company to
distribute to Holders of Preferred Stock.
(i) This Agreement shall remain in full force and effect until all
amounts held hereunder by the Deposit Agent have been finally distributed in
accordance herewith.
3. Record Date. The Quarterly Return Amount or, if a Direction
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Notice has been delivered by the Company, Common Stock, shall be returned or
delivered to the Holders of Record of the Preferred Stock, as they appear on the
stock register of the Company or its transfer agent or registrar 10 business
days prior to each Deposit Payment Date ("Holders of Record"). A list of the
Holders of Record, including the number of shares of Preferred Stock held by
each such Holder, shall be delivered to the Deposit Agent by the Company or its
transfer agent or registrar at least 5 days prior to each Deposit Payment Date.
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<PAGE>
4. Expenses. The Deposit Agent shall be entitled to customary fees
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and expenses for performing its duties hereunder, as may be agreed from time to
time by the Company and the Deposit Agent. The Deposit Agent shall be entitled
to prompt reimbursement of all reasonable expenses incurred by the Deposit Agent
in carrying out its duties hereunder, including, without limitation, reasonable
travel and other out-of-pocket expenses and reasonable fees and expenses of its
legal counsel arising in connection with the entering into this Agreement or the
negotiation, interpretation or enforcement of any provision hereof or any
arbitration or other proceeding hereunder. The fees and expenses of the Deposit
Agent in carrying out its duties hereunder shall be paid or reimbursed by the
Company. In the event the Deposit Agent renders any extraordinary services in
connection with the Deposit Account or otherwise under this Agreement at the
request of the Company or the Holders, the Deposit Agent shall be entitled to
reasonable additional compensation therefor. The terms of this Section 4 shall
survive termination of this Deposit Agreement.
5. Notices. All notices, requests, demands and other communications
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hereunder shall be deemed to have been duly given on the next business day after
being sent if by hand or if by overnight courier service for next business day
delivery, or five days after being sent if mailed, certified or registered mail,
return receipt requested, with postage prepaid:
(a) if to the Holders, to their address as set forth in the stock
transfer records of the Company, and to Paul, Hastings, Janofsky & Walker LLP,
399 Park Avenue, New York, NY 10022, Attention: Scott M. Wornow, Esq.;
(b) if to the Company, to PSINet Inc., 510 Huntmar Park Drive,
Herndon, Virginia 20170, Attention: Treasurer, or to such other person or
address as the Company shall designate in writing, with a copy to PSINet Inc.,
510 Huntmar Park Drive, Herndon, Virginia 20170, Attention: General Counsel, and
to Nixon Peabody LLP, 437 Madison Avenue, New York, New York 10022, Attention:
Richard F. Langan, Jr., Esq.; and
(c) if to the Deposit Agent, to Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Bruce L. Bisson.
Any party may change the address (or the person to whose attention such notice
is directed) by notice given to the other parties hereto as aforesaid.
6. Concerning the Deposit Agent. In order to induce the Deposit
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Agent to act as deposit agent hereunder, the Company hereby covenants and agrees
with the Deposit Agent as follows:
(a) The Deposit Agent shall not in any way be bound or affected by
any amendment, modification or cancellation of this Deposit Agreement, unless
the same shall have been agreed to in writing by the Deposit Agent.
(b) The Deposit Agent shall be entitled conclusively to rely, and
shall be protected in acting in reliance upon, any Direction Notice or other
notice, letter, statement, list,
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<PAGE>
instruction or direction or any signature furnished to the Deposit Agent
pursuant to this Deposit Agreement and shall be entitled to treat as genuine,
and as the document it purports to be, any letter, notice, statement, list,
instruction, direction or other document or instrument and any signature
delivered to the Deposit Agent hereunder and believed by the Deposit Agent to be
genuine and to have been presented by the proper party or parties, without being
required to determine (and the Deposit Agent shall be permitted to so assume)
the authenticity or correctness thereof and of any fact stated therein, the
propriety or validity thereof, or the authority or authorization of the party or
parties making and/or delivering the same.
(c) This Agreement sets forth exclusively the duties and obligations
of the Deposit Agent with respect to any and all matters pertinent to its acting
as deposit agent under this Agreement.
(d) The Deposit Agent undertakes to perform only such duties as are
expressly set forth in this Deposit Agreement, and no implied duties or implied
obligations shall be read into this Deposit Agreement against the Deposit Agent.
Neither the Deposit Agent nor any of its directors, officers, employees or
agents shall be in any manner liable or responsible to the Company, any holder
(or any other holder of Preferred Stock) or any other person or entity for or in
respect of any loss, claim, damage or liability (collectively, "Loss") resulting
from, or arising out of, any action or failure or omission to act hereunder or
for any mistake of fact or error of judgment, including, but not limited to, any
Loss that may occur by reason of the exercise of the Deposit Agent's discretion
in connection with to the Deposit Agreement or Deposit Account in any particular
matter or for any other reason, except for any Loss which is the result of gross
negligence or willful misconduct on the part of the Deposit Agent or such
director, officer, employee or agent.
(e) The Company covenants and agrees to indemnify and hold the
Deposit Agent and each of its directors, officers, employees and agents (the
Deposit Agent and any such person or entity seeking indemnification hereunder
being hereinafter referred to as an "Indemnified Party") harmless from and
against, and upon demand reimburse each Indemnified Party for, any and all
losses, claims, damages, liabilities, costs and expenses, actions, suits or
proceedings at law or in equity, and any other expenses, fees or charges of any
character or nature (including reasonable costs of investigation and fees and
disbursements of its legal counsel) (collectively, "Indemnified Losses"), which
may be paid, incurred or suffered by such Indemnified Party or to which such
Indemnified Party may become subject by reason of or in connection with its
acting as deposit agent hereunder or arising out of the Deposit Account
(including, but not limited to, any action taken or omitted by the Deposit Agent
in connection with this Agreement or any action allegedly so taken or omitted)
or by reason of, or as a result of, the Deposit Agent's compliance with the
instructions set forth herein or with any instructions delivered to the Deposit
Agent pursuant hereto, except with respect to Indemnified Losses which shall be
the result of gross negligence or willful misconduct on the part of such
Indemnified Party. The terms of this Section 6(e) shall survive the termination
of this Deposit Agreement.
