As filed with the Securities and Exchange Commission on April 5, 1999
Registration No. 333-72309
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT
NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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VIATEL, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 685 THIRD AVENUE 13-3787366
(State or Other NEW YORK, NEW YORK 10017 (I.R.S. Employer
Jurisdiction of (212) 350-9200 Identification Number)
Incorporation or (Address, Including Zip Code,
Organization) and Telephone Number, Including
Area Code, of Registrant's Principal
Executive Offices)
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SHELDON M. GOLDMAN, ESQ.
SENIOR VICE PRESIDENT,
BUSINESS AFFAIRS AND GENERAL COUNSEL
VIATEL, INC.
685 THIRD AVENUE
NEW YORK, NEW YORK 10017
(212) 350-9200
(Name, Address, Including Zip Code, and
Telephone Number, Including Area Code, of
Agent For Service)
COPIES OF ALL COMMUNICATIONS TO:
JAMES P. PRENETTA, ESQ.
KELLEY DRYE & WARREN LLP
101 PARK AVENUE
NEW YORK, NEW YORK 10178
(212) 808-7800
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time following the effectiveness of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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The information in this Prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell nor does it seek an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
Subject To Completion, Dated April 5, 1999
6,824,249 Shares
Viatel, Inc.
Common Stock
This Prospectus may be used by us for the issuance, from time to time,
of up to 6,824,249 shares of our common stock, upon the conversion of our
outstanding subordinated debentures or shares of Series A preferred stock. We
will not receive any proceeds from the issuance of the shares of common stock
covered by this prospectus.
Our common stock is traded on the Nasdaq National Market under the
symbol "VYTL." On April 1, 1999, our common stock closed at $28-1/8 per share.
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See "Risk Factors" beginning on page 2 to read about certain factors
you should consider before converting your subordinated debentures or shares of
series a preferred stock into shares of our common stock.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is April , 1999.
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RISK FACTORS
This prospectus includes and incorporates "forward looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21e
of the Securities Exchange Act of 1934. Although we believe that our plans,
intentions and expectations reflected in or suggested by these forward-looking
statements are reasonable, we can give no assurance that such plans, intentions
or expectations will be achieved. Important factors that could cause actual
results to differ materially from these forward-looking statements are discussed
below. All forward-looking statements attributable to the company or persons
acting on our behalf are expressly qualified by the following cautionary
statements.
Our substantial leverage could adversely affect our ability to run our business
We have now and will continue to have a significant amount of
indebtedness. Our substantial indebtedness could have important consequences to
you. For example, it could:
o limit our ability to obtain additional financing in the future for
working capital, capital expenditures, acquisitions and general
corporate purposes;
o require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
funds available to us for other purposes, including working capital,
capital expenditures, acquisitions and general corporate purposes;
o make us more vulnerable to economic downturns, limiting our ability
to withstand competitive pressures and reduce our flexibility in
responding to changing business and economic conditions;
o limit our flexibility in planning for, or reacting to, changes in
our business and the industry in which we operate;
o place us at a competitive disadvantage compared to our competitors
that have less debt; and
o limit, along with the financial and other restrictive covenants, our
ability to borrow additional funds.
Our cash flow may not be sufficient to permit repayment of our indebtedness when
due
Our ability to make payments on and to refinance our indebtedness will
depend on our ability to generate cash in the future. We cannot assure you that
our business will generate sufficient cash flow from operations to meet our debt
service requirements. We may need to refinance all or a portion of our
indebtedness. Based on our current level of operation, we anticipate that cash
flows from operations may be insufficient to repay our indebtedness at scheduled
maturity and that some or all of such indebtedness may need to be refinanced. If
we are unable to refinance our debt or if additional financing is not available,
we could be forced to dispose of assets under circumstances that might not be
favorable to realizing the highest price for the assets or to default on our
obligations with respect to our indebtedness.
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Terms of our indebtedness restrict our corporate activities
The indentures under which our long-term debt was issued restrict, and
in some cases significantly limit or prohibit, among other things, our ability
and the ability of our subsidiaries to:
o incur additional indebtedness,
o make prepayments of certain indebtedness,
o pay dividends,
o make investments,
o engage in transactions with stockholders and affiliates,
o issue capital stock,
o create liens,
o sell assets, and
o engage in mergers and consolidations.
To date, we have incurred substantial net losses and negative cash flow from
operations, and if this continues we would be unable to meet our working capital
and future debt service requirements
Our operating loss, negative EBITDA and net loss have increased for
each of the last four years. In 1998, we had an operating loss of $48.1 million,
negative EBITDA of $31.8 million and a net loss of $127.3 million. We also had
interest expense of $79.2 million and capitalized interest of $3.3 million.
Interest expense will increase substantially as a result of the offering which
we completed in March 1999. These losses and interest expense present a
significant risk for investors. We need to begin placing traffic on our network
to reduce our costs and reverse these trends.
Our negative EBITDA and negative cash flows are likely to continue
beyond the year 2000 if:
o we extend our expansion plans,
o prices charged to end users decline faster than we anticipate,
o interconnection rates and wholesale prices paid by us do not decline
as quickly as we anticipate, and
o any of the other risks described in this prospectus materialize.
Accordingly, we cannot assure you that we will achieve or sustain
profitability or positive cash flows from operating activities in the future.
Our future growth will require substantial additional capital which could exceed
budgeted amounts and cause us to delay or abandon expansion projects
We currently have budgeted approximately $720.0 million for capital
expenditures in 1999 and 2000, including the proposed expansion of our network
into southern France and Switzerland. That network expansion could cost us as
much as $350 million, including civil construction costs and the cost of network
equipment and related facilities. We will seek to reduce this amount by sharing
civil construction costs with a partner. However, we do not currently have a
partner for this expansion project. If we do not find a partner, we may be
required to reduce the size of our planned network expansion. In that event, we
might not build a "ring." As a result, on that route a fiber cut would interrupt
our service on that segment. We cannot assure you that actual costs of our
network expansion projects will not substantially exceed our budget for these
projects. Future sources of financing may include:
o additional public and private debt and equity offerings,
o project financing,
o equipment financings, and
o the sale of capacity on our network.
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We cannot assure you that additional financing arrangements will be
available to us on acceptable terms or at all. Moreover, the amount of our
outstanding indebtedness may adversely affect our ability to raise additional
funds.
We believe that available cash and investments on hand and the sale of
capacity on our network will provide sufficient funds for us to expand our
business as planned and to fund our operating losses for at least the next 12 to
18 months. However, the actual amount of our future capital requirements will
depend on a number of factors, including:
o the success of our business;
o the start-up dates for new transmission infrastructure;
o the rate at which we further expand our network;
o the types of services that we offer;
o staffing levels;
o acquisitions and customer growth; and
o other factors that are not within our control, including competitive
conditions, government regulatory developments and capital costs.
In the event that our plans or assumptions change or prove to be
inaccurate or available cash and investments on hand and proceeds from the sale
of capacity on our network prove to be insufficient to fund our growth in the
manner and at the rate we currently anticipate, we may be required to delay or
abandon some or all of our development and expansion plans or we may be required
to seek additional sources of financing earlier than currently anticipated.
Failure to implement our strategy of owning infrastructure could significantly
impact our financial performance
If we are unable to effectively implement our strategy of owning,
rather than leasing, facilities, we could experience a substantial reduction in
gross margin on international calls which, absent a substantial increase in
billable minutes of traffic carried or charges for additional services, would
have a material adverse effect on our business, financial condition and results
of operations.
There are significant risks of entry into the data transmission business
We have no direct experience providing data transmission services
although we have extensive experience in the telecommunications business
including an executive team with significant telecommunications expertise. We
intend to begin offering data transmission services by the end of 1999. These
services, which will include frame relay and asynchronous transfer mode, will be
targeted at our existing and potential customers with substantial data
communications requirements.
The data transmission business is extremely competitive and prices have
declined substantially in recent years and are expected to continue to decline.
In providing these services, we will be dependent upon vendors for assistance in
the planning and deployment of our data product offerings, as well as ongoing
training and support. Our provider for our asynchronous transfer mode equipment
is Lucent Technologies. We believe that Lucent Technologies does not have
extensive experience providing this equipment, or configuring data networks, in
Europe. In addition, this Lucent Technologies equipment will need to be
integrated with our existing Nortel Telecom-based platforms. In Europe, there
are a number of different protocols for data transmission. Our network will need
to be able to handle all these protocols, which will pose technical
difficulties. The success of our entry into the data transmission business will
depend upon, among other things, our ability to select new equipment and
software and integrate these into our network, hire and train qualified
personnel, enhance our billing, back-office and information systems to
accommodate data transmission services and customer acceptance of our service
offerings. We cannot provide any assurance that we will be successful in the
data transmission business. If we are not successful, there may be adverse
material effect on our business, financial condition and results of operations.
Our operating results may be subject to substantial fluctuations
Our quarterly operating results have fluctuated in the past, primarily
as a result of the evolution of our business, and may fluctuate significantly in
the future as a result of a variety of factors, including:
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o pricing changes in the industry;
o changes in the mix of services which we sell or channels through
which those services are sold;
o timing of capacity sales;
o changes in user demand, customer terminations of service, capital
expenditures and other costs relating to the expansion of our
network;
o the start-up and ready-for-service dates of each phase of our
network expansion;
o the timing and costs of any acquisitions of customer bases,
businesses, services or technologies;
o the timing and costs of marketing and advertising efforts;
o the effects of government regulation and regulatory changes; and
o specific economic conditions in the telecommunications industry.
Variability in our operating results could have a material adverse effect on our
business, financial condition and results of operations. Any significant
shortfall in demand for our services in relation to our expectations, or the
occurrence of any other factor which causes revenue to fall significantly short
of our expectations, would also have a material adverse effect on our business,
financial condition and results of operations.
Our ability to use net operating loss carryforwards may be limited in the future
As of December 31, 1998, we had federal income tax net operating loss
carryforwards of $218.8 million which begin to expire in 2007. Our ability to
use net operating loss carryforwards to reduce our future tax payments would be
limited if there were to occur a more than fifty percent ownership change over a
three-year period. It is possible that this offering, when combined with prior
or subsequent direct or indirect changes in the ownership of our common stock
within the relevant three-year period could trigger this limitation.
Our industry is highly competitive with participants that have greater resources
than we do, and we may not be able to compete successfully with these and other
competitors
Our success depends upon our ability to compete with other
telecommunications providers in each of our markets, many of which have
substantially greater financial, marketing and other resources than we do. If
our competitors devote significant additional resources to the provision of
international or national long distance telecommunications services to our
target customer base, this action could have a material adverse effect on our
business, financial condition and results of operations and we cannot assure you
that we will be able to compete successfully.
Our competitors include the incumbent telecommunications operator in
each country in which we operate, global alliances among some of the world's
largest telecommunications carriers, such as Global One (Sprint, France Telecom
and Deutsche Telekom) and an alliance between MCI Worldcom and Telefonica de
Espana, and new entrants, such as alternative carriers, Internet backbone
networks and other service providers. Other potential competitors include:
o cable communications companies,
o wireless telephone companies,
o electric and other utilities with rights-of-way,
o railways,
o microwave carriers and
o large end-users which have private networks.
The intensity of competition and price declines have increased over the past
several years and we believe that competition and price declines will continue
to intensify, particularly in Western Europe, as other providers obtain
operative connectivity.
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Failure to identify suitable acquisition targets, or the costs and difficulties
of acquiring and integrating businesses could impede our future growth and
adversely affect our competitiveness
We may seek to acquire customer bases and businesses from, make
investments in, or enter into strategic alliances with, other companies, which
may expose us to the following risks:
o the difficulty of identifying appropriate acquisition candidates in
the countries in which we do business;
o the difficulty of assimilating the operations and personnel of the
acquired entities;
o the potential disruption to our ongoing business caused by senior
management's focus on the acquisition transactions;
o our failure to successfully incorporate licensed or acquired
technology into our network and service offerings;
o the failure to maintain uniform standards, controls, procedures and
policies; and
o the impairment of relationships with employees as a result of
changes in management and ownership.
Additionally, in connection with an acquisition, we may experience
rates of customer attrition that are significantly higher than the rate of
customer attrition which we generally experience. Further, to the extent that
any transaction involves customer bases or businesses located outside the United
States, the transaction would involve the risks associated with international
operations. We cannot assure you that we would be successful in overcoming these
risks.
Inability to expand our network could adversely affect our business
Our success is dependent, in part, on our ability to continue to expand
our network. Furthermore, as we continue to expand our network to increase its
capacity and reach, we will face increasing demands and challenges including:
o effectively managing the construction of new fiber routes, obtaining
any necessary rights-of-way and required licenses for such
construction, and completing any such construction on budget and on
time;
o increasing traffic volume on our network; and
o selling capacity on the network.
If the costs of construction projects significantly exceed our budget
for those projects, we may be required to obtain additional financing or to
abandon or curtail portions of those projects.
The expansion and development of our network will entail the
significant expenditure of resources in projecting growth in traffic volume and
routing preferences and determining the most cost effective means of growing the
network. Failure to project traffic volume and route preferences correctly or to
determine the optimal means of expanding our network would result in less than
optimal utilization of our network and could have a material adverse effect on
our business, financial condition and results of operations.
Network construction delays and system failures could adversely affect our
business
Our success is dependent, in part, on our ability to provide seamless
technical operation of our network. If we encounter construction delays, we will
not be able to route our traffic over our owned facilities as soon as we hope,
which will, for some period of time, have a detrimental effect on our ability to
increase traffic volumes and gross margins. In addition, construction delays
could negatively affect our ability to sell capacity to other carriers.
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Our network is subject to several risks that are outside of our
control, such as the risk of damage to software and hardware resulting from
fire, power loss, natural disasters and general transmission failures caused by
a number of additional factors. Any failure of our network or other systems or
hardware that causes significant interruptions to our operations could have a
material adverse effect on our business, financial condition and results of
operations.
Our operations are also dependent on our ability to successfully
integrate new and emerging technologies and equipment into the network, which
could increase the risk of system failure and result in further strains upon our
network. We attempt to minimize customer inconvenience in the event of a system
disruption by routing traffic to other circuits and switches that may be owned
by other carriers. However, prolonged or significant system failures, or
difficulties for customers in accessing and maintaining connection with our
network, could seriously damage our reputation and result in customer attrition,
reduced margins and financial losses. Additionally, any damage to our switching
centers in New York, New York, Somerset, New Jersey or London, England (of which
there are two) could have a material adverse effect on our ability to monitor
and manage the network operations and generate accurate call detail reports.
Foreign currency exchange rates could have adverse effects on our business
Our payment obligations with respect to our outstanding indebtedness
are denominated in U.S. Dollars and the Euro, but certain of our revenues are
denominated in Pound Sterling. Any appreciation in the value of the U.S. Dollar
or the Euro relative to the Pound Sterling could have a material adverse effect
on our ability to make payments on such obligations.
We do not currently use financial hedging transactions, although in the
future we may elect to manage the exchange rate exposure presented by our Euro
denominated obligations. We cannot provide any assurance that exchange rate
fluctuations will not have a material adverse effect on our ability to make
payments on our outstanding indebtedness.
In addition, we cannot assure you that the laws or administrative
practices relating to taxation, foreign exchange or other matters in countries
within which we operate will not change. Any such change could have a material
adverse effect on our business, financial condition and results of operations.
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Operating in foreign countries presents risks that may affect our performance
There are certain risks inherent in conducting our operations in
numerous European and Latin American countries. These risks include, among
others:
o unexpected changes in regulatory requirements, tariffs, customs,
duties and other trade barriers applicable to the communications
industry;
o difficulties associated with recruiting, training and staffing
employees at our foreign sales and business offices;
o political risks and uncertainties;
o fluctuations in currency exchange rates;
o export and import restrictions or prohibitions relating to
communications equipment;
o delays from custom's brokers or government agencies;
o seasonal reductions in business activity during the summer months in
Europe and certain other parts of the world; and
o potentially adverse tax consequences resulting from operating in
multiple European and Latin American countries with different
tax laws.
If any of these risks materialize, our business, financial
condition and results of operations could be materially and adversely affected.
We may be unable to implement required enhancements to our information systems
While we believe that our billing and information systems are currently
sufficient for our operations, our systems will require enhancements and ongoing
investments, particularly as volume of minutes on our network increases. We
cannot assure you that we will not encounter difficulties in enhancing our
systems or integrating new technology into our systems. Our failure to implement
any required system enhancement, to acquire new systems or to integrate new
technology in a timely and cost effective manner could have a material adverse
effect on our business, financial condition and results of operations.
We could experience system failures and service disruptions as a result of the
year 2000 issue
The year 2000 issue is the result of computer programs, microprocessors
and embedded date reliant systems using two digits rather than four to define
the applicable year. If such programs are not corrected, such date sensitive
computer programs, microprocessors and embedded systems may recognize a date
using "00" as the year 1900 rather than the year 2000. This could result in a
system failure or miscalculation causing disruptions in operations.
In an effort to assess our year 2000 state of readiness, during 1997 we
began performing a complete inventory assessment of all of our information
technology and non-information technology systems, the vast majority of which
have either been developed or purchased by us within the past four years. Based
on our review to date, we believe that the vast majority of our existing systems
are year 2000 compliant. However, we cannot provide any assurance until the year
2000 occurs that such is the case. With regard to systems which are not
currently year 2000 compliant, we are actively replacing such systems to ensure
our ability to continue to meet our internal needs and the requirements of our
customers.
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We currently anticipate that the upgrade or modification of
non-compliant systems will be completed during the first half of 1999. We have
also initiated formal communications with the key carriers and other vendors on
which our operations and infrastructure are dependent to determine the extent to
which we are susceptible to a failure resulting from such third parties'
inability to remediate their own year 2000 issues.
We cannot assure you that the carriers and other vendors on which our
operations and infrastructure rely are or will be year 2000 compliant in a
timely manner. Interruptions in the services provided to us by these third
parties could result in disruptions in our services. Depending upon the extent
and duration of any disruptions and the specific services affected, these
disruptions could have a material adverse affect on our business, financial
condition and results of operations.
In addition, disruptions in the economy generally resulting from year
2000 issues could also have a material adverse affect on us. We could be subject
to litigation resulting from any disruption in our services. The amount and
potential liability or lost revenue cannot be reasonably estimated at this time.
Our dependence upon third parties for leased capacity and interconnection
arrangements may result in less than maximum utilization of our network
We currently lease capacity for point-to-point circuits with fixed
monthly payments and buy minutes of use under agreements with maximum
twelve-month terms and are vulnerable to changes in our lease arrangements,
capacity limitations and service cancellations. These lease arrangements present
us with high fixed costs, while revenues generated by the utilization of these
leases will vary based on traffic volume and pricing. Accordingly, if we are
unable to generate sufficient traffic volume over particular routes or are
unable to charge appropriate rates, we could fail to generate revenue sufficient
to meet the fixed costs associated with the lease and may incur negative gross
margins with respect to those routes. Although we believe that our arrangements
and relationships with other carriers generally are satisfactory, the
deterioration or termination of our arrangements and relationships with one or
more carriers could have a material adverse effect on our cost structure,
service quality, network coverage, financial condition and results of
operations.
Our ability to access customers and to effectively utilize our network
is dependent upon our ability to secure operative interconnection agreements,
providing access to and an exit from the public switched telephone network, with
the respective incumbent telecommunications operator in each market in which we
operate. Difficulties or delays in obtaining necessary operative
interconnections in a satisfactory or timely manner may significantly delay or
prevent the maximum utilization of our network which could have a material
adverse effect on us.
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Loss of more than one significant carrier customer would result in a significant
loss of revenues
We currently derive a significant portion of our revenues from a
relatively small number of carrier customers. Accordingly, the loss of revenue
from more than one significant carrier customer would have a material adverse
effect upon our business, financial condition and results of operations.
The future success of our business depends upon certain key personnel and our
ability to attract and retain other qualified personnel
The success of our business is dependent, to a significant extent, upon
the abilities and continued efforts of our senior management, and particularly
upon the abilities and efforts of Michael J. Mahoney, our Chairman, Chief
Executive Officer and President. We do not currently have employment agreements
with any executive officer other than Mr. Mahoney, Allan L. Shaw, our Senior
Vice President of Finance and Chief Financial Officer, and Sheldon M. Goldman,
our Senior Vice President, Business Affairs and General Counsel. Except for
a $3.0 million key-man life insurance policy which we obtained on the life of
Mr. Mahoney, we do not maintain and do not contemplate obtaining such life
insurance policies on any of our employees.
The success of our business also depends on our ability to attract,
retain and motivate qualified management, marketing, technical and sales
executives and other personnel who are in high demand and who often have
multiple employment options. In addition, the labor market for software
engineers and central office technicians has been extremely competitive recently
and we may lose key employees or be forced to increase their compensation. The
loss of the services of key personnel, or the inability to attract additional
qualified personnel, could have a material adverse effect on our business,
financial condition and results of operations. We cannot assure you that we will
be successful in attracting, retaining and motivating personnel.
Certain provisions of our certificate of incorporation, by-laws, would make it
more difficult for another company to successfully takeover the company without
approval of our board of directors
Our certificate of incorporation and by-laws include certain provisions
that are intended to enhance the likelihood of continuity and stability in the
composition of our board of directors. In addition, these provisions may render
the removal of directors and management more difficult. These provisions may
have the effect of delaying, deterring or preventing a future takeover or change
in control of the company, unless such takeover or change in control is approved
by our board of directors, even though such a transaction might offer holders of
our common stock an opportunity to sell their shares at a price above the
current market price.
Certain provisions of our indentures, employment arrangements and our
stock option plan would require us to either purchase our debt or make
substantial payments upon the occurrence of a change in control of the company
The indentures under which the vast majority of our outstanding
indebtedness was issued provide that, upon the occurrence of certain specified
events, we are required to make an offer to purchase all of the indebtedness
outstanding under the indentures at a stated purchase price. However, our
ability to repurchase our indebtedness upon the occurrence of specified events
may be limited by the terms of other existing contractual obligations. In
addition, we cannot assure you that, in the event of a triggering event, we will
have, or will have access to, sufficient funds to repurchase our indebtedness.
If we fail to repurchase all of the indebtedness tendered for purchase upon the
occurrence of a triggering event, such failure will constitute an event of
default under the indentures.
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In addition, the employment agreements between the company and each of
Messrs. Mahoney, Shaw and Goldman contain provisions which require us to make
certain payments to those officers in certain instances if employment is
terminated following certain specified events. Finally, our amended stock
incentive plan provides that outstanding options, restricted stock or stock
appreciation rights held by certain members of management vest in their entirety
and become exercisable, and as with respect to restricted stock, are released
from restrictions on transfer and repurchase rights in event of certain
corporate transactions.
We are subject to substantial government regulation which may affect our ability
to offer certain services and which may be changed in a manner adverse to the
company
Overview. National and local laws and regulations governing the
provision of telecommunications services differ significantly among the
countries in which we currently operate and intend to operate. The
interpretation and enforcement of such laws and regulations varies and could
limit our ability to provide certain communications services in certain markets.
We cannot assure you that:
o future regulatory, judicial and legislative changes will not have a
material adverse effect on us;
o domestic or international regulators or third parties will not raise
material issues with regard to our compliance with applicable laws
and regulations; or
o other regulatory activities will not have a material adverse effect
on our business, financial condition and results of operations.
International Traffic. Under the World Trade Organization Basic Telecom
Agreement, concluded on February 15, 1997, 69 countries comprising 95% of the
global market for basic telecommunications services agreed to permit competition
from foreign carriers. In addition, 59 of these countries have subscribed to
specific procompetitive regulatory principles. The WTO Agreement became
effective on February 5, 1998 and has been implemented, to varying degrees, by
the signatory countries. We believe that the WTO Agreement will increase
opportunities for us and our competitors. However, we cannot assure you that the
WTO Agreement will result in beneficial regulatory liberalization in all
signatory countries.
On November 26, 1997, the FCC adopted the Foreign Participation Order
to implement the U.S. obligations under the WTO Agreement. In this order, the
FCC adopted an open entry standard for carriers from World Trade Organization
member countries, generally facilitating market entry for such applicants by
eliminating certain existing tests. These tests remain in effect, however, for
carriers from non-World Trade Organization member countries. Requests for
reconsideration of the Foreign Participation Order are pending at the FCC.
International carriers serving the United States, including us, remain
subject to the FCC's international settlement policies, including rules adopted
by the FCC regarding international settlement rates which became effective on
January 1, 1998. The international accounting rate system allows a U.S.
facilities-based carrier to negotiate an accounting rate with a foreign carrier
for handling each minute of international telephone service. Each carrier's
portion of the accounting rate, usually one-half, is referred to as the
settlement rate. The International Settlement Rates Order generally requires
U.S. facilities-based carriers to negotiate settlement rates with their foreign
correspondent at no greater than FCC-established benchmark prices.
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Historically, international settlement rates have vastly exceeded the
cost of terminating telecommunications traffic. In addition, the International
Settlement Rates Order imposed new conditions upon certain carriers, including
us. First, the FCC conditioned facilities-based authorizations for service on a
route on which a carrier has a foreign affiliate upon the foreign affiliate
offering all other U.S. carriers a settlement rate at or below the relevant
benchmark. Our foreign affiliates satisfy this condition. Second, the FCC
conditioned any authorization to provide switched services over either
facilities-based or resold international private lines upon the condition that
at least half of the facilities based international message telephone service
traffic on the subject route is settled at or below the relevant benchmark rate.
This condition applies whether or not the licensee has a foreign affiliate on
the route in question.
In the Foreign Participation Order described above, if the subject
route does not comply with the benchmark requirement, a carrier can demonstrate
that the foreign country provides equivalent resale opportunities. Accordingly,
since the February 9, 1998 effective date of the Foreign Participation Order, we
have been permitted to resell private lines for the provision of switched
services to any country that either has been found by the FCC to comply with the
benchmarks or has been determined to be equivalent. We, however, remain subject
to prior FCC approval in order to provide resold private lines to any country in
which we have an affiliated carrier that has not been found by the FCC to lack
market power. Many parties appealed the International Settlement Rates Order to
the U.S. Court of Appeals for the D.C. Circuit or have filed requests for
reconsideration with the FCC. On January 12, 1999, the U.S. Court of Appeals for
the D.C. Circuit issued an order resolving this appeal, upholding the
International Settlement Rates Order in all respects. The appealing parties now
have the option of requesting that the case be heard by the U.S. Supreme Court.
The petition for reconsideration is still pending at the FCC. We cannot predict
the outcome of these proceedings and their possible impact on us.
Increasing regulatory liberalization in many countries'
telecommunications markets now permits more flexibility in the way we can route
calls. Although certain FCC rules limit the way in which some international
calls can be routed, we do not believe that our network configuration,
specifically the way in which traffic is routed through our facilities in the
UK, is specifically prohibited by, or undermines in any way the intent of, these
rules. It is possible, however, that the FCC could find that our network
configuration violates these rules. If we were found to be in violation of these
routing restrictions, and if the violation was sufficiently severe, it is
possible that the FCC could impose sanctions and penalties upon us.
Call Reorigination. In addition, outside the European Union we provide
a small number of customers with access to services through the use of call
reorigination. A substantial number of countries have prohibited certain forms
of call reorigination. We cannot assure you that certain of our services and
transmission methods will not be or not become prohibited in certain
jurisdictions and, depending on the jurisdictions, services and transmission
methods affected, there could be a material adverse effect on our business,
financial condition and results of operations.
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Unsettled Nature of Regulatory Environment. We have pursued and expect
to continue to pursue a strategy of providing our services to the maximum extent
we believe permissible under applicable laws and regulations. Our provision of
services in Western Europe may also be affected if any European Union member
state imposes greater restrictions on non-European Union international service
than on such service within the European Union. We cannot assure you that the
United States or foreign jurisdictions will not adopt laws or regulatory
requirements that will adversely affect us. Additionally, we cannot assure you
that future United States or foreign regulatory, judicial or legislative changes
will not have a material adverse effect on us or that regulators or third
parties will not raise material issues with regard to our compliance with
applicable laws or regulations. If we are unable to provide the services we are
presently providing or intend to provide or to use our existing or contemplated
transmission methods, due to our inability to receive or retain formal or
informal approvals for such services or transmission methods, or for any other
reason related to regulatory compliance or the lack of such compliance, such
events could have a material adverse effect on our business, financial condition
and results of operations.
Since January 1, 1998, we, as well as our U.S. competitors, have been
required by the FCC to make contributions to a universal service fund to
subsidize telecommunications services for low-income persons, schools and
libraries, and rural health care providers. These contributions are based upon
our gross revenues. There can be no assurance that we will be able fully to pass
the cost of these contributions on to our customers or that doing so will not
result in a loss of customers.
European Implementation. The national governments of the European Union
member states were required to pass legislation to liberalize the
telecommunications markets within their countries to implement European
Commission directives. Although most of the member states have now implemented
the required legislation, they have done so on an inconsistent, and sometimes
unclear, basis. In addition, the legislation and/or its implementation have, in
certain circumstances, imposed significant obstacles on the ability of carriers
to proceed with the necessary licensing process. Such barriers include
requirements that carriers post significant bonds, make significant capital
commitments to build infrastructure, complete extensive application
documentation and pay significant license fees. Implementation has also been
slow in certain member states as a result of such member state's failure to
dedicate the resources necessary to have a functioning regulatory body in place.
The above factors and other potential obstacles associated with the effective
implementation of liberalization could have a material adverse effect on our
operations by preventing us from expanding our operations either as quickly or
as currently intended, as well as a material adverse effect on our business,
financial condition and results of operations.
The price of our common stock has been subject to substantial fluctuations in
price
Since our common stock has been publicly traded, its market price has
fluctuated over a wide range and may continue to do so in the future. The market
price of our common stock could be subject to significant fluctuations in
response to various factors and events, including, among other things, the depth
and liquidity of the trading market of our common stock, variations in our
operating results and the difference between actual results and the results
expected by investors and securities analysts.
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THE COMPANY
General. We are a rapidly growing, facilities-based, global provider of
telecommunications services, primarily to small and medium-sized businesses,
carriers and resellers. We currently operate one of the largest alternative
Pan-European networks, with international gateway switching centers in New York,
New York, Somerset, New Jersey and London, England, network points of presence
in 37 cities, direct sales forces in nine Western European cities and indirect
sales offices in more than 100 additional locations in Western Europe. We offer
a broad array of competitively priced, value-added services and voice telephony
to more than 230 countries and territories worldwide.
Series A Preferred Stock and Subordinated Convertible Debentures.
On April 8, 1998, we issued and sold in an exempt transaction:
o units consisting of one of our 12.50% senior discount notes due
2008 and .490 of a share of our 10% redeemable convertible series A
preferred stock;
o units consisting of one of our 11.25% senior notes due 2008 and .483
of a share of our Series A preferred stock;
o units consisting of one of our DM denominated 12.40% senior
discount notes due 2008 and 2.77 of our 10% subordinated convertible
debentures due 2011; and
o units consisting of one of our DM denominated 11.15% senior notes
due 2008 and 2.69 subordinated debentures.
As required by the terms of our April 8, 1998 offering, in August 1998
we offered to exchange registered notes, with substantially identical terms, for
each series of our outstanding unregistered notes issued in the 1998 offering.
Upon effectiveness of the registration statement for the exchange offer, the
notes automatically separated from the other security originally sold as part of
the unit.
This prospectus has been prepared by us to satisfy certain agreements
which we made in connection with our April 1998 high yield offering, which
require that we have this prospectus available for use on or prior to April 8,
1999. Subject to certain limitations, we are required to keep this prospectus
current and available for use for a period of up to two years. Our obligation to
keep this prospectus current and available for use will terminate prior to April
8, 2001 if all shares of Series A preferred stock and convertible debentures
covered by this prospectus have been converted into shares of our common stock.
Subject to certain conditions, the Series A preferred stock and the
subordinated debentures will be automatically converted into shares of our
common stock if the per share closing price of our common stock for any 20
consecutive trading days reaches certain prices. In addition, the Series A
preferred stock and the subordinated debentures may be converted at the option
of the holder, at any time after April 8, 1999, at specified prices. See
"Description of Capital Stock."
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Description of Capital Stock
General
Our authorized capital stock consists of (i) 50.0 million shares of
common stock, and (ii) 2.0 million shares of preferred stock. As of April 2,
1999, there were 23,185,765 shares of common stock and 472,790 shares of
preferred stock are issued and outstanding.
The statements under this caption are brief summaries of certain
material provisions of our certificate of incorporation and by-laws. These
summaries do not purport to be complete, and are subject to, and are qualified
in their entirety by reference to, such documents.
Common Stock
Holders of our common stock are entitled to one vote per share on all
matters on which the holders of common stock are entitled to vote and do not
have any cumulative voting rights. This means that the holders of more than
50.0% of our common stock voting for the election of directors can elect all of
the directors up for election if they choose to do so; if this event occurs, the
holders of the remaining shares of our common stock will not be able to elect
any person to our board of directors. Subject to the rights of the holders of
shares of our preferred stock, holders of our common stock are entitled to
receive ratably such dividends as may be from time to time declared by our board
of directors out of funds legally available for this purpose. Holders of our
common stock are not entitled to any preemptive, conversion, redemption,
subscription or similar rights. In the event of a liquidation, dissolution or
winding up of Viatel, whether voluntary or involuntary, holders of our common
stock are entitled to share ratably in the assets legally available for
distribution, if any, remaining after the payment or provision for the payment
of all our debts and other liabilities and the payment and setting aside for
payment of any preferential amount due to the holders of shares of our
outstanding preferred stock.
Preferred Stock
Our certificate of incorporation authorizes our board of directors to
issue, from time to time, up to two million shares of preferred stock in one or
more series. The board is authorized to fix or alter the rights, designations,
preferences, qualifications, limitations and restrictions of the shares of each
series, including dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption, redemption prices, liquidation preferences and the
number of shares constituting any series or designations of these series. The
issuance of preferred stock, while providing flexibility in connection with
possible acquisitions and other corporate purposes could, among other things,
have the effect, under certain circumstances, of delaying, deterring or
preventing a change in control of the Viatel.
Series a Preferred Stock
We have designated 718,042 shares of our authorized shares of preferred
stock as the Series A redeemable convertible preferred stock. The following
description of an Series A preferred stock is qualified in its entirety by
reference to our certificate of incorporation and the certificate of
designations, preferences and rights relating to the Series A preferred stock.
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<PAGE>
We are required to redeem all outstanding shares of the Series A
preferred stock on April 15, 2010 at $100 per share, plus any dividends which
may have accrued and remain unpaid as of such date. In addition, we can redeem
the Series A preferred stock option at our option, either in whole or in part,
at any time and from time to time, on or after April 15, 2003, upon not less
than 30 nor more than 60 days' prior notice at the following redemption
prices, expressed in percentages of liquidation preference, plus any accrued
and unpaid dividends, if any, to the date we redeem the shares, if redeemed
during the 12-month period commencing April 15, of the years set forth below.
YEAR REDEMPTION PRICE
---- ----------------
2003.................................... 105.000%
2004.................................... 103.333%
2005.................................... 101.667%
2006 and thereafter..................... 100.000%
At any time on or after April 8, 1999, the Series A preferred stock is
convertible, at the option of the holders, into shares of our common stock at a
conversion price of $13.20 purchase. In addition, if the per share closing price
of our common stock for any 20 consecutive trading days during the twelve months
ending April 15, 1999, April 15, 2000, April 15, 2001, April 15, 2002 or April
15, 2003, exceeds $26.40, $32.30, $38.20, $44.10 or $50.00, then the Series A
preferred stock will automatically convert into shares of common stock at the
conversion price.
We are required to pay cumulative dividends on the Series A preferred
stock, to the extent that funds are legally available, on each January 15, April
15, July 15 and October 15, at the rate of 10% per year. Dividends are payable:
o through April 15, 2003 in additional shares of Series A preferred
stock or cash or any combination thereof, at our option, subject to
restrictions contained in our indentures that effectively prohibit
our payment of cash dividends until April 15, 2003, and
o after April 15, 2003, in cash.
Under the terms of the Series A preferred stock, if the average closing
price of our common stock, rounded down to the nearest one-cent, during the 20
trading days immediately prior to April 15, 1999, is within one of the price
ranges specified in the left column below, we are required to issue a special
dividend, payable in additional shares of Series A preferred stock, having an
aggregate liquidation preference equal to the amount set forth on the
corresponding line of the right column below:
Special Per
Common Stock Price Share Dividend Amount
------------------ ---------------------
$11.25 - 11.75 $ 2.13
$10.75 - 11.24 $ 6.76
$10.25 - 10.74 $11.73
$ 9.75 - 10.24 $17.19
$ 9.25 - 9.74 $23.20
$ 8.75 - 9.24 $29.87
$ 8.25 - 8.74 $37.30
$ 7.75 - 8.24 $45.63
$ 7.25 - 7.74 $55.04
$ 7.00 - 7.24 $65.75
Below $7.00 $71.43
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Any shares of Series A preferred stock issued as a special dividend
would have the same conversion price as the shares of Series A preferred stock
which we initially issued.
The holders of our Series A preferred stock are not entitled to any
voting rights except as provided by law or as indicated below.
Whenever we do not pay dividends on the Series A preferred stock within
15 days of the dividend payment date, the holders of our Series A preferred
stock, voting together with certain other holders of our securities, are
entitled to vote for and elect, at the next annual meeting or at a special
meeting called for this purpose, two additional directors to our board. This
right continues until we have paid in full all past due dividends. Upon
termination of this right, the term of office of all directors then in office
elected by these holders terminate. Subject to certain exceptions, the
affirmative vote or consent of the holders of at least two-thirds of our
outstanding shares of the Series A preferred stock, voting as a class, is
required to:
o authorize, create or issue, or increase the authorized or issued
amount of shares of, any class or series of stock ranking senior to
the Series A preferred stock, either as to dividends or upon
liquidation, or
o amend, alter or repeal, whether by merger, consolidation or
otherwise, any provision of our certificate of incorporation or of
the certificate of designations so as to materially and adversely
affect the preferences, special rights or powers of the Series A
preferred stock.
In the event of any liquidation, dissolution or winding-up of Viatel,
whether voluntary or involuntary, the holders of our Series A preferred stock
are entitled to receive a liquidation preference of $100 per share before any
payment or distribution can be made by us or set apart for payment to the
holders of any class or series of our stock ranking junior to the Series A
preferred stock. If, upon any liquidation, dissolution or winding-up of Viatel,
our assets or proceeds from the sale of our assets is insufficient to pay the
liquidation value of the Series A preferred stock and any class of stock ranking
equal to the Series A preferred stock, then we are required to distribute the
assets, or the proceeds from their sale, ratably in accordance with the
respective amounts that would be payable on such shares if all amounts payable
thereon were paid in full.
In the event there is a change of control of Viatel, we are required to
make an offer to purchase all of the outstanding shares of Series A preferred
stock at a price equal to 101% of the liquidation preference of such shares.
Instead of making an offer to purchase, we have the option of reducing, under
specified terms, the price at which the Series A preferred stock is convertible
into shares of our common stock.
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Certificate of Incorporation and By-laws
Our certificate of incorporation provides that no director shall be
liable to Viatel or its stockholders for monetary damages for breach of his or
her fiduciary duty as a director, except for liability:
o for any breach of the director's duty of loyalty to Viatel or its
stockholders,
o for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
o in respect of certain unlawful dividend payments or stock
redemptions or repurchases, or
o for any transaction from which the director derived an improper
personal benefit.
These provisions effectively eliminate our right and the right of our
stockholders, through stockholders' derivative suits on behalf of Viatel, to
recover monetary damages against a director for breach of fiduciary duty as a
director, including breaches resulting from grossly negligent behavior, except
in the situations described above.
Our by-laws require that we indemnify any of our legal representatives,
directors and officers and any person who is or was serving at our request as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, to the fullest extent authorized by the Delaware General
Corporation Law.
We have obtained officers' and directors' liability insurance of $15
million for members of our board of directors and executive officers. In
addition to the indemnification provided in our certificate of incorporation and
by-laws, we have entered into agreements to indemnify our directors and officers
from and against any expenses incurred by these persons in connection with
investigating, defending, serving as a witness in, participating in (including
on appeal), or preparing for any of the foregoing in any threatened, pending or
contemplated action, suit, or proceeding, including an action by or in the right
of Viatel, or any inquiry, hearing or investigation, to the fullest extent
permitted by law, as this law may be amended or interpreted, but only to the
extent that the amendment or interpretation provides for broader indemnification
rights. The indemnity agreements contain certain provisions to ensure that the
beneficiary of the indemnification receives the benefits contemplated by the
indemnity agreement in the event of a change in control, like the establishment
and funding of a trust in an amount sufficient to satisfy any and all expenses
reasonably anticipated to be incurred by the beneficiary in connection with
investigating, preparing for, participating in and/or defending a proceeding.
Our certificate of incorporation and by-laws include certain provisions
which are intended to enhance the likelihood of continuity and stability in the
composition of our board of directors and which may have the effect of delaying,
deterring or preventing a future takeover or change in control of Viatel unless
the takeover or change in control is approved by our board of directors. These
provisions may also render the removal of directors and management more
difficult.
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Our certificate of incorporation provides that our board of directors
be divided into three classes, as equal in number as possible, serving
staggered, three-year terms. Our by-laws contain provisions establishing advance
notice procedures with regard to the nomination, other than by or at the
direction of our board of directors, of candidates for election as directors and
with regard to certain matters to be brought before an annual meeting of our
stockholders. In general, we must receive notice no less than 120 days prior to
the meeting, which must contain specified information regarding (1) the person
to be nominated or the matter to be brought before the meeting and (2) the
stockholder submitting the proposal.
Delaware Anti-takeover Law
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, or the DGCL. The DGCL generally prohibits a publicly-held
company from engaging in a business combination with an interested stockholder
for a period of three years after the date of the transaction in which the
person became an interested stockholder, unless the interested stockholder
attained that status with the approval of the board or unless the business
combination is approved in a prescribed manner. A business combination includes
mergers, asset sales, and other transactions resulting in a financial benefit to
the interested stockholder. Subject to certain exceptions, an interested
stockholder is a person who, together with affiliates and associates, owns, or
within three years did own, fifteen percent or more of a corporation's voting
stock. This statute could prohibit or delay the accomplishment of mergers or
other takeover or change in control attempts with respect to us and,
accordingly, may discourage attempts to acquire us.
Registration Rights
In connection with our 1998 high yield offering, we agreed to register,
no later than April 8, 1999, the shares of our common stock which will be issued
upon conversion of our outstanding preferred stock and subordinated convertible
debentures. Subject to limited exceptions, we are required to keep the
registration statement current and available for use for a period of two years
or until all the unregistered notes have been sold under the registration
statement, if earlier. The registration statement of which this prospectus is a
part has been filed to satisfy this registration obligation.
In connection with our 1999 high yield offering, we agreed to use our
best efforts to complete, at our expense, by September 19, 1999, a registered
exchange offer for each of the two series of notes which were issued. Under the
terms of our agreement, we are required to offer to exchange registered notes
which have terms substantially identical to those of the notes originally sold
by us on a private placement basis in our March 1999 offering. In the event we
are unable to complete the exchange offer due to a change in SEC policy, we are
required to use our best efforts to put in place a shelf registration statement
for the sale of the unregistered notes by the respective holders. We are
required to keep any shelf registration which we file current and available for
use for up to two years or until all the unregistered notes have been sold under
the registration statement, if earlier. If we do not complete the registered
exchange offer or have the shelf registration statement in place within the
required time frames, we will be required to pay specified penalties.
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Use of Proceeds
We will not receive any proceeds from the conversion of the
subordinated debentures or the Series A preferred stock by the holders of such
securities. The expenses incurred in registering the shares of common stock
covered by this prospectus will be paid by us.
Plan of Distribution
This prospectus registers 6,824,249 shares of our common stock to be
issued upon the conversion of the subordinated debentures and the Series A
preferred stock by the holders of such securities.
Upon conversion of the subordinated debentures and the Series A
Preferred Stock, the holders will receive registered shares, which may be sold
in any one or more transactions on the Nasdaq Stock Market, or any exchange on
which our common stock may then be listed, in the over-the-counter market or
otherwise in negotiated transactions or a combination of such methods of sale,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Legal Matters
Certain legal matters relating to the validity of the shares of our
common stock covered by this prospectus will be passed upon for us by Kelley
Drye & Warren LLP, New York, New York.
Experts
The consolidated financial statements and schedule of Viatel, Inc. and
subsidiaries as of December 31, 1998 and 1997, and for each of the years in the
three-year period ended December 31, 1998, have been incorporated by reference
in the registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference in this
prospectus, and upon the authority of said firm as experts in accounting and
auditing.
Available Information
We are subject to the informational requirements of the Securities
Exchange Act of 1934, and, in accordance therewith, files reports, proxy
statements and other information with the SEC. Such reports, proxy and
information statements and other information may be read and copied at the
Public Reference Room maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the SEC: 7
World Trade Center, Suite 1300, New York, New York 10048, and 500 West Madison
Street, Suite 1300, Chicago, Illinois 60661-2511. Copies of such material also
may be obtained from the Public Reference Section of the SEC, at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Information regarding
the operation of the SEC's Public Reference Room may be obtained by calling the
SEC at 1-800-SEC-0330. The SEC also maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC. The address of the SEC's Web site is
http://www.sec.gov. Our common stock is traded on Nasdaq, and our periodic
reports, proxy and information statements and other information can be inspected
at the offices of Nasdaq Operations, 1735 K Street, N.W., Washington, D.C.
20006. Information regarding us may also be obtained from its Web site at
http://www.viatel.com.
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This prospectus constitutes a part of a registration statement on Form
S-3 filed by us with the SEC under the Securities Act of 1933. This prospectus
does not contain all of the information contained in the registration statement,
certain parts of which are omitted in accordance with the rules and regulations
of the SEC. Reference is made to the registration statement and exhibits thereto
for further information. Exhibits to the registration statement that are omitted
from this prospectus may also be obtained at the SEC's Web site described above.
Statements contained or incorporated by reference in this prospectus concerning
the provisions of any agreement or other document filed as an exhibit to the
registration statement or otherwise filed with the SEC are not necessarily
complete, and you are referred to the copy so filed for more detailed
information, each such statement being qualified in its entirety by such
reference.
Incorporation of Certain Documents by Reference
The following documents heretofore filed by us with the SEC under the
Securities Exchange Act of 1934 are incorporated by reference in this
prospectus:
(i) Our annual report on Form 10-K for the fiscal year ended
December 31, 1998, as filed with the Commission on March 31,
1999; and
(ii) The description of our common stock, $0.01 par value,
contained in our registration statement on Form 8-A
(Registration No. 000-21261) filed with the Commission on
August 27, 1996 under Section 12 of the Securities Exchange
Act of 1934.
All reports and other documents filed by us under Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
prospectus and prior to the termination of this offering will be deemed to be
incorporated by reference in this prospectus and to be a part of this prospectus
from the date of filing of such reports and documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference in this
prospectus will be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained therein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference in this prospectus modifies or supersedes such statement. Any such
statement so modified or superseded will not be deemed, except as so modified or
superseded, to constitute a part of this prospectus.
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We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents incorporated by
reference in this prospectus, excluding exhibits to such documents, unless such
exhibits are specifically incorporated by reference into such documents. Written
requests for such documents should be directed to our Director of Investor
Relations at our principal executive offices located at 685 Third Avenue, New
York, New York 10017 or by telephone at (212) 350-9200.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses, all of which will
be paid by the Registrant in connection with the sale and distribution of the
securities being registered. All of the amounts shown are estimates except the
SEC registration fee.
SEC Registration Fee....................................... $35,859.30
Legal Fees and Expenses.................................... $15,000.00
Accounting Fees and Expenses............................... $ 2,500.00
Miscellaneous expenses..................................... $ 913.97
-----------
Total................................................... $54,273.27
=========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporations Law of the State of Delaware
(the "DGCL") provides that a Delaware corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (a "proceeding") (other than an action by or in the right of
the corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. A Delaware corporation may indemnify any person under such
Section in connection with a proceeding by or in the right of the corporation to
procure judgment in its favor, as provided in the preceding sentence, against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action, except that no
indemnification shall be made with respect thereto unless, and then only to the
extent that, a court of competent jurisdiction shall determine upon application
that such person is fairly and reasonably entitled to indemnity for such
expenses as the court shall deem proper. A Delaware corporation must indemnify
present or former directors and officers who are successful on the merits or
otherwise in defense of any action, suit or proceeding or in defense of any
claim, issue or matter in any proceeding, by reason of the fact that he is or
was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation, against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith. A Delaware corporation may pay for the expenses (including attorneys'
fees) incurred by an officer or director in defending a proceeding in advance of
the final disposition upon receipt of an undertaking by or on behalf of such
officer or director to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the corporation. Article Tenth of
the Registrant's Amended and Restated Certificate of Incorporation and Article X
of the Registrant's Amended and Restated Bylaws provide for indemnification of
directors and officers to the fullest extent permitted by Section 145 of the
DGCL.
<PAGE>
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director shall not be personally liable to
the corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for any
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) with respect to certain unlawful dividend
payments or stock redemptions or repurchases or (iv) for any transaction from
which the director derived an improper personal benefit. Article Ninth of the
Registrant's Amended and Restated Certificate of Incorporation eliminates the
liability of directors to the fullest extent permitted by Section 102(b)(7) of
the DGCL.
Section 145 of the DGCL permits a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other employee against any liability asserted against
such person and incurred by such person in such capacity, or arising out of
their status as such, whether or not the corporation would have the power to
indemnify directors and officers against such liability. The Registrant has
obtained officers' and directors' liability insurance of $15 million for members
of its Board of Directors and executive officers. In addition, the Registrant
has entered into agreements to indemnify its directors and officers from and
against any Expenses (as defined in the indemnity agreement) incurred by such
person in connection with investigating, defending, serving as a witness in,
participating in (including on appeal) or preparing for any of the foregoing in
any threatened, pending or contemplated action, suit or proceeding (including an
action by or in the right of the Registrant), or any inquiry, hearing or
investigation, to the fullest extent permitted by law, as such law may be
amended or interpreted (but only to the extent that such amendment or
interpretation provides for broader indemnification rights). The indemnity
agreement contains certain provisions to ensure that the indemnitee receives the
benefits contemplated by the agreement in the event of a "change in control" (as
defined in the indemnity agreement) such as the establishment and funding of a
trust in an amount sufficient to satisfy any and all expenses reasonably
anticipated to be incurred by the indemnitee in connection with investigating,
preparing for, participating in and/or defending a proceeding.
At present, there is no pending litigation or other proceeding
involving a director or officer of the Registrant as to which indemnification is
being sought, nor is the Registrant aware of any threatened litigation that may
result in claims for indemnification by any officer or director.
ITEM 16. EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
4.1* Indenture, dated as of April 8, 1998, between Viatel, Inc. and
The Bank of New York, as Trustee, relating to Viatel, Inc.'s
12.50% Senior Discount Notes Due 2008 (including form of 12.50%
Senior Discount Note) (incorporated herein by reference to
Exhibit 4.1 to Viatel, Inc.'s Registration Statement on Form
S-4, filed on July 10, 1998, Registration No. 333-58921
("Viatel's 1998 Form S-4")).
<PAGE>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
4.2* Indenture, dated as of April 8, 1998, between Viatel, Inc. and
The Bank of New York, as Trustee, relating to Viatel, Inc.'s
11.25% Senior Notes Due 2008 (including form of 11.25% Senior
Note) (incorporated herein by reference to Exhibit 4.2 to
Viatel's 1998 Form S-4).
4.3* Indenture, dated as of April 8, 1998, among Viatel, Inc., The
Bank of New York, as Trustee, and Deutsche Bank,
Aktiengesellschaft, as German Paying Agent and Co-Registrar,
relating to Viatel, Inc.'s 12.40% Senior Discount Notes Due
2008 (including form of 12.40% Senior Discount Note)
(incorporatedherein by reference to Exhibit 4.3 to Viatel's
1998 Form S-4).
4.4* Indenture, dated as of April 8, 1998, among Viatel, Inc., The
Bank of New York, as Trustee, and Deutsche Bank,
Aktiengesellschaft, as German Paying Agent and Co-Registrar,
relating to Viatel, Inc.'s 11.15% Senior Notes Due 2008
(including form of 11.15% Senior Note) (incorporated herein by
reference to Exhibit 4.4 to Viatel's 1998 Form S-4).
4.5* Indenture, dated as of April 8, 1998, among Viatel, Inc., The
Bank of New York, as Trustee, and Deutsche Bank,
Aktiengesellschaft, as German Paying Agent and Co-Registrar,
relating to Viatel, Inc.'s 10% Subordinated Convertible
Debentures Due 2011 (including form of 10% Subordinated
Convertible Debenture) (incorporated herein by reference to
Exhibit 4.5 to Viatel's 1998 Form S-4).
4.6* Conversion Shares Registration Rights Agreement, dated April 3,
1998, among Viatel, Inc., Morgan Stanley & Co. Incorporated,
Morgan Stanley Bank AG, Salomon Brothers Inc, ING Baring (U.S.)
Securities, Inc. and NationsBanc Montgomery Securities LLC
(incorporated herein by reference to Exhibit 4.7 to Viatel's
1998 Form S-4).
4.7* Amended and Restated Certificate of Incorporation of Viatel,
Inc. (incorporated herein by reference to Exhibit 3.1(i)(a) to
Viatel, Inc.'s Registration Statement on Form S-1,
Registration No. 333-09699, filed on August 7, 1996;
Certificate of Designations, Preferences and Rights of 10%
Series A Redeemable Convertible Preferred Stock, $.01 par
value (incorporated herein by reference to Exhibit 3(i)(b) to
Viatel's 1998 Form S-4); Certificate of Amendment to Viatel,
Inc.'s Amended and Restated Certificate of Incorporation
(incorporated herein by reference to Exhibit 4.9 to Viatel,
Inc.'s quarterly report on Form 10-Q for the quarter ended
September 30, 1998, File No. 000-21261).
4.8* Second Amended and Restated Bylaws of Viatel, Inc.
(incorporated herein by reference to Exhibit 3(ii) of Viatel,
Inc.'s quarterly report on Form 10-Q for the quarter ended
September 30, 1997, File No.
000-21261).
4.9 Indenture, dated as of March 19, 1999, between Viatel, Inc.
and The Bank of New York, as Trustee, relating to Viatel,
Inc.'s US dollar denominated 11.50% Senior Notes Due 2009
(including form of 11.50% Senior Note).
4.10 Indenture, dated as of March 19, 1999, between Viatel, Inc.
and The Bank of New York, as Trustee, relating to Viatel,
Inc.'s Euro denominated 11.50% Senior Notes Due 2009
(including form of 11.50% Senior Note).
<PAGE>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
4.11 Registration Rights Agreement, dated as of March 12, 1999,
among Viatel, Inc. and the Initial Purchasers.
5.1** Opinion of Kelley Drye & Warren LLP (included in their opinion
filed as Exhibit 5.1).
23.1** Consent of Kelley Drye & Warren LLP (included in their opinion
filed as Exhibit 5.1).
23.2 Consent of KPMG LLP.
24* Powers of Attorney (included on original S-3 signature page).
- --------------------
* Incorporated herein by reference.
** Previously filed.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price, represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Under the requirements of the Securities Act, the Registrant, Viatel,
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Amendment to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York on this 2nd day of April 2, 1999.
VIATEL, INC.
By: MICHAEL J. MAHONEY*
------------------------------------
Chairman of the Board, President and
Chief Executive Officer
Under the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities indicated on April 2, 1999.
Signature Title
- --------- -----
MICHAEL J. MAHONEY * Chairman of the Board, President and
- ---------------------------------- Chief Executive Officer (Principal
Michael J. Mahoney Executive Officer)
/S/ALLAN L. SHAW Senior Vice President, Finance, Chief
- ---------------------------------- Financial Officer and Director
Allan L. Shaw (Principal Financial and Accounting
Officer)
PAUL G. PIZZANI * Director
- ----------------------------------
Paul G. Pizzani
FRANCIS J. MOUNT * Director
- ----------------------------------
Francis J. Mount
JOHN G. GRAHAM * Director
- ----------------------------------
John G. Graham
* By: /S/ ALLAN L. SHAW
----------------------------
Allan L. Shaw
by Power of Attorney
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
4.1* Indenture, dated as of April 8, 1998, between Viatel, Inc. and
The Bank of New York, as Trustee, relating to Viatel, Inc.'s
12.50% Senior Discount Notes Due 2008 (including form of 12.50%
Senior Discount Note) (incorporated herein by reference to
Exhibit 4.1 to Viatel, Inc.'s Registration Statement on Form
S-4, filed on July 10, 1998, Registration No. 333-58921
("Viatel's 1998 Form S-4")).
4.2* Indenture, dated as of April 8, 1998, between Viatel, Inc. and
The Bank of New York, as Trustee, relating to Viatel, Inc.'s
11.25% Senior Notes Due 2008 (including form of 11.25% Senior
Note) (incorporated herein by reference to Exhibit 4.2 to
Viatel's 1998 Form S-4).
4.3* Indenture, dated as of April 8, 1998, among Viatel, Inc., The
Bank of New York, as Trustee, and Deutsche Bank,
Aktiengesellschaft, as German Paying Agent and Co-Registrar,
relating to Viatel, Inc.'s 12.40% Senior Discount Notes Due
2008 (including form of 12.40% Senior Discount Note)
(incorporated herein by reference to Exhibit 4.3 to Viatel's
1998 Form S-4).
4.4* Indenture, dated as of April 8, 1998, among Viatel, Inc., The
Bank of New York, as Trustee, and Deutsche Bank,
Aktiengesellschaft, as German Paying Agent and Co-Registrar,
relating to Viatel, Inc.'s 11.15% Senior Notes Due 2008
(including form of 11.15% Senior Note) (incorporated herein by
reference to Exhibit 4.4 to Viatel's 1998 Form S-4).
4.5* Indenture, dated as of April 8, 1998, among Viatel, The Bank of
New York, as Trustee, and Deutsche Bank, Aktiengesellschaft, as
German Paying Agent and Co-Registrar, relating to Viatel, Inc.'s
10% Subordinated Convertible Debentures Due 2011 (including form
of 10% Subordinated Convertible Debenture) (incorporated herein
by reference to Exhibit 4.5 to Viatel's 1998 Form S-4).
4.6* Conversion Shares Registration Rights Agreement, dated April
3, 1998, among Viatel, Inc., Morgan Stanley & Co.
Incorporated, Morgan Stanley Bank AG, Salomon Brothers Inc,
ING Baring (U.S.) Securities, Inc. and NationsBanc Montgomery
Securities LLC (incorporated herein by reference to Exhibit
4.7 to Viatel's 1998 Form S-4).
4.7* Amended and Restated Certificate of Incorporation of Viatel,
Inc. (incorporated herein by reference to Exhibit 3.1(i)(a) to
Viatel, Inc.'s Registration Statement on Form S-1, Registration
No. 333-09699, filed on August 7, 1996; Certificate of
Designations, Preferences and Rights of 10% Series A Redeemable
Convertible Preferred Stock, $.01 par value (incorporated herein
by reference to Exhibit 3(i)(b) to Viatel's 1998 Form S-4);
Certificate of Amendment to Viatel, Inc.'s Amended and Restated
Certificate of Incorporation (incorporated herein by reference
to Exhibit 4.9 to Viatel, Inc.'s quarterly report on Form 10-Q
for the quarter ended September 30, 1998, File No. 000-21261).
4.8* Second Amended and Restated Bylaws of Viatel, Inc.
(incorporated herein by reference to Exhibit 3(ii) of Viatel,
Inc.'s Form 10-Q for the quarter ended September 30, 1997,
File No. 000-21261).
<PAGE>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
4.9 Indenture, dated as of March 19, 1999, between Viatel, Inc.
and The Bank of New York, as Trustee, relating to Viatel,
Inc.'s US dollar denominated 11.50% Senior Notes Due 2009
(including form of 11.50% Senior Note).
4.10 Indenture, dated as of March 19, 1999, between Viatel, Inc.
and The Bank of New York, as Trustee, relating to Viatel,
Inc.'s Euro denominated 11.50% Senior Notes Due 2009
(including form of 11.50% Senior Note).
4.11 Registration Rights Agreement, dated as of March 12, 1999,
among Viatel, Inc. and the Initial Purchasers.
5.1** Opinion of Kelley Drye & Warren LLP as to the validity of the
securities being registered.
23.1** Consent of Kelley Drye & Warren LLP (included in their opinion
filed as Exhibit 5.1).
23.2 Consent of KPMG LLP.
24** Powers of Attorney (included on original S-3 signature page).
- --------------------
* Incorporated herein by reference
** Previously filed.
EXHIBIT 4.9
EXECUTION COPY
================================================================================
VIATEL, INC.,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
Senior Dollar Notes Indenture
Dated as of March 19, 1999
11 1/2% Senior Dollar Notes due 2009
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
TIA SECTIONS INDENTURE SECTIONS
ss. 310(a)(1)........................................ 7.10
(a)(5)......................................... 7.10
(b)............................................ 7.03; 7.08
ss. 311.............................................. 7.03
ss. 313(a)........................................... 7.06
(c)............................................ 7.05; 7.06
ss. 314(a)........................................... 4.17
(b)............................................ 10.01
(c)(1)......................................... 1.01
(d)............................................ 10.01
(e)............................................ 1.01
ss. 315(a)........................................... 7.02
(b)............................................ 7.05; 10.02
ss. 316(a)........................................... 6.06
Note: The Cross-Reference Table shall not for any purpose be deemed to
be a part of this Indenture.
<PAGE>
TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY ......................................1
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS...................................................2
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT............19
SECTION 1.03. RULES OF CONSTRUCTION........................................19
ARTICLE TWO
THE NOTES
SECTION 2.01. FORM AND DATING..............................................20
SECTION 2.02. RESTRICTIVE LEGENDS..........................................21
SECTION 2.03. EXECUTION, AUTHENTICATION AND DENOMINATIONS..................22
SECTION 2.04. REGISTRAR AND PAYING AGENT...................................23
SECTION 2.05. PAYING AGENT TO HOLD MONEY IN TRUST..........................24
SECTION 2.06. TRANSFER AND EXCHANGE........................................24
SECTION 2.07. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.......................25
SECTION 2.08. SPECIAL TRANSFER PROVISIONS..................................26
SECTION 2.09. REPLACEMENT NOTES............................................29
SECTION 2.10. OUTSTANDING NOTES............................................29
SECTION 2.11. TEMPORARY NOTES..............................................30
SECTION 2.12. CANCELLATION.................................................30
SECTION 2.13. CUSIP NUMBERS................................................30
SECTION 2.14. DEFAULTED INTEREST...........................................30
SECTION 2.15. ISSUANCE OF ADDITIONAL NOTES.................................30
ARTICLE THREE
REDEMPTION
SECTION 3.01. RIGHT OF REDEMPTION..........................................31
SECTION 3.02. NOTICES TO TRUSTEE...........................................31
SECTION 3.03. SELECTION OF NOTES TO BE REDEEMED............................31
SECTION 3.04. NOTICE OF REDEMPTION.........................................32
SECTION 3.05. EFFECT OF NOTICE OF REDEMPTION...............................32
SECTION 3.06. DEPOSIT OF REDEMPTION PRICE..................................32
SECTION 3.07. PAYMENT OF NOTES CALLED FOR REDEMPTION.......................33
SECTION 3.08. NOTES REDEEMED IN PART.......................................33
Note: The Table of Contents shall not for any purpose be deemed to be a part
of this Indenture.
<PAGE>
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.............................................33
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY..............................33
SECTION 4.03. LIMITATION ON INDEBTEDNESS...................................34
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS............................36
SECTION 4.05. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.........................40
SECTION 4.06. LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES...................................41
SECTION 4.07. LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED
SUBSIDIARIES..............................................41
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES..42
SECTION 4.09. LIMITATION ON LIENS..........................................43
SECTION 4.10. LIMITATION ON SALE-LEASEBACK TRANSACTIONS....................43
SECTION 4.11. LIMITATION ON ASSET SALES....................................44
SECTION 4.12. REPURCHASE OF NOTES UPON A CHANGE OF CONTROL.................45
SECTION 4.13. EXISTENCE....................................................45
SECTION 4.14. PAYMENT OF TAXES AND OTHER CLAIMS............................45
SECTION 4.15. MAINTENANCE OF PROPERTIES AND INSURANCE......................45
SECTION 4.16. NOTICE OF DEFAULTS...........................................46
SECTION 4.17. COMPLIANCE CERTIFICATES......................................46
SECTION 4.18. COMMISSION REPORTS AND REPORTS TO HOLDERS....................46
SECTION 4.19. WAIVER OF STAY, EXTENSION OR USURY LAWS......................46
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC..................................47
SECTION 5.02. SUCCESSOR SUBSTITUTED........................................48
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT............................................48
SECTION 6.02. ACCELERATION.................................................49
SECTION 6.03. OTHER REMEDIES...............................................50
SECTION 6.04. WAIVER OF PAST DEFAULTS......................................50
SECTION 6.05. CONTROL BY MAJORITY..........................................50
SECTION 6.06. LIMITATION ON SUITS..........................................50
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.........................51
SECTION 6.08. COLLECTION SUIT BY TRUSTEE...................................51
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.............................51
SECTION 6.10. PRIORITIES...................................................52
SECTION 6.11. UNDERTAKING FOR COSTS........................................52
SECTION 6.12. RESTORATION OF RIGHTS AND REMEDIES...........................52
SECTION 6.13. RIGHTS AND REMEDIES CUMULATIVE...............................52
SECTION 6.14. DELAY OR OMISSION NOT WAIVER.................................52
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. GENERAL......................................................53
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE....................................53
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.................................54
SECTION 7.04. TRUSTEE'S DISCLAIMER.........................................54
SECTION 7.05. NOTICE OF DEFAULT............................................54
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS................................54
SECTION 7.07. COMPENSATION AND INDEMNITY...................................55
SECTION 7.08. REPLACEMENT OF TRUSTEE.......................................55
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.............................56
SECTION 7.10. ELIGIBILITY..................................................56
SECTION 7.11. MONEY HELD IN TRUST..........................................56
SECTION 7.12. WITHHOLDING TAXES............................................56
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF THE COMPANY'S OBLIGATIONS.....................57
SECTION 8.02. DEFEASANCE AND DISCHARGE OF INDENTURE........................58
SECTION 8.03. DEFEASANCE OF CERTAIN OBLIGATIONS............................59
SECTION 8.04. APPLICATION OF TRUST MONEY...................................59
SECTION 8.05. REPAYMENT TO COMPANY.........................................59
SECTION 8.06. REINSTATEMENT................................................60
SECTION 8.07. DEFEASANCE AND CERTAIN OTHER EVENTS OF DEFAULT...............60
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS...................................60
SECTION 9.02. WITH CONSENT OF HOLDERS......................................61
SECTION 9.03. REVOCATION AND EFFECT OF CONSENT.............................62
SECTION 9.04. NOTATION ON OR EXCHANGE OF NOTES.............................62
SECTION 9.05. TRUSTEE TO SIGN AMENDMENTS, ETC..............................62
SECTION 9.06. CONFORMITY WITH TRUST INDENTURE ACT..........................62
ARTICLE TEN
SECURITY
SECTION 10.01. SECURITY.....................................................63
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT OF 1939..................................64
SECTION 11.02. NOTICES......................................................64
SECTION 11.03. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT...........65
SECTION 11.04. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION................65
SECTION 11.05. RULES BY TRUSTEE, PAYING AGENT OR REGISTRAR..................66
SECTION 11.06. PAYMENT DATE OTHER THAN A BUSINESS DAY.......................66
SECTION 11.07. GOVERNING LAW; SUBMISSION TO JURISDICTION; AGENT FOR SERVICE.66
SECTION 11.08. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS................66
SECTION 11.09. NO RECOURSE AGAINST OTHERS...................................66
SECTION 11.10. SUCCESSORS...................................................67
SECTION 11.11. DUPLICATE ORIGINALS..........................................67
SECTION 11.12. SEPARABILITY.................................................67
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.............................67
EXHIBIT A FORM OF RESTRICTED GLOBAL NOTE...............................A-1
EXHIBIT B FORM OF REGULATION S GLOBAL NOTE.............................B-1
EXHIBIT C FORM OF U.S. CERTIFICATED NOTE...............................C-1
EXHIBIT D FORM OF CERTIFICATE..........................................D-1
EXHIBIT E FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S........................E-1
EXHIBIT F FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS.................F-1
<PAGE>
INDENTURE, dated as of March 19, 1999, between VIATEL, INC., a
Delaware corporation, as issuer (the "Company"), and THE BANK OF NEW YORK, a New
York banking corporation, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of 11 1/2% Senior Dollar
Notes due 2009 (the "NOTES") issuable as provided in this Indenture. Pursuant to
the terms of a Purchase Agreement dated as of March 12, 1999 (the "PURCHASE
AGREEMENT") between the Company and Morgan Stanley & Co. Incorporated, as the
manager for itself and the several initial purchasers named on Schedule I
thereto (the "MANAGER"), the Company has agreed to issue and sell an aggregate
of $200,000,000 of Notes and an aggregate of Euro 150,000,000 of 11 1/2% Senior
Euro Notes due 2009 of the Company (the "EURO NOTES").
The Notes will be issued pursuant to the provisions of an Indenture
(the "INDENTURE", and together with the Euro Notes Indenture (as defined
herein), the "INDENTURES") dated as of the Closing Date (as defined below)
between the Company and the Trustee.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done, and the Company has done
all things necessary to make the Notes, when executed by the Company and
authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the legal, valid and binding obligations of the Company as hereinafter
provided.
This Indenture will, upon the effectiveness of the registration
statement provided for under the Registration Rights Agreement, be subject to,
and governed by, the provisions of the Trust Indenture Act of 1939, as amended,
that are required to be a part of and to govern indentures qualified under the
Trust Indenture Act of 1939, as amended.
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows.
<PAGE>
2
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by the Company or a Restricted Subsidiary and not Incurred
in connection with, or in anticipation of, such Person becoming a Restricted
Subsidiary or such Asset Acquisition.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined in conformity with generally accepted accounting
principles; PROVIDED that the following items shall be excluded in computing
Adjusted Consolidated Net Income (without duplication): (i) the net income (or
loss) of any Person that is not a Restricted Subsidiary, except (x) with respect
to net income, to the extent of the amount of dividends or other distributions
actually paid to the Company or any of its Restricted Subsidiaries by such
Person during such period and (y) with respect to net losses, to the extent of
the amount of Investments made by the Company or any Restricted Subsidiary in
such Person during such period; (ii) solely for the purposes of calculating the
amount of Restricted Payments that may be made pursuant to clause (C) of the
first paragraph of Section 4.04 hereof (and in such case, except to the extent
includable pursuant to clause (i) above), the net income (or loss) of any Person
accrued prior to the date it becomes a Restricted Subsidiary or is merged into
or consolidated with the Company or any of its Restricted Subsidiaries or all or
substantially all of the property and assets of such Person are acquired by the
Company or any of its Restricted Subsidiaries; (iii) the net income of any
Restricted Subsidiary to the extent that the declaration or payment of dividends
or similar distributions by such Restricted Subsidiary of such net income is not
at the time permitted by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Restricted Subsidiary; (iv) any gains or losses
(on an after-tax basis) attributable to Asset Sales and sales of capacity or
dark fibers; (v) except for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 4.04 hereof, any amount paid or accrued as dividends on Preferred Stock
of the Company or any Restricted Subsidiary owned by Persons other than the
Company and any of its Restricted Subsidiaries; (vi) all extraordinary gains and
extraordinary losses; and (vii) any compensation expense paid or payable solely
with Capital Stock (other than Disqualified Stock) of the Company or any
options, warrants or other rights to acquire Capital Stock (other than
Disqualified Stock) of the Company.
"Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries,
prepared in conformity with GAAP and filed with the Commission or provided to
the Trustee pursuant to Section 4.18 hereof.
<PAGE>
3
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent, authenticating agent or
co-Registrar.
"Agent Members" has the meaning provided in Section 2.07(a) hereof.
"Asset Acquisition" means (i) an investment by the Company or any of
its Restricted Subsidiaries in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged into or consolidated
with the Company or any of its Restricted Subsidiaries; PROVIDED that such
Person's primary business is related, ancillary or complementary to the
businesses of the Company or any of its Restricted Subsidiaries on the date of
such investment or (ii) an acquisition by the Company or any of its Restricted
Subsidiaries of the property and assets of any Person other than the Company or
any of its Restricted Subsidiaries that constitute substantially all of a
division or line of business of such Person; PROVIDED that the property and
assets acquired are related, ancillary or complementary to the businesses of the
Company or any of its Restricted Subsidiaries on the date of such acquisition.
"Asset Disposition" means the sale or other disposition by the Company
or any of its Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of
any Restricted Subsidiary or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any of its
Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of a
division or line of business of the Company or any of its Restricted
Subsidiaries or (iii) any other property and assets (other than the Capital
Stock or other Investment in an Unrestricted Subsidiary) of the Company or any
of its Restricted Subsidiaries outside the ordinary course of business of the
Company or such Restricted Subsidiary and, in each case, that is not governed by
Article Five hereof; PROVIDED that "Asset Sale" shall not include (a) sales or
other dispositions of inventory, receivables and other current assets, (b)
sales, transfers or other dispositions of assets constituting a Restricted
Payment permitted to be made under Section 4.04 hereof, (c) sales, transfers or
other dispositions of assets with a fair market value (as certified in an
Officers' Certificate) not in excess of $1 million in any transaction or series
of related transactions, (d) sales or other dispositions of assets for
consideration at least equal to the fair market value of the assets sold or
disposed of, to the extent that the consideration received would constitute
property or assets of the kind described in clause (B) of Section 4.11 hereof,
(e) any liquidation of Temporary Cash Investments, (f) a transfer, directly or
indirectly, of receivables or other payment rights arising from a transfer of
indefeasible rights of use or dark fiber, which transfer of receivables or
<PAGE>
4
rights is to a special purpose entity created for the purpose of issuing
securities to be paid or redeemed from, or beneficial interests in, the cash or
revenues generated from the assets transferred; PROVIDED that the consideration
received by the Company is at least equal to the fair market value of the asset
transferred and the proceeds are used by the Company (A) to repay unsubordinated
Indebtedness of the Company owed to a Person other than the Company or a
Restricted Subsidiary, (B) to invest in the manner described in clause (i)(B) of
Section 4.11 hereof covenant or (C) for working capital purposes or (g) other
transfers of capacity or dark fiber.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means the Board of Directors of the Company as
required by the context or any committee of such Board of Directors duly
authorized to act under this Indenture.
"Board Resolution" means a copy of a resolution, certified by the
Secretary or Assistant Secretary of the Company as required by the context to
have been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York, in the city of the Corporate
Trust Office of the Trustee or in the city in which any Paying Agent or
Registrar is located are authorized or required by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.
"Certificated Notes" has the meaning provided in Section 2.01 hereof.
"Change of Control" means such time as (i) a "person" or a "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes
the ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than 50% of the total voting power of the Voting Stock of the
Company on a fully diluted basis; or (ii) individuals who on the Closing Date
constitute the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination to the Board of Directors
for election by the Company's stockholders was approved by a vote of at least
two-thirds of the members of the Board of Directors then in office who either
were members of the Board of Directors on the Closing Date or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the members of the Board of Directors then in office.
<PAGE>
5
"Closing Date" means the date on which the Notes are originally issued
under this Indenture.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Indenture, including, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to the applicable provisions of
this Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the name of
the Company (i) by its Chairman of the Board, the Vice Chairman of the Board,
its President or a Vice President and (ii) by its Chief Financial Officer,
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary and
delivered to the Trustee; PROVIDED, HOWEVER, that such written request or order
may be signed by any two of the officers or directors listed in clause (i) above
in lieu of being signed by one of such officers or directors listed in such
clause (i) and one of the officers listed in clause (ii) above.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) income taxes, (iii) depreciation expense, (iv) amortization
expense and (v) all other non-cash items reducing Adjusted Consolidated Net
Income (other than items that will require cash payments and for which an
accrual or reserve is, or is required by GAAP to be, made), less all non-cash
items increasing Adjusted Consolidated Net Income, all as determined on a
consolidated basis for the Company and its Restricted Subsidiaries in conformity
with GAAP; PROVIDED that, if any Restricted Subsidiary is not a Wholly Owned
Restricted Subsidiary, Consolidated EBITDA shall be reduced (to the extent not
otherwise reduced in accordance with GAAP) by an amount equal to (A) the amount
of the Adjusted Consolidated Net Income attributable to such Restricted
Subsidiary multiplied by (B) the percentage ownership interest in the income of
such Restricted Subsidiary not owned on the last day of such period by the
Company or any of its Restricted Subsidiaries.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and interest
in respect of Indebtedness that is Guaranteed or secured by the Company or any
of its Restricted Subsidiaries, and all but the principal component of rentals
in respect of Capitalized Lease Obligations paid, accrued or scheduled to be
paid or to be accrued by the Company and its Restricted Subsidiaries during such
periods).
<PAGE>
6
"Consolidated Leverage Ratio" means, on any Transaction Date, the
ratio of (i) the aggregate amount of Indebtedness of the Company and its
Restricted Subsidiaries on a consolidated basis outstanding on such Transaction
Date to (ii) four times Consolidated EBITDA for the then most recent fiscal
quarter for which financial statements of the Company have been filed with the
Commission or provided to the Trustee pursuant to Section 4.18 hereof; PROVIDED
that, in making the foregoing calculation, (A) PRO FORMA effect shall be given
to the Incurrence or repayment of any Indebtedness to be Incurred or repaid on
the Transaction Date; (B) PRO FORMA effect shall be given to Asset Dispositions
and Asset Acquisitions (including giving PRO FORMA effect to the application of
proceeds of any Asset Disposition) that occur from the beginning of the then
most recent four fiscal quarters through the Transaction Date (the "REFERENCE
PERIOD"), as if they had occurred and such proceeds had been applied on the
first day of such Reference Period; and (C) PRO FORMA effect shall be given to
asset dispositions and asset acquisitions (including giving PRO FORMA effect to
the application of proceeds of any asset disposition) that have been made by any
Person that has become a Restricted Subsidiary or has been merged with or into
the Company or any Restricted Subsidiary during such Reference Period and that
would have constituted Asset Dispositions or Asset Acquisitions had such
transactions occurred when such Person was a Restricted Subsidiary as if such
asset dispositions or asset acquisitions were Asset Dispositions or Asset
Acquisitions that occurred on the first day of such Reference Period; PROVIDED
that to the extent that clause (B) or (C) of this sentence requires that PRO
FORMA effect be given to an Asset Acquisition or Asset Disposition, such PRO
FORMA calculation shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the Person, or division or line of business of
the Person, that is acquired or disposed of for which financial information is
available.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
including, without limitation, the respective amounts reported on such balance
sheet attributable to Preferred Stock, less any amounts attributable to
Disqualified Stock or any equity security convertible into or exchangeable for
Indebtedness, the cost of treasury stock and the principal amount of any
promissory notes receivable from the sale of the Capital Stock of the Company or
any of its Restricted Subsidiaries, each item to be determined in conformity
with GAAP (excluding the effects of foreign currency exchange adjustments under
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 52).
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 101 Barclay Street, Floor 21 West, New York NY 10286, Attention:
Corporate Trust Administration.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Depository" shall mean DTC.
<PAGE>
7
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; PROVIDED that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in Sections 4.11 and 4.12 hereof,
and such Capital Stock, or the agreements or instruments governing the
redemption rights thereof, specifically provides that such Person will not
repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required to be repurchased pursuant to
Sections 4.11 and 4.12 hereof.
"DTC" means The Depository Trust Company, its nominees, and their
respective successors.
"Euro Pledge Account" means an account established with the Trustee
pursuant to the terms of the Pledge Agreement for the deposit of the Euro
Pledged Securities purchased by the Company with a portion of the proceeds from
the sale of the Notes.
"Euro Pledged Securities" means the securities originally purchased by
the Company with a portion of the proceeds from the sale of the Notes, which
shall consist of Government Securities, to be deposited in the Euro Pledge
Account, all in accordance with the terms of the Pledge Agreement.
"Euro Notes" has the meaning provided in the recitals to this
Indenture (and includes the Exchange Notes as defined in the Euro Notes
Indenture).
"Euro Notes Indenture" means the Indenture dated as of the Closing
Date between the Company, The Bank of New York, as trustee, relating to the Euro
Notes, as such indenture may be amended or supplemented from time to time.
"Event of Default" has the meaning provided in Section 6.01 hereof.
"Excess Proceeds" has the meaning provided in Section 4.11 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means any notes of the Company containing terms
identical to the Notes (except that such Exchange Notes (i) shall be registered
under the Securities Act, (ii) will not provide for an increase in the rate of
interest (other than with respect to overdue amounts) and (iii) will not contain
terms with respect to transfer restrictions) that are issued and exchanged for
the Notes pursuant to the Registration Rights Agreement and this Indenture.
"Existing Stockholder Agreements" means the Stock Purchase Agreement,
dated as of September 30, 1993, between the Company and S-C V-Tel, the Stock
Purchase Agreement dated as of April 5, 1994, between the Company and COMSAT,
the S-C V-Tel Shareholders' Agreement and the COMSAT Shareholders' Agreement,
and, in each case, any amendments to such agreements.