(f) In the event of any controversy or dispute hereunder, or with
respect to any question as to the construction of this Agreement or any action
to be taken by it hereunder,
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<PAGE>
the Deposit Agent may, in its discretion, obtain the advice of counsel
reasonably satisfactory to it and shall incur no liability for, and shall be
fully protected in, acting in accordance with the advice or opinion of such
counsel.
(g) If any part of the Deposit Fund is at any time attached,
garnished or levied upon or under any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any of the Deposit Fund shall be
stayed or enjoined by any court order, or in case any order, writ, judgment or
decree shall be made or entered by any court affecting the Deposit Fund or any
part thereof, then and in any of such events, the Deposit Agent is authorized,
in its sole discretion, to rely upon and comply with any such order, writ,
judgment or decree. The Deposit Agent shall not be liable to any of the parties
hereto, to any Holder or to any holder of Preferred Stock, or to any other
person, firm or corporation by reason of such compliance even though such order,
writ, judgment or decree may be subsequently reversed, modified, annulled, set
aside, vacated, found to have been entered without jurisdiction, or found to be
in violation of or beyond the scope of a constitution or a law.
(h) Notwithstanding anything to the contrary contained herein, if the
Deposit Agent shall be uncertain as to its duties or rights hereunder, shall
receive any notice, advice, direction, or other document from the Company with
respect to the Deposit Fund which, in its opinion, is in conflict with any of
the provisions of this Agreement, should be advised that a dispute has arisen
with respect to the payment, ownership, or right of possession of the Deposit
Fund or any part thereof (or as to the delivery, non-delivery, or content of any
notice, advice, direction, or other document) or if any obligation of the
Deposit Agent under this Agreement shall, in the opinion of the Deposit Agent,
expose the Deposit Agent to liability due to actual or potential conflicting
claims to the Deposit Account, the Deposit Agent shall be entitled (but not
obligated), without liability to anyone, to refrain from taking any action other
than to hold the Deposit Fund in accordance with this Agreement until such
uncertainty, conflict, dispute or obligation is resolved to the reasonable
satisfaction of the Deposit Agent, including by (and, notwithstanding anything
to the contrary, it shall be reasonable for the Deposit Agent not to act until
it has received) an order, decree or judgment of a court of competent
jurisdiction which has been finally affirmed on appeal or which by lapse of time
or otherwise is no longer subject to appeal, but the Deposit Agent shall be
under no duty to institute or to defend any proceeding, although it may
institute or defend such proceedings.
(i) The Company shall have the right to cause the Deposit Agent to be
relieved of its duties hereunder and to select a substitute deposit agent, upon
the expiration of 30 days following delivery of written notice of substitution
to the Deposit Agent. Upon selection of such substitute deposit agent, such
substitute deposit agent and the Company shall enter into an agreement
substantially identical to this Agreement and, thereafter, the replaced deposit
agent shall be relieved of its duties and obligations to perform hereunder,
except that the replaced deposit agent shall transfer to the substitute deposit
agent upon request therefor the Deposit Funds and copies of all books, records,
plans and other documents in the replaced deposit agent's possession relating to
such funds or this Agreement.
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<PAGE>
(j) Upon not less than 30 days' written notice to the Company and the
Holders of its intention to resign under this Agreement, the Deposit Agent may
resign as deposit agent hereunder by selecting, as a successor deposit agent,
any other deposit agent as directed or approved by the Company (which approval
shall not be unreasonably withheld). Such resignation shall take effect upon
delivery by the resigning Deposit Agent of the Deposit Fund to such successor
deposit agent; the resigning Deposit Agent shall thereupon be discharged of all
its duties and obligations hereunder. In addition, the Deposit Agent shall be
discharged of all of its duties and obligations hereunder upon its deposit of
the Deposit Fund with a court of competent jurisdiction. The Company, the
Holders (and any other holder of Preferred Stock) each hereby irrevocably
consents and submits to the jurisdiction of such court in any such action and
waives all rights to contest the jurisdiction of such court.
(k) The Company hereby authorizes the Deposit Agent, (i) to institute
a bill of interpleader in any court of competent jurisdiction to determine the
rights of any person (including the Initial Holders, the Holders (and any other
holder of Preferred Stock), the Company and any other person) to the Deposit
Account and the Company shall pay all reasonable costs, expenses and
disbursements of the Deposit Agent in connection therewith, including reasonable
attorney's fees and (ii) to deposit the Deposit Account with the clerk of that
court.
(l) The Deposit Agent's duties, obligations and liabilities
hereunder, except as a result of the Deposit Agent's gross negligence or willful
misconduct, will terminate upon its delivery of all of the Deposit Fund under
any provision of this Agreement. The provisions of this Section 6(l) shall
survive any such termination.
7. Specific Performance. In the event of the failure by a party
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hereto to give any notice required under the terms of this Agreement, the other
parties hereto shall be entitled to specific performance by such non-performing
party.
8. Miscellaneous.
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(a) Continuance of Agreement. This Agreement shall be binding upon
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the parties hereto and their respective heirs, personal representatives,
successors and assigns.
(b) Counterparts. This Agreement may be executed in any number of
------------
counterparts all of which, taken together shall constitute the same agreement.
(c) No Amendments. This Agreement may not be modified or amended, nor
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may any provision hereof be waived, except (i) by a writing duly executed by the
Deposit Agent, the Company and by a majority of the Holders or (ii) as provided
in Section 1(b).
(d) Governing Law. This Agreement shall be governed and construed in
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accordance with the laws of the State of New York without reference to its
principles of conflicts of law.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and the 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/ James J. McGinley
-----------------------------------
Name: James J. McGinley
Title: Authorized Signor
<PAGE>
Exhibit A
RECEIPT
The undersigned Initial Purchasers, as defined in Schedule I to that
certain Purchase Agreement dated as of January 26, 2000 on behalf of themselves,
hereby deliver, at the request of the Holders of the 7% Series D Cumulative
Convertible Preferred Stock, $.01 par value, of the Company, to Wilmington Trust
Company, a Delaware banking corporation (the "Deposit Agent"), as deposit agent
under the Deposit Agreement (the "Deposit Agreement") dated as of February 1,
2000 by and between the Deposit Agent and the Company, in immediately available
funds paid by wire transfer, the amount of $49,081,517.02 to the Deposit Account
(as defined in the Deposit Agreement) in accordance with the provisions of the
Deposit Agreement.
[Remainder of the Page Intentionally Left Blank]
<PAGE>
Date: February 1, 2000
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
BANCBOSTON ROBERTSON STEPHENS INC.
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Raymond Cleeman
-----------------------------------
Name: Raymond Cleeman
Title: Vice President
Receipt and deposit in the Deposit
Account of the above-mentioned wire
transfer is hereby acknowledged
WILMINGTON TRUST COMPANY,
as Deposit Agent
By: /s/ James J. McGinley
---------------------------------
Name: James J. McGinley
Title: Authorized Signor
<PAGE>
Exhibit B
Investments
The funds that the purchasers of the 7% Series D Cumulative
Convertible Preferred Stock deposit in the Deposit Account will be invested in
U.S. government obligations or U.S. government guaranteed obligations as
provided on the attachment hereto.
This Exhibit B shall be amended in the event of any issuance of the
Over-Allotment Shares.
In the event that investments made pursuant to this Exhibit B shall
mature or otherwise require reinvestment, the Deposit Agent shall make overnight
(or, if requested in writing by the Company, other) investment of available
funds in U.S. government obligations or U.S. government guaranteed obligations
which shall mature as required to make payments required under the Deposit
Agreement.
PSINet Inc.
DEPOSIT ACCOUNT PURCHASES
Amendment
Trade Settlement Date: 02/01/00
CUSIP # FACE VALUE ISSUE PRICE COST
- --------------------------------------------------------------------------------
912833FL9 $14,156,000.00 U.S. TREASURY STRIP 0.98398 $13,929,220.88
DUE 5/15/00
912833CC2 $12,250,000.00 U.S. TREASURY STRIP 0.96934 $11,874,415.00
DUE 8/15/00
912820AY3 $12,250,000.00 U.S. TREASURY STRIP 0.95287 $11,672,657.50
DUE 11/15/00
912820AZ0 $12,250,000.00 U.S. TREASURY STRIP 0.93670 $11,474,575.00
DUE 2/15/01
Total Value $50,906,000.00 $48,950,868.38
============= =============
<PAGE>
Exhibit C
Form of Direction Notice
[Letterhead of the Company]
[Date]
[Deposit Agent]
Re: Direction Notice No. [___]
Ladies and Gentlemen:
We refer to the Deposit Agreement (the "Deposit Agreement") dated as
of the 1st day of February, 2000 between you, as Deposit Agent, and PSINet Inc.,
a New York corporation (the "Company"). Unless otherwise specified, capitalized
terms used herein shall have the meaning given in the Deposit Agreement. This
letter constitutes a Direction Notice under the Deposit Agreement.
[The undersigned hereby notifies you that you are directed, pursuant
to Section 2(b) of the Deposit Agreement, to purchase from the Company, for
delivery to each Holder of Record of Preferred Stock in lieu of the Quarterly
Return Amount on the next Deposit Payment Date or the Deposit Expiration Date,
as applicable, ___ shares of Common Stock for $____ of Quarterly Return Amount.]
[The undersigned hereby notifies you of the conversion of [_________]
shares of Preferred Stock by certain Holders, and that you are directed,
pursuant to Section 2(c) of the Deposit Agreement, to pay to the Company any
funds remaining in the Deposit Account allocable to the shares of Preferred
Stock so converted.]
[The undersigned hereby notifies you of the redemption of [____]
shares of Preferred Stock by certain Holders, and that you are directed,
pursuant to Section 2(d) of the Deposit Agreement, to pay $[_____] to the
Company, representing funds remaining in the Deposit Account allocable to the
shares of Preferred Stock so redeemed.]
[The undersigned hereby notifies you that you are directed, pursuant
to Section 2(e) of the Deposit Agreement, to purchase from the Company for
delivery to each Holder of Record of Preferred Stock in lieu of the Quarterly
Return Amount on the Deposit Expiration Date ___ shares of Common Stock for
$____ of Quarterly Return Amount.]
In connection with the requested disbursement, the undersigned hereby
notifies you that: (i) you may elect to have the Company deliver, for and on
your behalf, the shares of Common Stock acquired by you directly to the
appropriate Holders of the Preferred Stock and (ii) your obligation to purchase
shares of Common Stock is secured by the funds in the Deposit Account. The
Deposit Agent is entitled to rely on the foregoing in disbursing funds relating
to this Deposit Notice.
<PAGE>
PSINET INC.
By:______________________________
Name:
Title:
<PAGE>
Exhibit 4.2
PSINET INC.
FIRST AMENDMENT TO
DEPOSIT AGREEMENT
THIS FIRST AMENDMENT TO DEPOSIT AGREEMENT, dated as of February 7, 2000
(this "First Amendment"), by and between PSINet Inc., a New York corporation
(the "Company") and Wilmington Trust Company (the "Deposit Agent"), as deposit
agent for the benefit of the Holders of the 7% Series D Cumulative Convertible
Preferred Stock (the "Preferred Stock").
W I T N E S S E T H :
-------------------
WHEREAS, the Company and the Deposit Agent are parties to that certain
Deposit Agreement, dated as of February 1, 2000 (the "Deposit Agreement");
WHEREAS, the Company and the Deposit Agent desire to amend the Deposit
Agreement in the manner set forth in this First Amendment;
WHEREAS, on February 2, 2000, the purchasers exercised their option under
the Purchase Agreement in respect of the purchase of the Over-Allotment Shares
(the "Over-Allotment Offering"); and
WHEREAS, all capitalized terms not defined herein have the meanings
ascribed to them in the Deposit Agreement.
NOW, THEREFORE, in consideration of the above premises and such other good
and valuable consideration the sufficiency of which is hereby acknowledged, each
party agrees for the benefit of the other, as follows:
<PAGE>
ARTICLE 1
AMENDMENT
---------
Section 1.1 Exhibit B Amendment. The Deposit Agreement is hereby amended
-------------------
to modify Exhibit B thereto to add thereto the list of Treasury strips in the
form attached hereto as Schedule A, which Treasury strips shall be purchased for
purposes of investing the funds deposited into the Deposit Account in connection
with the offering of the Over-Allotment Shares.