<PAGE>
8
"fair market value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors, whose determination shall
be conclusive if evidenced by a Board Resolution; PROVIDED that, for purposes of
clause (viii) of the second paragraph of Section 4.03 hereof, (x) the fair
market value of any security registered under the Exchange Act shall be the
average of the closing prices, regular way, of such security for the 20
consecutive trading days immediately preceding the sale of Capital Stock and (y)
in the event the aggregate fair market value of any other property (other than
cash or cash equivalents) received by the Company exceeds $30 million, the fair
market value of such property shall be determined by a nationally recognized
investment banking firm or a nationally recognized firm having expertise in the
specific area which is the subject of such determination and set forth in their
written opinion which shall be delivered to the Trustee.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations contained or referred
to in this Indenture shall be computed in conformity with GAAP applied on a
consistent basis, except that calculations made for purposes of determining
compliance with the terms of the covenants and with other provisions of this
Indenture shall be made without giving effect to (i) the amortization or
write-off of any expenses incurred in connection with the offering of the Notes
and the Euro Notes, and (ii) except as otherwise provided, the amortization of
any amounts required or permitted by Accounting Principles Board Opinion Nos. 16
and 17.
"Global Notes" has the meaning provided in Section 2.01.
"Government Securities" means, in connection with the U.S. Pledged
Securities, the direct obligations of, obligations fully guaranteed by, or
participations in pools consisting solely of obligations of or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States of America is
pledged and which are not callable or redeemable at the option of the issuer
thereof.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); PROVIDED that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
<PAGE>
9
"Guaranteed Indebtedness" has the meaning provided in Section 4.07
hereof.
"Holder" or "Noteholder" means the registered holder of any Note.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; PROVIDED that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto, but excluding obligations with
respect to letters of credit (including trade letters of credit) securing
obligations (other than obligations described in (i) or (ii) above or (v), (vi)
or (vii) below) entered into in the ordinary course of business of such Person
to the extent such letters of credit are not drawn upon or, if drawn upon, to
the extent such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except Trade Payables, (v) all Capitalized
Lease Obligations of such Person, (vi) all Indebtedness of other Persons secured
by a Lien on any asset of such Person, whether or not such Indebtedness is
assumed by such Person; PROVIDED that the amount of such Indebtedness shall be
the lesser of (A) the fair market value of such asset at such date of
determination and (B) the amount of such Indebtedness, (vii) all Indebtedness of
other Persons Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person and (viii) to the extent not otherwise included in
this definition, obligations under Currency Agreements and Interest Rate
Agreements. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations, as described
above, and the maximum liability at such time with respect to contingent
obligations upon the occurrence of the contingency giving rise to the
obligation, which, in the case of a Guarantee, shall be the outstanding balance
of the Guaranteed Indebtedness, PROVIDED (A) that the amount outstanding at any
time of any Indebtedness issued with original issue discount is the face amount
of such Indebtedness less the remaining unamortized portion of the original
issue discount of such Indebtedness at the time of its issuance as determined in
conformity with GAAP, (B) that money borrowed and set aside at the time of the
Incurrence of any Indebtedness in order to prefund the payment of the interest
on such Indebtedness shall not be deemed to be "Indebtedness" so long as such
money is held to secure the payment of such interest and (C) that Indebtedness
shall not include any liability for federal, state, local or other taxes.
"Indenture" means this Indenture as originally executed or as it may
be amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.
"Institutional Accredited Investor" shall mean an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
<PAGE>
10
"Interest Payment Date" means each semiannual interest payment date on
March 15 and September 15 of each year, commencing September 15, 1999.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement, option or future contract or other
similar agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding extensions of credit to customers in the
ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable on the balance sheet of the Company or its Restricted
Subsidiaries) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, bonds,
notes, debentures or other similar instruments issued by, such Person and shall
include (i) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary and (ii) the fair market value of the Capital Stock (or any other
Investment), held by the Company or any of its Restricted Subsidiaries, of (or
in) any Person that has ceased to be a Restricted Subsidiary, including, without
limitation, by reason of any transaction permitted by clause (iii) of Section
4.06 hereof; PROVIDED that the fair market value of the Investment remaining in
any Person that has ceased to be a Restricted Subsidiary shall not exceed the
aggregate amount of Investments previously made in such Person valued at the
time such Investments were made less the net reduction of such Investments. For
purposes of the definition of "Unrestricted Subsidiary" and Section 4.04 hereof,
(i) "Investment" shall include the fair market value of the assets (net of
liabilities (other than liabilities to the Company or any of its Restricted
Subsidiaries)) of any Restricted Subsidiary at the time that such Restricted
Subsidiary is designated an Unrestricted Subsidiary, (ii) the fair market value
of the assets (net of liabilities (other than liabilities to the Company or any
of its Restricted Subsidiaries)) of any Unrestricted Subsidiary at the time that
such Unrestricted Subsidiary is designated a Restricted Subsidiary shall be
considered a reduction in outstanding Investments and (iii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof or any
agreement to give any security interest).
"Manager" means Morgan Stanley & Co. Incorporated, as lead manager for
the several initial purchasers named in the Purchase Agreement.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
<PAGE>
11
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole, (iii) payments made or required to be made to
repay Indebtedness or any other obligation outstanding at the time of such Asset
Sale that either (A) is secured by a Lien on the property or assets sold or (B)
is required to be paid as a result of such sale, (iv) payments made or required
to be made to Persons having a beneficial interest in the assets subject to the
Asset Sale, and (v) appropriate amounts to be provided by the Company or any
Restricted Subsidiary as a reserve against any liabilities associated with such
Asset Sale, including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale, all as determined in conformity with GAAP, and (b) with respect to any
issuance or sale of Capital Stock, the proceeds of such issuance or sale in the
form of cash or cash equivalents, including payments in respect of deferred
payment obligations (to the extent corresponding to the principal, but not
interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to the Company or any Restricted Subsidiary) and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of attorney's fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"Non-U.S. Person" means a Person who is not a U.S. person, as defined
in Regulation S.
"Notes" means any of the Notes, as defined in the first paragraph of
the recitals hereof, that are authenticated and delivered under this Indenture.
For all purposes of this Indenture, the term "Notes" shall include any Exchange
Notes to be issued and exchanged for any Notes pursuant to the Registration
Rights Agreement and this Indenture and, for purposes of this Indenture, all
Notes and Exchange Notes shall vote together as one series of Notes under this
Indenture.
"Note Register" has the meaning provided in Section 2.04.
"Offer to Purchase" means an offer to purchase Notes by the Company
from the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that all
Notes validly tendered will be accepted for payment on a PRO RATA basis; (ii)
the purchase price and the date of purchase (which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed)
(the "PAYMENT DATE"); (iii) that any Note not tendered will continue to accrue
interest pursuant to its terms; (iv) that, unless the Company defaults in the
payment of the purchase price, any Note accepted for payment pursuant to the
Offer to Purchase shall cease to accrue interest on and after the Payment Date;
(v) that Holders electing to have a Note purchased pursuant to the Offer to
Purchase will be required to surrender the Note, together with the form entitled
"Option of the Holder to Elect Purchase" on the reverse side of the Note
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the Business Day immediately preceding the Payment
Date; (vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the principal
<PAGE>
12
amount of Notes delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased; and (vii) that Holders
whose Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered; PROVIDED
that each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or an integral multiple thereof. On the Payment Date, the Company
shall (i) accept for payment on a PRO RATA basis Notes or portions thereof
tendered pursuant to an Offer to Purchase; (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Notes or portions thereof so
accepted; and (iii) deliver, or cause to be delivered, to the Trustee all Notes
or portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof accepted for payment by the Company.
The Paying Agent shall promptly mail to the Holders of Notes so accepted payment
in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered; PROVIDED that each Note
purchased and each new Note issued shall be in a principal amount of $1,000 or
an integral multiple thereof. The Company will publicly announce the results of
an Offer to Purchase as soon as practicable after the Payment Date. The Trustee
shall act as the Paying Agent for an Offer to Purchase. The Company will comply
with Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable,
in the event that the Company is required to repurchase Notes pursuant to an
Offer to Purchase.
"Officer" means, with respect to the Company, (i) the Chairman of the
Board, the Vice Chairman of the Board, the President, the Chief Executive
Officer, the Chief Financial Officer or a Vice President, and (ii) the Treasurer
or any Assistant Treasurer, or the Secretary or any Assistant Secretary of the
Company.
"Officers' Certificate" means a certificate signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in clause
(ii) of the definition thereof; PROVIDED, HOWEVER, that any such certificate may
be signed by any two of the Officers listed in clause (i) of the definition
thereof in lieu of being signed by one Officer listed in clause (i) of the
definition thereof and one Officer listed in clause (ii) of the definition
thereof. Each Officers' Certificate (other than certificates provided pursuant
to TIA Section 314(a)(4)) shall include the statements provided for in TIA
Section 314(e).
"Opinion of Counsel" means a written opinion signed by legal counsel
who may be an employee of or counsel to the Company. Each such Opinion of
Counsel shall include the statements provided for in TIA Section 314(e).
"Participant" means, with respect to DTC, Euroclear or Cedel, a Person
who has an account with DTC, Euroclear or Cedel, respectively (and, with respect
to DTC, shall include Euroclear and Cedel).
"Paying Agent" has the meaning provided in Section 2.04, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Company or
a Subsidiary of the Company or an Affiliate of any of them).
"Payment Date" means the date of purchase, which shall be a Business
Day no earlier than 30 days nor later than 60 days from the date of notice is
mailed pursuant to an Offer to Purchase.
"Permanent Regulation S Global" has the meaning provided in Section
2.01.
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13
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with or
into or transfer or convey all or substantially all its assets to the Company or
a Restricted Subsidiary; PROVIDED that such Person's primary business is
related, ancillary or complementary to the businesses of the Company or any of
its Restricted Subsidiaries on the date of such Investment; (ii) Temporary Cash
Investments; (iii) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
in accordance with GAAP; (iv) Investments received in the bankruptcy or
reorganization of a Person or any exchange of such Investment with the issuer
thereof or taken in settlement of or other resolution of claims or disputes or
acquired as the result of foreclosure of any secured Investment and, in each
case, extensions, modifications and renewal thereof; (v) Investments in prepaid
expenses, negotiable instruments held for collection and lease, utility and
worker's compensation, performance and other similar deposits; (vi) Interest
Rate Agreements and Currency Agreements designed solely to protect the Company
or its Restricted Subsidiaries against fluctuations in interest rates or foreign
currency exchange rates; (vii) loans or advances to officers or employees of the
Company or any Restricted Subsidiary that do not in the aggregate exceed $1
million at any time outstanding; (viii) investments consisting of securities
issued by or beneficial interests in a special purpose entity referred to in
clause (f) of the definition of "Asset Sale" and which are received in exchange
for assets that are transferred by the Company or a Restricted Subsidiary to
such special purpose entity and used for the purpose referred to therein; and
(ix) Investments as a result of consideration received in connection with an
Asset Sale made in compliance with Section 4.11 hereof.
"Permitted Joint Venture" means any joint venture between the Company
or any Restricted Subsidiary and (i) any Person, other than a Subsidiary,
engaged in the provision or sale of telecommunications services or (ii) any
Person engaged as an independent sale representative of the Company; PROVIDED
that, prior to making any Investment in such a Person, the Company's Board of
Directors shall have determined that such Investment fits the Company's
strategic plan and is on terms that are fair and reasonable to the Company.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims not yet subject to penalty or that are being contested in good
faith by appropriate legal proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made; (ii) statutory
and common law Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other similar Liens arising in the ordinary
course of business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate legal proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made; (iii)
Liens incurred or deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security; (iv) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations, bankers'
acceptances, surety and appeal bonds, government contracts, performance and
return-of-money bonds and other obligations of a similar nature incurred in the
ordinary course of business (exclusive of obligations for the payment of
borrowed money); (v) easements, rights-of-way, municipal and zoning ordinances
and similar charges, encumbrances, title defects or other irregularities that do
not materially interfere with the ordinary course of business of the Company or
any of its Restricted Subsidiaries; (vi) Liens (including extensions and
<PAGE>
14
renewals thereof) upon real or personal (whether tangible or intangible)
property acquired after the Closing Date; PROVIDED that (a) such Lien is created
solely for the purpose of securing Indebtedness Incurred, in accordance with
Section 4.03 hereof, to finance or refinance the cost (including the cost of
design, development, acquisition, construction, installation, improvement,
transportation or integration) of the item or related group of items of property
or assets subject thereto or the business in which such property or assets are
used and such Lien is created prior to, at the time of or within eighteen months
after the later of the acquisition, the completion of (except in the case of
refinancing) construction or the commencement of full operation of such
property, (b) the principal amount of the Indebtedness secured by such Lien does
not exceed 100% of such cost and (c) any such Lien shall not extend to or cover
any property or assets other than such item or group of items of property or
assets and any improvements on such item; (vii) leases or subleases granted to
others that do not materially interfere with the ordinary course of business of
the Company and its Restricted Subsidiaries, taken as a whole; (viii) Liens
encumbering property or assets under construction arising from progress or
partial payments by a customer of the Company or its Restricted Subsidiaries
relating to such property or assets; (ix) any interest or title of a lessor in
the property subject to any Capitalized Lease or operating lease; (x) Liens
arising from filing Uniform Commercial Code financing statements regarding
leases; (xi) Liens on property of, or on shares of Capital Stock or Indebtedness
of, any Person existing at the time such Person becomes, or becomes a part of,
any Restricted Subsidiary; PROVIDED that such Liens do not extend to or cover
any property or assets of the Company or any Restricted Subsidiary other than
the property or assets acquired; (xii) Liens in favor of the Company or any
Restricted Subsidiary; (xiii) Liens arising from the rendering of a final
judgment or order against the Company or any Restricted Subsidiary that does not
give rise to an Event of Default; (xiv) Liens securing reimbursement obligations
with respect to letters of credit that encumber documents and other property
relating to such letters of credit and the products and proceeds thereof; (xv)
Liens in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation of goods;
(xvi) Liens encumbering customary initial deposits and margin deposits, and
other Liens that are within the general parameters customary in the industry and
incurred in the ordinary course of business, in each case securing Indebtedness
under Interest Rate Agreements and Currency Agreements and forward contracts,
options, future contracts, futures options or similar agreements or arrangements
designed solely to protect the Company or any of its Restricted Subsidiaries
from fluctuations in interest rates, currencies or the price of commodities;
(xvii) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business in accordance
with the past practices of the Company and its Restricted Subsidiaries prior to
the Closing Date; (xviii) Liens on or sales of receivables or other rights to
payment; (xix) Liens secured with assets that have a fair market value not in
excess of 15% of Adjusted Consolidated Net Tangible Assets when such Liens are
Incurred; and (xx) any extension, renewal, or replacement (or successive
extensions, renewals, or replacements) in whole or in part of Liens described in
clauses (i) through (xix) above.
"Permitted Wholesale Consortium" means any Person in which the Company
invests for the principal purpose of leasing or otherwise acquiring transmission
rights with respect to long distance telecommunications; PROVIDED that, prior to
making any Investment in such a Person, the Company's Board of Directors shall
have determined that such Investment will afford the Company greater economic
benefits than it could otherwise obtain from other sources of transmission
rights.
<PAGE>
15
"Person" means an individual, a corporation, a partnership, a limited
liability company, a joint venture, an association, a trust, an unincorporated
organization or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Pledge Accounts" means the U.S. Pledge Account and the Euro Pledge
Account.
"Pledge Agreement" means the Collateral Pledge and Security Agreement,
dated as of the date of this Indenture, made by the Company in favor of the
Trustee, governing the disbursement of funds from the Pledge Accounts, as such
agreement may be amended, restated, supplemented or otherwise modified from time
to time.
"Preferred Stock" or "preferred stock" means, with respect to any
Person, any and all shares, interests, participation or other equivalents
(however designated, whether voting or non-voting) of such Person's preferred or
preference stock, whether now outstanding or issued after the date of this
Indenture, including, without limitation, all series and classes of such
preferred or preference stock.
"principal" of a debt security, including the Notes, means the
principal amount due on the Stated Maturity as shown on such debt security.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02(a).
"Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Purchase Agreement" has the meaning provided in the recitals to this
Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date" when used with respect to any Note or part thereof
to be redeemed, means the date fixed for such redemption by or pursuant to the
terms of the Notes and this Indenture.
"Redemption Price" when used with respect to any Note or part thereof
to be redeemed, means the price at which such Note is to be redeemed pursuant to
the terms of the Notes and this Indenture.
"Registrar" has the meaning provided in Section 2.04.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 12, 1999, between the Company and Morgan Stanley &
Co. Incorporated, on behalf of itself and ING Baring Furman Selz LLC relating to
the Notes and the Euro Notes.
"Registration Statement" means any registration statement of the
Company that covers any of the Exchange Notes, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Regular Record Date" for the interest payable on any Interest Payment
Date means March 1 or September 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
<PAGE>
16
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Certificated Notes" has the meaning provided in Section
2.01.
"Regulation S Global" has the meaning provided in Section 2.01.
"Responsible Officer", when used with respect to the Trustee, means
any officer of the Trustee with direct responsibility for the administration of
this Indenture, and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Global" has the meaning provided in Section 2.01.
"Restricted Payments" has the meaning provided in Section 4.04.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Preferred" means the Series A preferred stock, $.01 par
value per share, of the Company.
"Significant Subsidiary" means, at any date of determination,
any Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"S&P" means Standard & Poor's Ratings Services and its successors.
"Stated Maturity" means (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
"Strategic Subordinated Indebtedness" means Indebtedness of the
Company Incurred to finance the acquisition of a Person engaged in a business
that is related, ancillary or complementary to the business conducted by the
Company or any of its Restricted Subsidiaries, which Indebtedness by its terms,
or by the terms of any agreement or instrument pursuant to which such
Indebtedness is Incurred, (i) is expressly made subordinate in right of payment
to the Notes and (ii) provides that no payment of principal, premium or interest
on, or any other payment with respect to, such Indebtedness may be made prior to
the payment in full of all of the Company's obligations under the Notes;
PROVIDED that such Indebtedness may provide for and be repaid at any time from
the proceeds of a capital contribution, the sale of Capital Stock (other than
Disqualified Stock) of the Company, or other Strategic Subordinated Indebtedness
Incurred after the Incurrence of such Indebtedness.
<PAGE>
17
"Subordinated Convertible Debentures" means the debentures issued
pursuant to the Subordinated Indentures dated as of April 1998 between the
Company, The Bank of New York and Deutsche Bank.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof, (ii) time deposit accounts, eurodollar time deposits, bankers'
acceptances, certificates of deposit and money market deposits, in each case
maturing within one year of the date of acquisition thereof and issued by a bank
or trust company which is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50 million (or the foreign currency
equivalent thereof) and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act), or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above, (iv)
commercial paper, maturing not more than one year after the date of acquisition,
issued by a corporation (other than an Affiliate of the Company) organized and
in existence under the laws of the United States of America, any state thereof
or any foreign country recognized by the United States of America with a rating
at the time as of which any investment therein is made of "P-2" (or higher)
according to Moody's or "A-2" (or higher) according to S&P, (v) securities with
maturities of one year or less from the date of acquisition issued or fully and
unconditionally guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof,
and rated at least "A" by S&P or Moody's, (vi) shares or other interests in an
investment company the assets of which consist solely of (A) securities of the
type described in clauses (i) through (v) above and (B) mortgage-backed
securities rated AAA or the equivalent by S&P, Moody's or Fitch Investor
Services, Inc., and (vii) the Euro Pledge Securities.
"Temporary Regulation S Global" has the meaning provided in Section
2.01.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended (15 U.S. Code ss.ss. 77aaa-77bbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06; PROVIDED, HOWEVER,
that, in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" or "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries arising
in the ordinary course of business in connection with the acquisition of goods
or services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date such
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18
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture, and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of
1978, as amended and as codified in Title 11 of the United States Code, as
amended from time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below; and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company or
any Restricted Subsidiary; PROVIDED that (A) any Guarantee by the Company or any
Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated
shall be deemed an "Incurrence" of such Indebtedness and an "Investment" by the
Company or such Restricted Subsidiary (or both, if applicable) at the time of
such designation; (B) either (I) the Subsidiary to be so designated has total
assets of $1,000 or less or (II) if such Subsidiary has assets greater than
$1,000, such designation would be permitted under Section 4.04 hereof and (C) if
applicable, the Incurrence of Indebtedness and the Investment referred to in
clause (A) of this proviso would be permitted under Section 4.03 hereof and
Section 4.04 hereof. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED that (i) no Default or Event
of Default shall have occurred and be continuing at the time of or after giving
effect to such designation and (ii) all Liens and Indebtedness of such
Unrestricted Subsidiary outstanding immediately after such designation would, if
Incurred at such time, have been permitted to be Incurred (and shall be deemed
to have been Incurred) for all purposes of this Indenture. Any such designation
by the Board of Directors shall be evidenced to the Trustee by promptly filing
with the Trustee a copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Certificated Notes" has the meaning provided in Section 2.01.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof at any time prior
to the Stated Maturity of the Notes, and shall also include depository receipts
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; PROVIDED that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.
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19
"U.S. Paying Agent" means The Bank of New York and any successor U.S.
Paying Agent.
"U.S. Person" has the meaning ascribed thereto in Rule 902 under the
Securities Act.
"U.S. Pledge Account" means an account established with the Trustee
pursuant to the terms of the Pledge Agreement for the deposit of the U.S.
Pledged Securities purchased by the Company with a portion of the proceeds from
the sale of the Notes.]
"U.S. Pledged Securities" means the securities originally purchased by
the Company with a portion of the proceeds from the sale of the Notes, which
shall consist of Government Securities, to be deposited in the U.S. Pledge
Account, all in accordance with the terms of the Pledge Agreement.
"Voting Stock" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person,
the ownership of all of the outstanding Capital Stock of such Subsidiary (other
than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the plural
include the singular;
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20
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(vii) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
SECTION 2.01. FORM AND DATING. The Notes and the Trustee's certificate
of authentication with respect thereto shall be substantially in the form
annexed hereto as Exhibit A, in the case of the Restricted Global, Exhibit B, in
the case of the Regulation S Global, and Exhibit C, in the case of a U.S.
Certificated Note. The Notes may have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have letters, notations, legends or endorsements required by
law, stock exchange agreements to which the Company is subject or usage. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note. The Company shall approve
the form of the Notes and any notation, legend or endorsement on the Notes. Each
Note shall be dated the date of its authentication.
The terms and provisions contained in the form of the Notes annexed
hereto as Exhibits A, B and C shall constitute, and are hereby expressly made, a
part of this Indenture. Each of the Company and the Trustee, by its execution
and delivery of this Indenture, expressly agrees to the terms and provisions of
the Notes applicable to it and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (the "RESTRICTED GLOBAL"),
registered in the name of a nominee of the Depository, deposited with the
Trustee, as custodian for the Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of a Restricted Global may from time to time be increased or decreased by
adjustments made on the records of the Registrar as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more temporary
global Notes in registered form substantially in the form set forth in Exhibit B
(the "TEMPORARY REGULATION S GLOBAL") registered in the name of a nominee of the
Depository for the accounts of Euroclear and Cedelbank, deposited on behalf of
the purchasers of the Notes represented thereby with the Trustee, as custodian
for the Depository, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. At any time following July 28, 1999, upon
receipt by the Trustee and the Company of a certificate substantially in the
form of Exhibit D hereto, one or more permanent global Notes in registered form
substantially in the form set forth in Exhibit B (the "PERMANENT REGULATION S
GLOBAL" and, together with the Temporary Regulation S Global, the "REGULATION S
GLOBAL") duly executed by the Company and authenticated by the Trustee as
hereinafter provided shall be deposited with the Trustee, as custodian for the
Depository which shall reflect on its books and records the date and a decrease
in the principal amount of the Temporary Regulation S Global in an amount equal
to the principal amount of the beneficial interest in the Temporary Regulation S
Global transferred. The aggregate principal amount of a Regulation S Global may
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21
from time to time be increased or decreased by adjustments made in the records
of the Trustee, as custodian for the Depository or its nominee, as herein
provided.
Notes which are transferred to Institutional Accredited Investors
which are not QIBs (excluding Non-U.S. Persons) shall be issued in the form of
permanent certificated Notes in registered form in substantially the form set
forth in Exhibit C (the "U.S. CERTIFICATED NOTES"). Notes issued pursuant to
Section 2.07 in exchange for interests in the Regulation S Global shall be in
the form of certificated Notes in registered form substantially in the form set
forth in Exhibit C (the "REGULATION S CERTIFICATED NOTES"). Notes issued
pursuant to Section 2.07 in exchange for interests in the Restricted Global
shall be in the form of the U.S. Certificated Note.
The Regulation S Certificated Notes and the U.S. Certificated Notes
are sometimes collectively referred to herein as the "CERTIFICATED NOTES." The
Restricted Global and Regulation S Global are sometimes collectively herein
referred to as the "GLOBAL NOTES."
The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 2.02. RESTRICTIVE LEGENDS. (a) NOTE LEGENDS. Unless and until
a Note is exchanged for an Exchange Note or otherwise disposed of in connection
with an effective Registration Statement pursuant to the Registration Rights
Agreement, (i) each Restricted Global and U.S. Certificated Note shall bear the
legend set forth below on the face thereof and (ii) each Temporary Regulation S
Global and each Regulation S Certificated Note shall bear the legend set forth
below on the face thereof until at least 41 days after the Closing Date and
receipt by the Company and the Trustee of a certificate substantially in the
form of Exhibit D hereto.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, 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 FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OF REGULATION S
UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT, WITHIN THE TIME
PERIOD REFERRED TO IN RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF
RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE), RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF DOLLAR NOTES OF LESS THAN $100,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
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22
COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER
OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO EACH OF THE TRUSTEE AND THE
COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS SUCH
PERSONS MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
(b) GLOBAL NOTE LEGEND. Each Global Note, whether or not an Exchange
Note, shall also bear the following legend on the face thereof:
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.08 OF THE INDENTURE.
SECTION 2.03. EXECUTION, AUTHENTICATION AND DENOMINATIONS. Subject to
Article Four, the aggregate principal amount of Notes (including Exchange Notes)
which may be authenticated and delivered under this Indenture is unlimited. The
Notes shall be executed by two Officers of the Company, by facsimile or manual
signature, in the name and on behalf of the Company.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
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23
At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall, upon receipt of a
Company Order, authenticate for original issue Notes in the aggregate principal
amount specified in such Company Order. Such Company Order shall specify the
amount of Notes to be authenticated, the date on which the issue of Notes is to
be authenticated and, in case of an issuance of Notes pursuant to Section 2.15,
shall certify that such issuance is in compliance with Article Four.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such authenticating agent. An authenticating agent
has the same rights as an Agent to deal with the Company or an Affiliate of the
Company.
The Notes shall be issuable only in registered form without coupons in
principal amount of $1,000 and any integral multiple of $1,000 in excess
thereof.
SECTION 2.04. REGISTRAR AND PAYING AGENT. The Company shall maintain
an office or agency in the City of New York where Notes may be presented for
registration of transfer or for exchange (the "REGISTRAR"), an office or agency
in the City of New York where Notes may be presented for payment (the "PAYING
AGENT"), and an office or agency where notices and demands to or upon the
Company in respect of the Notes and this Indenture may be served, which shall be
in the City of New York. The Company shall cause the Registrar to keep a
register of the Notes and of their transfer and exchange (the "NOTE REGISTER").
The Company may have one or more co-Registrars and one or more additional Paying
Agents.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands for so long as such failure shall continue. The Company may
remove any Agent upon written notice to such Agent and the Trustee; PROVIDED
that no such removal shall become effective until (i) the acceptance of an
appointment by a successor Agent to such Agent as evidenced by an appropriate
agency agreement entered into by the Company and such successor Agent and
delivered to the Trustee or (ii) notification to the Trustee that the Trustee
shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company, any Subsidiary of the
Company, or any Affiliate of any of them may act as Paying Agent, Registrar or
co-Registrar, and/or agent for service of notice and demands; PROVIDED, HOWEVER,
that neither the Company, a Subsidiary of the Company nor an Affiliate of any of
them shall act as Paying Agent in connection with the defeasance of the Notes or
the discharge of this Indenture under Article Eight.
The Company initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. If, at any
time, the Trustee is not the Registrar, the Registrar shall make available to
the Trustee on or before each Interest Payment Date and at such other times as
the Trustee may reasonably request, the names and addresses of the Holders as
they appear in the Note Register.
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24
SECTION 2.05. PAYING AGENT TO HOLD MONEY IN TRUST. Not later than
10:00 a.m. New York City time on each due date of the principal, premium, if
any, or interest on any Notes, the Company shall deposit with the Paying Agent
money in immediately available funds sufficient to pay such principal, premium,
if any, or interest so becoming due. The Company shall require each Paying
Agent, if any, other than the Trustee to agree in writing that such Paying Agent
shall hold in trust for the benefit of the Holders or the Trustee all money held
by the Paying Agent for the payment of principal of, premium, if any, or
interest on the Notes (whether such money has been paid to it by the Company or
any other obligor on the Notes), and that such Paying Agent shall promptly
notify the Trustee of any default by the Company (or any other obligor on the
Notes) in making any such payment. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and account for any funds
disbursed, and the Trustee may at any time during the continuance of any payment
default, upon written request to a Paying Agent, require such Paying Agent to
pay all money held by it to the Trustee and to account for any funds disbursed.
Upon doing so, the Paying Agent shall have no further liability for the money so
paid over to the Trustee. If the Company or any Subsidiary of the Company or any
Affiliate of any of them acts as Paying Agent, it will, on or before each due
date of any principal of, premium, if any, or interest on the Notes, segregate
and hold in a separate trust fund for the benefit of the Holders a sum of money
sufficient to pay such principal, premium, if any, or interest so becoming due
until such sum of money shall be paid to such Holders or otherwise disposed of
as provided in this Indenture, and will promptly notify the Trustee of its
action or failure to act as required by this Section 2.05.
SECTION 2.06. TRANSFER AND EXCHANGE. The Notes are issuable only in
registered form. A Holder may transfer a Note by written application to the
Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon registration
of the transfer by the Registrar in the Note Register. Prior to the registration
of any transfer by a Holder as provided herein, the Company, the Trustee, and
any agent of the Company or the Trustee shall treat the Person in whose name the
Note is registered as the owner thereof for all purposes whether or not the Note
shall be overdue, and neither the Company, the Trustee, nor any such agent shall
be affected by notice to the contrary. Furthermore, any Holder of a Global Note
shall, by acceptance of such Global Note, agree that transfers of beneficial
interests in such Global Note may be effected only through a book-entry system
maintained by the Depository (or its agent), and that ownership of a beneficial
interest in the Note shall be required to be reflected in a book entry. When
Notes are presented to the Registrar or a co-Registrar with a request to
register the transfer or to exchange them for an equal principal amount of Notes
of other authorized denominations (including an exchange of Notes for Exchange
Notes), the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met; PROVIDED that no
exchanges of Notes for Exchange Notes shall occur until a Registration Statement
shall have been declared effective by the Commission and that any Notes that are
exchanged for Exchange Notes shall be cancelled by the Trustee. To permit
registrations of transfers and exchanges in accordance with the terms,
conditions and restrictions hereof, the Company shall execute and the Trustee
shall authenticate Notes at the Registrar's request. No service charge shall be
made to any Holder for any registration of transfer or exchange or redemption of
the Notes, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental charge payable
upon transfers, exchanges or redemptions pursuant to Section 2.11, 3.08, 4.11,
4.12 or 9.04).
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25
The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Notes selected for redemption under Section 3.03 or Section 3.08 and ending at
the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
SECTION 2.07. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES. (a) Each
Restricted Global and Regulation S Global initially shall (i) be registered in
the name of the Depository for such Global Note or the nominee of such
Depository, (ii) be delivered to the Trustee as custodian for such Depository
and (iii) bear legends as set forth in Section 2.02 hereof.
Members of, or Participants in, the Depository ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under any
Global Note, and the Depository may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a beneficial owner of any Note.
(b) Transfers of a Global Note shall be limited to transfers of
such Global Note in whole, but not in part, to the Depository, its successors or
their respective nominees. Transfers of interests in one Global Note to parties
who will hold the interests through the same Global Note will be effected in the
ordinary way in accordance with the respective rules and operating procedures of
the DTC, Euroclear or Cedelbank, as the case may be, and the provisions of
Section 2.08 hereof. In addition, U.S. Certificated Notes or Regulation S
Certificated Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in a Restricted Global or a Regulation S Global,
respectively, if (i) the Depository with respect to such Global Notes notifies
the Company that it is unwilling or unable to continue as Depository for the
Restricted Global or the Regulation S Global, as the case may be, and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request to the foregoing effect from the Depository or
the Trustee.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a Person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) In connection with any transfer pursuant to paragraph (b) of
this Section 2.07 of a portion of the beneficial interests in a Restricted
Global or Regulation S Global to beneficial owners who are required to hold
Certificated Notes, the Registrar shall reflect on its books and records the
date and a decrease in the principal amount of such Restricted Global or
Regulation S Global in an amount equal to the principal amount of the beneficial
interest in such Restricted Global or Regulation S Global to be transferred, and
<PAGE>
26
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more U.S. Certificated Notes or Regulation S Certificated Notes, as the case
may be, of like tenor and amount.
(e) In connection with the transfer of all the beneficial
interests in a Restricted Global or Regulation S Global to beneficial owners
pursuant to paragraph (b) of this Section 2.07, the Restricted Global or
Regulation S Global, as the case may be, shall be deemed to be surrendered to
the Trustee for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the Restricted Global or
Regulation S Global, as the case may be, an equal aggregate principal amount of
U.S. Certificated Notes or Regulation S Certificated Notes, as the case may be,
of authorized denominations.
(f) Any U.S. Certificated Note delivered in exchange for an
interest in a Restricted Global pursuant to paragraph (b), (d) or (e) of this
Section 2.07 shall, except as otherwise provided by paragraphs (f)(i)(x) and (d)
of Section 2.08 hereof, bear the legend regarding transfer restrictions
applicable to the U.S. Certificated Note set forth in Section 2.02.
(g) Any Regulation S Certificated Note delivered in exchange for
an interest in a Regulation S Global pursuant to paragraph (b), (d) or (e) of
this Section 2.07 shall, except as otherwise provided by paragraphs (f)(i)(x)
and (d) of Section 2.08 hereof, bear the legend regarding transfer restrictions
applicable to the Regulation S Certificated Note set forth in Section 2.02
hereof.
(h) The registered holder of a Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
(i) QIBs that are beneficial owners of interests in a Global Note
may receive Certificated Notes (which shall bear the Private Placement Legend if
required by Section 2.02) in accordance with the procedures of the Depository.
In connection with the execution, authentication and delivery of such
Certificated Notes, the Registrar shall reflect on its books and records a
decrease in the principal amount of the relevant Global Note equal to the
principal amount of such Certificated Notes and the Company shall execute and
the Trustee shall authenticate and deliver one or more Certificated Notes having
an equal aggregate principal amount.
(j) All Notes issued upon any transfer or exchange of Notes shall
be valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Notes surrendered upon such
transfer or exchange.
SECTION 2.08. SPECIAL TRANSFER PROVISIONS. Unless and until a Note is
exchanged for an Exchange Note in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) TRANSFERS TO QIBS. The following provisions shall apply with
respect to the registration of any proposed transfer of a U.S. Certificated Note
or an interest in a Restricted Global to a QIB (excluding Non-U.S. Persons):
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27
(i) If the Note to be transferred consists of (x) U.S. Certificated
Notes, the Registrar shall register the transfer if such transfer is being
made by a proposed transferor who has checked the box provided for on the
form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the 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 QIB within the
meaning of Rule 144A, 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 it 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 its foregoing representations in order to
claim the exemption from registration provided by Rule 144A or (y) an
interest in a Restricted, the transfer of such interest may be effected
only through the book-entry system maintained by the Depository.
(ii) If the proposed transferee is an Agent Member, and the Note to be
transferred consists of U.S. Certificated Notes, upon receipt by the
Registrar of the documents referred to in clause (i) and instructions given
in accordance with the Depository's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of such Restricted Global in an amount equal to the
principal amount of the U.S. Certificated Notes to be transferred, and the
Trustee shall cancel the Certificated Note so transferred.
(b) TRANSFERS OF INTERESTS IN REGULATION S GLOBAL OR REGULATION S
CERTIFICATED NOTES TO U.S. PERSONS. The following provisions shall apply with
respect to any transfer of interests in a Regulation S Global or Regulation S
Certificated Notes to U.S. Persons:
(i) prior to the removal of the Private Placement Legend from a
Regulation S Global or a Regulation S Certificated Note pursuant to Section
2.02, the Registrar shall refuse to register such transfer; and
(ii) after such removal, the Registrar shall register the transfer of
any such Note without requiring any additional certification.
(c) TRANSFERS TO NON-U.S. PERSONS AT ANY TIME. The following
provisions shall apply with respect to any transfer of a Note to a Non-U.S.
Person:
(i) The Registrar shall register any proposed transfer to any Non-U.S.
Person if the Note to be transferred is a U.S. Certificated Note or an
interest in a Restricted Global only upon receipt of a certificate
substantially in the form of Exhibit E from the proposed transferor.
(ii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in a Restricted Global, upon receipt by the Registrar
of (x) the documents required by paragraph (i) and (y) instructions in
accordance with the Depository's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and a decrease in
the principal amount of such Restricted Global in an amount equal to the
principal amount of the beneficial interest in the Restricted Global to be
transferred, and (b) if the proposed transferee is an Agent Member, upon
receipt by the Registrar of instructions given in accordance with the
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28
Depository's and the Registrar's procedures, the Registrar shall reflect on
its books and records the date and an increase in the principal amount of
such Regulation S Global in an amount equal to the principal amount of the
U.S. Certificated Notes or the Restricted Global, as the case may be, to be
transferred, and the Trustee shall cancel the Certificated Note, if any, so
transferred or decrease the amount of the Restricted Global.
(d) PRIVATE PLACEMENT LEGEND. Upon the registration of transfer,
exchange or replacement of Notes not bearing the Private Placement Legend, the
Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the registration of transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar shall deliver only Notes that bear the
Private Placement Legend unless either (i) the Private Placement Legend is no
longer required by Section 2.02 or (ii) there is delivered to the Registrar an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(e) GENERAL. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture. The Registrar shall not register a transfer of any Note unless such
transfer complies with the restrictions on transfer of such Note set forth in
this Indenture. In connection with any transfer of Notes to an Institutional
Accredited Investor, each Holder agrees by its acceptance of the Notes to
furnish the Registrar or the Company such certifications, legal opinions or
other information as either of them may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act; PROVIDED that
the Registrar shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information.
The Registrar shall retain, in accordance with its customary
procedures, copies of all letters, notices and other written communications
received pursuant to Section 2.07 or this Section 2.08. The Company shall have
the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Registrar.
(f) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons): (i) The Registrar shall register the
transfer of any Note, whether or not such Note bears the Private Placement
Legend, if (x) the requested transfer is after the time period referred to in
Rule 144(k) under the Securities Act as in effect with respect to such transfer
or (y) the proposed transferee has delivered to the Registrar (A) a certificate
substantially in the form of Exhibit F hereto and (B) if the aggregate principal
amount of the Notes being transferred is less than $100,000 at the time of such
transfer, an Opinion of Counsel acceptable to the Company that such transfer is
in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in a Restricted Global, upon receipt by the
Registrar and the Company of (x) the documents, if any, required by
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29
paragraph (i) and (y) instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and a decrease in the
principal amount of such Restricted Global in an amount equal to the
principal amount of the beneficial interest in the Restricted Global to
be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more U.S. Certificated Notes of like
tenor and amount.
SECTION 2.09. REPLACEMENT NOTES. If a mutilated Note is surrendered to
the Trustee or if the Holder claims that the Note has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding; PROVIDED that the requirements of this Section
2.09 and the second paragraph of Section 2.10 are met. If required by the
Trustee or the Company, an indemnity bond must be furnished that is sufficient
in the judgment of both the Trustee and the Company to protect the Company, the
Trustee or any Agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge such Holder for its expenses and the expenses
of the Trustee in replacing a Note. In case any such mutilated, lost, destroyed
or wrongfully taken Note has become or is about to become due and payable, the
Company in its discretion may pay such Note instead of issuing a new Note in
replacement thereof.
Every replacement Note is an additional obligation of the Company and
shall be entitled to the benefits of this Indenture.
SECTION 2.10. OUTSTANDING NOTES. Notes outstanding at any time are all
Notes that have been authenticated by the Trustee except for those cancelled by
it, those delivered to it for cancellation and those described in this Section
2.10 as not outstanding.