ARTICLE 2
MISCELLANEOUS
-------------
Section 2.1 Governing Law. This First Amendment shall be governed and
-------------
construed in accordance with the laws of the State of New York without reference
to its principles of conflicts of law.
Section 2.2 Counterparts. This First Amendment may be executed in any
------------
number of counterparts all of which, taken together, shall constitute the same
agreement.
Section 2.3 Deposit Agreement. Except as amended hereby, the Deposit
-----------------
Agreement is in all respects ratified and confirmed and all the terms thereof
shall remain in full force and effect. From and after the effectiveness of this
First Amendment, any reference to the Deposit Agreement shall mean the Deposit
Agreement as amended by this First Amendment.
[signatures appear on the following page]
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the date and year first above written.
PSINET INC.
By: /s/ Michael J. Malesardi
--------------------------------
Name: Michael J. Malesardi
Title: Vice President and Controller
WILMINGTON TRUST COMPANY
By: /s/ James J. McGinley
--------------------------------
Name: James J. McGinley
Title: Authorized Signor
<PAGE>
Schedule A
----------
PSINet Inc.
DEPOSIT ACCOUNT PURCHASES
Amendment
Trade Settlement Date: 02/07/00
CUSIP # FACE ISSUE PRICE COST
VALUE
- ------------------------------------------------------------------------------
912833FL9 $2,528,000.00 U.S. TREASURY STRIP 0.98504 $2,490,181.12
DUE 5/15/2000
912820AX5 $2,187,000.00 U.S. TREASURY STRIP 0.97012 $2,121,652.44
DUE 8/15/00
912833FM7 $2,188,000.00 U.S. TREASURY STRIP 0.95398 $2,087,308.24
DUE 11/15/00
912820AZ0 $2,187,000.00 U.S. TREASURY STRIP 0.93766 $2,050,662.42
DUE 2/15/01
Total Value $9,090,000.00 $8,749,804.22
============= =============
Less Excess Deposit
Funds $ (130,648.64)
-------------
Total Funding of Deposit
Account $8,619,155.58
=============
<PAGE>
Exhibit 4.3
PD
PSINet Inc.
INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK
CUSIP 74437C 40 8
SEE REVERSE SIDE
FOR CERTAIN DEFINITIONS
This Certifies that
is the owner of
SHARES OF THE 7% SERIES D CUMULATIVE CONVERTIBLE PREFERRED STOCK, PAR VALUE
$.01 PER SHARE, OF
PSINet Inc., transferable on the books of the Corporation by the holder hereof
in person or by duly authorized attorney upon surrender of this certificate
properly endorsed. The shares represented hereby are issued and shall be held
subject to the provisions of the Certificate of Incorporation and By-laws of the
Corporation and all amendments thereto, and any restrictions on the reverse side
hereof, to all of which the holder by acceptance hereof assents. This
certificate is not valid until countersigned and registered by the Transfer
Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
Corporate Secretary Chairman and Chief Executive Officer
Countersigned and Registered:
First Chicago Trust Company of New York
Transfer Agent and Registrar
By
Authorized Signature
<PAGE>
PSINet Inc.
THE CORPORATION WILL FURNISH TO ANY SHAREHOLDER UPON REQUEST AND WITHOUT
CHARGE A FULL STATEMENT OF THE DESIGNATION, RELATIVE RIGHTS, PREFERENCES AND
LIMITATIONS OF THE SHARES OF EACH CLASS AUTHORIZED TO BE ISSUED AND THE
DESIGNATION, RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS OF EACH SERIES OF ANY
CLASS OF PREFERRED STOCK WHICH THE CORPORATION IS AUTHORIZED TO ISSUE SO FAR AS
THE SAME HAVE BEEN FIXED AND THE AUTHORITY OF THE BOARD TO DESIGNATE AND FIX THE
RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS OF OTHER SERIES. SUCH REQUEST
SHOULD BE ADDRESSED TO THE SECRETARY OF THE CORPORATION OR TO THE TRANSFER AGENT
NAMED ON THE FACE HEREOF.
THIS SECURITY (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, U.S. PERSONS. EXCEPT AS SET FORTH IN
THE NEXT SENTENCE, BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER:
(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A "QIB"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY
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 OF FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THIS SECURITIES ACT,
(D) 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 (E) 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, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable law or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - .......Custodian.......
(Cust) (Minor)
TEN ENT - as tenants by the under Uniform Gifts to Minors
entireties
Act..........................
(State)
JT TEN - as joint tenants with
right of survivorship
and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
<PAGE>
For value received hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE
Shares of the capital stock represented by the within
Certificate, and do hereby irrevocably constitute and appoint
Attorney to transfer the said stock on the books of the within-named Corporation
with a full power of substitution in the premises.
Dated, ___________________
________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON
THE FACE OF THE CERTIFICATE, IN EVERY
PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT, OR ANY CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED
By _____________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (Banks,
Stockbrokers, Savings and Loan
Associations and Credit Unions) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO
S.E.C. Rule 17ad. - 15.
<PAGE>
Exhibit 4.4
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.
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/Euro 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
1
<PAGE>
-2-
States Dollars/Euros, 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
Note) 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 such 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.
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.
<PAGE>
-3-
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
<PAGE>
-4-
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:
<PAGE>
-5-
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]
<PAGE>
-6-
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.
<PAGE>
-7-
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).
<PAGE>
-8-
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.
<PAGE>
1
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.
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.
<PAGE>
2
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
<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 10.1
REGISTRATION RIGHTS AGREEMENT
Dated as of February ___, 2000
by and among
PSINet Inc.
and
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Inc.
Bear, Stearns & Co. Inc.
BancBoston Robertson Stephens
and
Chase Securities Inc.
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
---------
entered into as of February 1, 2000, by and among PSINet Inc., a New York
corporation (the "Company"), and Donaldson, Lufkin & Jenrette Securities
-------
Corporation, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Inc., Bear Stearns & Co. Inc., BancBoston
Robertson Stephens, and Chase Securities Inc. (each an "Initial Purchaser" and,
-----------------
collectively, the "Initial Purchasers"), each of whom (or their respective
------------------
affiliates) has agreed to purchase the Company's 14,000,000 shares of 7% Series
D Cumulative Preferred Stock of the Company (the "Preferred Stock") pursuant to
the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
January 26, 2000 (the "Purchase Agreement"), by and among the Company and the
------------------
Initial Purchasers. In order to induce the Initial Purchasers to purchase the
Preferred Stock, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution and delivery of this Agreement has been
agreed to by the Company under Section 3(b) of the Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in the Purchase Agreement.
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.
---------
Business Day: A day other than Saturday, Sunday or a day on which
------------
banking institutions located in New York City, 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.
Commission: The Securities and Exchange Commission.
----------
Common Stock: The common stock, par value $ .01 per share, of the
------------
Company, issuable upon conversion of the Preferred Stock.
Effectiveness Deadline: As defined in Section 3(a) hereof.
----------------------
Exchange Act: The Securities Exchange Act of 1934, as amended.
------------
<PAGE>
Exempt Resales: The transactions in which the Initial Purchasers
--------------
propose to resell the Preferred Stock 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 Section 3(a) hereof.
----------------
Holders: As defined in Section 2 hereof.
-------
Majority Holders: The holders of a majority of the aggregate number
----------------
of shares of Preferred Stock registered under the Shelf Registration Statement.
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 Shelf Registration Statement
----------
at the time such Shelf 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.
Registration Default: As defined in Section 6 hereof.
--------------------
Shelf Registration Statement: Any registration statement filed by the
----------------------------
Company relating to the registration for resale of Transfer Restricted
Securities (as defined) that is filed pursuant to the provisions of this
Agreement, including the Prospectus included therein; and all exhibits,
amendments, supplements (including post-effective amendments), and material
incorporated by reference therein.
Supplement Delay Period: means any period commencing on the date of
-----------------------
receipt by a Holder of Transfer Restricted Securities of any notice from the
Company of the existence of any fact or event of the kind described in Section
4(b)(2) hereof and ending on the date of receipt by such Holder of an amended or
supplemented Shelf Registration Statement or Prospectus, as contemplated by
Section 4(h) hereof, or the receipt by such Holder of written notice from the
Company (the "Advice") that the use of the Prospectus may be resumed, and the
receipt of copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus.
Transfer Restricted Securities: means each share of Preferred Stock
------------------------------
and the common stock issuable upon conversion thereof until (i) the date on
which such Series D Preferred Stock or the common stock issuable upon conversion
thereof has been effectively registered under the Securities Act and disposed of
in accordance with the Shelf Registration Statement, (ii) the date on which such
Preferred Stock or the common stock issuable upon conversion thereof is
distributed to the public pursuant to Rule 144(k) under the Securities Act (or
any similar provision then in effect) or is saleable pursuant to Rule 144(k)
under the Act or (iii) the date on which such Series D Preferred Stock or the
common stock issuable upon conversion thereof ceases to be outstanding.
2
<PAGE>
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. SHELF REGISTRATION
a. The Company (i) shall within 90 days of the date of original
issuance of the Preferred Stock, file with the Commission a Shelf Registration
Statement (the "Filing Deadline") and, (ii) shall use its reasonable best
efforts to cause to be declared effective under the Act on or prior to 180 days
(plus any additional days allowed as a result of a Supplement Delay Period)
after the date of original issuance of the Preferred Stock, a Shelf Registration
Statement relating to the offer and sale of the Transfer Restricted Securities
by the Holders from time to time in accordance with the methods of distribution
elected by such Holders and set forth in such Shelf Registration Statement (the
"Effectiveness Deadline").
b. The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period of two
years from the date of original issuance of the Preferred Stock or such shorter
period that will terminate when (i) all the Transfer Restricted Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement, (ii) the date on which, in the opinion of counsel to the
Company, all of the Transfer Restricted Securities then held by the Holders may
be sold by such Holders in the public United States securities markets in the
absence of a registration statement covering such sales or (iii) the date on
which there ceases to be outstanding any Transfer Restricted Securities (in any
such case, such period being called the "Shelf Registration Period"). The
Company shall be deemed not to have used its reasonable best efforts to keep the
Shelf Registration Statement effective during the requisite period if it
voluntarily takes any action that would result in Holders of Transfer Restricted
Securities covered thereby not being able to offer and sell such securities
during that period, unless (i) such action is required by applicable law, (ii)
such action is taken by the Company in good faith and for valid business reasons
(not including avoidance of the Company's obligations hereunder), including
without limitation, the acquisition or divestiture of assets, or (iii) such
action is taken because of any fact or circumstance giving rise to a Supplement
Delay Period.
c. 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 6 hereof unless and until 20 Business
Days after
3
<PAGE>
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 they are 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 4. REGISTRATION PROCEDURES
In connection with any Shelf Registration Statement, the following
provisions shall apply:
a. The Company shall ensure that (i) any Shelf Registration
Statement and any amendment thereto and any Prospectus forming part thereof and
any amendment or supplement thereto complies in all material respects with the
Act and the rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and (iii) any Prospectus forming part of any Shelf Registration Statement, and
any amendment or supplement to such Prospectus, does not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements, in the light of the circumstances under which they were
made, not misleading.
b. (1) The Company shall advise the Initial Purchasers and the
Holders of Transfer Restricted Securities named in any Shelf Registration
Statement, and, if requested by the Initial Purchasers or any such Holder,
confirm such advice in writing when a Shelf Registration Statement and any
amendment thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has become
effective.