If a Note is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
reasonably satisfactory to them that the replaced Note is held by a BONA FIDE
purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on the maturity date or a redemption date money sufficient to pay
all principal, premium, if any, and interest payable on that date with respect
to the Notes (or portions thereof) to be redeemed or payable on that date, then
on and after that date such Notes cease to be outstanding and interest on them
shall cease to accrue.
A Note does not cease to be outstanding because the Company or one of
its Affiliates holds such Note; PROVIDED, HOWEVER, that, in determining whether
the Holders of the requisite principal amount of the outstanding Notes have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Company or any other obligor upon the Notes or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which a Responsible Officer of
the Trustee knows to be so owned shall be so disregarded. Notes so owned which
have been pledged in good faith may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Notes and that the pledgee is not the Company or any other
obligor upon the Notes or any Affiliate of the Company or of such other obligor.
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30
SECTION 2.11. TEMPORARY NOTES. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have insertions, substitutions, omissions and other variations
determined to be appropriate by the Officers executing the temporary Notes, as
evidenced by their execution of such temporary Notes. If temporary Notes are
issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company designated for such purpose
pursuant to Section 4.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Notes of authorized denominations. Until so exchanged, the
temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 2.12. CANCELLATION. The Company at any time may deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold. The Registrar and the
Paying Agent shall forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange, purchase or payment. The Trustee shall
cancel all Notes surrendered for registration of transfer, exchange, purchase,
payment or cancellation and shall return all such Notes to the Company. The
Company shall not issue Notes to replace Notes it has paid in full or delivered
to the Trustee for cancellation.
SECTION 2.13. CUSIP NUMBERS. The Company in issuing the Notes may use
"CUSIP," "CINS," or "ISIN" numbers, or common codes (if then generally in use),
as the case may be, in notices of redemption or exchange as a convenience to
Holders; PROVIDED that any such notice shall state that no representation is
made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of redemption or exchange and that reliance may be
placed only on the other identification numbers printed on the Notes. The
Company shall promptly advise the Trustee of any change in the CUSIP, CINS or
ISIN numbers or common codes for the Notes.
SECTION 2.14. DEFAULTED INTEREST. If the Company defaults in a payment
of interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) interest on the defaulted interest, to the Persons
who are Holders on a subsequent special record date. A special record date, as
used in this Section 2.14 with respect to the payment of any defaulted interest,
shall mean the 15th day next preceding the date fixed by the Company for the
payment of defaulted interest, whether or not such day is a Business Day. At
least 15 days before the subsequent special record date, the Company shall mail
to each Holder and to the Trustee a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.15. ISSUANCE OF ADDITIONAL NOTES. The Company may, subject
to Article Four of this Indenture, issue additional Notes under this Indenture.
The Notes issued on the Closing Date and any additional Notes subsequently
issued shall be treated as a single class for all purposes under this Indenture.
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31
ARTICLE THREE
REDEMPTION
SECTION 3.01. RIGHT OF REDEMPTION. The Notes may be redeemed at the
election of the Company, in whole or in part, at any time and from time to time
on or after March 15, 2004 and prior to maturity, upon not less than 30 nor more
than 60 days' prior notice mailed by first-class mail to each Holder's last
address as it appears in the Note Register, at the following Redemption Prices
(expressed in percentages of their principal amount), plus accrued and unpaid
interest, if any, to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date that is on or prior to the Redemption
Date to receive interest due on an Interest Payment Date) if redeemed during the
12-month period commencing on March 15 of the applicable year set forth below:
YEAR REDEMPTION PRICE
- ---- ----------------
2004.................................... 105.750%
2005.................................... 103.833%
2006.................................... 101.917%
2007 and thereafter..................... 100.000%
(b) In addition, at any time prior to March 15, 2002, the Company
may, at its option, redeem up to 35% of the aggregate principal amount of the
Notes with the net proceeds of one or more Public Equity Offerings, at any time
or from time to time in part, at a Redemption Price (expressed as a percentage
of the principal amount) of 111.500%, provided (i) that Notes and Euro Notes
representing at least 65% of the principal amount of the Notes and Euro Notes
initially issued remain outstanding immediately after each such redemption and
(ii) that notice of each such redemption is mailed within 60 days of each such
Public Equity Offering.
SECTION 3.02. NOTICES TO TRUSTEE. If the Company elects to redeem
Notes pursuant to Section 3.01, it shall notify the Trustee in writing of the
Redemption Date and the principal amount of Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.02
in an Officers' Certificate at least 45 days before the Redemption Date (unless
a shorter period shall be satisfactory to the Trustee).
SECTION 3.03. SELECTION OF NOTES TO BE REDEEMED. If less than all of
the Notes are to be redeemed at any time, the Trustee shall select the Notes to
be redeemed in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or if the Notes are
not listed on a national securities exchange, by lot or by such other method as
the Trustee in its sole discretion shall deem to be fair and appropriate;
PROVIDED that no Notes of $1,000 in principal amount or less shall be redeemed
in part.
The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption. Notes in denominations of $1,000 in
principal amount may only be redeemed in whole. The Trustee may select for
redemption portions (equal to $1,000 in principal amount or any integral
multiple thereof) of Notes that have denominations larger than $1,000 in
principal amount. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. The Trustee
shall notify the Company and the Registrar promptly in writing of the Notes or
portions of Notes to be called for redemption.
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32
SECTION 3.04. NOTICE OF REDEMPTION. With respect to any redemption of
Notes pursuant to Section 3.01, at least 30 days but not more than 60 days
before a Redemption Date, the Company, or at the Company's request the Trustee,
shall mail a notice of redemption by first class mail to each Holder whose Notes
are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes (or portions thereof) called for redemption
ceases to accrue on and after the Redemption Date and the only remaining
right of the Holders is to receive payment of the Redemption Price plus
accrued interest to the Redemption Date upon surrender of the Notes to the
Paying Agent;
(vi) that, if any Note is being redeemed in part, the portion of the
principal amount (equal to $1,000 in principal amount or any integral
multiple thereof) of such Note to be redeemed and that, on and after the
Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof, will be reissued;
and
(vii) that, if any Note contains a CUSIP, CINS or ISIN number or a
common code, as provided in Section 2.13, no representation is being made
as to the correctness of the CUSIP, CINS or ISIN number or the common code
either as printed on the Notes or as contained in the notice of redemption.
At the Company's request (which request may be revoked by the Company at any
time prior to the time at which the Trustee shall have given such notice to the
Holders), made in writing to the Trustee at least 45 days (or such shorter
period as shall be satisfactory to the Trustee) before a Redemption Date, the
Trustee shall give the notice of redemption in the name and at the expense of
the Company. If, however, the Company gives such notice to the Holders, the
Company shall concurrently deliver to the Trustee a copy of such notice of
redemption.
SECTION 3.05. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
Redemption Date and at the Redemption Price. Upon surrender of any Notes to the
Paying Agent, such Notes shall be paid at the Redemption Price, plus accrued
interest, if any, to the Redemption Date. Notice of redemption shall be deemed
to be given when mailed, whether or not the Holder receives the notice. In any
event, failure to give such notice, or any defect therein, shall not affect the
validity of the proceedings for the redemption of Notes held by Holders to whom
such notice was properly given.
SECTION 3.06. DEPOSIT OF REDEMPTION PRICE. On or prior to any
Redemption Date, the Company shall deposit with the Paying Agent (or, if the
Company, one of its Subsidiaries or any of their Affiliates is acting as Paying
<PAGE>
33
Agent, shall segregate and hold in trust as provided in Section 2.05) money
sufficient to pay the Redemption Price of and accrued interest on all Notes to
be redeemed on that date other than Notes or portions thereof called for
redemption on that date that have been delivered by the Company to the Trustee
for cancellation.
SECTION 3.07. PAYMENT OF NOTES CALLED FOR REDEMPTION. If notice of
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such date (unless the
Company shall default in the payment of such Notes at the Redemption Price and
accrued interest to the Redemption Date, in which case the principal, until
paid, shall bear interest from the Redemption Date at the rate prescribed in the
Notes), such Notes shall cease to accrue interest. Upon surrender of any Note
for redemption in accordance with a notice of redemption, such Note shall be
paid and redeemed by the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; PROVIDED that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders registered as such at the close of business on the relevant Regular
Record Date.
SECTION 3.08. NOTES REDEEMED IN PART. Upon surrender of any Note that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Note equal in principal amount to
the unredeemed portion of such surrendered Note.
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF NOTES. The Company shall pay the principal
of, premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal, premium,
if any, or interest shall be considered paid on the date due if the Trustee or
Paying Agent (other than the Company, a Subsidiary of the Company, or any
Affiliate of any of them) holds on that date money designated for and sufficient
to pay the installment. If the Company or any Subsidiary of the Company or any
Affiliate of any of them, acts as Paying Agent, an installment of principal,
premium, if any, or interest shall be considered paid on the due date if the
entity acting as Paying Agent complies with the last sentence of Section 2.05.
As provided in Section 6.09, upon any bankruptcy or reorganization procedure
relative to the Company, the Trustee shall serve as the Paying Agent and
conversion agent, if any, for the Notes.
The Company shall pay interest on overdue principal, premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Notes.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. The Company will
maintain an office or agency in the Borough of Manhattan, the City of New York,
where Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
<PAGE>
34
may be made or served at the address of the Trustee set forth in Section 11.02
hereof.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the City of New York) where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; PROVIDED that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York, for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby initially designates the Corporate Trust Office of
the Trustee, located in the Borough of Manhattan, the City of New York, as such
office of the Company in accordance with Section 2.04.
SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (other than the Notes and the Euro Notes and Indebtedness existing
on the Closing Date); PROVIDED that the Company may Incur Indebtedness if, after
giving effect to the Incurrence of such Indebtedness and the receipt and
application of the proceeds therefrom, the Consolidated Leverage Ratio would be
greater than zero and less than 6:1.
Notwithstanding the foregoing, the Company and any Restricted
Subsidiary (except as specified below) may Incur each and all of the following:
(i) Indebtedness outstanding at any time in an aggregate principal
amount not to exceed $100 million of Indebtedness that is PARI PASSU with
or subordinated to the Notes and $150 million of Indebtedness that is
subordinated to the Notes, less any amount of such Indebtedness permanently
repaid as provided under Section 4.11 hereof;
(ii) Indebtedness owed (A) by any Restricted Subsidiary to the Company
or another Restricted Subsidiary or (B) by the Company to any Restricted
Subsidiary; PROVIDED that any event which results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer
of such Indebtedness (other than to the Company or another Restricted
Subsidiary) shall be deemed, in each case, to constitute an Incurrence of
such Indebtedness not permitted by this clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to repay, redeem, defease, refinance, refund, extend, renew,
replace, discharge or otherwise retire any then outstanding Indebtedness
(other than Indebtedness Incurred under clause (i), (ii), (iv), (vi),
(viii), (xi) or (xii) of this paragraph) and any refinancings thereof in an
amount not to exceed the amount so refinanced or refunded (plus premiums,
penalties, accrued interest, fees and expenses); PROVIDED that Indebtedness
the proceeds of which are used to refinance or refund the Notes or
Indebtedness that is PARI PASSU with, or subordinated in right of payment
to, the Notes shall only be permitted under this clause (iii) if (A) in
case the Notes are refinanced in part or the Indebtedness to be refinanced
is PARI PASSU with the Notes, such new Indebtedness, by its terms or by the
terms of any agreement or instrument pursuant to which such new
Indebtedness is outstanding, is expressly made PARI PASSU with, or
subordinate in right of payment to, the remaining Notes, (B) in case the
Indebtedness to be refinanced is subordinated in right of payment to the
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35
Notes, such new Indebtedness, by its terms or by the terms of any agreement
or instrument pursuant to which such new Indebtedness is issued or remains
outstanding, is expressly made subordinate in right of payment to the Notes
at least to the extent that the Indebtedness to be refinanced is
subordinated to the Notes and (C) such new Indebtedness, determined as of
the date of Incurrence of such new Indebtedness, does not mature prior to
the Stated Maturity of the Indebtedness to be refinanced or refunded, and
the Average Life of such new Indebtedness is at least equal to the
remaining Average Life of the Indebtedness to be refinanced or refunded;
and PROVIDED FURTHER that in no event may Indebtedness of the Company be
refinanced by means of any Indebtedness of any Restricted Subsidiary
pursuant to this clause (iii);
(iv) Indebtedness (A) in respect of performance, surety or appeal
bonds provided in the ordinary course of business, (B) under Currency
Agreements and Interest Rate Agreements; PROVIDED that such agreements (a)
are designed solely to protect the Company or any of its Restricted
Subsidiaries against fluctuations in foreign currency exchange rates or
interest rates and (b) do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of fees, indemnities
and compensation payable thereunder, and (C) arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in any case Incurred
in connection with the disposition of any business, assets or Restricted
Subsidiary (other than Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition), in a principal
amount not to exceed the gross proceeds actually received by the Company or
any Restricted Subsidiary in connection with such disposition;
(v) Indebtedness of the Company, to the extent the net proceeds
thereof are promptly (A) used to purchase Notes or Euro Notes tendered in
an Offer to Purchase made as a result of a Change in Control or (B)
deposited to defease the Notes as described below under Article Eight
hereof;
(vi) Guarantees of the Notes and Guarantees of Indebtedness of the
Company by any Restricted Subsidiary PROVIDED the Guarantee of such
Indebtedness is permitted by and made in accordance with Section 4.07
hereof;
(vii) Indebtedness (including Guarantees) Incurred to finance the cost
(including the cost of design, development, acquisition, construction,
installation, improvement, transportation or integration) to acquire
equipment, inventory or network assets (including acquisitions by way of
Capitalized Lease and acquisitions of the Capital Stock of a Person that
becomes a Restricted Subsidiary to the extent of the fair market value of
the equipment, inventory or network assets so acquired) by the Company or a
Restricted Subsidiary after the Closing Date;
(viii) Indebtedness of the Company not to exceed, at any one time
outstanding, two times (A) the Net Cash Proceeds received by the Company
after the Closing Date as a capital contribution or from the issuance and
sale of its Capital Stock (other than Disqualified Stock) to a Person that
is not a Subsidiary of the Company, to the extent (I) such capital
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36
contribution or Net Cash Proceeds have not been used pursuant to clause
(C)(2) of the first paragraph or clause (iii), (iv), (vi) or (vii) of the
second paragraph of Section 4.04 hereof to make a Restricted Payment and
(II) if such capital contribution or Net Cash Proceeds are used to
consummate a transaction pursuant to which the Company Incurs Acquired
Indebtedness, the amount of such Net Cash Proceeds exceeds one-half of the
amount of Acquired Indebtedness so Incurred and (B) 80% of the fair market
value of property (other than cash and cash equivalents) received by the
Company after the Closing Date from the sale of its Capital Stock (other
than Disqualified Stock) to a Person that is not a Subsidiary of the
Company, to the extent (I) such capital contribution or sale of Capital
Stock has not been used pursuant to clause (iii), (iv), (vi) or (vii) of
the second paragraph of Section 4.04 hereof to make a Restricted Payment
and (II) if such capital contribution or Capital Stock is used to
consummate a transaction pursuant to which the Company Incurs Acquired
Indebtedness, 80% of the fair market value of the property received exceeds
one-half of the amount of Acquired Indebtedness so Incurred PROVIDED that
such Indebtedness does not mature prior to the Stated Maturity of the Notes
and has an Average Life longer than the Notes;
(ix) Acquired Indebtedness;
(x) Strategic Subordinated Indebtedness;
(xi) Indebtedness in respect of bankers' acceptance and letters of
credit, all in the ordinary course of business, in an aggregate amount
outstanding at any time of up to $10 million;
(xii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business, PROVIDED that such Indebtedness
is extinguished within three Business Days of Incurrence.
(b) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that the Company or a Restricted Subsidiary may
Incur pursuant to this Section 4.03 shall not be deemed to be exceeded, with
respect to any outstanding Indebtedness due solely to the result of fluctuations
in the exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (1) Guarantees, Liens or obligations with respect to
letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included and (2) any Liens
granted pursuant to the equal and ratable provisions referred to in Section 4.09
shall not be treated as Indebtedness. For purposes of determining compliance
with this Section 4.03, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in clauses (i)
through (xii) of Section 4.03(a), the Company, in its sole discretion, shall
classify, and from time to time may reclassify, such item of Indebtedness and
only be required to include the amount and type of such Indebtedness in one of
such clauses.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly,
(i) (A) declare or pay any dividend or make any distribution on or
with respect to its Capital Stock (other than (1) dividends or
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37
distributions payable solely in shares of its Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to acquire
shares of such Capital Stock and (2) PRO RATA dividends or distributions on
Common Stock of Restricted Subsidiaries held by minority stockholders) held
by Persons other than the Company or any of its Restricted Subsidiaries or
(B) pay any cash interest on the Subordinated Convertible Debentures,
(ii) purchase, redeem, retire or otherwise acquire for value any
shares of Capital Stock of (A) the Company or an Unrestricted Subsidiary
(including options, warrants or other rights to acquire such shares of
Capital Stock) held by any Person or (B) a Restricted Subsidiary (including
options, warrants or other rights to acquire such shares of Capital Stock)
held by any Affiliate of the Company (other than a Wholly Owned Restricted
Subsidiary) or any holder (or any Affiliate of such holder) of 5% or more
of the Capital Stock of the Company,
(iii) make any voluntary or optional principal payment, or voluntary
or optional redemption, repurchase, defeasance, or other acquisition or
retirement for value, of Indebtedness of the Company that is subordinated
in right of payment to the Notes or
(iv) make any Investment (after the Closing Date), other than a
Permitted Investment, in any Person (such payments or any other actions
described in clauses (i) through (iv) above being collectively "RESTRICTED
PAYMENTS")
if, at the time of, and after giving effect to, the proposed Restricted Payment:
(A) a Default or Event of Default shall have occurred and be continuing, (B) the
Company could not Incur at least $1.00 of Indebtedness under the first paragraph
of Section 4.03 hereof or (C) the aggregate amount of all Restricted Payments
(the amount, if other than in cash, to be determined in good faith by the Board
of Directors, whose determination shall be conclusive and evidenced by a Board
Resolution) made after the Closing Date shall exceed the sum of (1) 50% of the
aggregate amount of the Adjusted Consolidated Net Income (or, if the Adjusted
Consolidated Net Income is a loss, minus 100% of the amount of such loss)
(determined by excluding income resulting from transfers of assets by the
Company or a Restricted Subsidiary to an Unrestricted Subsidiary) accrued on a
cumulative basis during the period (taken as one accounting period) beginning on
the first day of the fiscal quarter immediately following the Closing Date and
ending on the last day of the last fiscal quarter preceding the Transaction Date
for which reports have been filed with the Commission or provided to the Trustee
pursuant to Section 4.18 hereof PLUS (2) the aggregate Net Cash Proceeds
received by the Company after the Closing Date as a capital contribution or from
the issuance and sale permitted by this Indenture of its Capital Stock (other
than Disqualified Stock) to a Person who is not a Subsidiary of the Company,
including an issuance or sale permitted by this Indenture of Indebtedness of the
Company for cash subsequent to the Closing Date upon the conversion of such
Indebtedness into Capital Stock (other than Disqualified Stock) of the Company,
or from the issuance to a Person who is not a Subsidiary of the Company of any
options, warrants or other rights to acquire Capital Stock of the Company (in
each case, exclusive of any Disqualified Stock or any options, warrants or other
rights that are redeemable at the option of the holder, or are required to be
redeemed, prior to the Stated Maturity of the Notes), in each case except to the
extent such Net Cash Proceeds are used to Incur Indebtedness pursuant to clause
(viii) of the second paragraph under Section 4.03 hereof, PLUS (3) an amount
equal to the net reduction in Investments (other than reductions in Permitted
Investments) in any Person resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances, or other transfers of assets, in
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38
each case to the Company or any Restricted Subsidiary or from the Net Cash
Proceeds from the return of capital, redemption, or sale of any such Investment
(except, in each case, to the extent any such payment or proceeds are included
in the calculation of Adjusted Consolidated Net Income), or from redesignations
of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as
provided in the definition of "Investments"), or from the release of any
Guarantee that constituted a Restricted Payment, to the extent of such release,
not to exceed, in each case, the amount of Investments previously made by the
Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.
The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the date of
declaration thereof if, at said date of declaration, such payment would
comply with the foregoing paragraph;
(ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of
payment to the Notes including premium, if any, and accrued and unpaid
interest, with the proceeds of, or in exchange for, Indebtedness Incurred
under clause (iii) of the second paragraph of part (a) of Section 4.03
hereof;
(iii) the repurchase, redemption or other acquisition of Capital Stock
of the Company or an Unrestricted Subsidiary (or options, warrants or other
rights to acquire such Capital Stock) in exchange for, or out of the
proceeds of a capital contribution or a substantially concurrent offering
of, shares of Capital Stock (other than Disqualified Stock) of the Company
(or options, warrants or other rights to acquire such Capital Stock);
(iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company which is subordinated in right of payment to
the Notes in exchange for, or out of the proceeds of a capital contribution
or a substantially concurrent offering of, shares of the Capital Stock
(other than Disqualified Stock) of the Company (or options, warrants or
other rights to acquire such Capital Stock);
(v) payments or distributions to dissenting stockholders pursuant to
applicable law, pursuant to or in connection with a consolidation, merger
or transfer of assets that complies with the provisions of Article Five
hereof;
(vi) Investments in any Person the primary business of which is
related, ancillary or complementary to the business of the Company or any
of its Restricted Subsidiaries on the date of such Investments; PROVIDED
that the aggregate amount of Investments made pursuant to this clause (vi)
does not exceed $30 million at any one time outstanding;
(vii) Investments acquired in exchange for Capital Stock (other than
Disqualified Stock) of the Company or the Net Cash Proceeds from the
issuance and sale of such Capital Stock, PROVIDED that such proceeds are so
used within 180 days of the receipt thereof;
(viii) the redemption, repurchase, retirement or other acquisition of
any Capital Stock of the Company (or options, warrants or other rights to
acquire such Capital Stock) from an employee or former employee of the
Company or any of its Subsidiaries (or from such person's estate, heirs or
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39
representatives) in connection with such employee's death, disability or
termination of employment, PROVIDED that the aggregate amount expended
pursuant to this clause does not exceed $1 million per annum plus the
cumulative amount of such per annum limit not used in prior years and the
cash proceeds from such Investments, PROVIDED that such proceeds are used
within 180 days of the receipt thereof;
(ix) Investments in permitted Wholesale Consortiums and Permitted
Joint Ventures not exceeding, at the time of the Investment, the sum of (A)
10% of the consolidated revenue of the Company (excluding with respect to
Persons in whom an equity interest is owned by Persons other than the
Company and its Restricted Subsidiaries, the PRO RATA share of such revenue
attributable to such other equity holders) accrued on a cumulative basis
during the period (taken as one accounting period) beginning on the first
day of the first full fiscal quarter immediately following the Closing Date
and ending on the last day of the last fiscal quarter preceding the date of
such Investment and (B) the Net Cash Proceeds from the disposition of the
Company's interest in any such Permitted Wholesale Consortium or Permitted
Joint Venture;
(x) the repurchase of shares of the Series A Preferred upon a Change
of Control pursuant to an Offer to Purchase; PROVIDED that an Offer to
Purchase is consummated with respect to the Notes prior to any repurchase
of shares of the Series A Preferred;
(xi) the repurchase of Subordinated Debentures upon a Change of
Control pursuant to an Offer to Purchase; provided that an Offer to
Purchase is consummated with respect to the Notes prior to any repurchase
of the Subordinated Debentures;
(xii) the payment of cash dividends on the Series A Preferred after
April 15, 2003; and
(xiii) other Restricted Payments in an aggregate amount not to exceed
$10 million, increased by the amount of any Restricted Payment made
pursuant to this clause (xiii) that is an Investment and is not
outstanding;
PROVIDED that, except in the case of clauses (i) and (iii), no Default or Event
of Default shall have occurred and be continuing or occur as a consequence of
the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof and an Investment referred to in clause (vi)
thereof), and the Net Cash Proceeds from any capital contribution or any
issuance of Capital Stock referred to in clauses (iii), (iv) and (vi), shall be
included in calculating whether the conditions of clause (C) of the first
paragraph of this Section 4.04 have been met with respect to any subsequent
Restricted Payments. In the event the proceeds of an issuance of Capital Stock
of the Company are used for the redemption, repurchase or other acquisition of
the Notes, or Indebtedness that is PARI PASSU with the Notes, then the Net Cash
Proceeds of such issuance shall be included in clause (C) of the first paragraph
of this Section 4.04 only to the extent such proceeds are not used for such
redemption, repurchase or other acquisition of Indebtedness.
Any Restricted Payments made in other than cash shall be valued at
fair market value. The amount of any Investment "outstanding" at any time shall
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40
be deemed to be equal to the amount of such Investment on the date made, less
the return of capital, repayment of loans, return on capital and release of
Guarantees, in each case of or to the Company and its Restricted Subsidiaries
with respect to such Investment (up to the amount of such investment on the date
made).
SECTION 4.05. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (iii) make loans or advances to the Company or any other Restricted
Subsidiary or (iv) transfer any of its property or assets to the Company or any
other Restricted Subsidiary. The foregoing provisions shall not restrict any
encumbrances or restrictions:
(i) existing on the Closing Date in this Indenture, the Euro Notes
Indenture or any other agreements in effect on the Closing Date, and any
extensions, refinancings, renewals or replacements of such agreements;
PROVIDED that the encumbrances and restrictions in any such extensions,
refinancings, renewals or replacements are no less favorable in any
material respect to the Holders than those encumbrances or restrictions
that are then in effect and that are being extended, refinanced, renewed or
replaced;
(ii) existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or assets of
such Person acquired by the Company or any Restricted Subsidiary, existing
at the time of such acquisition and not incurred in contemplation thereof,
which encumbrances or restrictions are not applicable to any Person or the
property or assets of any Person other than such Person or the property or
assets of such Person so acquired;
(iv) in the case of clause (iv) of the first paragraph of this Section
4.05, (A) that restrict in a customary manner the subletting, assignment or
transfer of any property or asset that is a lease, license, conveyance or
contract or similar property or asset, (B) existing by virtue of any
transfer of, agreement to transfer, option or right with respect to, or
Lien on, any property or assets of the Company or any Restricted Subsidiary
not otherwise prohibited by this Indenture or (C) arising or agreed to in
the ordinary course of business, not relating to any Indebtedness, and that
do not, individually or in the aggregate, detract from the value of
property or assets of the Company or any Restricted Subsidiary in any
manner material to the Company or any Restricted Subsidiary;
(v) with respect to a Restricted Subsidiary and imposed pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or property and assets of, such
Restricted Subsidiary;
(vi) contained in the terms of any Indebtedness or any agreement
pursuant to which such Indebtedness was issued if (A) the encumbrance or
restriction applies only in the event of a payment default or a default
with respect to a financial covenant contained in such Indebtedness or
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41
agreement, (B) the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary in comparable
financings (as determined by the Company) and (C) the Company determines
that any such encumbrance or restriction will not materially affect the
Company's ability to make principal or interest payments on the Notes; or
(vii) imposed in connection with a transaction described in clause (f)
of the proviso to the definition of "Asset Sale" and relating solely to a
Restricted Subsidiary that transfers assets to the special purpose entity
referred to therein; PROVIDED that the Company determines that any such
encumbrance or restriction will not materially affect the Company's ability
to make principal or interest payments on the Notes.
Nothing contained in this Section 4.05 shall prevent the Company or any
Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.09 hereof or (2) restricting
the sale or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 4.06. LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF
RESTRICTED Subsidiaries. The Company will not sell, and will not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) except (i) to the Company or a
Wholly Owned Restricted Subsidiary; (ii) issuances of director's qualifying
shares or sales to foreign nationals of shares of Capital Stock of foreign
Restricted Subsidiaries, to the extent required by applicable law; (iii) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any Investment
in such Person remaining after giving effect to such issuance or sale would have
been permitted to be made under Section 4.04 hereof if made on the date of such
issuance or sale; (iv) a pledge or hypothecation of or Lien on any Capital Stock
of a Subsidiary to the extent not prohibited under Section 4.09 hereof; or (v)
sales by the Company or Restricted Subsidiaries of Common Stock of a Restricted
Subsidiary, PROVIDED that the Company or such Restricted Subsidiaries apply the
Net Cash Proceeds, if any, of any such sale in accordance with clause (A) or (B)
of Section 4.11 hereof.
SECTION 4.07. LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED
SUBSIDIARIES. The Company will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee any Indebtedness of the Company which is PARI PASSU
with or subordinate in right of payment to the Notes ("GUARANTEED
INDEBTEDNESS"), unless (i) such Restricted Subsidiary simultaneously executes
and delivers a supplemental indenture to this Indenture providing for a
Guarantee (a "SUBSIDIARY GUARANTEE") of payment of the Notes by such Restricted
Subsidiary and (ii) such Restricted Subsidiary waives, and will not in any
manner whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Subsidiary Guarantee; PROVIDED that this paragraph shall
not be applicable to any Guarantee of any Restricted Subsidiary that existed at
the time such Person became a Restricted Subsidiary and was not Incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary. If the Guaranteed Indebtedness is (A) PARI PASSU with the Notes,
then the Guarantee of such Guaranteed Indebtedness shall be PARI PASSU with, or
subordinated to, the Subsidiary Guarantee or (B) subordinated to the Notes, then
the Guarantee of such Guaranteed Indebtedness shall be subordinated to the
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42
Subsidiary Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Notes.
Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary may provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Company, of all of the Company's
and each Restricted Subsidiary's Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by this Indenture) or (ii) the release or discharge of the
Guarantee which resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such Guarantee.
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH SHAREHOLDERS AND
AFFILIATES. The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any holder (or any
Affiliate of such holder) of 5% or more of any class of Capital Stock of the
Company or with any Affiliate of the Company or any Restricted Subsidiary,
except upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than could be obtained, at the time of such transaction
or, if such transaction is pursuant to a written agreement, at the time of the
execution of the agreement providing therefor, in a comparable arm's-length
transaction with a Person that is not such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to:
(i) transactions (A) approved by a majority of the disinterested
members of the Board of Directors or (B) for which the Company or a
Restricted Subsidiary delivers to the Trustee a written opinion of a
nationally recognized investment banking firm stating that the transaction
is fair to the Company or such Restricted Subsidiary from a financial point
of view;
(ii) any transaction solely between the Company and any of its
Restricted Subsidiaries or solely between Restricted Subsidiaries;
(iii) the payment of reasonable and customary regular fees to
directors of the Company who are not employees of the Company;
(iv) any payments or other transactions pursuant to any tax-sharing
agreement between the Company and any other Person with which the Company
files a consolidated tax return or with which the Company is part of a
consolidated group for tax purposes;
(v) compensation, indemnification and other benefits paid or made
available to officers, directors and employees in the ordinary course of
business in connection with services actually rendered and consistent with
past practice;
(vi) transactions in accordance with the Existing Stockholder
Agreements as in effect on the Closing Date; or
(vii) any Restricted Payments not prohibited by Section 4.04 hereof.
Notwithstanding the foregoing, any transaction or series of related transactions
covered by the first paragraph of this Section 4.08 and not covered by clauses
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43
(ii) through (v) of this paragraph, the aggregate amount of which exceeds $2.0
million in value, must be approved or determined to be fair in the manner
provided for in clause (i)(A) or (B) of this Section 4.08.
SECTION 4.09. LIMITATION ON LIENS. The Company will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist
any Lien on any of its assets or properties of any character (including, without
limitation, licenses), or any shares of Capital Stock or Indebtedness of any
Restricted Subsidiary, without making effective provision for all of the Notes
and all other amounts due under this Indenture to be directly secured equally
and ratably with (or, if the obligation or liability to be secured by such Lien
is subordinated in right of payment to the Notes, prior to) the obligation or
liability secured by such Lien.
The foregoing limitation does not apply to:
(i) Liens existing on the Closing Date;
(ii) Liens granted after the Closing Date on any assets or
Capital Stock of the Company or its Restricted Subsidiaries created in
favor of the Holders;
(iii) Liens with respect to the assets of a Restricted
Subsidiary granted by such Restricted Subsidiary to the Company or a
Wholly Owned Restricted Subsidiary to secure Indebtedness owing to the
Company or such other Restricted Subsidiary;
(iv) Liens securing Indebtedness permitted to be Incurred
under clause (iii) of the second paragraph of Section 4.03 hereof which
is Incurred to refinance secured Indebtedness; PROVIDED that such Liens
do not extend to or cover any property or assets of the Company or any
Restricted Subsidiary other than the property or assets securing the
Indebtedness being refinanced;
(v) Liens on the Capital Stock of, or any property or assets
of, a Restricted Subsidiary securing Indebtedness of such Restricted
Subsidiary permitted under Section 4.03 hereof;
(vi) Liens on the Capital Stock of Restricted Subsidiaries
that own a substantial portion of assets financed with Indebtedness
Incurred under clause (vii) of Section 4.03 hereof, if such liens
secure only such Indebtedness; or
(vii) Permitted Liens.
SECTION 4.10. LIMITATION ON SALE-LEASEBACK TRANSACTIONS. The Company
will not, and will not permit any Restricted Subsidiary to, enter into any
sale-leaseback transaction involving any of its assets or properties whether now
owned or hereafter acquired, whereby the Company or a Restricted Subsidiary
sells or transfers such assets or properties and then or thereafter leases such
assets or properties or any part thereof or any other assets or properties which
the Company or such Restricted Subsidiary, as the case may be, intends to use
for substantially the same purpose or purposes as the assets or properties sold
or transferred; PROVIDED that a sale-leaseback transaction shall not include any
lease in connection with which the Company or a Restricted Subsidiary acquires
assets or property in anticipation of the substantially contemporaneous sale or
transfer to the lessor under such lease.
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44
The foregoing restriction does not apply to any sale-leaseback
transaction if:
(i) the lease is for a period, including renewal rights, of not in
excess of three years;
(ii) the lease secures or relates to industrial revenue or pollution
control bonds;
(iii) the transaction is solely between the Company and any Restricted
Subsidiary or solely between Restricted Subsidiaries; or
(iv) the Company or such Restricted Subsidiary, within 12 months after
the sale or transfer of any assets or properties is completed, applies an
amount not less than the net proceeds received from such sale in accordance
with clause (A) or (B) of the first paragraph of Section 4.11 hereof.
SECTION 4.11. LIMITATION ON ASSET SALES. The Company will not, and
will not permit any Restricted Subsidiary to, consummate any Asset Sale, unless
(i) the consideration received by the Company or such Restricted Subsidiary is
at least equal to the fair market value of the assets sold or disposed of and
(ii) at least 75% of the consideration received consists of cash or Temporary
Cash Investments. In the event and to the extent that the Net Cash Proceeds
received by the Company or any of its Restricted Subsidiaries from one or more
Asset Sales occurring on or after the Closing Date in any period of 12
consecutive months exceed 10% of Adjusted Consolidated Net Tangible Assets
(determined as of the date closest to the commencement of such 12-month period
for which a consolidated balance sheet of the Company and its Subsidiaries has
been filed with the Commission pursuant to Section 4.18 hereof), then the
Company shall or shall cause the relevant Restricted Subsidiary to (i) within 12
months after the date Net Cash Proceeds so received exceed 10% of Adjusted
Consolidated Net Tangible Assets, (A) apply an amount equal to such excess Net
Cash Proceeds to permanently repay unsubordinated Indebtedness of the Company,
or any Restricted Subsidiary providing a Subsidiary Guarantee pursuant to
Section 4.07 hereof or Indebtedness of any other Restricted Subsidiary, in each
case owing to a Person other than the Company or any of its Restricted
Subsidiaries or (B) invest an equal amount, or the amount not so applied
pursuant to clause (A) (or enter into a definitive agreement committing to so
invest within 12 months after the date of such agreement), either in property or
assets (other than current assets) of a nature or type or that are used in a
business, or in a company having property and assets of a nature or type, or
engaged in a business, in either case similar or related to the nature or type
of the property and assets of, or the business of, the Company or any of its
Restricted Subsidiaries existing on the date of such investment (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and evidenced by a Board Resolution) and (ii) apply (no later than the end of
the 12-month period referred to in clause (i)) such excess Net Cash Proceeds (to
the extent not applied pursuant to clause (i)) as provided in the following
paragraph of this Section 4.11. The amount of such excess Net Cash Proceeds
required to be applied (or to be committed to be applied) during such 12-month
period as set forth in clause (i) of the preceding sentence and not applied as
so required by the end of such period shall constitute "EXCESS PROCEEDS."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.11 totals at least $10 million, the Company must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders on a PRO RATA basis an aggregate principal amount of
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45
Notes equal to the Excess Proceeds on such date, at a purchase price equal to
101% of the principal amount of the Notes on the relevant Payment Date, plus, in
each case, accrued interest (if any) to the Payment Date.
SECTION 4.12. REPURCHASE OF NOTES UPON A CHANGE OF CONTROL. The
Company must commence, within 30 days of the occurrence of a Change of Control,
and consummate an Offer to Purchase for all the Notes then outstanding, at a
purchase price equal to 101% of the principal amount of the Notes on the
relevant Payment Date, plus accrued interest (if any) to the Payment Date.
SECTION 4.13. EXISTENCE. Except as otherwise provided or permitted in
Articles Four and Five of this Indenture, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence and the existence of each of its Restricted Subsidiaries in accordance
with the respective organizational documents of the Company and each such
Subsidiary (as the same may be amended from time to time) and the rights
(whether pursuant to charter, partnership certificate, agreement, statute or
otherwise), material licenses and franchises of the Company and each such
Subsidiary; PROVIDED that the Company shall not be required to preserve any such
right, license or franchise, or the existence of any Restricted Subsidiary, if
the maintenance or preservation thereof is no longer desirable in the conduct of
the business of the Company and its Restricted Subsidiaries taken as a whole.
SECTION 4.14. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay
or discharge and shall cause each of its Subsidiaries to pay or discharge, or
cause to be paid or discharged, before the same shall become delinquent (i) all
material taxes, assessments and governmental charges levied or imposed upon (a)
the Company or any such Subsidiary, (b) the income or profits of any such
Subsidiary which is a corporation or (c) the property of the Company or any such
Subsidiary and (ii) all material lawful claims for labor, materials and supplies
that, if unpaid, might by law become a Lien upon the property of the Company or
any such Subsidiary; PROVIDED that the Company shall not be required to pay or
discharge, or cause to be paid or discharged, any such tax, assessment, charge
or claim the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings, for which adequate reserves have been
established.
SECTION 4.15. MAINTENANCE OF PROPERTIES AND INSURANCE. The Company
will cause all properties used or useful in the conduct of its business or the
business of any of its Restricted Subsidiaries, to be maintained and kept in
good condition, repair and working order (ordinary wear and tear excepted) and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED that nothing in this Section 4.15 shall prevent the Company or any such
Subsidiary from discontinuing the use, operation or maintenance of any of such
properties or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Company, desirable in the conduct of the business of the
Company or such Subsidiary.
The Company will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, with reputable insurers or with
the government of the United States of America, or an agency or instrumentality
thereof, in such amounts, with such deductibles and by such methods as shall be
customary for corporations similarly situated in the industry in which the
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46
Company or such Restricted Subsidiary, as the case may be, is then conducting
business.
SECTION 4.16. NOTICE OF DEFAULTS. In the event that the Company
becomes aware of any Default or Event of Default, the Company, promptly after it
becomes aware thereof, will give written notice thereof to the Trustee.
SECTION 4.17. COMPLIANCE CERTIFICATES. The principal accounting
officer and the principal financial officer of the Company shall certify, on or
before a date not more than 90 days after the end of each fiscal year of the
Company, that a review has been conducted of the activities of the Company and
its Restricted Subsidiaries and the Company's and its Restricted Subsidiaries'
performance under this Indenture and that the Company has fulfilled all
obligations hereunder, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default and the nature and status thereof.
The Company shall also notify the Trustee of any default or defaults in the
performance of any covenants or agreements under this Indenture. The Company
shall also comply with the other provisions of Section 314(a) of the TIA.