(2) The Company shall advise the Initial Purchasers and the Holders
of Transfer Restricted Securities named in any Shelf Registration Statement,
which have provided in writing to the Company a telephone or facsimile number
and address for notices, and, if requested by the Initial Purchasers or any such
Holder, confirm such advice in writing:
4
<PAGE>
(i) of any request by the Commission for amendments or supplements to
the Shelf Registration Statement or the Prospectus included therein or for
additional information;
(ii) of the initiation by the Commission of proceedings relating to a
stop order suspending the effectiveness of the Shelf Registration Statement;
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement;
(iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the securities included therein for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and
(v) of the existence of any fact and the happening of any event
(including, without limitation, pending negotiations relating to, or the
consummation of, a transaction or the occurrence of any event which would
require additional disclosure of material non-public information by the Company
in the Shelf Registration Statement as to which the Company has a bona fide
business purpose for preserving confidential or which renders the Company unable
to comply with Commission requirements) that, in the opinion of the Company,
makes untrue any statement of a material fact made in its Shelf Registration
Statement, the Prospectus or any amendment or supplement thereto or any document
incorporated by reference therein or requires the making of any changes in the
Shelf Registration Statement or the Prospectus so that, as of such date, the
statements therein are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances under which they were
made) not misleading, provided, that the foregoing obligation shall only arise
if the Company has been notified by the Transfer Agent that the Shelf
Registration Statement is being used to effect transfers of Transfer Restricted
Securities as provided by Section 4(o) below.
Such advice may be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made.
c. The Company shall use its best efforts to obtain the withdrawal
of any order suspending the effectiveness of any Shelf Registration Statement at
the earliest possible time.
d. The Company shall use its best efforts to furnish to each selling
Holder named in any Shelf Registration Statement who so requests in writing and
who has provided to the Company an address for notices, without charge, at least
one conformed copy of such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and, if the Holder so requests
in writing, all exhibits and schedules (including those incorporated by
reference).
5
<PAGE>
e. The Company shall, during the Shelf Registration Period, deliver
to each Holder of Transfer Restricted Securities named in any Shelf Registration
Statement and who has provided to the Company an address for notices, without
charge, as many copies of the Prospectus (including each preliminary Prospectus)
contained in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request; subject to any advice or notice
by the Company in accordance with Section 4(b) or 5(b) hereof, the Company
consents to the use of the Prospectus or any amendment or supplement thereto by
each of the selling Holders for the purposes of offering and resale of the
Transfer Restricted Securities covered by the Prospectus in accordance with the
applicable regulations promulgated under the Act.
f. Prior to any offering of Transfer Restricted Securities pursuant
to any Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Holders of Transfer Restricted Securities named therein and
their respective counsel in connection with the registration or qualification of
such Transfer Restricted Securities for offer and sale under the securities or
blue sky laws of such jurisdictions of the United States as any such Holders
reasonably request in writing not later than the date that is 20 Business Days
prior to the date upon which this Agreement specifies that the Shelf
Registration Statement shall become effective; provided, however, that the
Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which would
subject it to general or unlimited service of process or to taxation in any such
jurisdiction where it is not then so subject.
g. The Company shall cooperate with the Holders of Transfer
Restricted Securities to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold pursuant to
any Shelf Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may request in writing at
least two Business Days prior to sales of securities pursuant to such Shelf
Registration Statement.
h. Upon the occurrence of any event contemplated by paragraph
(b)(2)(v) hereof, the Company shall promptly prepare a post-effective amendment
to any Shelf Registration Statement or an amendment or supplement to the related
Prospectus or file any other required document so that as thereafter delivered
to purchasers of the Transfer Restricted Securities covered thereby, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that
in the event of a material business transaction (including, without limitation,
pending negotiations relating to such a transaction) which would, in the opinion
of counsel to the Company, require disclosure by the Company in the Shelf
Registration Statement of material non-public information for which the Company
has a bona fide business purpose for not disclosing, then for so long as such
circumstances exist, the Company shall not be required to prepare and file a
supplement or post-effective amendment hereunder.
6
<PAGE>
i. Not later than the effective date of any such Shelf Registration
Statement hereunder, the Company shall cause to be provided a CUSIP number for
the Preferred Stock and Common Stock registered under such Shelf Registration
Statement, and provide the Transfer Agent with certificates for such Preferred
Stock and Common Stock in a form eligible for deposit with The Depository Trust
Company.
j. The Company shall make generally available to its security
holders in a regular filing on Form 10-Q or 10-K, an earnings statement
satisfying the provisions of Rule 158 (which need not be audited) for the
twelve-month period commencing after effectiveness of the Shelf Registration
Statement, provided that the Company shall be allowed to fulfill its obligations
pursuant to this Section 4(j) by publicly filing such reports on the
Commission's EDGAR database.
k. The Company may require each Holder of Transfer Restricted
Securities, which are to be sold pursuant to any Shelf Registration Statement,
to furnish to the Company within 10 Business Days after written request for such
information has been made by the Company, such information regarding the Holder
and the distribution of such securities as the Company may from time to time
reasonably require for inclusion in such Shelf Registration Statement and such
other information as may be necessary or advisable in the reasonable opinion of
the Company and its counsel, in connection with such Shelf Registration
Statement. No Holder of Transfer Restricted Securities shall be entitled to be
named as a selling Holder in the Shelf Registration Statement as of the
effective time of such Shelf Registration Statement (or in the first prospectus
supplement filed thereafter in the case of an expedited filing that the Company
expects to file and obtain effectiveness within 60 days of this Agreement), and
no holder of Transfer Restricted Securities shall be entitled to use the
prospectus forming a part thereof for offers and resales of Transfer Restricted
Securities at any time, unless such Holder has returned a completed and signed
notice and questionnaire to the Company by the deadline for response set forth
therein. The Company shall not be required to take any action to name such
Holder as a selling Holder in the Shelf Registration Statement until such Holder
has returned a completed and signed notice and questionnaire to the Company.
Following its receipt of such notice and questionnaire, the Company will, as
promptly as possible, but not prior to the next required amendment or supplement
to the Shelf Registration Statement, include the Transfer Restricted Securities
covered thereby in the Shelf Registration Statement (if not previously
included). No Holder of Transfer Restricted Securities shall be entitled to use
the Prospectus unless and until such Holder has furnished the information
required by this Section 4(k) and all such information required to be disclosed
in order to make the information previously furnished to the Company by such
Holder not materially misleading.
l. The Company shall, if requested, promptly incorporate in a
Prospectus supplement or post-effective amendment to a Shelf Registration
Statement, such information as the Majority Holders reasonably agree should be
included therein in order to effect their distribution of the Preferred Stock
and shall make all required filings of such Prospectus supplement or post-
effective amendment as soon as notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment; provided, however, that
7
<PAGE>
the Company shall not be required to take any action pursuant to this Section
4(l) that would, in the opinion of counsel for the Company, violate applicable
law or to include information the disclosure of which at the time would have an
adverse effect on the business or operations of the Company and/or its
subsidiaries, as determined in good faith by the Company.
m. The Company shall enter into such agreements and take all other
reasonably appropriate actions in order to expedite or facilitate the
registration or the disposition of the Transfer Restricted Securities, and in
connection therewith, if an underwriting agreement is entered into, cause the
same to contain indemnification and contribution provisions and procedures no
less favorable than those set forth in Section 7 (or such other provisions and
procedures acceptable to the Majority Holders and the Company), with respect to
all parties to be indemnified pursuant to Section 7 from Holders of Preferred
Stock to the Company.
n. The Company shall upon receipt of a reasonable request in writing
therefor:
(i) make reasonably available at reasonable times prior to the
effectiveness of the related Shelf Registration Statement for inspection by
representatives of the Holders of Transfer Restricted Securities to be
registered thereunder and any attorney, accountant or other agent retained by
the Holders, at the office where normally kept during normal business hours, all
financial and other records, pertinent corporate documents and properties of the
Company and its subsidiaries, and cause the Company's officers, directors and
employees to supply all relevant information reasonably requested by the
Holders' attorneys, accountants or other agents in connection with any such
Shelf Registration Statement as is customary for similar due diligence
examinations; provided, however, that the foregoing inspection and information
gathering shall be coordinated by one counsel designated by the Holders and that
such persons shall first agree in writing with the Company that any information
that is designated in writing by the Company, in good faith, as confidential at
the time of delivery of such information shall be kept confidential by such
person, unless such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public generally
or through a third party without an accompanying obligation of confidentiality;
(ii) obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Majority Holders), addressed to each selling Holder covering
such matters (in form, scope and substance) as those matters set forth in
Section 9(e)(i), (ii), (iii) and (iv) of the Purchase Agreement;
(iii) obtain "cold comfort" letters (or, in the case of any person that
does not satisfy the conditions for receipt of a "cold comfort" letter specified
in Statement on Auditing Standards No. 72, an "agreed-upon procedures letter")
and updates thereof from the independent certified public accountants of the
Company (and, if necessary, any other independent certified public accountants
of any subsidiary of the Company or of any
8
<PAGE>
business acquired by the Company for which financial statements and financial
data are, or are required to be, included in the Shelf Registration Statement),
addressed where reasonably practicable to each selling Holder of Transfer
Restricted Securities registered thereunder and the underwriters, if any, in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with primary underwritten offerings; and
(iv) deliver such documents and certificates as may be reasonably
requested by the Majority Holders, including those to evidence compliance with
Section 4(h).
The foregoing actions set forth in clauses (ii), (iii) and (iv) of this
Section 4(n) shall, if reasonably requested by the Majority Holder, be performed
upon the effectiveness of such Shelf Registration Statement and the
effectiveness of each post-effective amendment thereto.
(v) The Company may offer securities of the Company other than the
Preferred Stock under the Shelf Registration Statement.
o. The Company shall provide instructions to the Transfer Agent, as
applicable, to notify the Company of any requested transfer of Transfer
Restricted Securities using the Shelf Registration Statement and to only effect
such transfer upon confirmation from the Company or its counsel that the Shelf
Registration Statement conforms to the requirements of Section 4(a) above.
SECTION 5. HOLDERS' AGREEMENTS
Each Holder of Transfer Restricted Securities severally but not jointly, by
the acquisition of such Transfer Restricted Securities, agrees:
a. To furnish the information required to be furnished pursuant to
Sections 3(c) and 4(k) hereof within the time periods set forth therein.
b. That upon receipt of a notice of the commencement of a Supplement
Delay Period, it will keep the fact of such notice confidential, forthwith
discontinue disposition of its Transfer Restricted Securities pursuant to the
Shelf Registration Statement, and will not deliver any Prospectus forming a part
thereof until receipt of the amended or supplemented Shelf Registration
Statement or Prospectus, as applicable, as contemplated by Section 4(h) hereof,
or until receipt of the Advice. If a Supplement Delay Period occurs, the Shelf
Registration Period shall be extended by the number of days which the Supplement
Delay Period comprises; provided that (1) the Shelf Registration Period shall
not be extended if the Company has received an opinion of counsel (which
counsel, if different from counsel to the Company referred to in Section 9(e) of
the Purchase Agreement, shall be reasonably satisfactory to the Majority Holders
of the Transfer Restricted Securities named in the Shelf Registration Period and
which opinion shall be in writing if the Majority of the Holders so request) to
the effect that the Transfer Restricted Securities can be freely tradeable
without the continued effectiveness of the Shelf Registration Statement and (2)
9
<PAGE>
in no event shall the Shelf Registration Period be extended beyond two years
from the date of original issuance of the Preferred Stock.
c. If so directed by the Company in a notice of the commencement of
a Supplement Delay Period, each Holder of Transfer Restricted Securities will
deliver to the Company (at the Company's expense) or, if requested by the
Company destroy (and confirm such designation in writing to the Company), all
copies, other than permanent file copies then in such Holder's possession, of
the Prospectus covering the Transfer Restricted Securities.
d. Sales of such Transfer Restricted Securities pursuant to a Shelf
Registration Statement shall only be made in the manner set forth in such
currently effective Shelf Registration Statement.
SECTION 6. 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 effective by the
Commission on or prior to the applicable Effectiveness Deadline, or (iii) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter, and during the Shelf Registration Period, 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 within 10 Business Days thereafter (each such
event referred to in clauses (i) through (iii), 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% of
the liquidation preference per share of the Preferred Stock 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% of the liquidation preference per share of the Preferred Stock held by
such Holder with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of liquidated damages of 1.00%
per annum of the liquidation preference per share of the Preferred Stock held by
such Holder; 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 Shelf Registration Statement) in the case of clause (i) above, (2) upon the
effectiveness of the Shelf Registration Statement, in the case of clause (ii)
above, or (3) upon the filing of a post-effective amendment to the Shelf
Registration Statement or an additional Shelf Registration Statement that causes
the Shelf Registration Statement to again be declared effective or made usable
in the case of clause (iii) above, the liquidated damages payable with respect
to the Transfer Restricted Securities as a result of such clause (i), (ii) or
(iii), as applicable, shall cease.