SECTION 4.18. COMMISSION REPORTS AND REPORTS TO HOLDERS. At all times
from and after the earlier of (i) the date of the commencement of an Exchange
Offer or the effectiveness of a Shelf Registration Statement (the
"REGISTRATION") and (ii) the date that is six months after the Closing Date, in
either case, whether or not the Company is then required to file reports with
the Commission, the Company shall file with the Commission all such reports and
other information as it would be required to file with the Commission by
Sections 13(a) or 15(d) under the Securities Exchange Act of 1934 if it were
subject thereto. The Company shall supply the Trustee and each Holder or shall
supply to the Trustee for forwarding to each such Holder, without cost to such
Holder, copies of such reports and other information. In addition, at all times
prior to the earlier of the date of the Registration and the date that is six
months after the Closing Date, the Company shall, at its cost, deliver to each
Holder of the Notes quarterly and annual reports substantially equivalent to
those which would be required by the Exchange Act. In addition, at all times
prior to the Registration, upon the request of any Holder or any prospective
purchaser of the Notes designated by a Holder, the Company shall supply to such
Holder or such prospective purchaser the information required under Rule 144A
under the Securities Act.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.19. WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC. The Company shall not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into the
Company unless:
(i) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the
Company is merged or that acquired or leased such property and assets of
the Company shall be a corporation organized and validly existing under the
laws of the United States of America or any jurisdiction thereof and shall
expressly assume, by a supplemental indenture, executed and delivered to
the Trustee, all of the obligations of the Company on all of the Notes and
under this Indenture;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a PRO
FORMA basis, the Company or any Person becoming the successor obligor of
the Notes shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such
transaction;
(iv) immediately after giving effect to such transaction on a PRO
FORMA basis, the Company, or any Person becoming the successor obligor of
the Notes and the Euro Notes, as the case may be, could Incur at least
$1.00 of Indebtedness under the first paragraph of Section 4.03 hereof;
PROVIDED that this clause (iv) shall not apply to (1) a consolidation,
merger or sale of all (but not less than all) of the assets of the Company
if all Liens and Indebtedness of the Company or any Person becoming the
successor obligor on the Notes, as the case may be, and its Restricted
Subsidiaries outstanding immediately after such transaction would, if
Incurred at such time, have been permitted to be Incurred (and all such
Liens and Indebtedness, other than Liens and Indebtedness of the Company
and its Restricted Subsidiaries outstanding immediately prior to the
transaction, shall be deemed to have been Incurred) for all purposes of
this Indenture or (2) a consolidation, merger or sale of all or
substantially all of the assets of the Company if, immediately after giving
effect to such transaction on a PRO FORMA basis, the Company or any Person
becoming the successor obligor of the Notes shall have a Consolidated
Leverage Ratio equal to or less than the Consolidated Leverage Ratio of the
Company immediately prior to such transaction; and
(v) the Company delivers to the Trustee an Officers' Certificate
(attaching the arithmetic computations to demonstrate compliance with
clauses (iii) and (iv) of this Section 5.01) and Opinion of Counsel, in
each case stating that such consolidation, merger or transfer and such
supplemental indenture complies with this provision and that all conditions
precedent provided for herein relating to such transaction have been
complied with;
PROVIDED, HOWEVER, that clauses (iii) and (iv) of this Section 5.01 do not apply
if, in the good faith determination of the Board of Directors, whose
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48
determination shall be evidenced by a Board Resolution, the principal purpose of
such transaction is to change the state of incorporation of the Company; and
PROVIDED FURTHER that any such transaction shall not have as one of its purposes
the evasion of the foregoing limitations.
SECTION 5.02. SUCCESSOR SUBSTITUTED. Upon any consolidation or merger,
or any sale, conveyance, transfer or other disposition of all or substantially
all of the property and assets of the Company in accordance with Section 5.01 of
this Indenture, the successor Person formed by such consolidation or into which
the Company is merged or to which such sale, conveyance, transfer or other
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such successor Person had been named as the Company herein.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" shall occur
with respect to the Notes if:
(a) the Company defaults in the payment of principal of (or premium,
if any, on) any Note when the same becomes due and payable at maturity,
upon acceleration, redemption or otherwise;
(b) the Company defaults in the payment of interest on any Note when
the same becomes due and payable, and such default continues for a period
of 30 days; PROVIDED that a failure to make any of the first four scheduled
interest payments on the Notes in a timely manner will constitute an Event
of Default with no grace or cure period;
(c) the Company defaults in the performance or breach of the
provisions of Article Five hereof or fails to make or consummate an Offer
to Purchase in accordance with Section 4.11 or Section 4.12 hereof;
(d) the Company defaults in the performance of or breaches any other
covenant or agreement of the Company in this Indenture or under the Notes
(other than a default specified in clause (a), (b) or (c) of this Section
6.01) and such default or breach continues for a period of 30 consecutive
days after written notice by the Trustee or the Holders of 25% or more in
aggregate principal amount of the Notes;
(e) there occurs with respect to any issue or issues of Indebtedness
of the Company or any Significant Subsidiary having an outstanding
principal amount of $10 million or more in the aggregate for all such
issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (I) an event of default that has caused the holder
thereof to declare such Indebtedness to be due and payable prior to its
Stated Maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled within 30 days of such
acceleration and/or (II) the failure to make a principal payment at the
final (but not any interim) fixed maturity and such defaulted payment shall
not have been made, waived or extended within 30 days of such payment
default;
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $10 million in the aggregate for all such
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49
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Significant Subsidiary and shall not be
paid or discharged, and there shall be any period of 60 consecutive days
following entry of the final judgment or order that causes the aggregate
amount for all such final judgments or orders outstanding and not paid or
discharged against all such Persons to exceed $10 million during which a
stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (B) appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary and, in each case, such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(h) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any
general assignment for the benefit of creditors.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to the Company) occurs and is continuing under this Indenture, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, by written notice to the Company (and to the Trustee if
such notice is given by the Holders), may, and the Trustee at the request of
such Holders shall, declare the principal amount of, premium, if any, and
accrued interest on the Notes to be immediately due and payable. Upon a
declaration of acceleration, such principal amount of, premium, if any, and
accrued interest shall be immediately due and payable. In the event of a
declaration of acceleration because an Event of Default set forth in clause (e)
of Section 6.01 has occurred and is continuing, such declaration of acceleration
shall be automatically rescinded and annulled if the event of default triggering
such Event of Default pursuant to clause (e) shall be remedied or cured by the
Company or the relevant Significant Subsidiary or waived by the holders of the
relevant Indebtedness within 60 days after the declaration of acceleration with
respect thereto. If an Event of Default specified in clause (g) or (h) of
Section 6.01 occurs with respect to the Company, the principal amount of,
premium, if any, and accrued interest on the Notes then outstanding shall IPSO
FACTO become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder.
The Holders of at least a majority in principal amount of the
outstanding Notes, by written notice to the Company and to the Trustee, may
waive all past defaults and rescind and annul a declaration of acceleration and
its consequences if (i) all existing Events of Default, other than the
nonpayment of the principal of, premium, if any, and interest on the Notes that
have become due solely by such declaration of acceleration, have been cured or
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50
waived and (ii) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium, if any, or interest
on the Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding.
SECTION 6.04. WAIVER OF PAST DEFAULTS. Subject to Section 9.02, at any
time after such a declaration of acceleration, but before a judgment or decree
for the payment of the money due has been obtained by the Trustee, the Holders
of at least a majority in aggregate principal amount of the outstanding Notes by
written notice to the Company and to the Trustee may waive all past Defaults and
rescind and annul a declaration of acceleration and its consequences (except a
Default in the payment of principal of premium, if any, or interest on any Note
as specified in clause (a) or (b) of Section 6.01 (but not as a result of such
acceleration) or in respect of a covenant or provision of this Indenture which
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected) if (i) all existing Events of Default, other than the
nonpayment of the principal amount of, premium, if any, and interest on the
Notes that have become due solely by such declaration of acceleration, have been
cured or waived and (ii) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction. Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereto.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of at least a majority
in aggregate principal amount of the outstanding Notes may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of the Notes, not joining in the giving of such direction and may take
any other action it deems proper that is not inconsistent with any such
direction received from Holders of the Notes.
SECTION 6.06. LIMITATION ON SUITS. A Holder may not pursue any remedy
with respect to this Indenture or the Notes unless:
(i) the Holder gives the Trustee written notice of a continuing Event
of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(iii) such Holder or Holders offer the Trustee indemnity satisfactory
to the Trustee against any costs, liability or expense;
(iv) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
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51
(v) during such 60-day period, the Holders of a majority in aggregate
principal amount of the outstanding Notes do not give the Trustee a
direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section 6.06,
the Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Notes have concurred in any request or direction of the Trustee to pursue any
remedy available to the Trustee or the Holders with respect to this Indenture or
the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal of, premium, if any, or interest on such Holder's
Note on or after the respective due dates expressed on such Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default in
payment of principal, premium or interest specified in clause (a) or (b) of
Section 6.01 of this Indenture occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor of the Notes for the whole amount of principal, premium, if
any, and accrued interest remaining unpaid, together with interest on overdue
principal, premium, if any, and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
specified in the Notes, and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Notes), its creditors or its property
and the Trustee shall be entitled and empowered to collect and receive any
monies, securities or other property payable or deliverable upon conversion or
exchange of the Notes or upon any such claims and to distribute the same, and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.07. Nothing herein contained shall be
deemed to empower the Trustee to authorize or consent to, or accept or adopt on
behalf of any Holder, any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
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52
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant
to this Article Six, it shall pay out the money in the following order:
FIRST: to the Trustee for all amounts due under Section 7.07;
SECOND: to Holders for amounts then due and unpaid for principal of,
premium, if any, and interest on the Notes in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Notes for principal, premium, if any, and interest, respectively; and
THIRD: to the Company as its interests may appear.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
6.10.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of the suit, and
the court may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit having due regard to the merits
and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 of this Indenture, or a suit by Holders of more than
10% in principal amount of the outstanding Notes.
SECTION 6.12. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then,
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Company, the Trustee and the Holders shall continue as though no
such proceeding had been instituted.
SECTION 6.13. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.09, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.14. DELAY OR OMISSION NOT WAIVER. No delay or omission of
the Trustee or of any Holder to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article Six or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
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53
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. GENERAL. The duties and responsibilities of the Trustee
shall be as provided by the TIA and as set forth herein. Notwithstanding the
foregoing, no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Article Seven.
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE. Subject to TIA Sections
315(a) through (d):
(i) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document (whether in its original or facsimile form) believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document and
may in good faith conclusively rely as to the truth of the statements and
the correctness of the opinions therein;
(ii) before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, which shall conform to
Section 10.04 of this Indenture. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate, opinion and/or an accountants' certificate if required under
the TIA;
(iii) the Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care;
(iv) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses and liabilities that might be incurred by it in complying
with such request or direction;
(v) the Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its
rights or powers or for any action it takes or omits to take in accordance
with the direction of the Holders of a majority in principal amount of the
outstanding Notes relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture; PROVIDED that
the Trustee's conduct does not constitute negligence or bad faith;
(vi) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting to take any action hereunder, the Trustee
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54
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate;
(vii) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled at the sole cost of the Company to examine the books,
records and premises of the Company personally or by agent or attorney and
shall incur no liability or additional liability of any kind by reason of
such inquiry or investigation;
(viii) the Trustee shall not be charged with knowledge of any Default
or Event of Default, the identity of any Restricted Subsidiary or of the
existence of any Change of Control or Asset Sale unless either (i) a
Responsible Officer shall have actual knowledge thereof, or (ii) the
Trustee shall have received written notice thereof from the Company or any
Holder of the Notes; and
(ix) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted to be taken by it hereunder in good faith and in reliance thereon.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not the Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee (a) makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(b) shall not be accountable for the Company's use or application of the
proceeds of the Notes and (c) shall not be responsible for any statement in the
Notes other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULT. If any Default or any Event of
Default occurs and is continuing and if such Default or Event of Default is
known to a Responsible Officer of the Trustee, the Trustee shall mail to each
Holder in the manner and to the extent provided in TIA Section 313(c) notice of
the Default or Event of Default within 90 days after it occurs, unless such
Default or Event of Default has been cured; PROVIDED, HOWEVER, that, except in
the case of a default in the payment of the principal of, premium, if any, or
interest on any Note, the Trustee shall be protected in withholding such notice
if and as long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the Holders.
If an Event of Default has occurred and is continuing, the Trustee shall use the
same degree of care and skill in its exercise of the rights and powers invested
in it under this Indenture as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each
May 15, beginning with May 15, 1999, the Trustee shall mail to each Holder as
provided in TIA Section 313(c) a brief report that complies with TIA Section
313(a) dated as of such May 15, if required by TIA Section 313(a).
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55
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee such compensation as shall be agreed upon from time to time in writing
for its services. The compensation of the Trustee shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses and
advances incurred or made by the Trustee. Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee and any predecessor trustee
for, and hold it harmless against, any and all loss, claim, damage or liability
or expense (including taxes other than taxes based upon the income of the
Trustee) incurred by it without negligence or bad faith on its part in
connection with the acceptance or administration of this Indenture and its
duties under this Indenture and the Notes, including the costs and expenses of
defending itself against any claim or liability and of complying with any
process served upon it or any of its officers in connection with the exercise or
performance of any of its powers or duties under this Indenture and the Notes.
The Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall provide reasonable cooperation at the Company's expense in the
defense. The Trustee may have separate counsel of its selection and the Company
shall pay the reasonable fees and expenses of such counsel; PROVIDED, that the
Company will not be required to pay such fees and expenses if it assumes the
Trustee's defense and there is no conflict of interest between the Company and
the Trustee in connection with such defense. The Company need not pay for any
settlement made without its written consent.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Noteholders on all money or property held
or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of, premium, if any, and interest on
particular Notes.
If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in clause (h) or (i) of Section
6.01, the expenses and the compensation for the services will be intended to
constitute expenses of administration under Title 11 of the United States
Bankruptcy Code or any applicable federal or state law for the relief of
debtors.
The rights, privileges, protections and benefits given to the Trustee,
including, without limitation, its rights to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder.
The provisions of this Section 7.07 shall survive the resignation or
removal of the Trustee and the defeasance or other termination of this
Indenture.
SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of its appointment as provided in this
Section 7.08.
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Trustee in writing and may appoint a successor
Trustee with the consent of the Company. The Company may at any time remove the
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56
Trustee, by Company Order given at least 30 days prior to the date of the
proposed removal; PROVIDED that, at such date, no Event of Default shall have
occurred and be continuing.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount of the outstanding Notes may petition at the
expense of the Company any court of competent jurisdiction for the appointment
of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07 of this Indenture, (i) the retiring Trustee shall transfer all property
held by it as Trustee to the successor Trustee, (ii) the resignation or removal
of the retiring Trustee shall become effective and (iii) the successor Trustee
shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If the Trustee is no longer eligible under Section 7.10 of this
Indenture, any Holder who satisfies the requirements of TIA Section 310(b) may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
The Company shall give notice of any resignation and any removal of
the Trustee and each appointment of a successor Trustee to all Holders. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
SECTION 7.10. ELIGIBILITY. This Indenture shall always have a Trustee
who satisfies the requirements of TIA Sections 310(a)(1) and 310(a)(5). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition.
SECTION 7.11. MONEY HELD IN TRUST. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company in writing. Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law and except for money held
in trust under Article Eight of this Indenture.
SECTION 7.12. WITHHOLDING TAXES. The Trustee, as agent for the
Company, shall exclude and withhold from each payment of principal and interest
and other amounts due hereunder or under the Notes any and all withholding taxes
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57
applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any amounts
payable in respect of the Notes, to withhold such amounts and timely pay the
same to the appropriate authority in the name of and on behalf of the Holders of
the Notes, that it will file any necessary withholding tax returns or statements
when due, and that, as promptly as possible after the payment thereof, it will
deliver to each Holder of a Note appropriate documentation evidencing the
payment thereof, together with such additional documentary evidence as such
Holders may reasonably request from time to time.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF THE COMPANY'S OBLIGATIONS. Except as
otherwise provided in this Section 8.01, the Company may terminate its
obligations under the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes that have been replaced or Notes that are
paid pursuant to Section 4.01 hereof or Notes for whose payment money or
securities have theretofore been held in trust and thereafter repaid to the
Company, as provided in Section 8.05 hereof) have been delivered to the
Trustee for cancellation and the Company has paid all sums payable by it
hereunder; or
(ii) (A) all of the Notes mature within one year or all of them are to
be called for redemption within one year under arrangements satisfactory to
the Trustee for giving the notice of redemption, (B) the Company deposits
in trust with the Trustee during such one-year period, under the terms of
an irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds solely for the benefit of the Holders for that
purpose, money or U.S. Government Obligations sufficient to pay principal,
premium, if, any, and interest on the Notes to maturity or redemption, as
the case may be, and to pay all other sums payable by it hereunder, (C) no
Default or Event of Default with respect to the Notes shall have occurred
and be continuing on the date of such deposit, (D) such deposit will not
result in a breach or violation of, or constitute a default under, this
Indenture or any other agreement or instrument to which the Company is a
party or by which it is bound, (E) if at such time the Notes are listed on
a national securities exchange, the Notes will not be delisted as a result
of such deposit, defeasance or discharge and (F) the Company has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, in each
case stating that all conditions precedent provided for herein relating to
the satisfaction and discharge of this Indenture have been complied with.
With respect to the foregoing clause (i), the Company's obligations
under Section 7.07 hereof shall survive. With respect to the foregoing clause
(ii), the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07,
2.08, 2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 of this Indenture
shall survive until the Notes are no longer outstanding. Thereafter, only the
Company's obligations in Sections 7.07, 8.05 and 8.06 of this Indenture shall
survive. After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations, as the case
may be, under the Notes and this Indenture, except for those surviving
obligations specified above.
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SECTION 8.02. DEFEASANCE AND DISCHARGE OF INDENTURE. The Company will
be deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the 123rd day after the deposit referred to below, and
the provisions of this Indenture will no longer be in effect with respect to the
Notes if: (A) the Company has deposited with the Trustee, in trust, money and/or
U.S. Government Obligations that through the payment of interest and principal
in respect thereof in accordance with their terms will provide money in an
amount sufficient to pay the principal of, premium, if any, and accrued interest
on the Notes on the Stated Maturity of such payments in accordance with the
terms of this Indenture and the Notes;
(A) the Company has deposed with the Trustee, in trust, money and/or
U.S. Government Obligations that through the payment of interest and
principal in respect thereof in accordance with their terms will provide
money in an amount sufficient to pay the principal of, premium, if any,and
accrued interest on the Notes on the Stated Maturity of such payments in
accordance with the terms of this Indenture and the Notes;
(B) the Company has delivered to the Trustee (i) either (1) an Opinion
of Counsel to the effect that Holders will not recognize income, gain or
loss for federal income tax purposes as a result of the Company's exercise
of its option under this Section 8.02 and will be subject to federal income
tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit, defeasance and discharge had not
occurred, which Opinion of Counsel must be based upon (and accompanied by a
copy of) a ruling of the Internal Revenue Service to the same effect unless
there has been a change in applicable federal income tax law after the
Closing Date such that a ruling is no longer required or (2) a ruling
directed to the Trustee received from the Internal Revenue Service to the
same effect as the aforementioned Opinion of Counsel and (ii) an Opinion of
Counsel to the effect that the creation of the defeasance trust does not
violate the Investment Company Act of 1940 and after the passage of 123
days following the deposit, the trust fund will not be subject to the
effect of Section 547 of the United States Bankruptcy Code or Section 15 of
the New York Debtor and Creditor Law;
(C) immediately after giving effect to such deposit on a PRO FORMA
basis, no Event of Default, or event that after the giving of notice or
lapse of time or both would become an Event of Default, shall have occurred
and be continuing on the date of such deposit or during the period ending
on the 123rd day after the date of such deposit, and such deposit shall not
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound; and
(D) if at such time the Notes are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge.
Notwithstanding the foregoing, prior to the end of the 123-day period
referred to in clause (B)(ii) of this Section 8.02, none of the Company's
obligations under this Indenture shall be discharged. Subsequent to the end of
such 123-day period with respect to this Section 8.02, the Company's obligations
in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02,
4.17, 7.07, 7.08, 8.05 and 8.06 shall survive until the Notes are no longer
outstanding. Thereafter, only the Company's obligations in Sections 7.07, 8.05
and 8.06 shall survive. If and when a ruling from the Internal Revenue Service
or an Opinion of Counsel referred to in clause (B)(i) of this Section 8.02 may
be provided specifically without regard to, and not in reliance upon, the
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59
continuance of the Company's obligations under Section 4.01, then the Company's
obligations under such Section 4.01 shall cease upon delivery to the Trustee of
such ruling or Opinion of Counsel and compliance with the other conditions
precedent provided for herein relating to the defeasance contemplated by this
Section 8.02.
After the 123 day period referred to in clause (B)(ii) of this Section
8.02, the Trustee upon Company Order shall acknowledge in writing the discharge
of the Company's obligations under the Notes and this Indenture except for those
surviving obligations in the immediately preceding paragraph.
SECTION 8.03. DEFEASANCE OF CERTAIN OBLIGATIONS. The Company may omit
to comply with any term, provision or condition set forth in clauses (iii) and
(iv) of Section 5.01 and Sections 4.03 through 4.11 of this Indenture, and
clause (c) of Section 6.01 with respect to clauses (iii) and (iv) of Section
5.01 of this Indenture and clause (d) of Section 6.01 with respect to Sections
4.01, 4.02 and 4.12 through 4.19 hereof, and clauses (e) and (f) of Section 6.01
hereof shall be deemed not to be Events of Default, upon:
(a) the deposit, in trust, with the Trustee (or another trustee
satisfying the requirements of Section 7.10 hereof) of money and/or U.S.
Government Obligations that, through the payment of interest and principal
in respect thereof in accordance with their terms, will provide money in an
amount sufficient to pay the principal of, premium, if any, and accrued
interest on the Notes on the Stated Maturity of such payments in accordance
with the terms of this Indenture and the Notes;
(b) the satisfaction of the provisions described in clauses B(ii), (C)
and (D) of Section 8.02 hereof;
(c) delivery by the Company to the Trustee of an Opinion of Counsel to
the effect that, the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance and
will be subject to federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred; and
(d) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. APPLICATION OF TRUST MONEY. Subject to Section 8.06, the
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
and shall apply the deposited money and the money from U.S. Government
Obligations in accordance with the Notes and this Indenture to the payment of
principal of, premium, if any, and interest on the Notes; but such money need
not be segregated from other funds except to the extent required by law.
SECTION 8.05. REPAYMENT TO COMPANY. Subject to Sections 7.07, 8.01,
8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Company any excess money, as determined by a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, and held by them at any time and thereupon shall be
relieved from all liability with respect to such money. The Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal, premium, if any, or interest that remains unclaimed
for two years; PROVIDED that the Trustee or such Paying Agent before being
required to make any payment may cause to be published at the expense of the
Company once in a newspaper of general circulation in the City of New York or
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60
mail to each Holder entitled to such money at such Holder's address (as set
forth in the Note Register) notice that such money remains unclaimed provided
that the Trustee or such Paying Agent before being required to make any payment
may give notice in accordance with Section 11.02(b) that such money remains
unclaimed and that after a date specified therein (which shall be at least 30
days from the date of such publication or mailing) any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to such money must look to the Company for payment as
general creditors unless an applicable law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
SECTION 8.06. REINSTATEMENT. If the Trustee or the Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
Section 8.01, 8.02 or 8.03, as the case may be, by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01, 8.02 or
8.03, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 8.01, 8.02 or 8.03, as the case may be; PROVIDED that, if the
Company has made any payment of principal of, premium, if any, or interest on
any Notes because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.
SECTION 8.07. DEFEASANCE AND CERTAIN OTHER EVENTS OF DEFAULT. In the
event that the Company exercises its option to omit compliance with certain
covenants and provisions of this Indenture with respect to the Notes pursuant to
Section 8.03 and such Notes are declared due and payable because of the
occurrence of an Event of Default that remains applicable, the amount of money
and/or U.S. Government Obligations on deposit with the Trustee will be
sufficient to pay amounts due on such Notes at the time of their Stated
Maturity. If, in the event the Company exercises its option to omit compliance
with certain covenants and provisions of this Indenture with respect to the
Notes pursuant to Section 8.03 and such Notes are declared due and payable
because of the occurrence of an Event of Default that remains applicable, the
amount of money and/or U.S. Government Obligations on deposit with the Trustee
is insufficient to pay amounts due on the Notes at the time of the acceleration
resulting from such Events of Default pursuant to Section 6.02, the Company will
remain liable for such payments.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company, when authorized
by resolutions of its Board of Directors (as evidenced by a Board Resolution),
and the Trustee may amend or supplement this Indenture or the Notes without
notice to, or the consent of, any Holder:
(a) to cure any ambiguity, defect or inconsistency in this Indenture;
PROVIDED that, in the good faith opinion of the Board of Directors of the
Company evidenced by a Board Resolution, such amendments or supplements do
not adversely affect the interests of the Holders in any material respect;
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(b) to comply with Article Five;
(c) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA;
(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee; or
(e) to make any change that, in the good faith opinion of the Board of
Directors of the Company evidenced by a Board Resolution, does not
materially and adversely affect the rights of any Holder.
SECTION 9.02. WITH CONSENT OF HOLDERS. Subject to Sections 6.07 and
without prior notice to the Holders, the Company, when authorized by its Board
of Directors (as evidenced by a Board Resolution), and the Trustee may amend
this Indenture and the Notes with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding, and the
Holders of a majority in aggregate principal amount of the Notes then
outstanding by written notice to the Trustee may waive compliance by the Company
with any provision of this Indenture or the Notes.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected thereby, an amendment or waiver, including a
waiver pursuant to Section 6.04 hereof, may not:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Note;
(b) reduce the principal amount of, or premium, if any, or interest
on, any Note;
(c) change the place or currency of payment of principal of, or
premium, if any, or interest on, any Note;
(d) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of a redemption,
on or after the Redemption Date) of any Note;
(e) reduce the above-stated percentage of outstanding Notes, the
consent of whose Holders is necessary to modify or amend this Indenture;
(f) waive a default in the payment of principal of, premium, if any,
or interest on the Notes; or
(g) reduce the percentage or aggregate principal amount of outstanding
Notes the consent of whose Holders is necessary for waiver of compliance
with certain provisions of this Indenture or for waiver of certain
defaults.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Trustee shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. The Company will
mail supplemental indentures to Holders upon request. Any failure of the Company
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62
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. REVOCATION AND EFFECT OF CONSENT. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies) and only those
Persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in any of clauses (i)
through (vii) of Section 9.02. In case of an amendment or waiver of the type
described in clauses (i) through (vii) of Section 9.02, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder of a
Note that evidences the same indebtedness as the Note of the consenting Holder.
SECTION 9.04. NOTATION ON OR EXCHANGE OF NOTES. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Note about the changed terms and return it to the Holder and the
Trustee may place an appropriate notation on any Note thereafter authenticated.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms.
SECTION 9.05. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, in addition
to the documents required by Section 11.03, an Opinion of Counsel stating that
the execution of any amendment, supplement or waiver authorized pursuant to this
Article Nine is authorized or permitted by this Indenture. Subject to the
preceding sentence, the Trustee shall sign such amendment, supplement or waiver
if the same does not adversely affect the rights of the Trustee. The Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver that affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 9.06. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
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ARTICLE TEN
SECURITY
SECTION 10.01. SECURITY. (a) On the Closing Date, the Company shall
(i) enter into the Pledge Agreement and comply with the terms and provisions
thereof and (ii) purchase the U.S. Pledged Securities to be pledged to the
Trustee for the benefit of the Holders in such amount as will be sufficient upon
receipt of scheduled interest and/or principal payments of such U.S. Pledged
Securities to provide for payment in full of the first four scheduled interest
payments due on the Notes. The U.S. Pledged Securities shall be pledged by the
Company to the Trustee for the benefit of the Holders and shall be held by the
Trustee in the U.S. Pledge Account pending disposition pursuant to the Pledge
Agreement.
(b) Each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Pledge Agreement (including, without limitation, the provisions
providing for foreclosure and release of the U.S. Pledged Securities) as the
same may be in effect or may be amended from time to time in accordance with its
terms, and authorizes and directs the Trustee to enter into the Pledge Agreement
and to perform its respective obligations and exercise its respective rights
thereunder in accordance therewith. The Company will do or cause to be done all
such acts and things as may be necessary or reasonably requested by the Trustee,
or as may be required by the provisions of the Pledge Agreement, to assure and
confirm to the Trustee the security interest in the U.S. Pledged Securities
contemplated hereby, by the Pledge Agreement or any part thereof, as from time
to time constituted, so as to render the same available for the security and
benefit of this Indenture and of the Notes secured hereby, according to the
intent and purposes herein and therein expressed. The Company shall take, or
shall cause to be taken, upon request of the Trustee, any and all actions
reasonably required to cause the Pledge Agreement to create and maintain, as
security for the obligations of the Company under this Indenture and the Notes,
valid and enforceable first priority liens in and on all the U.S. Pledged
Securities, in favor of the Trustee, superior to and prior to the rights of
third Persons and subject to no other Liens.
(c) The release of any U.S. Pledged Securities pursuant to the Pledge
Agreement will not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the U.S. Pledged
Securities are released pursuant to this Indenture and the Pledge Agreement. To
the extent applicable, the Company shall cause TIA Section 314(d) relating to
the release of property or securities from the Lien and security interest of the
Pledge Agreement and relating to the substitution therefor of any property or
securities to be subjected to the Lien and security interest of the Pledge
Agreement to be complied with. Any certificate or opinion required by TIA
Section 314(d) may be made by an Officer of the Company, except in cases where
TIA Section 314(d) requires that such certificate or opinion be made by an
independent Person, which Person shall be an independent engineer, appraiser or
other expert selected by the Company.
(d) The Company shall cause TIA Section 314(b), relating to opinions
of counsel regarding the Lien under the Pledge Agreement, to be complied with.
The Trustee may accept, to the extent permitted by Sections 4.18 and 7.06 as
conclusive evidence of compliance with the foregoing provisions, the appropriate
statements contained in such instruments.
(e) The Trustee may, in its sole discretion and without the consent of
the Holders, on behalf of the Holders, take all reasonable actions in accordance
with the Pledge Agreement necessary or appropriate in order to (i) enforce any
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64
of the terms of the Pledge Agreement and (ii) collect and receive any and all
amounts payable in respect of the obligations of the Company thereunder. The
Trustee shall have power to institute and to maintain such suits and proceedings
as the Trustee may reasonably deem expedient to preserve or protect its
interests and the interests of the Holders in the U.S. Pledged Securities
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of the
Holders or of the Trustee).
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT OF 1939. Prior to the effectiveness
of the Registration Statement, this Indenture shall incorporate and be governed
by the provisions of the TIA that are required or deemed to be part of and to
govern indentures qualified under the TIA. After the effectiveness of the
Registration Statement, this Indenture shall be subject to the provisions of the
TIA that are required or deemed to be a part of this Indenture and shall, to the
extent applicable, be governed by such provisions.
SECTION 11.02. NOTICES. (a) Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail, commercial courier service or telecopier communication, addressed as
follows:
IF TO THE COMPANY:
Viatel, Inc.
685 Third Avenue
New York, NY 10017
Telecopier Number: (212) 350-9250
Attention: Sheldon M. Goldman
With, in the case of any notice given pursuant to
Article Six, a copy to:
Kelley Drye & Warren LLP
101 Park Avenue
New York, NY 10178
Telecopier Number: (212) 808-7897
Attention: James P. Prenetta, Jr.
IF TO THE TRUSTEE:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Telecopier Number: (212) 815-5915
Attention: Corporate Trust Administration
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With a copy to:
Emmet, Marvin & Martin
120 Broadway
New York, NY 10271
Attention: Anthony Harvin
The Company, the Trustee, or the Depository by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
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 the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
(b) Any notice or communication mailed to a Holder shall be mailed to
him at his address as it appears on the Note Register by first class mail and
shall be sufficiently given to him if so mailed within the time prescribed.
Copies of any such communication or notice to a Holder shall also be mailed to
the Trustee and each Agent at the same time.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except for a
notice to the Trustee, which is deemed given only when received, and except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided in this Section 11.02, it is duly given, whether or not the
addressee receives it.
(c) Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 11.03. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
Counsel, all such conditions precedent have been complied with.
SECTION 11.04. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
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(a) a statement that each person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statement or opinion contained in such
certificate or opinion is based;
(c) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; PROVIDED,
HOWEVER, that, with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 11.05. RULES BY TRUSTEE, PAYING AGENT OR REGISTRAR. The
Trustee may make reasonable rules for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.06. PAYMENT DATE OTHER THAN A BUSINESS DAY. If an Interest
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of maturity
of any Note shall not be a Business Day, then payment of principal of, premium,
if any, or interest on such Note, as the case may be, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Payment Date, or Redemption
Date, or at the Stated Maturity or date of maturity of such Note; PROVIDED that
no interest shall accrue for the period from and after such Interest Payment
Date, Payment Date, Redemption Date, Stated Maturity or date of maturity, as the
case may be.
SECTION 11.07. GOVERNING LAW; SUBMISSION TO JURISDICTION; AGENT FOR
SERVICE. This Indenture and the Notes shall be governed by the laws of the State
of New York. The Company hereby appoints CT Corporation System as its agent for
service of process in any suit, action or proceeding with respect to this
Indenture or the Notes and for actions brought under the U.S. federal or state
securities laws brought in any federal or state court located in the City of New
York and the Company agrees to submit to the jurisdiction of any such court.
SECTION 11.08. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any Subsidiary of the Company. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 11.09. NO RECOURSE AGAINST OTHERS. No recourse for the payment
of the principal of, premium, if any, or interest on any of the Notes, or for
any claim based thereon or otherwise in respect thereof, and no recourse under
or upon any obligation, covenant or agreement of the Company contained in this
Indenture, or in any of the Notes, or because of the creation of any
Indebtedness represented thereby, shall be had against any incorporator or
against any past, present or future partner, stockholder, other equity holder,
officer, director, employee or controlling person, as such, of the Company or of
any successor Person, either directly or through the Company or any successor
Person, whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
<PAGE>
67
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
SECTION 11.10. SUCCESSORS. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors.
SECTION 11.11. DUPLICATE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 11.12. SEPARABILITY. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC. The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms and provisions hereof.
<PAGE>
68
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
VIATEL, INC.
By:/s/ ALLAN L. SHAW
---------------------------------------
Name: Allan L. Shaw
Title: Senior Vice President and
Chief Financial Officer
THE BANK OF NEW YORK,
as Trustee
By:/s/ MING J. SHANG
---------------------------------------
Name: Ming J. Shang
Title: Vice President
<PAGE>
A-1
EXHIBIT A
FORM OF REGISTERED GLOBAL NOTE
FACE OF NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, 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 FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND
IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OF
REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT, WITHIN THE
TIME PERIOD REFERRED TO IN RULE 144(k) AS IN EFFECT ON THE DATE OF SUCH
TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO VIATEL, INC. OR
ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF DOLLAR NOTES OF LESS THAN $100,000, AN OPINION OF
COUNSEL ACCEPTABLE TO VIATEL, INC. THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) TO A PERSON OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO EACH OF
THE TRUSTEE AND VIATEL, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUCH PERSONS MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO VIATEL, INC. OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE>
A-2
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.08 OF
THE INDENTURE.
<PAGE>
A-3
VIATEL, INC.
11 1/2% Senior Dollar Note Due 2009
[CUSIP][CINS][ISIN][___]
$[_______]
No.________________
Issue date: March 19, 1999
VIATEL, INC., a Delaware corporation (the "Company", which term
includes any successor under the Indenture hereinafter referred to), for value
received, promises to pay to ________________, or its registered assigns, upon
surrender hereof the principal sum of $___________ on March 15, 2009.
Interest Payment Dates: March 15 and September 15, commencing
September 15, 1999.
Record Dates: March 1 and September 1.
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.
<PAGE>
A-4
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Date: March 19, 1999 VIATEL, INC.
By ____________________________________
Name:
Title:
By ____________________________________
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 11 1/2% Senior Dollar Notes due 2009 described in the
within-mentioned IndenturE.
Date: March 19, 1999 THE BANK OF NEW YORK, as Trustee
By ____________________________________
Authorized Signatory
<PAGE>
A-5
[REVERSE SIDE OF NOTE]
VIATEL, INC.
11 1/2% Senior Dollar Note due 2009
1. PRINCIPAL AND INTEREST.
The Company will pay the principal of this Note on March 15, 2009.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest will be payable semiannually in cash (to the holders of
record of the Notes at the close of business on the March 1 or September 1
immediately preceding the Interest Payment Date) on each Interest Payment Date,
commencing September 15, 1999. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
If an exchange offer registered under the Securities Act is not
consummated, and a shelf registration statement under the Securities Act with
respect to resales of the Notes is not declared effective by the Commission, on
or before the date that is six months after the Closing Date in accordance with
the terms of the Registration Rights Agreement, dated March 12, 1999, between
the Company and Morgan Stanley & Co. Incorporated, as the manager for itself and
the several initial purchasers named on Schedule I to the Purchase Agreement,
dated March 12, 1999, annual interest (in addition to interest otherwise due on
the Notes) will accrue, at an annual rate of .5% per annum of the principal
amount, payable in cash semiannually, in arrears on March 15 and September 15 of
each year, commencing March 15, 2000 until the consummation of a registered
exchange offer or the effectiveness of a shelf-registration statement with
respect to resale of this Note. The Holder of this Note is entitled to the
benefits of such Registration Rights Agreement.
The Holder of this Note is entitled to the benefits of a Pledge
Agreement, dated March 19, 1999, between the Company and The Bank of New York,
as trustee (the "Trustee"), pursuant to which the Company has placed in the U.S.
Pledge Account cash or Government Securities sufficient to provide for the
payment of the first four interest payments on this Note.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
a rate per annum that is 11 1/2% per annum.
2. METHOD OF PAYMENT.
The Company will pay principal as provided above and interest (except
defaulted interest) on the principal amount of the Notes as provided above on
each March 15 and September 15 to the Persons who are Holders (as reflected in
the Note Register at the close of business on such March 1 and September 1,
immediately preceding the Interest Payment Date), in each case, even if the Note
is cancelled on registration of transfer or registration of exchange after such
record date; PROVIDED that, with respect to the payment of principal, the
Company will not make payment to the Holder unless this Note is surrendered to a
Paying Agent.
<PAGE>
A-6
The Company will pay principal, premium, if any, and as provided
above, interest in the currency of the United States that at the time of payment
is legal tender for the payment of public and private debts. However, the
Company may pay principal, premium, if any, and interest by its check payable in
such currency. It may mail an interest check to a Holder's registered address
(as reflected in the Note Register). If a payment date is a date other than a
Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
3. PAYING AGENT AND REGISTRAR.
Initially, the Trustee will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice. The Company,
any Subsidiary or any Affiliate of any of them may act as Paying Agent,
Registrar or co-Registrar.
4. INDENTURE; ISSUANCE OF ADDITIONAL NOTES.
This Note is one of a duly authorized issue of Notes of the Company
designated its 11 1/2% Senior Notes due 2009, issued and to be issued under an
Indenture, dated as of March 19, 1999 (the "Indenture"), between the Company and
the Trustee. Capitalized terms used herein are used as defined in the Indenture
unless otherwise indicated. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Notes are subject to all such terms, and Holders are referred
to the Indenture and the Trust Indenture Act for a statement of all such terms.
To the extent permitted by applicable law, in the event of any inconsistency
between the terms of this Note and the terms of the Indenture, the terms of the
Indenture shall control.
5. REDEMPTION.
The Notes will be redeemable, at the Company's option, in whole or in
part, at any time and from time to time on or after March 15, 2004 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holders' last address as it appears in the Note
Register, at the following Redemption Prices (expressed in percentages of their
principal amount), plus accrued and unpaid interest, if any, to the Redemption
Date (subject to the right of Holders of record on the relevant Regular Record
Date that is on or prior to the Redemption Date to receive interest due on an
Interest Payment Date), if redeemed during the 12-month period commencing on
March 15 of the years set forth below:
REDEMPTION
YEAR PRICE
2004 105.750%
2005 103.833%
2006 101.917%
2007 and thereafter 100.000%
In addition, at any time or from time to time on or prior to March 15,
2002, the Company may, at its option, redeem up to 35% of the aggregate
principal amount of the Notes with the net proceeds of one or more Public Equity
Offerings, at a Redemption Price (expressed as a percentage of principal amount)
of 111.500%, provided, (i) that Notes and Euro Notes representing at least 65%
of the principal amount of the Notes and Euro Notes originally issued remain
outstanding after each such redemption and (ii) that notice of each such
redemption is mailed within 60 days of each such Public Equity Offering.
<PAGE>
A-7
6. NOTICE OF REDEMPTION.
Notice of any optional redemption will be mailed at least 30 days but
not more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at such Holder's last address as it appears in the Note Register. Notes
in original denominations larger than $1,000 of principal amount may be redeemed
in part. On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price.