10
<PAGE>
All accrued liquidated damages will be paid by the Company to Holders
entitled thereto by wire transfer to the accounts specifed by them or by mailing
checks to their registered address if no such accounts have been specified.
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.
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 Preferred Stock and Common Stock to be issued 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 Preferred Stock on a national
securities exchange or automated quotation system pursuant to the requirements
hereof; and (vi) 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, the Company will reimburse the Initial Purchasers and the Holders of
Transfer Restricted Securities who are offering or selling Preferred Stock
pursuant to the "Plan of Distribution" contained in the Shelf Registration
Statement, 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
11
<PAGE>
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 registered Preferred Stock, 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 the relevant 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 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
12
<PAGE>
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 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
13
<PAGE>
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 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.
14
<PAGE>
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 6
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 aggregate outstanding number of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates).
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
15
<PAGE>
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;
With a copy to:
Paul, Hastings, Janofsky & Walker LLP
399 Park Avenue
New York, NY 10022
Telecopier No.: (212) 319-4090
Attention: Scott M. Wornow
ii. if to the Company:
PSINet Inc.
510 Huntmar Park Drive
Herndon, VA 20170-5100
Telecopier No.: (703) 397-5349
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.
16
<PAGE>
Upon the date of filing a Shelf Registration Statement, notice shall be
delivered to Donaldson, Lufkin & Jenrette Securities Corporation on behalf of
the Initial Purchasers (in the form attached hereto as Exhibit A) and shall be
addressed 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. If
any transferee of any Holder shall acquire Transfer Restricted Securities in any
manner permitted by this Agreement, the Purchase Agreement, whether by operation
of law or otherwise, such Transfer Restricted Securities shall be held subject
to all of the terms of this Agreement, 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
and the Purchase Agreement, including the restrictions on resale set forth in
this Agreement and the Purchase Agreement, 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
17
<PAGE>
Securities. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
[SIGNATURE PAGES FOLLOW]
18
<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 Officer
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.,
MERRILL LYNCH PIERCE FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
BEAR STEARNS & CO. INC.
BANCBOSTON ROBERTSON STEPHENS INC.
CHASE SECURITIES INC.
Acting severally on behalf of
themselves and the several
Initial Purchasers named in
Schedule I hereto
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Raymond Cleeman
-------------------------------
Name: Raymond Cleeman
Title: Vice President
<PAGE>
EXHIBIT 10.2
AMENDMENT NO. 1
TO
REGISTRATION RIGHTS AGREEMENT
AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT, dated February 7, 2000
(this "First Amendment") to the Registration Rights Agreement dated as of
February 1, 2000 (the "Rights Agreement"), among Donaldson, Lufkin & Jenrette
Securities Corporation, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc.,
Chase Securities Inc. and BancBoston Robertson Stephens Inc., (together, the
"Initial Purchasers"), and with PSINet Inc., a New York corporation (the
"Company").
WITNESSETH:
WHEREAS, the parties entered into the Purchase Agreement for the purchase
and sale of 14,000,000 shares of 7% Series D Cumulative Convertible Preferred
Stock of the Company ("Preferred Stock") pursuant to the Purchase Agreement (the
"Purchase Agreement") dated January 26, 2000 between the Initial Purchasers and
the Company;
WHEREAS, Section 3 (b) of the Purchase Agreement provides that the Company
and the Initial Purchasers shall enter into the Rights Agreement;
WHEREAS, Section 2 of the Purchase Agreement provides the Initial
Purchasers with an option to purchase an additional 2,500,000 shares of
Preferred Stock (the "Option Shares");
WHEREAS, on February 2, 2000 the Purchasers exercised their right to
purchase the Option Shares;
WHEREAS, on February 1, 2000 the Company and the Initial Purchasers
executed the Rights Agreement;
WHEREAS, the parties desire to amend the Rights Agreement to include the
Option Shares; and
WHEREAS, capitalized terms used herein and not defined herein shall have
the meanings set forth in such Purchase Agreement.
NOW, THEREFORE, the parties agree as follows:
<PAGE>
ARTICLE I
AMENDMENT
---------
Section 1.1. The first paragraph of the preamble to the Rights Agreement is
deleted and restated as follows:
"This Registration Rights Agreement (this "Agreement") is made and
---------
entered into as of February 1, 2000, by and among PSINet Inc., a New
York corporation (the "Company"), and Donaldson, Lufkin & Jenrette
-------
Securities Corporation, Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. Inc., Bear Stearns &
Co. Inc., BancBoston Robertson Stephens, and Chase Securities Inc.
(each an "Initial Purchaser" and, collectively, the "Initial
----------------- -------
Purchasers"), each of whom (or their respective affiliates) has agreed
----------
to purchase the Company's 16,500,000 shares of 7% Series D Cumulative
Preferred Stock of the Company (the "Preferred Stock") pursuant to the
Purchase Agreement (as defined below).".
ARTICLE II
MISCELLANEOUS
-------------
Section 2.1 Governing Law. This First Amendment shall be governed and
-------------
construed in accordance with the laws of the State of New York without reference
to its principles of conflicts of law.
Section 2.2 Counterparts. This First Amendment may be executed in any
------------
number of counterparts all of which, taken together, shall constitute the same
agreement.
Section 2.3 Rights Agreement. Except as amended hereby, the Rights
----------------
Agreement is in all respects ratified and confirmed and all the terms thereof
shall remain in full force and effect. From and after the effectiveness of this
First Amendment, any reference to the Rights Agreement shall mean the Rights
Agreement as amended by this First Amendment.
2
<PAGE>
IN WITNESS WHEREOF, the parties have executed this First Amendment as of the
date first written above.
PSINET INC.
By: /s/ Michael J. Malesardi
--------------------------------------
Name: Michael J. Malesardi
Title: Vice President and Controller
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.,
MERRILL LYNCH PIERCE FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
BEAR STEARNS & CO. INC.
BANCBOSTON ROBERTSON STEPHENS INC.
CHASE SECURITIES INC.
Acting severally on behalf of
themselves and the several
Initial Purchasers named in
Schedule I hereto
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Raymond Cleeman
------------------------------
Name: Raymond Cleeman
Title: Vice President
3