7. REPURCHASE UPON CHANGE IN CONTROL.
Upon the occurrence of any Change of Control, each Holder shall have
the right to require the repurchase of its Notes by the Company in cash pursuant
to the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30 days after
any Change of Control occurs to each Holder at his last address as it appears in
the Note Register. Notes in original denominations larger than $1,000 of
principal amount may be sold to the Company in part. On and after the date of
the Change of Control Payment, interest ceases to accrue on Notes or portions of
Notes surrendered for purchase by the Company, unless the Company defaults in
the payment of the Change of Control Payment.
8. REGISTRATION RIGHTS
Pursuant to the Registration Rights Agreement, the Company will be
obligated, within 180 days after the issue date of this Note, to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right to
exchange this Note for the Company's Exchange Notes (as defined in the
Registration Rights Agreement) which have been registered under the Securities
Act, in like principal amount and having terms identical in all material
respects as the initial Notes. The Holders of the initial Notes shall be
entitled to receive certain additional interest payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant and in accordance with the terms of the Registration Rights Agreement.
9. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount and any integral multiples of $1,000 in excess
thereof. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer or exchange of any Notes selected for redemption. Also, it
need not register the transfer or exchange of any Notes for a period of 15 days
before a selection of Notes to be redeemed is made.
10. PERSONS DEEMED OWNERS.
A Holder shall be treated as the owner of a Note for all purposes.
11. UNCLAIMED MONEY.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
<PAGE>
A-8
money back to the Company at its request. After that, Holders entitled to the
money must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Company deposits with the Trustee money and/or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in certain
circumstances for certain sections thereof, and (b) to Stated Maturity, the
Company will be discharged from certain covenants set forth in the Indenture.
13. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding. Without
notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not materially
and adversely affect the rights of any Holder.
14. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries, among other things, to Incur
Indebtedness, make Restricted Payments, use the proceeds from Asset Sales,
engage in transactions with Affiliates or, with respect to the Company, merge,
consolidate or transfer substantially all of its assets. Within 90 days after
the end of the last fiscal quarter of each year, the Company must report to the
Trustee on compliance with the terms of the Indenture.
15. SUCCESSOR PERSONS.
When a successor Person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor Person will
be released from those obligations.
16. DEFAULTS AND REMEDIES.
The following events constitute "Events of Default" under the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise; (b) default in the payment of interest on any Note when
the same becomes due and payable, and such default continues for a period of 30
days; PROVIDED that a failure to make any of the first four scheduled interest
payments on this Note in a timely manner will constitute an Event of Default
with no grace or cure period; (c) default in the performance or breach of the
provisions of the Indenture applicable to mergers, consolidations and transfers
of all or substantially all of the assets of the Company or the failure to make
or consummate an Offer to Purchase in accordance with Section 4.11 of the
Indenture or Section 4.12 of the Indenture; (d) the Company defaults in the
performance of or breaches any other covenant or agreement of the Company in the
Indenture or under the Notes (other than a default specified in clause (a), (b)
<PAGE>
A-9
or (c) of Section 6.01 of the Indenture) and such default or breach continues
for a period of 30 consecutive days after written notice by the Trustee or the
Holders of 25% or more in aggregate principal amount or principal amount of
Notes; (e) there occurs with respect to any issue or issues of Indebtedness of
the Company or any Significant Subsidiary having an outstanding principal amount
of $10 million or more in the aggregate for all such issues of all such Persons,
whether such Indebtedness now exists or shall hereafter be created, (I) an event
of default that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such defaulted
payment shall not have been made, waived or extended within 30 days of such
payment default; (f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $10 million in the aggregate for all such
final judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Significant Subsidiary and shall not be paid or discharged, and
there shall be any period of 60 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such Persons to
exceed $10 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; (g) a
court having jurisdiction in the premises enters a decree or order for (A)
relief in respect of the Company or any Significant Subsidiary in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or (h) the Company or any Significant Subsidiary (A)
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors.
If an Event of Default (other than an Event of Default specified in
clause (g) or (h) above that occurs with respect to the Company) occurs and is
continuing under the Indenture, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes, then outstanding, by written notice to
the Company (and to the Trustee if such notice is given by the Holders), may,
and the Trustee at the request of such Holders shall, declare the principal
amount of, premium, if any, and accrued interest on the Notes to be immediately
due and payable.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding may declare all the Notes to be due and
payable. If a bankruptcy or insolvency default with respect to the Company or
any Restricted Subsidiary occurs and is continuing, the Notes automatically
become due and payable. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
<PAGE>
A-10
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of at least a majority in principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power.
17. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No incorporator or any past, present or future partner, stockholder,
other equity holder, officer, director, employee or controlling person as such,
of the Company or of any successor Person shall have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
19. AUTHENTICATION.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Viatel, Inc.,
685 Third Avenue, New York, New York, 10017, Attention: Sheldon M. Goldman.
<PAGE>
A-11
SCHEDULE OF PRINCIPAL AMOUNT OF INDEBTEDNESS
EVIDENCED BY THIS NOTE
The initial principal amount of indebtedness evidenced by this Note
shall be $ [_________ ]. The following decreases/increases in the principal
amount evidenced by this Note have been made:
<TABLE>
<CAPTION>
Decrease in Increase in Total Principal
Principal Principal Amount of this Notation Made
Amount of Amount of Global Note by or on
Date of Decrease/ this Global this Global Following such Behalf of
Increase Note Note Decrease/Increase Trustee
- ---------------- ----------- ----------- ----------------- -------------
<S> <C> <C> <C> <C>
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
________________ ___________ ___________ _________________ _____________
</TABLE>
<PAGE>
A-12
[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 said Note on the books of the Company with full power of
substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
UNLEGENDED REGULATION S GLOBAL AND
UNLEGENDED REGULATION S CERTIFICATED NOTES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of an effective Registration or (ii)
the end of the period referred to in Rule 144(k) under the Securities Act, 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 (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 2.08 of the Indenture shall have
been satisfied.
Date:___________________ __________________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
<PAGE>
A-13
TO BE COMPLETED BY PURCHASER IF (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
executive officer
<PAGE>
A-14
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 4.11 or Section 4.12 of the Indenture, check the Box: /_/
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.11 or Section 4.12 of the Indenture, state the amount (in
principal amount): Euro ___________.
Date:_____________
Your Signature: _______________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: ______________________________
<PAGE>
B-1
EXHIBIT B
FORM OF REGULATION S GLOBAL NOTE
[FACE OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, 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 FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND
IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OF
REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT, WITHIN THE
TIME PERIOD REFERRED TO IN RULE 144(k) AS IN EFFECT ON THE DATE OF SUCH
TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO VIATEL, INC. OR
ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF DOLLAR NOTES OF LESS THAN $100,000, AN OPINION OF
COUNSEL ACCEPTABLE TO VIATEL, INC. THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) TO A PERSON OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO EACH OF
THE TRUSTEE AND VIATEL, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUCH PERSONS MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO VIATEL, INC. OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
<PAGE>
B-2
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.08 OF
THE INDENTURE.
<PAGE>
B-3
VIATEL, INC.
11 1/2% Senior Dollar Note Due 2009
[CUSIP][CINS][ISIN][Common Code] _________
No. __________ $________
Issue date: March 19, 1999
VIATEL, INC., a Delaware corporation (the "Company", which term
includes any successor under the Indenture hereinafter referred to), for value
received, promises to pay to ___________, or its registered assigns, the
principal sum of $_________ on March 15, 2009.
Interest Payment Dates: March 15 and September 15, commencing
September 15, 1999.
Record Dates: March 1 and September 1.
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.
<PAGE>
B-4
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Date: March 19, 1999 VIATEL, INC.
By ______________________________
Name:
Title:
By ______________________________
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 11 1/2% Senior Dollar Notes due 2009 described in the
within-mentioned Indenture.
Date: March 19, 1999 THE BANK OF NEW YORK, as Trustee
By ___________________________________
Authorized Signatory
<PAGE>
B-5
[REVERSE SIDE OF NOTE]
VIATEL, INC.
11 1/2% Senior Dollar Note due 2009
1. PRINCIPAL AND INTEREST.
The Company will pay the principal of this Note on March 15, 2009.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest will be payable semiannually in cash (to the holders of
record of the Notes at the close of business on the March 1 or September 1
immediately preceding the Interest Payment Date) on each Interest Payment Date,
commencing September 15, 1999. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
If an exchange offer registered under the Securities Act is not
consummated, and a shelf registration statement under the Securities Act with
respect to resales of the Notes is not declared effective by the Commission, on
or before the date that is six months after the Closing Date in accordance with
the terms of the Registration Rights Agreement, dated March 12, 1999, between
the Company and Morgan Stanley & Co. Incorporated, as the manager for itself and
the several initial purchasers named on Schedule I to the Purchase Agreement,
dated March 12, 1999, annual interest (in addition to interest otherwise due on
the Notes) will accrue, at an annual rate of 0.5% per annum of the principal
amount, payable in cash semiannually, in arrears on March 15 and September 15 of
each year, commencing March 15, 2000 until the consummation of a registered
exchange offer or the effectiveness of a shelf-registration statement with
respect to resale of this Note. The Holder of this Note is entitled to the
benefits of such Registration Rights Agreement.
The Holder of this Note is entitled to the benefits of a Pledge
Agreement, dated March 19, 1999, between the Company and The Bank of New York,
as trustee (the "Trustee"), pursuant to which the Company has placed in the U.S.
Pledge Account cash or Government Securities sufficient to provide for the
payment of the first four interest payments on this Note.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
a rate per annum that is 11 1/2% per annum.
2. METHOD OF PAYMENT.
The Company will pay principal as provided above and interest (except
defaulted interest) on the principal amount of the Notes as provided above on
each March 15 and September 15 to the Persons who are Holders (as reflected in
the Note Register at the close of business on such March 1 and September 1,
immediately preceding the Interest Payment Date), in each case, even if the Note
is cancelled on registration of transfer or registration of exchange after such
record date; provided that, with respect to the payment of principal, the
Company will not make payment to the Holder unless this Note is surrendered to a
Paying Agent.
<PAGE>
B-6
The Company will pay principal, premium, if any, and as provided
above, interest in the currency of the United States that at the time of payment
is legal tender for the payment of public and private debts. However, the
Company may pay principal, premium, if any, and interest by its check payable in
such currency. It may mail an interest check to a Holder's registered address
(as reflected in the Note Register). If a payment date is a date other than a
Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
3. PAYING AGENT AND REGISTRAR.
Initially, the Trustee will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice. The Company,
any Subsidiary or any Affiliate of any of them may act as Paying Agent,
Registrar or co-Registrar.
4. INDENTURE; ISSUANCE OF ADDITIONAL NOTES.
This Note is one of a duly authorized issue of Notes of the Company
designated its 11 1/2% Senior Notes due 2009, issued and to be issued under an
Indenture, dated as of March 19, 1999 (the "Indenture"), between the Company and
the Trustee. Capitalized terms herein are used as defined in the Indenture
unless otherwise indicated. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Notes are subject to all such terms, and Holders are referred
to the Indenture and the Trust Indenture Act for a statement of all such terms.
To the extent permitted by applicable law, in the event of any inconsistency
between the terms of this Note and the terms of the Indenture, the terms of the
Indenture shall control.
5. REDEMPTION.
The Notes will be redeemable, at the Company's option, in whole or in
part, at any time and from time to time on or after March 15, 2004 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holders' last address as it appears in the Note
Register, at the following Redemption Prices (expressed in percentages of their
principal amount), plus accrued and unpaid interest, if any, to the Redemption
Date (subject to the right of Holders of record on the relevant Regular Record
Date that is on or prior to the Redemption Date to receive interest due on an
Interest Payment Date), if redeemed during the 12-month period commencing on
March 15 of the years set forth below:
Redemption
Year Price
---- -----------
2004 105.750%
2005 103.833%
2006 101.917%
2007 and thereafter 100.000%
In addition, at any time or from time to time on or prior to March 15,
2002, the Company may, at its option, redeem up to 35% of the aggregate
principal amount of the Notes with the net proceeds of one or more Public Equity
Offerings, at a Redemption Price (expressed as a percentage of principal amount)
of 111.500%, provided, (i) that Notes and Euro Notes representing at least 65%
of the principal amount of the Notes and Euro Notes originally issued remain
<PAGE>
B-7
outstanding after each such redemption and (ii) that notice of each such
redemption is mailed within 60 days of each such Public Equity Offering.
6. NOTICE OF REDEMPTION.
Notice of any optional redemption will be mailed at least 30 days but
not more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at his last address as it appears in the Note Register. Notes in
original denominations larger than $1,000 of principal amount may be redeemed in
part. On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price.
7. REPURCHASE UPON CHANGE IN CONTROL.
Upon the occurrence of any Change of Control, each Holder shall have
the right to require the repurchase of its Notes by the Company in cash pursuant
to the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30 days after
any Change of Control occurs to each Holder at his last address as it appears in
the Note Register. Notes in original denominations larger than $1,000 of
principal amount may be sold to the Company in part. On and after the date of
the Change of Control Payment, interest ceases to accrue on Notes or portions of
Notes surrendered for purchase by the Company, unless the Company defaults in
the payment of the Change of Control Payment.
8. REGISTRATION RIGHTS
Pursuant to the Registration Rights Agreement, the Company will be
obligated, within 180 days after the issue date of this Note, to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right to
exchange this Note for the Company's Exchange Notes (as defined in the
Registration Rights Agreement) which have been registered under the Securities
Act, in like principal amount and having terms identical in all material
respects as the initial Notes. The Holders of the initial Notes shall be
entitled to receive certain additional interest payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant and in accordance with the terms of the Registration Rights Agreement.
9. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount and any integral multiples of $1,000 in excess
thereof. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer or exchange of any Notes selected for redemption. Also, it
need not register the transfer or exchange of any Notes for a period of 15 days
before a selection of Notes to be redeemed is made.
10. PERSONS DEEMED OWNERS.
A Holder shall be treated as the owner of a Note for all purposes.
<PAGE>
B-8
11. UNCLAIMED MONEY.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders entitled to the
money must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Company deposits with the Trustee money and/or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in certain
circumstances for certain sections thereof, and (b) to Stated Maturity, the
Company will be discharged from certain covenants set forth in the Indenture.
13. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding. Without
notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not materially
and adversely affect the rights of any Holder.
14. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries, among other things, to Incur
Indebtedness, make Restricted Payments, use the proceeds from Asset Sales,
engage in transactions with Affiliates or, with respect to the Company, merge,
consolidate or transfer substantially all of its assets. Within 90 days after
the end of the last fiscal quarter of each year, the Company must report to the
Trustee on compliance with the terms of the Indenture.
15. SUCCESSOR PERSONS.
When a successor Person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor Person will
be released from those obligations.
16. DEFAULTS AND REMEDIES.
The following events constitute "Events of Default" under the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise; (b) default in the payment of interest on any Note when
the same becomes due and payable, and such default continues for a period of 30
days; PROVIDED that a failure to make any of the first four scheduled interest
payments on this Note in a timely manner will constitute an Event of Default
with no grace or cure period; (c) default in the performance or breach of the
provisions of the Indenture applicable to mergers, consolidations and transfers
of all or substantially all of the assets of the Company or the failure to make
<PAGE>
B-9
or consummate an Offer to Purchase in accordance with Section 4.11 of the
Indenture or Section 4.12 of the Indenture; (d) the Company defaults in the
performance of or breaches any other covenant or agreement of the Company in the
Indenture or under the Notes (other than a default specified in clause (a), (b)
or (c) of Section 6.01 of the Indenture) and such default or breach continues
for a period of 30 consecutive days after written notice by the Trustee or the
Holders of 25% or more in aggregate principal amount or principal amount of
Notes; (e) there occurs with respect to any issue or issues of Indebtedness of
the Company or any Significant Subsidiary having an outstanding principal amount
of $10 million or more in the aggregate for all such issues of all such Persons,
whether such Indebtedness now exists or shall hereafter be created, (I) an event
of default that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such defaulted
payment shall not have been made, waived or extended within 30 days of such
payment default; (f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $10 million in the aggregate for all such
final judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Significant Subsidiary and shall not be paid or discharged, and
there shall be any period of 60 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such Persons to
exceed $10 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; (g) a
court having jurisdiction in the premises enters a decree or order for (A)
relief in respect of the Company or any Significant Subsidiary in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or (h) the Company or any Significant Subsidiary (A)
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors.
If an Event of Default (other than an Event of Default specified in
clause (g) or (h) above that occurs with respect to the Company) occurs and is
continuing under the Indenture, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes, then outstanding, by written notice to
the Company (and to the Trustee if such notice is given by the Holders) may, and
the Trustee at the request of such Holders shall, declare the principal amount
of, premium, if any, and accrued interest on the Notes to be immediately due and
payable.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding may declare all the Notes to be due and
<PAGE>
B-10
payable. If a bankruptcy or insolvency default with respect to the Company or
any Restricted Subsidiary occurs and is continuing, the Notes automatically
become due and payable. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of at least a majority in principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power.
17. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No incorporator or any past, present or future partner, stockholder,
other equity holder, officer, director, employee or controlling person as such,
of the Company or of any successor Person shall have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
19. AUTHENTICATION.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Viatel, Inc.,
685 Third Avenue, New York, New York, 10017, Attention: Sheldon M. Goldman.
<PAGE>
B-11
SCHEDULE OF PRINCIPAL AMOUNT OF INDEBTEDNESS
EVIDENCED BY THIS NOTE
The initial principal amount of indebtedness evidenced by this Note
shall be $_________. The following decreases/increases in the principal amount
evidenced by this Note have been made:
<TABLE>
<CAPTION>
Decrease in Increase in Total Principal
Principal Principal Amount of this Notation Made
Date of Amount of Amount of Global Note by or on
Decrease/ this Global this Global Following such Behalf of
Increase Note Note Decrease/Increase Trustee
- -------- ----------- ----------- ----------------- --------------
<S> <C> <C> <C> <C>
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
________ ____________ ___________ _________________ _______________
</TABLE>
<PAGE>
B-12
[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
said Note on the books of the Company with full power of substitution in the
premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
UNLEGENDED REGULATION S GLOBAL AND
UNLEGENDED REGULATION S CERTIFICATED NOTES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of an effective Registration or (ii)
the end of the period referred to in Rule 144(k) under the Securities Act, 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 (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 2.08 of the Indenture shall have
been satisfied.
Date: _______________________ _________________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
<PAGE>
B-13
TO BE COMPLETED BY PURCHASER IF (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 executive
officer
<PAGE>
B-14
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 4.11 or Section 4.12 of the Indenture, check the Box: |_|
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.11 or Section 4.12 of the Indenture, state the amount (in
principal amount): $_____________.
Date:_________________
Your Signature:____________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:______________________________
<PAGE>
C-1
EXHIBIT C
FORM OF U.S. CERTIFICATED NOTE
[FACE OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, 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 FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND
IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OF
REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT, WITHIN THE
TIME PERIOD REFERRED TO IN RULE 144(k) AS IN EFFECT ON THE DATE OF SUCH
TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO VIATEL, INC. OR
ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF DOLLAR NOTES OF LESS THAN $100,000, AN OPINION OF
COUNSEL ACCEPTABLE TO VIATEL, INC. THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) TO A PERSON OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO EACH OF
THE TRUSTEE AND VIATEL, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUCH PERSONS MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.
<PAGE>
C-2
VIATEL, INC.
11 1/2% Senior Dollar Note Due 2009
No.__________ $________________________________
Issue Date: March 19, 1999
VIATEL, INC., a Delaware corporation (the "Company", which term
includes any successor under the Indenture hereinafter referred to), for value
received, promises to pay to _____________________, or its registered assigns,
the principal sum of $__________ on March 15, 2009.
Interest Payment Dates: March 15 and September 15, commencing
September 15, 1999.
Record Dates: March 1 and September 1.
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.
<PAGE>
C-3
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Date: March 19, 1999 VIATEL, INC.
By ______________________________________
Name:
Title:
By ______________________________________
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 11 1/2% Senior Dollar Notes due 2009 described in the
within-mentioned Indenture.
Date: March 19, 1999 THE BANK OF NEW YORK, as Trustee
By _________________________________
Authorized Signatory
<PAGE>
C-4
[REVERSE SIDE OF NOTE]
VIATEL, INC.
11 1/2% Senior Dollar Note due 2009
1. PRINCIPAL AND INTEREST.
The Company will pay the principal of this Note on March 15, 2009.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest will be payable semiannually in cash (to the holders of
record of the Notes at the close of business on the March 1 or September 1
immediately preceding the Interest Payment Date) on each Interest Payment Date,
commencing September 15, 1999. Interest will be computed on the basis of a 360
day year of twelve 30 day months.
If an exchange offer registered under the Securities Act is not
consummated, and a shelf registration statement under the Securities Act with
respect to resales of the Notes is not declared effective by the Commission, on
or before the date that is six months after the Closing Date in accordance with
the terms of the Registration Rights Agreement dated March 12, 1999 between the
Company and Morgan Stanley & Co. Incorporated, as the manager for itself and the
several initial purchasers named on Schedule I to the Purchase Agreement dated
March 12, 1999, annual interest (in addition to interest otherwise due on the
Notes) will accrue, at an annual rate of 0.5% per annum of the principal amount,
payable in cash semiannually, in arrears on March 15 and September 15 of each
year, commencing March 15, 2000 until the consummation of a registered exchange
offer or the effectiveness of a shelf-registration statement with respect to
resale of this Note. The Holder of this Note is entitled to the benefits of such
Registration Rights Agreement.
The Holder of this Note is entitled to the benefits of a Pledge
Agreement dated March 19, 1999 between the Company and The Bank of New York, as
trustee (the "Trustee"), pursuant to which the Company has placed in the U.S.
Pledge Account cash or Government Securities sufficient to provide for the
payment of the first four interest payments on this Note.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
a rate per annum that is 11 1/2% per annum.
2. METHOD OF PAYMENT.
The Company will pay principal as provided above and interest (except
defaulted interest) on the principal amount of the Notes as provided above on
each March 15 and September 15 to the Persons who are Holders (as reflected in
the Note Register at the close of business on such March 1 and September 1,
immediately preceding the Interest Payment Date), in each case, even if the Note
is cancelled on registration of transfer or registration of exchange after such
record date; PROVIDED that, with respect to the payment of principal, the
Company will not make payment to the Holder unless this Note is surrendered to a
Paying Agent.
<PAGE>
C-5
The Company will pay principal, premium, if any, and as provided
above, interest in the currency of the United States that at the time of payment
is legal tender for the payment of public and private debts. However, the
Company may pay principal, premium, if any, and interest by its check payable in
such currency. It may mail an interest check to a Holder's registered address
(as reflected in the Note Register). If a payment date is a date other than a
Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
3. PAYING AGENT AND REGISTRAR.
Initially, the Trustee will act as U.S. Paying Agent and Registrar.
The Company may change any Paying Agent or Registrar without notice. The
Company, any Subsidiary or any Affiliate of any of them may act as Paying Agent,
Registrar or co-Registrar.
4. INDENTURE; ISSUANCE OF ADDITIONAL NOTES.
This Note is one of a duly authorized issue of Notes of the Company
designated its 11 1/2% Senior Dollar Notes due 2009, issued and to be issued
under an Indenture dated as of March 19, 1999 (the "Indenture"), between the
Company and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise indicated. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act. The Notes are subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of all
such terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
5. REDEMPTION.
The Notes will be redeemable, at the Company's option, in whole or in
part, at any time and from time to time on or after March 15, 2004 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holders' last address as it appears in the Note
Register, at the following Redemption Prices (expressed in percentages of their
principal amount), plus accrued and unpaid interest, if any, to the Redemption
Date (subject to the right of Holders of record on the relevant Regular Record
Date that is on or prior to the Redemption Date to receive interest due on an
Interest Payment Date), if redeemed during the 12-month period commencing on
March 15, of the years set forth below:
Redemption
YEAR Price
---- ----------
2004 105.750%
2005 103.833%
2006 101.917%
2007 and thereafter 100.000%
In addition, at any time or from time to time on or prior to March 15,
2002, the Company may, at its option, redeem up to 35% of the aggregate
principal amount of the Notes with the net proceeds of one or more Public Equity
Offerings, at a Redemption Price (expressed as a percentage of principal amount
of 111.500%, provided, (i) that Notes and Euro Notes representing at least 65%
of the principal amount of the Notes and Euro Notes originally issued remain
<PAGE>
C-6
outstanding after each such redemption and (ii) that notice of each such
redemption is mailed within 60 days of each such Public Equity Offering.
6. NOTICE OF REDEMPTION.
Notice of any optional redemption will be mailed at least 30 days but
not more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at his last address as it appears in the Note Register. Notes in
original denominations larger than $1,000 of principal amount may be redeemed in
part. On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price.
7. REPURCHASE UPON CHANGE IN CONTROL.
Upon the occurrence of any Change of Control, each Holder shall have
the right to require the repurchase of its Notes by the Company in cash pursuant
to the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30 days after
any Change of Control occurs to each Holder at his last address as it appears in
the Note Register. Notes in original denominations larger than $1,000 of
principal amount may be sold to the Company in part. On and after the date of
the Change of Control Payment, interest ceases to accrue on Notes or portions of
Notes surrendered for purchase by the Company, unless the Company defaults in
the payment of the Change of Control Payment.
8. REGISTRATION RIGHTS
Pursuant to the Registration Rights Agreement, the Company will be
obligated, within 180 days after the issue date of this Note, to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right to
exchange this Note for the Company's Exchange Notes (as defined in the
Registration Rights Agreement) which have been registered under the Securities
Act, in like principal amount and having terms identical in all material
respects as the initial Notes. The Holders of the initial Notes shall be
entitled to receive certain additional interest payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant and in accordance with the terms of the Registration Rights Agreement.
9. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount and any integral multiples of $1,000 in excess
thereof. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer or exchange of any Notes selected for redemption. Also, it
need not register the transfer or exchange of any Notes for a period of 15 days
before a selection of Notes to be redeemed is made.
10. PERSONS DEEMED OWNERS.
A Holder shall be treated as the owner of a Note for all purposes.
<PAGE>
C-7
11. UNCLAIMED MONEY.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders entitled to the
money must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Company deposits with the Trustee money and/or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in certain
circumstances for certain sections thereof, and (b) to Stated Maturity, the
Company will be discharged from certain covenants set forth in the Indenture.
13. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding. Without
notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not materially
and adversely affect the rights of any Holder.
14. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries, among other things, to Incur
Indebtedness, make Restricted Payments, use the proceeds from Asset Sales,
engage in transactions with Affiliates or, with respect to the Company, merge,
consolidate or transfer substantially all of its assets. Within 90 days after
the end of the last fiscal quarter of each year, the Company must report to the
Trustee on compliance with the terms of the Indenture.
15. SUCCESSOR PERSONS.
When a successor Person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor Person will
be released from those obligations.
16. DEFAULTS AND REMEDIES.
The following events constitute "Events of Default" under the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise; (b) default in the payment of interest on any Note when
the same becomes due and payable, and such default continues for a period of 30
days; PROVIDED that a failure to make any of the first four scheduled interest
payments on this Note in a timely manner will constitute an Event of Default
with no grace or cure period; (c) default in the performance or breach of the
provisions of the Indenture applicable to mergers, consolidations and transfers
of all or substantially all of the assets of the Company or the failure to make
<PAGE>
C-8
or consummate an Offer to Purchase in accordance with Section 4.11 of the
Indenture or Section 4.12 of the Indenture; (d) the Company defaults in the
performance of or breaches any other covenant or agreement of the Company in the
Indenture or under the Notes (other than a default specified in clause (a), (b)
or (c) of Section 6.01 of the Indenture) and such default or breach continues
for a period of 30 consecutive days after written notice by the Trustee or the
Holders of 25% or more in aggregate principal amount or principal amount of
Notes; (e) there occurs with respect to any issue or issues of Indebtedness of
the Company or any Significant Subsidiary having an outstanding principal amount
of $10 million or more in the aggregate for all such issues of all such Persons,
whether such Indebtedness now exists or shall hereafter be created, (I) an event
of default that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such defaulted
payment shall not have been made, waived or extended within 30 days of such
payment default; (f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $10 million in the aggregate for all such
final judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Significant Subsidiary and shall not be paid or discharged, and
there shall be any period of 60 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such Persons to
exceed $10 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; (g) a
court having jurisdiction in the premises enters a decree or order for (A)
relief in respect of the Company or any Significant Subsidiary in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or (h) the Company or any Significant Subsidiary (A)
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors.
If an Event of Default (other than an Event of Default specified in
clause (g) or (h) above that occurs with respect to the Company) occurs and is
continuing under the Indenture, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes, then outstanding, by written notice to
the Company (and to the Trustee if such notice is given by the Holders), may,
and the Trustee at the request of such Holders shall, declare the principal
amount of, premium, if any, and accrued interest on the Notes to be immediately
due and payable.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding may declare all the Notes to be due and
<PAGE>
C-9
payable. If a bankruptcy or insolvency default with respect to the Company or
any Restricted Subsidiary occurs and is continuing, the Notes automatically
become due and payable. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of at least a majority in principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power.
17. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No incorporator or any past, present or future partner, stockholder,
other equity holder, officer, director, employee or controlling person as such,
of the Company or of any successor Person shall have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
19. AUTHENTICATION.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to Viatel,
Inc., 685 Third Avenue, New York, New York, 10017, Attention:
Sheldon M. Goldman.
<PAGE>
C-10
[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 said Note
on the books of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
UNLEGENDED REGULATION S GLOBAL AND
UNLEGENDED REGULATION S CERTIFICATED NOTES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of an effective Registration or (ii)
the end of the period referred to in Rule 144(k) under the Securities Act, 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 (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 2.08 of the Indenture shall have
been satisfied.
Date:________________ _______________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
<PAGE>
C-11
TO BE COMPLETED BY PURCHASER IF (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 executive officer
<PAGE>
C-12
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 4.11 or Section 4.12 of the Indenture, check the Box: /_/
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.11 or Section 4.12 of the Indenture, state the amount (in
principal amount): $____________.
Date:____________________
Your Signature:______________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:____________________________________
<PAGE>
D-1
EXHIBIT D
FORM OF CERTIFICATE
The Bank of New York [DATE]
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: Viatel, Inc. (the "Company")
11 1/2% Senior Dollar Notes
due 2009 (the "Notes")
----------------------------
Ladies and Gentlemen:
This letter relates to $ ____________ principal amount of Notes
represented by a Note (the "Legended Note") which bears a legend outlining
restrictions upon transfer of such Legended Note. Pursuant to Section 2.02 of
the Indenture (the "Indenture") dated as of March 19, 1999 relating to the
Notes, we hereby certify that we are (or we will hold such Notes on behalf of) a
person outside the United States to whom the Notes could be transferred in
accordance with Rule 904 of Regulation S promulgated under the U.S. Securities
Act of 1933, as amended. Accordingly, you are hereby requested to exchange the
legended certificate for an unlegended certificate representing an identical
principal amount of Notes, all in the manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:_________________________________
Authorized Signature
<PAGE>
E-1
EXHIBIT E
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-----------------------------------
The Bank of New York [DATE]
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: Viatel, Inc. (the "Company")
11 1/2% Senior Dollar Notes
due 2009 (the "Notes")
----------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $__________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended, and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:______________________________________
Authorized Signature
<PAGE>
F-1
EXHIBIT F
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
The Bank of New York [DATE]
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: Viatel, Inc. (the "Company")
11 1/2% Senior Dollar Notes
due 2009 (the "Notes")
----------------------------
Dear Sirs:
In connection with our proposed purchase of $___________ aggregate
principal amount of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture dated as
of March 19, 1999 relating to the Notes (the "Indenture") and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities
Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered
or sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Notes, we will do so only (A) to the
Company or any subsidiary thereof, (B) in accordance with Rule 144A under
the Securities Act to a "qualified institutional buyer" (as defined
therein), (C) to an institutional "accredited investor" (as defined below)
that, prior to such transfer, furnishes (or has furnished on its behalf by
a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter, (D) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144 under the Securities Act, or (F)
pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing any of the Notes
from us a notice advising such purchaser that resales of the Notes are
restricted as stated herein.
3. We understand that, on any proposed resale of any Notes, we will be
required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will
bear a legend to the foregoing effect.
<PAGE>
F-2
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or its investment.
5. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferor]
By:____________________________________
Authorized Signature
EXECUTION COPY
VIATEL, INC.,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
Senior Euro Notes Indenture
Dated as of March 19, 1999
11-1/2% Senior Euro Notes due 2009
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA SECTIONS INDENTURE SECTIONS
<S> <C>
SECTION 310(a)(1)...........................................................7.10
(a)(5).............................................................. 7.10
(b)............................................................7.03; 7.08
SECTION 311 ... ............................................................7.03
SECTION 313(a)..............................................................7.06
(c)............................................................7.05; 7.06
SECTION 314(a)..............................................................4.17
(b).................................................................10.01
(c)(1)...............................................................1.01
(d).................................................................10.01
(e)..................................................................1.01
SECTION 315(a)..............................................................7.02
(b)...........................................................7.05; 10.02
SECTION 316(a)..............................................................6.06
</TABLE>
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of this Indenture.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
RECITALS OF THE COMPANY..................................................................................1
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS...............................................................................1
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT........................................19
SECTION 1.03. RULES OF CONSTRUCTION....................................................................19
ARTICLE TWO
THE NOTES
SECTION 2.01. FORM AND DATING..........................................................................20
SECTION 2.02. RESTRICTIVE LEGENDS......................................................................21
SECTION 2.03. EXECUTION, AUTHENTICATION AND DENOMINATIONS..............................................23
SECTION 2.04. REGISTRAR AND PAYING AGENT...............................................................23
SECTION 2.05. PAYING AGENT TO HOLD MONEY IN TRUST......................................................24
SECTION 2.06. TRANSFER AND EXCHANGE....................................................................24
SECTION 2.07. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES...................................................25
SECTION 2.08. SPECIAL TRANSFER PROVISIONS..............................................................27
SECTION 2.09. REPLACEMENT NOTES........................................................................29
SECTION 2.10. OUTSTANDING NOTES........................................................................30
SECTION 2.11. TEMPORARY NOTES..........................................................................30
SECTION 2.12. CANCELLATION.............................................................................30
SECTION 2.13. CUSIP NUMBERS............................................................................31
SECTION 2.14. DEFAULTED INTEREST.......................................................................31
SECTION 2.15. ISSUANCE OF ADDITIONAL NOTES.............................................................31
ARTICLE THREE
REDEMPTION
SECTION 3.01. RIGHT OF REDEMPTION......................................................................31
SECTION 3.02. NOTICES TO TRUSTEE.......................................................................32
SECTION 3.03. SELECTION OF NOTES TO BE REDEEMED........................................................32
SECTION 3.04. NOTICE OF REDEMPTION.....................................................................32
SECTION 3.05. EFFECT OF NOTICE OF REDEMPTION...........................................................33
SECTION 3.06. DEPOSIT OF REDEMPTION PRICE..............................................................33
SECTION 3.07. PAYMENT OF NOTES CALLED FOR REDEMPTION...................................................33
SECTION 3.08. NOTES REDEEMED IN PART...................................................................33
Note: The Table of Contents shall not for any purposes be deemed to be a part of this Indenture.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARTICLE FOUR
COVENANTS
<S> <C> <C> <C>
SECTION 4.01. PAYMENT OF NOTES.........................................................................34
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY..........................................................34
SECTION 4.03. LIMITATION ON INDEBTEDNESS...............................................................34
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS........................................................37
SECTION 4.05. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.................................................40
SECTION 4.06. LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES...........................................................40
SECTION 4.07. LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED SUBSIDIARIES.........................42
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES..............................42
SECTION 4.09. LIMITATION ON LIENS......................................................................43
SECTION 4.10. LIMITATION ON SALE-LEASEBACK TRANSACTIONS................................................44
SECTION 4.11. LIMITATION ON ASSET SALES................................................................44
SECTION 4.12. REPURCHASE OF NOTES UPON A CHANGE OF CONTROL.............................................45
SECTION 4.13. EXISTENCE................................................................................45
SECTION 4.14. PAYMENT OF TAXES AND OTHER CLAIMS........................................................45
SECTION 4.15. MAINTENANCE OF PROPERTIES AND INSURANCE..................................................46
SECTION 4.16. NOTICE OF DEFAULTS.......................................................................46
SECTION 4.17. COMPLIANCE CERTIFICATES..................................................................46
SECTION 4.18. COMMISSION REPORTS AND REPORTS TO HOLDERS................................................46
SECTION 4.19. WAIVER OF STAY, EXTENSION OR USURY LAWS..................................................47
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC..............................................................47
SECTION 5.02. SUCCESSOR SUBSTITUTED....................................................................48
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT........................................................................48
SECTION 6.02. ACCELERATION.............................................................................50
SECTION 6.03. OTHER REMEDIES...........................................................................50
SECTION 6.04. WAIVER OF PAST DEFAULTS..................................................................50
SECTION 6.05. CONTROL BY MAJORITY......................................................................51
SECTION 6.06. LIMITATION ON SUITS......................................................................51
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.....................................................51
SECTION 6.08. COLLECTION SUIT BY TRUSTEE...............................................................51
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.........................................................52
SECTION 6.10. PRIORITIES...............................................................................52
SECTION 6.11. UNDERTAKING FOR COSTS....................................................................52
SECTION 6.12. RESTORATION OF RIGHTS AND REMEDIES.......................................................53
SECTION 6.13. RIGHTS AND REMEDIES CUMULATIVE...........................................................53
SECTION 6.14. DELAY OR OMISSION NOT WAIVER.............................................................53
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. GENERAL..................................................................................53
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE................................................................53
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.............................................................53
SECTION 7.04. TRUSTEE'S DISCLAIMER.....................................................................55
SECTION 7.05. NOTICE OF DEFAULT........................................................................55
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS............................................................55
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SECTION 7.07. COMPENSATION AND INDEMNITY...............................................................55
SECTION 7.08. REPLACEMENT OF TRUSTEE...................................................................56
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.........................................................57
SECTION 7.10. ELIGIBILITY..............................................................................57
SECTION 7.11. MONEY HELD IN TRUST......................................................................57
SECTION 7.12. WITHHOLDING TAXES........................................................................57
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF THE COMPANY'S OBLIGATIONS.................................................57
SECTION 8.02. DEFEASANCE AND DISCHARGE OF INDENTURE....................................................58
SECTION 8.03. DEFEASANCE OF CERTAIN OBLIGATIONS........................................................59
SECTION 8.04. APPLICATION OF TRUST MONEY...............................................................60
SECTION 8.05. REPAYMENT TO COMPANY.....................................................................60
SECTION 8.06. REINSTATEMENT............................................................................60
SECTION 8.07. DEFEASANCE AND CERTAIN OTHER EVENTS OF DEFAULT...........................................61
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS...............................................................61
SECTION 9.02. WITH CONSENT OF HOLDERS..................................................................61
SECTION 9.03. REVOCATION AND EFFECT OF CONSENT.........................................................62
SECTION 9.04. NOTATION ON OR EXCHANGE OF NOTES.........................................................63
SECTION 9.05. TRUSTEE TO SIGN AMENDMENTS, ETC..........................................................63
SECTION 9.06. CONFORMITY WITH TRUST INDENTURE ACT......................................................63
ARTICLE TEN
SECURITY
SECTION 10.01. SECURITY................................................................................63
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT OF 1939.............................................................64
SECTION 11.02. NOTICES.................................................................................64
SECTION 11.03. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT......................................66
SECTION 11.04. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION...........................................66
SECTION 11.05. RULES BY TRUSTEE, PAYING AGENT OR REGISTRAR.............................................66
SECTION 11.06. PAYMENT DATE OTHER THAN A BUSINESS DAY..................................................66
SECTION 11.07. GOVERNING LAW; SUBMISSION TO JURISDICTION; AGENT FOR SERVICE............................67
SECTION 11.08. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS...........................................67
SECTION 11.09. NO RECOURSE AGAINST OTHERS..............................................................67
SECTION 11.10. SUCCESSORS..............................................................................67
SECTION 11.11. DUPLICATE ORIGINALS.....................................................................67
SECTION 11.12. SEPARABILITY............................................................................67
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC........................................................67
SECTION 11.14. METHOD OF PAYMENT.......................................................................67
SECTION 11.15. JUDGMENT CURRENCY.......................................................................68
EXHIBIT A FORM OF RESTRICTED GLOBAL NOTE...................................................A-1
EXHIBIT B FORM OF REGULATION S GLOBAL NOTE.................................................B-1
EXHIBIT C FORM OF U.S. CERTIFICATED NOTE...................................................C-1
EXHIBIT D FORM OF CERTIFICATE..............................................................D-1
EXHIBIT E FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S..........................................E-1
EXHIBIT F FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS...................................F-1
</TABLE>
<PAGE>
INDENTURE, dated as of March 19, 1999, between VIATEL, INC., a
Delaware corporation, as issuer (the "COMPANY"), and THE BANK OF NEW YORK, a New
York banking corporation, as trustee (the "TRUSTEE").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of 11-1/2% Senior Euro
Notes due 2009 (the "NOTES") issuable as provided in this Indenture. Pursuant to
the terms of a Purchase Agreement dated as of March 12, 1999 (the "PURCHASE
AGREEMENT") between the Company and Morgan Stanley & Co. Incorporated, as the
manager for itself and the several initial purchasers named on Schedule I
thereto (the "MANAGER"), the Company has agreed to issue and sell an aggregate
of Euro 150,000,000 of Notes and an aggregate of $200,000,000 of 11-1/2% Senior
Dollar Notes due 2009 of the Company (the "DOLLAR NOTES").
The Notes will be issued pursuant to the provisions of an Indenture
(the "INDENTURE", and together with the Dollar Notes Indenture (as defined
herein), the "INDENTURES") dated as of the Closing Date (as defined below)
between the Company and the Trustee.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done, and the Company has done
all things necessary to make the Notes, when executed by the Company and
authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the legal, valid and binding obligations of the Company as hereinafter
provided.
This Indenture will, upon the effectiveness of the registration
statement provided for under the Registration Rights Agreement, be subject to,
and governed by, the provisions of the Trust Indenture Act of 1939, as amended,
that are required to be a part of and to govern indentures qualified under the
Trust Indenture Act of 1939, as amended.
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by the Company or a Restricted Subsidiary and not Incurred
in connection with, or in anticipation of, such Person becoming a Restricted
Subsidiary or such Asset Acquisition.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined in conformity with generally accepted accounting
principles; PROVIDED that the following items shall be excluded in computing
Adjusted Consolidated Net Income (without duplication): (i) the net income (or
loss) of any Person that is not a Restricted Subsidiary, except (x) with respect
to net income, to the extent of the amount of dividends or other distributions
<PAGE>
2
actually paid to the Company or any of its Restricted Subsidiaries by such
Person during such period and (y) with respect to net losses, to the extent of
the amount of Investments made by the Company or any Restricted Subsidiary in
such Person during such period; (ii) solely for the purposes of calculating the
amount of Restricted Payments that may be made pursuant to clause (C) of the
first paragraph of Section 4.04 hereof (and in such case, except to the extent
includable pursuant to clause (i) above), the net income (or loss) of any Person
accrued prior to the date it becomes a Restricted Subsidiary or is merged into
or consolidated with the Company or any of its Restricted Subsidiaries or all or
substantially all of the property and assets of such Person are acquired by the
Company or any of its Restricted Subsidiaries; (iii) the net income of any
Restricted Subsidiary to the extent that the declaration or payment of dividends
or similar distributions by such Restricted Subsidiary of such net income is not
at the time permitted by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Restricted Subsidiary; (iv) any gains or losses
(on an after-tax basis) attributable to Asset Sales and sales of capacity or
dark fibers; (v) except for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 4.04 hereof, any amount paid or accrued as dividends on Preferred Stock
of the Company or any Restricted Subsidiary owned by Persons other than the
Company and any of its Restricted Subsidiaries; (vi) all extraordinary gains and
extraordinary losses; and (vii) any compensation expense paid or payable solely
with Capital Stock (other than Disqualified Stock) of the Company or any
options, warrants or other rights to acquire Capital Stock (other than
Disqualified Stock) of the Company.
"Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries,
prepared in conformity with GAAP and filed with the Commission or provided to
the Trustee pursuant to Section 4.18 hereof.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent, authenticating agent or
co-Registrar.
"Agent Members" has the meaning provided in Section 2.07(a) hereof.
"Asset Acquisition" means (i) an investment by the Company or any of
its Restricted Subsidiaries in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged into or consolidated
with the Company or any of its Restricted Subsidiaries; PROVIDED that such
<PAGE>
3
Person's primary business is related, ancillary or complementary to the
businesses of the Company or any of its Restricted Subsidiaries on the date of
such investment or (ii) an acquisition by the Company or any of its Restricted
Subsidiaries of the property and assets of any Person other than the Company or
any of its Restricted Subsidiaries that constitute substantially all of a
division or line of business of such Person; PROVIDED that the property and
assets acquired are related, ancillary or complementary to the businesses of the
Company or any of its Restricted Subsidiaries on the date of such acquisition.
"Asset Disposition" means the sale or other disposition by the Company
or any of its Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of
any Restricted Subsidiary or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any of its
Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of a
division or line of business of the Company or any of its Restricted
Subsidiaries or (iii) any other property and assets (other than the Capital
Stock or other Investment in an Unrestricted Subsidiary) of the Company or any
of its Restricted Subsidiaries outside the ordinary course of business of the
Company or such Restricted Subsidiary and, in each case, that is not governed by
Article Five hereof; PROVIDED that "Asset Sale" shall not include (a) sales or
other dispositions of inventory, receivables and other current assets, (b)
sales, transfers or other dispositions of assets constituting a Restricted
Payment permitted to be made under Section 4.04 hereof, (c) sales, transfers or
other dispositions of assets with a fair market value (as certified in an
Officers' Certificate) not in excess of $1 million in any transaction or series
of related transactions, (d) sales or other dispositions of assets for
consideration at least equal to the fair market value of the assets sold or
disposed of, to the extent that the consideration received would constitute
property or assets of the kind described in clause (B) of Section 4.11 hereof,
(e) any liquidation of Temporary Cash Investments, (f) a transfer, directly or
indirectly, of receivables or other payment rights arising from a transfer of
indefeasible rights of use or dark fiber, which transfer of receivables or
rights is to a special purpose entity created for the purpose of issuing
securities to be paid or redeemed from, or beneficial interests in, the cash or
revenues generated from the assets transferred; PROVIDED that the consideration
received by the Company is at least equal to the fair market value of the asset
transferred and the proceeds are used by the Company (A) to repay unsubordinated
Indebtedness of the Company owed to a Person other than the Company or a
Restricted Subsidiary, (B) to invest in the manner described in clause (i)(B) of
Section 4.11 hereof covenant or (C) for working capital purposes or (g) other
transfers of capacity or dark fiber.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means the Board of Directors of the Company as
required by the context or any committee of such Board of Directors duly
authorized to act under this Indenture.
<PAGE>
4
"Board Resolution" means a copy of a resolution, certified by the
Secretary or Assistant Secretary of the Company as required by the context to
have been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York, in the city of the Corporate
Trust Office of the Trustee or in the city in which any Paying Agent or
Registrar is located are authorized or required by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.
"Cedelbank" means Cedelbank, societe anonyme, and any successor
thereto.
"Certificated Notes" has the meaning provided in Section 2.01 hereof.
"Change of Control" means such time as (i) a "person" or a "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes
the ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than 50% of the total voting power of the Voting Stock of the
Company on a fully diluted basis; or (ii) individuals who on the Closing Date
constitute the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination to the Board of Directors
for election by the Company's stockholders was approved by a vote of at least
two-thirds of the members of the Board of Directors then in office who either
were members of the Board of Directors on the Closing Date or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the members of the Board of Directors then in office.
"Closing Date" means the date on which the Notes are originally issued
under this Indenture.
"Common Depositary" means The Bank of New York, London Branch, or any
of its successors acting in the capacity of common depositary for Euroclear and
Cedelbank.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
<PAGE>
5
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Indenture, including, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to the applicable provisions of
this Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the name of
the Company (i) by its Chairman of the Board, the Vice Chairman of the Board,
its President or a Vice President and (ii) by its Chief Financial Officer,
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary and
delivered to the Trustee; PROVIDED, HOWEVER, that such written request or order
may be signed by any two of the officers or directors listed in clause (i) above
in lieu of being signed by one of such officers or directors listed in such
clause (i) and one of the officers listed in clause (ii) above.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) income taxes, (iii) depreciation expense, (iv) amortization
expense and (v) all other non-cash items reducing Adjusted Consolidated Net
Income (other than items that will require cash payments and for which an
accrual or reserve is, or is required by GAAP to be, made), less all non-cash
items increasing Adjusted Consolidated Net Income, all as determined on a
consolidated basis for the Company and its Restricted Subsidiaries in conformity
with GAAP; PROVIDED that, if any Restricted Subsidiary is not a Wholly Owned
Restricted Subsidiary, Consolidated EBITDA shall be reduced (to the extent not
otherwise reduced in accordance with GAAP) by an amount equal to (A) the amount
of the Adjusted Consolidated Net Income attributable to such Restricted
Subsidiary multiplied by (B) the percentage ownership interest in the income of
such Restricted Subsidiary not owned on the last day of such period by the
Company or any of its Restricted Subsidiaries.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and interest
in respect of Indebtedness that is Guaranteed or secured by the Company or any
of its Restricted Subsidiaries, and all but the principal component of rentals
in respect of Capitalized Lease Obligations paid, accrued or scheduled to be
paid or to be accrued by the Company and its Restricted Subsidiaries during such
periods).
"Consolidated Leverage Ratio" means, on any Transaction Date, the
ratio of (i) the aggregate amount of Indebtedness of the Company and its
Restricted Subsidiaries on a consolidated basis outstanding on such Transaction
Date to (ii) four times Consolidated EBITDA for the then most recent fiscal
quarter for which financial statements of the Company have been filed with the
Commission or provided to the Trustee pursuant to Section 4.18 hereof; PROVIDED
that, in making the foregoing calculation, (A) PRO FORMA effect shall be given
to the Incurrence or repayment of any Indebtedness to be Incurred or repaid on
the Transaction Date; (B) PRO FORMA effect shall be given to Asset Dispositions
and Asset Acquisitions (including giving PRO FORMA effect to the application of
proceeds of any Asset Disposition) that occur from the beginning of the then
<PAGE>
6
most recent four fiscal quarters through the Transaction Date (the "REFERENCE
PERIOD"), as if they had occurred and such proceeds had been applied on the
first day of such Reference Period; and (C) PRO FORMA effect shall be given to
asset dispositions and asset acquisitions (including giving PRO FORMA effect to
the application of proceeds of any asset disposition) that have been made by any
Person that has become a Restricted Subsidiary or has been merged with or into
the Company or any Restricted Subsidiary during such Reference Period and that
would have constituted Asset Dispositions or Asset Acquisitions had such
transactions occurred when such Person was a Restricted Subsidiary as if such
asset dispositions or asset acquisitions were Asset Dispositions or Asset
Acquisitions that occurred on the first day of such Reference Period; PROVIDED
that to the extent that clause (B) or (C) of this sentence requires that PRO
FORMA effect be given to an Asset Acquisition or Asset Disposition, such PRO
FORMA calculation shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the Person, or division or line of business of
the Person, that is acquired or disposed of for which financial information is
available.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
including, without limitation, the respective amounts reported on such balance
sheet attributable to Preferred Stock, less any amounts attributable to
Disqualified Stock or any equity security convertible into or exchangeable for
Indebtedness, the cost of treasury stock and the principal amount of any
promissory notes receivable from the sale of the Capital Stock of the Company or
any of its Restricted Subsidiaries, each item to be determined in conformity
with GAAP (excluding the effects of foreign currency exchange adjustments under
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 52).
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 101 Barclay Street, Floor 21 West, New York NY 10286, Attention:
Corporate Trust Administration.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Depository" shall mean DTC, with respect to the Regulation S Global,
Euroclear and Cedelbank and, with respect to the Restricted Global, DTC.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; PROVIDED that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
<PAGE>
7
occurring prior to the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in Sections 4.11 and 4.12 hereof,
and such Capital Stock, or the agreements or instruments governing the
redemption rights thereof, specifically provides that such Person will not
repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required to be repurchased pursuant to
Sections 4.11 and 4.12 hereof.
"Dollar Note" has the meaning provided in the recitals to this
Indenture (and includes the Exchange Notes as defined in the Dollar Notes
Indenture).
"Dollar Notes Indenture" means the Indenture dated as of the Closing
Date between the Company, The Bank of New York, as trustee, relating to the
Dollar Notes, as such indenture may be amended or supplemented from time to
time.
"DTC" means The Depository Trust Company, its nominees, and their
respective successors.
"DTC Noteholder" has the meaning provided in Section 11.14.
"Euroclear" means Morgan Guaranty Trust Company of New York (Brussels
office) as operator of the Euroclear system and any successor thereto.
"Euro Paying Agent" means The Bank of New York, London Branch, located
at 46 Berkeley Street, London WIX 6AA, United Kingdom and any successor paying
agent.
"European Government Obligations" means the securities that are
directly and unconditionally obligations of the Belgian, Dutch, French, German
or Swiss government which are not callable or redeemable at the option of the
issuer thereof (PROVIDED that at the time of determination the conversion rate
between the sovereign currency of such country and the Euro is fixed) and shall
also include a depository receipt issued by a bank or trust company as custodian
with respect to any such European Government Obligation or a specific payment of
interest on or principal of any such European Government Obligation held by such
custodian for the account of the holder of a depository receipt; PROVIDED that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the European Government
Obligation or the specific payment of interest on or principal of the European
Government Obligation evidenced by such depository receipt.
"Euro Pledge Account" means an account established with the Trustee
pursuant to the terms of the Pledge Agreement for the deposit of the Euro
Pledged Securities purchased by the Company with a portion of the proceeds from
the sale of the Notes.
"Euro Pledged Securities" means the securities originally purchased by
the Company with a portion of the proceeds from the sale of the Notes, which
shall consist of Government Securities, to be deposited in the Euro Pledge
Account, all in accordance with the terms of the Pledge Agreement.
"Event of Default" has the meaning provided in Section 6.01 hereof.
<PAGE>
8
"Excess Proceeds" has the meaning provided in Section 4.11 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means any notes of the Company containing terms
identical to the Notes (except that such Exchange Notes (i) shall be registered
under the Securities Act, (ii) will not provide for an increase in the rate of
interest (other than with respect to overdue amounts) and (iii) will not contain
terms with respect to transfer restrictions) that are issued and exchanged for
the Notes pursuant to the Registration Rights Agreement and this Indenture.
"Existing Stockholder Agreements" means the Stock Purchase Agreement,
dated as of September 30, 1993, between the Company and S-C V-Tel, the Stock
Purchase Agreement dated as of April 5, 1994, between the Company and COMSAT,
the S-C V-Tel Shareholders' Agreement and the COMSAT Shareholders' Agreement,
and, in each case, any amendments to such agreements.
"fair market value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors, whose determination shall
be conclusive if evidenced by a Board Resolution; PROVIDED that, for purposes of
clause (viii) of the second paragraph of Section 4.03 hereof, (x) the fair
market value of any security registered under the Exchange Act shall be the
average of the closing prices, regular way, of such security for the 20
consecutive trading days immediately preceding the sale of Capital Stock and (y)
in the event the aggregate fair market value of any other property (other than
cash or cash equivalents) received by the Company exceeds $30 million, the fair
market value of such property shall be determined by a nationally recognized
investment banking firm or a nationally recognized firm having expertise in the
specific area which is the subject of such determination and set forth in their
written opinion which shall be delivered to the Trustee.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations contained or referred
to in this Indenture shall be computed in conformity with GAAP applied on a
consistent basis, except that calculations made for purposes of determining
compliance with the terms of the covenants and with other provisions of this
Indenture shall be made without giving effect to (i) the amortization or
write-off of any expenses incurred in connection with the offering of the Notes
and the Dollar Notes, and (ii) except as otherwise provided, the amortization of
any amounts required or permitted by Accounting Principles Board Opinion Nos. 16
and 17.
"Global Notes" has the meaning provided in Section 2.01.
"Government Securities" means, in connection with the Euro Pledged
Securities, the direct obligations of, obligations fully guaranteed by, or
participations in pools consisting solely of German government securities.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
<PAGE>
9
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); PROVIDED that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guaranteed Indebtedness" has the meaning provided in Section 4.07
hereof.
"Holder" or "Noteholder" means the registered holder of any Note.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; PROVIDED that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto, but excluding obligations with
respect to letters of credit (including trade letters of credit) securing
obligations (other than obligations described in (i) or (ii) above or (v), (vi)
or (vii) below) entered into in the ordinary course of business of such Person
to the extent such letters of credit are not drawn upon or, if drawn upon, to
the extent such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except Trade Payables, (v) all Capitalized
Lease Obligations of such Person, (vi) all Indebtedness of other Persons secured
by a Lien on any asset of such Person, whether or not such Indebtedness is
assumed by such Person; PROVIDED that the amount of such Indebtedness shall be
the lesser of (A) the fair market value of such asset at such date of
determination and (B) the amount of such Indebtedness, (vii) all Indebtedness of
other Persons Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person and (viii) to the extent not otherwise included in
this definition, obligations under Currency Agreements and Interest Rate
Agreements. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations, as described
above, and the maximum liability at such time with respect to contingent
obligations upon the occurrence of the contingency giving rise to the
obligation, which, in the case of a Guarantee, shall be the outstanding balance
of the Guaranteed Indebtedness, PROVIDED (A) that the amount outstanding at any
time of any Indebtedness issued with original issue discount is the face amount
of such Indebtedness less the remaining unamortized portion of the original
issue discount of such Indebtedness at the time of its issuance as determined in
<PAGE>
10
conformity with GAAP, (B) that money borrowed and set aside at the time of the
Incurrence of any Indebtedness in order to prefund the payment of the interest
on such Indebtedness shall not be deemed to be "Indebtedness" so long as such
money is held to secure the payment of such interest and (C) that Indebtedness
shall not include any liability for federal, state, local or other taxes.
"Indenture" means this Indenture as originally executed or as it may
be amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.
"Institutional Accredited Investor" shall mean an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Interest Payment Date" means each semiannual interest payment date on
March 15 and September 15 of each year, commencing September 15, 1999.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement, option or future contract or other
similar agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding extensions of credit to customers in the
ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable on the balance sheet of the Company or its Restricted
Subsidiaries) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, bonds,
notes, debentures or other similar instruments issued by, such Person and shall
include (i) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary and (ii) the fair market value of the Capital Stock (or any other
Investment), held by the Company or any of its Restricted Subsidiaries, of (or
in) any Person that has ceased to be a Restricted Subsidiary, including, without
limitation, by reason of any transaction permitted by clause (iii) of Section
4.06 hereof; PROVIDED that the fair market value of the Investment remaining in
any Person that has ceased to be a Restricted Subsidiary shall not exceed the
aggregate amount of Investments previously made in such Person valued at the
time such Investments were made less the net reduction of such Investments. For
purposes of the definition of "Unrestricted Subsidiary" and Section 4.04 hereof,
(i) "Investment" shall include the fair market value of the assets (net of
liabilities (other than liabilities to the Company or any of its Restricted
Subsidiaries)) of any Restricted Subsidiary at the time that such Restricted
Subsidiary is designated an Unrestricted Subsidiary, (ii) the fair market value
of the assets (net of liabilities (other than liabilities to the Company or any
of its Restricted Subsidiaries)) of any Unrestricted Subsidiary at the time that
such Unrestricted Subsidiary is designated a Restricted Subsidiary shall be
considered a reduction in outstanding Investments and (iii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer.
"Judgment Currency" has the meaning provided in Section 11.15.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional sale
<PAGE>
11
or other title retention agreement or lease in the nature thereof or any
agreement to give any security interest).
"Manager" means Morgan Stanley & Co. Incorporated, as lead manager for
the several initial purchasers named in the Purchase Agreement.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole, (iii) payments made or required to be made to
repay Indebtedness or any other obligation outstanding at the time of such Asset
Sale that either (A) is secured by a Lien on the property or assets sold or (B)
is required to be paid as a result of such sale, (iv) payments made or required
to be made to Persons having a beneficial interest in the assets subject to the
Asset Sale, and (v) appropriate amounts to be provided by the Company or any
Restricted Subsidiary as a reserve against any liabilities associated with such
Asset Sale, including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale, all as determined in conformity with GAAP, and (b) with respect to any
issuance or sale of Capital Stock, the proceeds of such issuance or sale in the
form of cash or cash equivalents, including payments in respect of deferred
payment obligations (to the extent corresponding to the principal, but not
interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to the Company or any Restricted Subsidiary) and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of attorney's fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"Non-U.S. Person" means a Person who is not a U.S. person, as defined
in Regulation S.
"Notes" means any of the Notes, as defined in the first paragraph of
the recitals hereof, that are authenticated and delivered under this Indenture.
For all purposes of this Indenture, the term "Notes" shall include any Exchange
Notes to be issued and exchanged for any Notes pursuant to the Registration
Rights Agreement and this Indenture and, for purposes of this Indenture, all
Notes and Exchange Notes shall vote together as one series of Notes under this
Indenture.
"Note Register" has the meaning provided in Section 2.04.
"Offer to Purchase" means an offer to purchase Notes by the Company
from the Holders commenced by mailing a notice to the Trustee and each Holder
<PAGE>
12
stating: (i) the covenant pursuant to which the offer is being made and that all
Notes validly tendered will be accepted for payment on a PRO RATA basis; (ii)
the purchase price and the date of purchase (which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed)
(the "Payment Date"); (iii) that any Note not tendered will continue to accrue
interest pursuant to its terms; (iv) that, unless the Company defaults in the
payment of the purchase price, any Note accepted for payment pursuant to the
Offer to Purchase shall cease to accrue interest on and after the Payment Date;
(v) that Holders electing to have a Note purchased pursuant to the Offer to
Purchase will be required to surrender the Note, together with the form entitled
"Option of the Holder to Elect Purchase" on the reverse side of the Note
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the Business Day immediately preceding the Payment
Date; (vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Notes delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased; and (vii) that Holders
whose Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered; PROVIDED
that each Note purchased and each new Note issued shall be in a principal amount
of Euro 1,000 or an integral multiple thereof. On the Payment Date, the Company
shall (i) accept for payment on a PRO RATA basis Notes or portions thereof
tendered pursuant to an Offer to Purchase; (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Notes or portions thereof so
accepted; and (iii) deliver, or cause to be delivered, to the Trustee all Notes
or portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof accepted for payment by the Company.
The Paying Agent shall promptly mail to the Holders of Notes so accepted payment
in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered; PROVIDED that each Note
purchased and each new Note issued shall be in a principal amount of Euro 1,000
or an integral multiple thereof. The Company will publicly announce the results
of an Offer to Purchase as soon as practicable after the Payment Date. The
Trustee shall act as the Paying Agent for an Offer to Purchase. The Company will
comply with Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable,
in the event that the Company is required to repurchase Notes pursuant to an
Offer to Purchase.
"Officer" means, with respect to the Company, (i) the Chairman of the
Board, the Vice Chairman of the Board, the President, the Chief Executive
Officer, the Chief Financial Officer or a Vice President, and (ii) the Treasurer
or any Assistant Treasurer, or the Secretary or any Assistant Secretary of the
Company.
"Officers' Certificate" means a certificate signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in clause
(ii) of the definition thereof; PROVIDED, HOWEVER, that any such certificate may
be signed by any two of the Officers listed in clause (i) of the definition
thereof in lieu of being signed by one Officer listed in clause (i) of the
definition thereof and one Officer listed in clause (ii) of the definition
thereof. Each Officers' Certificate (other than certificates provided pursuant
to TIA Section 314(a)(4)) shall include the statements provided for in TIA
Section 314(e).
<PAGE>
13
"Opinion of Counsel" means a written opinion signed by legal counsel
who may be an employee of or counsel to the Company. Each such Opinion of
Counsel shall include the statements provided for in TIA Section 314(e).
"Participant" means, with respect to DTC, Euroclear or Cedel, a Person
who has an account with DTC, Euroclear or Cedel, respectively (and, with respect
to DTC, shall include Euroclear and Cedel).
"Paying Agent" has the meaning provided in Section 2.04, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Company or
a Subsidiary of the Company or an Affiliate of any of them).
"Payment Date" means the date of purchase, which shall be a Business
Day no earlier than 30 days nor later than 60 days from the date of notice is
mailed pursuant to an Offer to Purchase.
"Permanent Regulation S Global" has the meaning provided in Section
2.01.
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with or
into or transfer or convey all or substantially all its assets to the Company or
a Restricted Subsidiary; PROVIDED that such Person's primary business is
related, ancillary or complementary to the businesses of the Company or any of
its Restricted Subsidiaries on the date of such Investment; (ii) Temporary Cash
Investments; (iii) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
in accordance with GAAP; (iv) Investments received in the bankruptcy or
reorganization of a Person or any exchange of such Investment with the issuer
thereof or taken in settlement of or other resolution of claims or disputes or
acquired as the result of foreclosure of any secured Investment and, in each
case, extensions, modifications and renewal thereof; (v) Investments in prepaid
expenses, negotiable instruments held for collection and lease, utility and
worker's compensation, performance and other similar deposits; (vi) Interest
Rate Agreements and Currency Agreements designed solely to protect the Company
or its Restricted Subsidiaries against fluctuations in interest rates or foreign
currency exchange rates; (vii) loans or advances to officers or employees of the
Company or any Restricted Subsidiary that do not in the aggregate exceed $1
million at any time outstanding; (viii) investments consisting of securities
issued by or beneficial interests in a special purpose entity referred to in
clause (f) of the definition of "Asset Sale" and which are received in exchange
for assets that are transferred by the Company or a Restricted Subsidiary to
such special purpose entity and used for the purpose referred to therein; and
(ix) Investments as a result of consideration received in connection with an
Asset Sale made in compliance with Section 4.11 hereof.
"Permitted Joint Venture" means any joint venture between the Company
or any Restricted Subsidiary and (i) any Person, other than a Subsidiary,
engaged in the provision or sale of telecommunications services or (ii) any
Person engaged as an independent sale representative of the Company; PROVIDED
that, prior to making any Investment in such a Person, the Company's Board of
Directors shall have determined that such Investment fits the Company's
strategic plan and is on terms that are fair and reasonable to the Company.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims not yet subject to penalty or that are being contested in good
faith by appropriate legal proceedings promptly instituted and diligently
<PAGE>
14
conducted and for which a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made; (ii) statutory
and common law Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other similar Liens arising in the ordinary
course of business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate legal proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made; (iii)
Liens incurred or deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security; (iv) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations, bankers'
acceptances, surety and appeal bonds, government contracts, performance and
return-of-money bonds and other obligations of a similar nature incurred in the
ordinary course of business (exclusive of obligations for the payment of
borrowed money); (v) easements, rights-of-way, municipal and zoning ordinances
and similar charges, encumbrances, title defects or other irregularities that do
not materially interfere with the ordinary course of business of the Company or
any of its Restricted Subsidiaries; (vi) Liens (including extensions and
renewals thereof) upon real or personal (whether tangible or intangible)
property acquired after the Closing Date; PROVIDED that (a) such Lien is created
solely for the purpose of securing Indebtedness Incurred, in accordance with
Section 4.03 hereof, to finance or refinance the cost (including the cost of
design, development, acquisition, construction, installation, improvement,
transportation or integration) of the item or related group of items of property
or assets subject thereto or the business in which such property or assets are
used and such Lien is created prior to, at the time of or within eighteen months
after the later of the acquisition, the completion of (except in the case of
refinancing) construction or the commencement of full operation of such
property, (b) the principal amount of the Indebtedness secured by such Lien does
not exceed 100% of such cost and (c) any such Lien shall not extend to or cover
any property or assets other than such item or group of items of property or
assets and any improvements on such item; (vii) leases or subleases granted to
others that do not materially interfere with the ordinary course of business of
the Company and its Restricted Subsidiaries, taken as a whole; (viii) Liens
encumbering property or assets under construction arising from progress or
partial payments by a customer of the Company or its Restricted Subsidiaries
relating to such property or assets; (ix) any interest or title of a lessor in
the property subject to any Capitalized Lease or operating lease; (x) Liens
arising from filing Uniform Commercial Code financing statements regarding
leases; (xi) Liens on property of, or on shares of Capital Stock or Indebtedness
of, any Person existing at the time such Person becomes, or becomes a part of,
any Restricted Subsidiary; PROVIDED that such Liens do not extend to or cover
any property or assets of the Company or any Restricted Subsidiary other than
the property or assets acquired; (xii) Liens in favor of the Company or any
Restricted Subsidiary; (xiii) Liens arising from the rendering of a final
judgment or order against the Company or any Restricted Subsidiary that does not
give rise to an Event of Default; (xiv) Liens securing reimbursement obligations
with respect to letters of credit that encumber documents and other property
relating to such letters of credit and the products and proceeds thereof; (xv)
Liens in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation of goods;
(xvi) Liens encumbering customary initial deposits and margin deposits, and
other Liens that are within the general parameters customary in the industry and
incurred in the ordinary course of business, in each case securing Indebtedness
under Interest Rate Agreements and Currency Agreements and forward contracts,
options, future contracts, futures options or similar agreements or arrangements
designed solely to protect the Company or any of its Restricted Subsidiaries
<PAGE>
15
from fluctuations in interest rates, currencies or the price of commodities;
(xvii) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business in accordance
with the past practices of the Company and its Restricted Subsidiaries prior to
the Closing Date; (xviii) Liens on or sales of receivables or other rights to
payment; (xix) Liens secured with assets that have a fair market value not in
excess of 15% of Adjusted Consolidated Net Tangible Assets when such Liens are
Incurred; and (xx) any extension, renewal, or replacement (or successive
extensions, renewals, or replacements) in whole or in part of Liens described in
clauses (i) through (xix) above.
"Permitted Wholesale Consortium" means any Person in which the Company
invests for the principal purpose of leasing or otherwise acquiring transmission
rights with respect to long distance telecommunications; PROVIDED that, prior to
making any Investment in such a Person, the Company's Board of Directors shall
have determined that such Investment will afford the Company greater economic
benefits than it could otherwise obtain from other sources of transmission
rights.
"Person" means an individual, a corporation, a partnership, a limited
liability company, a joint venture, an association, a trust, an unincorporated
organization or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Pledge Accounts" means the U.S. Pledge Account and the Euro Pledge
Account.
"Pledge Agreement" means the Collateral Pledge and Security Agreement,
dated as of the date of this Indenture, made by the Company in favor of the
Trustee, governing the disbursement of funds from the Pledge Accounts, as such
agreement may be amended, restated, supplemented or otherwise modified from time
to time.
"Preferred Stock" or "preferred stock" means, with respect to any
Person, any and all shares, interests, participation or other equivalents
(however designated, whether voting or non-voting) of such Person's preferred or
preference stock, whether now outstanding or issued after the date of this
Indenture, including, without limitation, all series and classes of such
preferred or preference stock.
"principal" of a debt security, including the Notes, means the
principal amount due on the Stated Maturity as shown on such debt security.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02(a).
"Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Purchase Agreement" has the meaning provided in the recitals to this
Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date" when used with respect to any Note or part thereof
to be redeemed, means the date fixed for such redemption by or pursuant to the
terms of the Notes and this Indenture.
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16
"Redemption Price" when used with respect to any Note or part thereof
to be redeemed, means the price at which such Note is to be redeemed pursuant to
the terms of the Notes and this Indenture.
"Registrar" has the meaning provided in Section 2.04.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 12, 1999, between the Company and Morgan Stanley &
Co. Incorporated, on behalf of itself and ING Baring Furman Selz LLC relating to
the Notes and the Dollar Notes.
"Registration Statement" means any registration statement of the
Company that covers any of the Exchange Notes, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Regular Record Date" for the interest payable on any Interest Payment
Date means March 1 or September 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Certificated Notes" has the meaning provided in Section
2.01.
"Regulation S Global" has the meaning provided in Section 2.01.
"Responsible Officer", when used with respect to the Trustee, means
any officer of the Trustee with direct responsibility for the administration of
this Indenture, and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Global" has the meaning provided in Section 2.01.
"Restricted Payments" has the meaning provided in Section 4.04.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Preferred" means the Series A preferred stock, $.01 par
value per share, of the Company.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"S&P" means Standard & Poor's Ratings Services and its successors.
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17
"Stated Maturity" means (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
"Strategic Subordinated Indebtedness" means Indebtedness of the
Company Incurred to finance the acquisition of a Person engaged in a business
that is related, ancillary or complementary to the business conducted by the
Company or any of its Restricted Subsidiaries, which Indebtedness by its terms,
or by the terms of any agreement or instrument pursuant to which such
Indebtedness is Incurred, (i) is expressly made subordinate in right of payment
to the Notes and (ii) provides that no payment of principal, premium or interest
on, or any other payment with respect to, such Indebtedness may be made prior to
the payment in full of all of the Company's obligations under the Notes;
PROVIDED that such Indebtedness may provide for and be repaid at any time from
the proceeds of a capital contribution, the sale of Capital Stock (other than
Disqualified Stock) of the Company, or other Strategic Subordinated Indebtedness
Incurred after the Incurrence of such Indebtedness.
"Subordinated Convertible Debentures" means the debentures issued
pursuant to the Subordinated Indentures dated as of April 1998 between the
Company, The Bank of New York and Deutsche Bank.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof, (ii) time deposit accounts, eurodollar time deposits, bankers'
acceptances, certificates of deposit and money market deposits, in each case
maturing within one year of the date of acquisition thereof and issued by a bank
or trust company which is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50 million (or the foreign currency
equivalent thereof) and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act), or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above, (iv)
commercial paper, maturing not more than one year after the date of acquisition,
issued by a corporation (other than an Affiliate of the Company) organized and
in existence under the laws of the United States of America, any state thereof
or any foreign country recognized by the United States of America with a rating
at the time as of which any investment therein is made of "P-2" (or higher)
according to Moody's or "A-2" (or higher) according to S&P, (v) securities with
maturities of one year or less from the date of acquisition issued or fully and
unconditionally guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof,
and rated at least "A" by S&P or Moody's, (vi) shares or other interests in an
investment company the assets of which consist solely of (A) securities of the
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18
type described in clauses (i) through (v) above and (B) mortgage-backed
securities rated AAA or the equivalent by S&P, Moody's or Fitch Investor
Services, Inc., (vii) the Euro Pledged Securities.
"Temporary Regulation S Global" has the meaning provided in Section
2.01.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended (15 U.S. Code Sections 77aaa-77bbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06; PROVIDED, HOWEVER,
that, in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" or "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries arising
in the ordinary course of business in connection with the acquisition of goods
or services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture, and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of
1978, as amended and as codified in Title 11 of the United States Code, as
amended from time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below; and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company or
any Restricted Subsidiary; PROVIDED that (A) any Guarantee by the Company or any
Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated
shall be deemed an "Incurrence" of such Indebtedness and an "Investment" by the
Company or such Restricted Subsidiary (or both, if applicable) at the time of
such designation; (B) either (I) the Subsidiary to be so designated has total
assets of $1,000 or less or (II) if such Subsidiary has assets greater than
$1,000, such designation would be permitted under Section 4.04 hereof and (C) if
applicable, the Incurrence of Indebtedness and the Investment referred to in
clause (A) of this proviso would be permitted under Section 4.03 hereof and
Section 4.04 hereof. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED that (i) no Default or Event
of Default shall have occurred and be continuing at the time of or after giving
effect to such designation and (ii) all Liens and Indebtedness of such
Unrestricted Subsidiary outstanding immediately after such designation would, if
Incurred at such time, have been permitted to be Incurred (and shall be deemed
to have been Incurred) for all purposes of this Indenture. Any such designation
by the Board of Directors shall be evidenced to the Trustee by promptly filing
with the Trustee a copy of the Board Resolution giving effect to such
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19
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Certificated Notes" has the meaning provided in Section 2.01.
"U.S. Paying Agent" means The Bank of New York and any successor U.S.
Paying Agent. "U.S. Person" has the meaning ascribed thereto in Rule 902 under
the Securities Act.
"U.S. Pledge Account" means an account established with the Trustee
pursuant to the terms of the Pledge Agreement for the deposit of the U.S.
Pledged Securities purchased by the Company with a portion of the proceeds from
the sale of the Notes.
"U.S. Pledged Securities" means the securities originally purchased by
the Company with a portion of the proceeds from the sale of the Notes, which
shall consist of Government Securities, to be deposited in the U.S. Pledge
Account, all in accordance with the terms of the Pledge Agreement.
"Voting Stock" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person,
the ownership of all of the outstanding Capital Stock of such Subsidiary (other
than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
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20
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the plural
include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(vii) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
SECTION 2.01. FORM AND DATING. The Notes and the Trustee's certificate
of authentication with respect thereto shall be substantially in the form
annexed hereto as Exhibit A, in the case of the Restricted Global, Exhibit B, in
the case of the Regulation S Global, and Exhibit C, in the case of a U.S.
Certificated Note. The Notes may have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have letters, notations, legends or endorsements required by
law, stock exchange agreements to which the Company is subject or usage. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note. The Company shall approve
the form of the Notes and any notation, legend or endorsement on the Notes. Each
Note shall be dated the date of its authentication.
The terms and provisions contained in the form of the Notes annexed
hereto as Exhibits A, B and C shall constitute, and are hereby expressly made, a
part of this Indenture. Each of the Company and the Trustee, by its execution
and delivery of this Indenture, expressly agrees to the terms and provisions of
the Notes applicable to it and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (the "Restricted Global"),
registered in the name of a nominee of the Depository, deposited with the
Trustee, as custodian for the Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of a Restricted Global may from time to time be increased or decreased by
adjustments made on the records of the Registrar as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more temporary
global Notes in registered form substantially in the form set forth in Exhibit B
(the "Temporary Regulation S Global") registered in the name of a nominee of the
Depository for the accounts of Euroclear and Cedelbank, deposited on behalf of
the purchasers of the Notes represented thereby with the Common Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. At any time following July 28, 1999, upon receipt by the Trustee and
the Company of a certificate substantially in the form of Exhibit D hereto, one
or more permanent global Notes in registered form substantially in the form set
forth in Exhibit B (the "PERMANENT REGULATION S GLOBAL" and, together with the
Temporary Regulation S Global, the "REGULATION S GLOBAL") duly executed by the
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21
Company and authenticated by the Trustee as hereinafter provided shall be
deposited with the Common Depositary which shall reflect on its books and
records the date and a decrease in the principal amount of the Temporary
Regulation S Global in an amount equal to the principal amount of the beneficial
interest in the Temporary Regulation S Global transferred. The aggregate
principal amount of a Regulation S Global may from time to time be increased or
decreased by adjustments made in the records of the Trustee, as custodian for
the Depository or its nominee, as herein provided.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" of Euroclear and "The
General Terms and Conditions of Cedel Bank" and "Customer Handbook" of Cedelbank
shall be applicable to interests in the Global Notes that are held by Agent
Members through Euroclear and Cedelbank.
Notes which are transferred to Institutional Accredited Investors
which are not QIBs (excluding Non-U.S. Persons) shall be issued in the form of
permanent certificated Notes in registered form in substantially the form set
forth in Exhibit C (the "U.S. CERTIFICATED NOTES"). Notes issued pursuant to
Section 2.07 in exchange for interests in the Regulation S Global shall be in
the form of certificated Notes in registered form substantially in the form set
forth in Exhibit C (the "REGULATION S CERTIFICATED NOTES"). Notes issued
pursuant to Section 2.07 in exchange for interests in the Restricted Global
shall be in the form of the U.S. Certificated Note.
The Regulation S Certificated Notes and the U.S. Certificated Notes
are sometimes collectively referred to herein as the "CERTIFICATED NOTES." The
Restricted Global and Regulation S Global are sometimes collectively herein
referred to as the "GLOBAL NOTES."
The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 2.02. RESTRICTIVE LEGENDS. (a) NOTE LEGENDS. Unless and until
a Note is exchanged for an Exchange Note or otherwise disposed of in connection
with an effective Registration Statement pursuant to the Registration Rights
Agreement, (i) each Restricted Global and U.S. Certificated Note shall bear the
legend set forth below on the face thereof and (ii) each Temporary Regulation S
Global and each Regulation S Certificated Note shall bear the legend set forth
below on the face thereof until at least 41 days after the Closing Date and
receipt by the Company and the Trustee of a certificate substantially in the
form of Exhibit D hereto.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, 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 FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OF REGULATION S
UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT, WITHIN THE TIME
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22
PERIOD REFERRED TO IN RULE 144(k) AS IN EFFECT ON THE DATE OF SUCH
TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO VIATEL, INC.
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF EURO NOTES OF LESS THAN EURO 100,000, AN OPINION OF COUNSEL
ACCEPTABLE TO VIATEL, INC., THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) TO A PERSON OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE IS GIVEN A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE
TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX
SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO EACH OF THE TRUSTEE AND VIATEL, INC. SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS SUCH PERSONS MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
(b) RESTRICTED GLOBAL NOTE LEGEND. Each Global Note, whether or not an
Exchange Note, shall also bear the following legend on the face thereof:
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO VIATEL, INC.THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.08 OF THE INDENTURE.
(c) REGULATION S GLOBAL NOTE LEGEND. Each Regulation S Global Note,
whether or not an Exchange Note, shall also bear the following legend on the
face thereof:
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THIS NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND
IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1)
THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO
SECTION 2.08 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07 OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.12 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE DELIVERED TO
A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER.
SECTION 2.03. EXECUTION, AUTHENTICATION AND DENOMINATIONS. Subject to
Article Four, the aggregate principal amount of Notes (including Exchange Notes)
which may be authenticated and delivered under this Indenture is unlimited. The
Notes shall be executed by two Officers of the Company, by facsimile or manual
signature, in the name and on behalf of the Company.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall, upon receipt of a
Company Order, authenticate for original issue Notes in the aggregate principal
amount specified in such Company Order. Such Company Order shall specify the
amount of Notes to be authenticated, the date on which the issue of Notes is to
be authenticated and, in case of an issuance of Notes pursuant to Section 2.15,
shall certify that such issuance is in compliance with Article Four.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such authenticating agent. An authenticating agent
has the same rights as an Agent to deal with the Company or an Affiliate of the
Company.
The Notes shall be issuable only in registered form without coupons in
principal amount of Euro 1,000 and any integral multiple of Euro 1,000 in excess
thereof.
SECTION 2.04. REGISTRAR AND PAYING AGENT. The Company shall maintain
an office or agency in the City of New York where Notes may be presented for
registration of transfer or for exchange (the "REGISTRAR"), an office or agency
in the City of New York and in the City of London, United Kingdom and, in the
event the Notes are included on the Frankfurt over-the-counter market, in
Frankfurt where Notes may be presented for payment (the "PAYING AGENT"), and an
office or agency where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served, which shall be in the City of New
York and, in the event the Notes are included on the Frankfurt over-the-counter
market, in Frankfurt. The Company shall cause the Registrar to keep a register
of the Notes and of their transfer and exchange (the "NOTE REGISTER"). The
Company may have one or more co- Registrars and one or more additional Paying
Agents.
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The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands for so long as such failure shall continue. The Company may
remove any Agent upon written notice to such Agent and the Trustee; PROVIDED
that no such removal shall become effective until (i) the acceptance of an
appointment by a successor Agent to such Agent as evidenced by an appropriate
agency agreement entered into by the Company and such successor Agent and
delivered to the Trustee or (ii) notification to the Trustee that the Trustee
shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company, any Subsidiary of the
Company, or any Affiliate of any of them may act as Paying Agent, Registrar or
co-Registrar, and/or agent for service of notice and demands; PROVIDED, HOWEVER,
that neither the Company, a Subsidiary of the Company nor an Affiliate of any of
them shall act as Paying Agent in connection with the defeasance of the Notes or
the discharge of this Indenture under Article Eight.
The Company initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. The Company
initially appoints the Euro Paying Agent, as Paying Agent with respect to the
Regulation S Global. If, at any time, the Trustee is not the Registrar, the
Registrar shall make available to the Trustee on or before each Interest Payment
Date and at such other times as the Trustee may reasonably request, the names
and addresses of the Holders as they appear in the Note Register.
SECTION 2.05. PAYING AGENT TO HOLD MONEY IN TRUST. Not later than
10:00 a.m. New York City time or 10:00 a.m. London time, as applicable, on each
due date of the principal, premium, if any, or interest on any Notes, the
Company shall deposit with the relevant Paying Agent money in immediately
available funds sufficient to pay such principal, premium, if any, or interest
so becoming due. The Company shall require each Paying Agent, if any, other than
the Trustee to agree in writing that such Paying Agent shall hold in trust for
the benefit of the Holders or the Trustee all money held by the Paying Agent for
the payment of principal of, premium, if any, or interest on the Notes (whether
such money has been paid to it by the Company or any other obligor on the
Notes), and that such Paying Agent shall promptly notify the Trustee of any
default by the Company (or any other obligor on the Notes) in making any such
payment. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and account for any funds disbursed, and the Trustee
may at any time during the continuance of any payment default, upon written
request to a Paying Agent, require such Paying Agent to pay all money held by it
to the Trustee and to account for any funds disbursed. Upon doing so, the Paying
Agent shall have no further liability for the money so paid over to the Trustee.
If the Company or any Subsidiary of the Company or any Affiliate of any of them
acts as Paying Agent, it will, on or before each due date of any principal of,
premium, if any, or interest on the Notes, segregate and hold in a separate
trust fund for the benefit of the Holders a sum of money sufficient to pay such
principal, premium, if any, or interest so becoming due until such sum of money
shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee of its action or failure to act
as required by this Section 2.05.
SECTION 2.06. TRANSFER AND EXCHANGE. The Notes are issuable only in
registered form. A Holder may transfer a Note by written application to the
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25
Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon registration
of the transfer by the Registrar in the Note Register. Prior to the registration
of any transfer by a Holder as provided herein, the Company, the Trustee, and
any agent of the Company or the Trustee shall treat the Person in whose name the
Note is registered as the owner thereof for all purposes whether or not the Note
shall be overdue, and neither the Company, the Trustee, nor any such agent shall
be affected by notice to the contrary. Furthermore, any Holder of a Global Note
shall, by acceptance of such Global Note, agree that transfers of beneficial
interests in such Global Note may be effected only through a book-entry system
maintained by the Depository (or its agent), and that ownership of a beneficial
interest in the Note shall be required to be reflected in a book entry. When
Notes are presented to the Registrar or a co-Registrar with a request to
register the transfer or to exchange them for an equal principal amount of Notes
of other authorized denominations (including an exchange of Notes for Exchange
Notes), the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met; provided that no
exchanges of Notes for Exchange Notes shall occur until a Registration Statement
shall have been declared effective by the Commission and that any Notes that are
exchanged for Exchange Notes shall be cancelled by the Trustee. To permit
registrations of transfers and exchanges in accordance with the terms,
conditions and restrictions hereof, the Company shall execute and the Trustee
shall authenticate Notes at the Registrar's request. No service charge shall be
made to any Holder for any registration of transfer or exchange or redemption of
the Notes, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental charge payable
upon transfers, exchanges or redemptions pursuant to Section 2.11, 3.08, 4.11,
4.12 or 9.04).
The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Notes selected for redemption under Section 3.03 or Section 3.08 and ending at
the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
SECTION 2.07. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES. (a) Each
Restricted Global and Regulation S Global initially shall (i) be registered in
the name of the Depository for such Global Note or the nominee of such
Depository, (ii) be delivered to the Trustee as custodian or the Common
Depositary, as applicable, for such Depository and (iii) bear legends as set
forth in Section 2.02 hereof.
Members of, or Participants in, the Depository ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian or the Common
Depositary, as applicable, or under any Global Note, and the Depository may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a beneficial owner
of any Note.
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26
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depository, its successors or
their respective nominees, or transfers between the Depository for the
Restricted Global and the Depository for the Regulation S Global Notes.
Transfers of interests in one Global Note to parties who will hold the interests
through the same Global Note will be effected in the ordinary way in accordance
with the respective rules and operating procedures of the DTC, Euroclear or
Cedelbank, as the case may be, and the provisions of Section 2.08 hereof. In
addition, U.S. Certificated Notes or Regulation S Certificated Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a Restricted Global or a Regulation S Global, respectively, if (i) the
Depository with respect to such Global Notes notifies the Company that it is
unwilling or unable to continue as Depository for the Restricted Global or the
Regulation S Global, as the case may be, and a successor depository is not
appointed by the Company within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Registrar has received a request
to the foregoing effect from the Depository or the Trustee.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a Person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) In connection with any transfer pursuant to paragraph (b) of this
Section 2.07 of a portion of the beneficial interests in a Restricted Global or
Regulation S Global to beneficial owners who are required to hold Certificated
Notes, the Registrar shall reflect on its books and records the date and a
decrease in the principal amount of such Restricted Global or Regulation S
Global in an amount equal to the principal amount of the beneficial interest in
such Restricted Global or Regulation S Global to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more U.S.
Certificated Notes or Regulation S Certificated Notes, as the case may be, of
like tenor and amount.
(e) In connection with the transfer of all the beneficial interests in
a Restricted Global or Regulation S Global to beneficial owners pursuant to
paragraph (b) of this Section 2.07, the Restricted Global or Regulation S
Global, as the case may be, shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depository in exchange
for its beneficial interest in the Restricted Global or Regulation S Global, as
the case may be, an equal aggregate principal amount of U.S. Certificated Notes
or Regulation S Certificated Notes, as the case may be, of authorized
denominations.
(f) Any U.S. Certificated Note delivered in exchange for an interest
in a Restricted Global pursuant to paragraph (b), (d) or (e) of this Section
2.07 shall, except as otherwise provided by paragraphs (f)(i)(x) and (d) of
Section 2.08 hereof, bear the legend regarding transfer restrictions applicable
to the U.S. Certificated Note set forth in Section 2.02.
(g) Any Regulation S Certificated Note delivered in exchange for an
interest in a Regulation S Global pursuant to paragraph (b), (d) or (e) of this
Section 2.07 shall, except as otherwise provided by paragraphs (f)(i)(x) and (d)
of Section 2.08 hereof, bear the legend regarding transfer restrictions
<PAGE>
27
applicable to the Regulation S Certificated Note set forth in Section 2.02
hereof.
(h) The registered holder of a Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
(i) QIBs that are beneficial owners of interests in a Global Note may
receive Certificated Notes (which shall bear the Private Placement Legend if
required by Section 2.02) in accordance with the procedures of the Depository.
In connection with the execution, authentication and delivery of such
Certificated Notes, the Registrar shall reflect on its books and records a
decrease in the principal amount of the relevant Global Note equal to the
principal amount of such Certificated Notes and the Company shall execute and
the Trustee shall authenticate and deliver one or more Certificated Notes having
an equal aggregate principal amount.
(j) All Notes issued upon any transfer or exchange of Notes shall be
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Notes surrendered upon such transfer
or exchange.
SECTION 2.08. SPECIAL TRANSFER PROVISIONS. Unless and until a Note is
exchanged for an Exchange Note in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) TRANSFERS TO QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a U.S. Certificated Note
or an interest in a Restricted Global to a QIB (excluding Non-U.S. Persons):
(i) If the Note to be transferred consists of (x) U.S. Certificated
Notes, the Registrar shall register the transfer if such transfer is being
made by a proposed transferor who has checked the box provided for on the
form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the 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 QIB within the
meaning of Rule 144A, 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 it 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 its foregoing representations in order to
claim the exemption from registration provided by Rule 144A or (y) an
interest in a Restricted Global, the transfer of such interest may be
effected only through the book-entry system maintained by the Depository.
(ii) If the proposed transferee is an Agent Member, and the Note to be
transferred consists of U.S. Certificated Notes, upon receipt by the
Registrar of the documents referred to in clause (i) and instructions given
in accordance with the Depository's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of such Restricted Global in an amount equal to the
principal amount of the U.S. Certificated Notes to be transferred, and the
Trustee shall cancel the Certificated Note so transferred.
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(b) TRANSFERS OF INTERESTS IN REGULATION S GLOBAL OR REGULATION S
CERTIFICATED NOTES TO U.S. PERSONS. The following provisions shall apply with
respect to any transfer of interests in a Regulation S Global or Regulation S
Certificated Notes to U.S. Persons:
(i) prior to the removal of the Private Placement Legend from a
Regulation S Global or a Regulation S Certificated Note pursuant to Section
2.02, the Registrar shall refuse to register such transfer; and
(ii) after such removal, the Registrar shall register the transfer of
any such Note without requiring any additional certification.
(c) TRANSFERS TO NON-U.S. PERSONS AT ANY TIME. The following
provisions shall apply with respect to any transfer of a Note to a Non-U.S.
Person:
(i) The Registrar shall register any proposed transfer to any Non-U.S.
Person if the Note to be transferred is a U.S. Certificated Note or an
interest in a Restricted Global only upon receipt of a certificate
substantially in the form of Exhibit E from the proposed transferor.
(ii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in a Restricted Global, upon receipt by the Registrar
of (x) the documents required by paragraph (i) and (y) instructions in
accordance with the Depository's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and a decrease in
the principal amount of such Restricted Global in an amount equal to the
principal amount of the beneficial interest in the Restricted Global to be
transferred, and (b) if the proposed transferee is an Agent Member, upon
receipt by the Registrar of instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall reflect on
its books and records the date and an increase in the principal amount of
such Regulation S Global in an amount equal to the principal amount of the
U.S. Certificated Notes or the Restricted Global, as the case may be, to be
transferred, and the Trustee shall cancel the Certificated Note, if any, so
transferred or decrease the amount of the Restricted Global.
(d) PRIVATE PLACEMENT LEGEND. Upon the registration of transfer,
exchange or replacement of Notes not bearing the Private Placement Legend, the
Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the registration of transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar shall deliver only Notes that bear the
Private Placement Legend unless either (i) the Private Placement Legend is no
longer required by Section 2.02 or (ii) there is delivered to the Registrar an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(e) GENERAL. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture. The Registrar shall not register a transfer of any Note unless such
transfer complies with the restrictions on transfer of such Note set forth in
this Indenture. In connection with any transfer of Notes to an Institutional
Accredited Investor, each Holder agrees by its acceptance of the Notes to
furnish the Registrar or the Company such certifications, legal opinions or
<PAGE>
29
other information as either of them may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act; PROVIDED that
the Registrar shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information.
The Registrar shall retain, in accordance with its customary
procedures, copies of all letters, notices and other written communications
received pursuant to Section 2.07 or this Section 2.08. The Company shall have
the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Registrar.
(f) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Note, whether or
not such Note bears the Private Placement Legend, if (x) the requested
transfer is after the time period referred to in Rule 144(k) under the
Securities Act as in effect with respect to such transfer or (y) the
proposed transferee has delivered to the Registrar (A) a certificate
substantially in the form of Exhibit F hereto and (B) if the aggregate
principal amount of the Notes being transferred is less than Euro 100,000
at the time of such transfer, an Opinion of Counsel acceptable to the
Company that such transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in a Restricted Global, upon receipt by the Registrar
and the Company of (x) the documents, if any, required by paragraph (i) and
(y) instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of such Restricted
Global in an amount equal to the principal amount of the beneficial
interest in the Restricted Global to be transferred, and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more U.S.
Certificated Notes of like tenor and amount.
SECTION 2.09. REPLACEMENT NOTES. If a mutilated Note is surrendered to
the Trustee or if the Holder claims that the Note has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding; PROVIDED that the requirements of this Section
2.09 and the second paragraph of Section 2.10 are met. If required by the
Trustee or the Company, an indemnity bond must be furnished that is sufficient
in the judgment of both the Trustee and the Company to protect the Company, the
Trustee or any Agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge such Holder for its expenses and the expenses
of the Trustee in replacing a Note. In case any such mutilated, lost, destroyed
or wrongfully taken Note has become or is about to become due and payable, the
Company in its discretion may pay such Note instead of issuing a new Note in
replacement thereof.
Every replacement Note is an additional obligation of the Company and
shall be entitled to the benefits of this Indenture.
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30
SECTION 2.10. OUTSTANDING NOTES. Notes outstanding at any time are all
Notes that have been authenticated by the Trustee except for those cancelled by
it, those delivered to it for cancellation and those described in this Section
2.10 as not outstanding.
If a Note is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
reasonably satisfactory to them that the replaced Note is held by a BONA FIDE
purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on the maturity date or a redemption date money sufficient to pay
all principal, premium, if any, and interest payable on that date with respect
to the Notes (or portions thereof) to be redeemed or payable on that date, then
on and after that date such Notes cease to be outstanding and interest on them
shall cease to accrue.
A Note does not cease to be outstanding because the Company or one of
its Affiliates holds such Note; PROVIDED, HOWEVER, that, in determining whether
the Holders of the requisite principal amount of the outstanding Notes have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Company or any other obligor upon the Notes or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which a Responsible Officer of
the Trustee knows to be so owned shall be so disregarded. Notes so owned which
have been pledged in good faith may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Notes and that the pledgee is not the Company or any other
obligor upon the Notes or any Affiliate of the Company or of such other obligor.
SECTION 2.11. TEMPORARY NOTES. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have insertions, substitutions, omissions and other variations
determined to be appropriate by the Officers executing the temporary Notes, as
evidenced by their execution of such temporary Notes. If temporary Notes are
issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company designated for such purpose
pursuant to Section 4.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Notes of authorized denominations. Until so exchanged, the
temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 2.12. CANCELLATION. The Company at any time may deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold. The Registrar and the
Paying Agent shall forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange, purchase or payment. The Trustee shall
cancel all Notes surrendered for registration of transfer, exchange, purchase,
payment or cancellation and shall return all such Notes to the Company. The
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31
Company shall not issue Notes to replace Notes it has paid in full or delivered
to the Trustee for cancellation.
SECTION 2.13. CUSIP NUMBERS. The Company in issuing the Notes may use
"CUSIP," "CINS," or "ISIN" numbers, or common codes (if then generally in use),
as the case may be, in notices of redemption or exchange as a convenience to
Holders; PROVIDED that any such notice shall state that no representation is
made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of redemption or exchange and that reliance may be
placed only on the other identification numbers printed on the Notes. The
Company shall promptly advise the Trustee of any change in the CUSIP, CINS or
ISIN numbers or common codes for the Notes.
SECTION 2.14. DEFAULTED INTEREST. If the Company defaults in a payment
of interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) interest on the defaulted interest, to the Persons
who are Holders on a subsequent special record date. A special record date, as
used in this Section 2.14 with respect to the payment of any defaulted interest,
shall mean the 15th day next preceding the date fixed by the Company for the
payment of defaulted interest, whether or not such day is a Business Day. At
least 15 days before the subsequent special record date, the Company shall mail
to each Holder and to the Trustee a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.15. ISSUANCE OF ADDITIONAL NOTES. The Company may, subject
to Article Four of this Indenture, issue additional Notes under this Indenture.
The Notes issued on the Closing Date and any additional Notes subsequently
issued shall be treated as a single class for all purposes under this Indenture.
ARTICLE THREE
REDEMPTION
SECTION 3.01. RIGHT OF REDEMPTION. The Notes may be redeemed at the
election of the Company, in whole or in part, at any time and from time to time
on or after March 15, 2004 and prior to maturity, upon not less than 30 nor more
than 60 days' prior notice mailed by first-class mail to each Holder's last
address as it appears in the Note Register, at the following Redemption Prices
(expressed in percentages of their principal amount), plus accrued and unpaid
interest, if any, to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date that is on or prior to the Redemption
Date to receive interest due on an Interest Payment Date) if redeemed during the
12-month period commencing on March 15 of the applicable year set forth below:
Year Redemption Price
---- ----------------
2004 .............................................105.750%
2005 .............................................103.833%
2006 .............................................101.917%
2007 and thereafter ..............................100.000%
(b) In addition, at any time prior to March 15, 2002, the Company may,
at its option, redeem up to 35% of the aggregate principal amount of the Notes
with the net proceeds of one or more Public Equity Offerings, at any time or
from time to time in part, at a Redemption Price (expressed as a percentage of
the principal amount) of 111.500%, provided (i) that Notes and Dollar Notes
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representing at least 65% of the principal amount of the Notes and Dollar Notes
initially issued remain outstanding immediately after each such redemption and
(ii) that notice of each such redemption is mailed within 60 days of each such
Public Equity Offering.
SECTION 3.02. NOTICES TO TRUSTEE. If the Company elects to redeem
Notes pursuant to Section 3.01, it shall notify the Trustee in writing of the
Redemption Date and the principal amount of Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.02
in an Officers' Certificate at least 45 days before the Redemption Date (unless
a shorter period shall be satisfactory to the Trustee).
SECTION 3.03. SELECTION OF NOTES TO BE REDEEMED. If less than all of
the Notes are to be redeemed at any time, the Trustee shall select the Notes to
be redeemed in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or if the Notes are
not listed on a national securities exchange, by lot or by such other method as
the Trustee in its sole discretion shall deem to be fair and appropriate;
PROVIDED that no Notes of Euro 1,000 in principal amount or less shall be
redeemed in part.
The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption. Notes in denominations of Euro 1,000 in
principal amount may only be redeemed in whole. The Trustee may select for
redemption portions (equal to Euro 1,000 in principal amount or any integral
multiple thereof) of Notes that have denominations larger than Euro 1,000 in
principal amount. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. The Trustee
shall notify the Company and the Registrar promptly in writing of the Notes or
portions of Notes to be called for redemption.
SECTION 3.04. NOTICE OF REDEMPTION. With respect to any redemption of
Notes pursuant to Section 3.01, at least 30 days but not more than 60 days
before a Redemption Date, the Company, or at the Company's request the Trustee,
shall mail a notice of redemption by first class mail to each Holder whose Notes
are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes (or portions thereof) called for redemption
ceases to accrue on and after the Redemption Date and the only remaining
right of the Holders is to receive payment of the Redemption Price plus
accrued interest to the Redemption Date upon surrender of the Notes to the
Paying Agent;
(vi) that, if any Note is being redeemed in part, the portion of the
principal amount (equal to Euro 1,000 in principal amount or any integral
multiple thereof) of such Note to be redeemed and that, on and after the
Redemption Date, upon surrender of such Note, a new Note or Notes in
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33
principal amount equal to the unredeemed portion thereof, will be reissued;
and
(vii) that, if any Note contains a CUSIP, CINS or ISIN number or a
common code, as provided in Section 2.13, no representation is being made
as to the correctness of the CUSIP, CINS or ISIN number or the common code
either as printed on the Notes or as contained in the notice of redemption.
At the Company's request (which request may be revoked by the Company at any
time prior to the time at which the Trustee shall have given such notice to the
Holders), made in writing to the Trustee at least 45 days (or such shorter
period as shall be satisfactory to the Trustee) before a Redemption Date, the
Trustee shall give the notice of redemption in the name and at the expense of
the Company. If, however, the Company gives such notice to the Holders, the
Company shall concurrently deliver to the Trustee a copy of such notice of
redemption.
SECTION 3.05. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
Redemption Date and at the Redemption Price. Upon surrender of any Notes to the
Paying Agent, such Notes shall be paid at the Redemption Price, plus accrued
interest, if any, to the Redemption Date. Notice of redemption shall be deemed
to be given when mailed, whether or not the Holder receives the notice. In any
event, failure to give such notice, or any defect therein, shall not affect the
validity of the proceedings for the redemption of Notes held by Holders to whom
such notice was properly given.
SECTION 3.06. DEPOSIT OF REDEMPTION PRICE. On or prior to any
Redemption Date, the Company shall deposit with the Paying Agent (or, if the
Company, one of its Subsidiaries or any of their Affiliates is acting as Paying
Agent, shall segregate and hold in trust as provided in Section 2.05) money
sufficient to pay the Redemption Price of and accrued interest on all Notes to
be redeemed on that date other than Notes or portions thereof called for
redemption on that date that have been delivered by the Company to the Trustee
for cancellation.
SECTION 3.07. PAYMENT OF NOTES CALLED FOR REDEMPTION. If notice of
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such date (unless the
Company shall default in the payment of such Notes at the Redemption Price and
accrued interest to the Redemption Date, in which case the principal, until
paid, shall bear interest from the Redemption Date at the rate prescribed in the
Notes), such Notes shall cease to accrue interest. Upon surrender of any Note
for redemption in accordance with a notice of redemption, such Note shall be
paid and redeemed by the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; PROVIDED that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders registered as such at the close of business on the relevant Regular
Record Date.
SECTION 3.08. NOTES REDEEMED IN PART. Upon surrender of any Note that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Note equal in principal amount to
the unredeemed portion of such surrendered Note.
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34
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF NOTES. The Company shall pay the principal
of, premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal, premium,
if any, or interest shall be considered paid on the date due if the Trustee or
Paying Agent (other than the Company, a Subsidiary of the Company, or any
Affiliate of any of them) holds on that date money designated for and sufficient
to pay the installment. If the Company or any Subsidiary of the Company or any
Affiliate of any of them, acts as Paying Agent, an installment of principal,
premium, if any, or interest shall be considered paid on the due date if the
entity acting as Paying Agent complies with the last sentence of Section 2.05.
As provided in Section 6.09, upon any bankruptcy or reorganization procedure
relative to the Company, the Trustee shall serve as the Paying Agent and
conversion agent, if any, for the Notes.
The Company shall pay interest on overdue principal, premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Notes.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. The Company will
maintain an office or agency in the Borough of Manhattan, the City of New York,
where Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 11.02
hereof.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the City of New York) where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided that no such designation or rescission shall
in any manner relieve the COMPANY of its obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York, for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby initially designates the Corporate Trust Office of
the Trustee, located in the Borough of Manhattan, the City of New York, as such
office of the Company in accordance with Section 2.04. The Company hereby
initially designates the Euro Paying Agent as an office where the Regulation S
Global may be surrendered for presentation for payment.
SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (other than the Notes and the Dollar Notes and Indebtedness
existing on the Closing Date); PROVIDED that the Company may Incur Indebtedness
if, after giving effect to the Incurrence of such Indebtedness and the receipt
and application of the proceeds therefrom, the Consolidated Leverage Ratio would
be greater than zero and less than 6:1.
Notwithstanding the foregoing, the Company and any Restricted
Subsidiary (except as specified below) may Incur each and all of the following:
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35
(i) Indebtedness outstanding at any time in an aggregate principal
amount not to exceed $100 million of Indebtedness that is PARI PASSU with
or subordinated to the Notes and $150 million of Indebtedness that is
subordinated to the Notes, less any amount of such Indebtedness permanently
repaid as provided under Section 4.11 hereof;
(ii) Indebtedness owed (A) by any Restricted Subsidiary to the Company
or another Restricted Subsidiary or (B) by the Company to any Restricted
Subsidiary; PROVIDED that any event which results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer
of such Indebtedness (other than to the Company or another Restricted
Subsidiary) shall be deemed, in each case, to constitute an Incurrence of
such Indebtedness not permitted by this clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to repay, redeem, defease, refinance, refund, extend, renew,
replace, discharge or otherwise retire any then outstanding Indebtedness
(other than Indebtedness Incurred under clause (i), (ii), (iv), (vi),
(viii), (xi) or (xii) of this paragraph) and any refinancings thereof in an
amount not to exceed the amount so refinanced or refunded (plus premiums,
penalties, accrued interest, fees and expenses); PROVIDED that Indebtedness
the proceeds of which are used to refinance or refund the Notes or
Indebtedness that is PARI PASSU with, or subordinated in right of payment
to, the Notes shall only be permitted under this clause (iii) if (A) in
case the Notes are refinanced in part or the Indebtedness to be refinanced
is PARI PASSU with the Notes, such new Indebtedness, by its terms or by the
terms of any agreement or instrument pursuant to which such new
Indebtedness is outstanding, is expressly made PARI PASSU with, or
subordinate in right of payment to, the remaining Notes, (B) in case the
Indebtedness to be refinanced is subordinated in right of payment to the
Notes, such new Indebtedness, by its terms or by the terms of any agreement
or instrument pursuant to which such new Indebtedness is issued or remains
outstanding, is expressly made subordinate in right of payment to the Notes
at least to the extent that the Indebtedness to be refinanced is
subordinated to the Notes and (C) such new Indebtedness, determined as of
the date of Incurrence of such new Indebtedness, does not mature prior to
the Stated Maturity of the Indebtedness to be refinanced or refunded, and
the Average Life of such new Indebtedness is at least equal to the
remaining Average Life of the Indebtedness to be refinanced or refunded;
and PROVIDED FURTHER that in no event may Indebtedness of the Company be
refinanced by means of any Indebtedness of any Restricted Subsidiary
pursuant to this clause (iii);
(iv) Indebtedness (A) in respect of performance, surety or appeal
bonds provided in the ordinary course of business, (B) under Currency
Agreements and Interest Rate Agreements; PROVIDED that such agreements (a)
are designed solely to protect the Company or any of its Restricted
Subsidiaries against fluctuations in foreign currency exchange rates or
interest rates and (b) do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of fees, indemnities
and compensation payable thereunder, and (C) arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in any case Incurred
in connection with the disposition of any business, assets or Restricted
Subsidiary (other than Guarantees of Indebtedness Incurred by any Person
<PAGE>
36
acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition), in a principal
amount not to exceed the gross proceeds actually received by the Company or
any Restricted Subsidiary in connection with such disposition;
(v) Indebtedness of the Company, to the extent the net proceeds
thereof are promptly (A) used to purchase Notes or Dollar Notes tendered in
an Offer to Purchase made as a result of a Change in Control or (B)
deposited to defease the Notes as described below under Article Eight
hereof;
(vi) Guarantees of the Notes and Guarantees of Indebtedness of the
Company by any Restricted Subsidiary PROVIDED the Guarantee of such
Indebtedness is permitted by and made in accordance with Section 4.07
hereof;
(vii) Indebtedness (including Guarantees) Incurred to finance the cost
(including the cost of design, development, acquisition, construction,
installation, improvement, transportation or integration) to acquire
equipment, inventory or network assets (including acquisitions by way of
Capitalized Lease and acquisitions of the Capital Stock of a Person that
becomes a Restricted Subsidiary to the extent of the fair market value of
the equipment, inventory or network assets so acquired) by the Company or a
Restricted Subsidiary after the Closing Date;
(viii) Indebtedness of the Company not to exceed, at any one time
outstanding, two times (A) the Net Cash Proceeds received by the Company
after the Closing Date as a capital contribution or from the issuance and
sale of its Capital Stock (other than Disqualified Stock) to a Person that
is not a Subsidiary of the Company, to the extent (I) such capital
contribution or Net Cash Proceeds have not been used pursuant to clause
(C)(2) of the first paragraph or clause (iii), (iv), (vi) or (vii) of the
second paragraph of Section 4.04 hereof to make a Restricted Payment and
(II) if such capital contribution or Net Cash Proceeds are used to
consummate a transaction pursuant to which the Company Incurs Acquired
Indebtedness, the amount of such Net Cash Proceeds exceeds one-half of the
amount of Acquired Indebtedness so Incurred and (B) 80% of the fair market
value of property (other than cash and cash equivalents) received by the
Company after the Closing Date from the sale of its Capital Stock (other
than Disqualified Stock) to a Person that is not a Subsidiary of the
Company, to the extent (I) such capital contribution or sale of Capital
Stock has not been used pursuant to clause (iii), (iv), (vi) or (vii) of
the second paragraph of Section 4.04 hereof to make a Restricted Payment
and (II) if such capital contribution or Capital Stock is used to
consummate a transaction pursuant to which the Company Incurs Acquired
Indebtedness, 80% of the fair market value of the property received exceeds
one-half of the amount of Acquired Indebtedness so Incurred PROVIDED that
such Indebtedness does not mature prior to the Stated Maturity of the Notes
and has an Average Life longer than the Notes;
(ix) Acquired Indebtedness;
(x) Strategic Subordinated Indebtedness;
(xi) Indebtedness in respect of bankers' acceptance and letters of
credit, all in the ordinary course of business, in an aggregate amount
outstanding at any time of up to $10 million;
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37
(xii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business, PROVIDED that such Indebtedness
is extinguished within three Business Days of Incurrence.
(b) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that the Company or a Restricted Subsidiary may
Incur pursuant to this Section 4.03 shall not be deemed to be exceeded, with
respect to any outstanding Indebtedness due solely to the result of fluctuations
in the exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (1) Guarantees, Liens or obligations with respect to
letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included and (2) any Liens
granted pursuant to the equal and ratable provisions referred to in Section 4.09
shall not be treated as Indebtedness. For purposes of determining compliance
with this Section 4.03, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in clauses (i)
through (xii) of Section 4.03(a), the Company, in its sole discretion, shall
classify, and from time to time may reclassify, such item of Indebtedness and
only be required to include the amount and type of such Indebtedness in one of
such clauses.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly,
(i) (A) declare or pay any dividend or make any distribution on or
with respect to its Capital Stock (other than (1) dividends or
distributions payable solely in shares of its Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to acquire
shares of such Capital Stock and (2) PRO RATA dividends or distributions on
Common Stock of Restricted Subsidiaries held by minority stockholders) held
by Persons other than the Company or any of its Restricted Subsidiaries or
(B) pay any cash interest on the Subordinated Convertible Debentures,
(ii) purchase, redeem, retire or otherwise acquire for value any
shares of Capital Stock of (A) the Company or an Unrestricted Subsidiary
(including options, warrants or other rights to acquire such shares of
Capital Stock) held by any Person or (B) a Restricted Subsidiary (including
options, warrants or other rights to acquire such shares of Capital Stock)
held by any Affiliate of the Company (other than a Wholly Owned Restricted
Subsidiary) or any holder (or any Affiliate of such holder) of 5% or more
of the Capital Stock of the Company,
(iii) make any voluntary or optional principal payment, or voluntary
or optional redemption, repurchase, defeasance, or other acquisition or
retirement for value, of Indebtedness of the Company that is subordinated
in right of payment to the Notes or
(iv) make any Investment (after the Closing Date), other than a
Permitted Investment, in any Person (such payments or any other actions
described in clauses (i) through (iv) above being collectively "Restricted
Payments")
if, at the time of, and after giving effect to, the proposed Restricted Payment:
(A) a Default or Event of Default shall have occurred and be continuing, (B) the
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38
Company could not Incur at least $1.00 of Indebtedness under the first paragraph
of Section 4.03 hereof or (C) the aggregate amount of all Restricted Payments
(the amount, if other than in cash, to be determined in good faith by the Board
of Directors, whose determination shall be conclusive and evidenced by a Board
Resolution) made after the Closing Date shall exceed the sum of (1) 50% of the
aggregate amount of the Adjusted Consolidated Net Income (or, if the Adjusted
Consolidated Net Income is a loss, minus 100% of the amount of such loss)
(determined by excluding income resulting from transfers of assets by the
Company or a Restricted Subsidiary to an Unrestricted Subsidiary) accrued on a
cumulative basis during the period (taken as one accounting period) beginning on
the first day of the fiscal quarter immediately following the Closing Date and
ending on the last day of the last fiscal quarter preceding the Transaction Date
for which reports have been filed with the Commission or provided to the Trustee
pursuant to Section 4.18 hereof PLUS (2) the aggregate Net Cash Proceeds
received by the Company after the Closing Date as a capital contribution or from
the issuance and sale permitted by this Indenture of its Capital Stock (other
than Disqualified Stock) to a Person who is not a Subsidiary of the Company,
including an issuance or sale permitted by this Indenture of Indebtedness of the
Company for cash subsequent to the Closing Date upon the conversion of such
Indebtedness into Capital Stock (other than Disqualified Stock) of the Company,
or from the issuance to a Person who is not a Subsidiary of the Company of any
options, warrants or other rights to acquire Capital Stock of the Company (in
each case, exclusive of any Disqualified Stock or any options, warrants or other
rights that are redeemable at the option of the holder, or are required to be
redeemed, prior to the Stated Maturity of the Notes), in each case except to the
extent such Net Cash Proceeds are used to Incur Indebtedness pursuant to clause
(viii) of the second paragraph under Section 4.03 hereof, PLUS (3) an amount
equal to the net reduction in Investments (other than reductions in Permitted
Investments) in any Person resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances, or other transfers of assets, in
each case to the Company or any Restricted Subsidiary or from the Net Cash
Proceeds from the return of capital, redemption, or sale of any such Investment
(except, in each case, to the extent any such payment or proceeds are included
in the calculation of Adjusted Consolidated Net Income), or from redesignations
of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as
provided in the definition of "Investments"), or from the release of any
Guarantee that constituted a Restricted Payment, to the extent of such release,
not to exceed, in each case, the amount of Investments previously made by the
Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.
The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the date of
declaration thereof if, at said date of declaration, such payment would
comply with the foregoing paragraph;
(ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of
payment to the Notes including premium, if any, and accrued and unpaid
interest, with the proceeds of, or in exchange for, Indebtedness Incurred
under clause (iii) of the second paragraph of part (a) of Section 4.03
hereof;
(iii) the repurchase, redemption or other acquisition of Capital Stock
of the Company or an Unrestricted Subsidiary (or options, warrants or other
rights to acquire such Capital Stock) in exchange for, or out of the
proceeds of a capital contribution or a substantially concurrent offering
of, shares of Capital Stock (other than Disqualified Stock) of the Company
(or options, warrants or other rights to acquire such Capital Stock);
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39
(iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company which is subordinated in right of payment to
the Notes in exchange for, or out of the proceeds of a capital contribution
or a substantially concurrent offering of, shares of the Capital Stock
(other than Disqualified Stock) of the Company (or options, warrants or
other rights to acquire such Capital Stock);
(v) payments or distributions to dissenting stockholders pursuant to
applicable law, pursuant to or in connection with a consolidation, merger
or transfer of assets that complies with the provisions of Article Five
hereof;
(vi) Investments in any Person the primary business of which is
related, ancillary or complementary to the business of the Company or any
of its Restricted Subsidiaries on the date of such Investments; PROVIDED
that the aggregate amount of Investments made pursuant to this clause (vi)
does not exceed $30 million at any one time outstanding;
(vii) Investments acquired in exchange for Capital Stock (other than
Disqualified Stock) of the Company or the Net Cash Proceeds from the
issuance and sale of such Capital Stock, PROVIDED that such proceeds are so
used within 180 days of the receipt thereof;
(viii) the redemption, repurchase, retirement or other acquisition of
any Capital Stock of the Company (or options, warrants or other rights to
acquire such Capital Stock) from an employee or former employee of the
Company or any of its Subsidiaries (or from such person's estate, heirs or
representatives) in connection with such employee's death, disability or
termination of employment, PROVIDED that the aggregate amount expended
pursuant to this clause does not exceed $1 million per annum plus the
cumulative amount of such per annum limit not used in prior years and the
cash proceeds from such Investments, PROVIDED that such proceeds are used
within 180 days of the receipt thereof;
(ix) Investments in permitted Wholesale Consortiums and Permitted
Joint Ventures not exceeding, at the time of the Investment, the sum of (A)
10% of the consolidated revenue of the Company (excluding with respect to
Persons in whom an equity interest is owned by Persons other than the
Company and its Restricted Subsidiaries, the PRO RATA share of such revenue
attributable to such other equity holders) accrued on a cumulative basis
during the period (taken as one accounting period) beginning on the first
day of the first full fiscal quarter immediately following the Closing Date
and ending on the last day of the last fiscal quarter preceding the date of
such Investment and (B) the Net Cash Proceeds from the disposition of the
Company's interest in any such Permitted Wholesale Consortium or Permitted
Joint Venture;
(x) the repurchase of shares of the Series A Preferred upon a Change
of Control pursuant to an Offer to Purchase; PROVIDED that an Offer to
Purchase is consummated with respect to the Notes prior to any repurchase
of shares of the Series A Preferred;
(xi) the repurchase of Subordinated Debentures upon a Change of
Control pursuant to an Offer to Purchase; provided that an Offer to
Purchase is consummated with respect to the Notes prior to any repurchase
of the Subordinated Debentures;
(xii) the payment of cash dividends on the Series A Preferred after
April 15, 2003; and
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(xiii) other Restricted Payments in an aggregate amount not to exceed
$10 million, increased by the amount of any Restricted Payment made
pursuant to this clause (xiii) that is an Investment and is not
outstanding;
PROVIDED that, except in the case of clauses (i) and (iii), no Default or Event
of Default shall have occurred and be continuing or occur as a consequence of
the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof and an Investment referred to in clause (vi)
thereof), and the Net Cash Proceeds from any capital contribution or any
issuance of Capital Stock referred to in clauses (iii), (iv) and (vi), shall be
included in calculating whether the conditions of clause (C) of the first
paragraph of this Section 4.04 have been met with respect to any subsequent
Restricted Payments. In the event the proceeds of an issuance of Capital Stock
of the Company are used for the redemption, repurchase or other acquisition of
the Notes, or Indebtedness that is PARI PASSU with the Notes, then the Net Cash
Proceeds of such issuance shall be included in clause (C) of the first paragraph
of this Section 4.04 only to the extent such proceeds are not used for such
redemption, repurchase or other acquisition of Indebtedness.
Any Restricted Payments made in other than cash shall be valued at
fair market value. The amount of any Investment "outstanding" at any time shall
be deemed to be equal to the amount of such Investment on the date made, less
the return of capital, repayment of loans, return on capital and release of
Guarantees, in each case of or to the Company and its Restricted Subsidiaries
with respect to such Investment (up to the amount of such investment on the date
made).
SECTION 4.05. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (iii) make loans or advances to the Company or any other Restricted
Subsidiary or (iv) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions:
(i) existing on the Closing Date in this Indenture, the Dollar Notes
Indenture or any other agreements in effect on the Closing Date, and any
extensions, refinancings, renewals or replacements of such agreements;
PROVIDED that the encumbrances and restrictions in any such extensions,
refinancings, renewals or replacements are no less favorable in any
material respect to the Holders than those encumbrances or restrictions
that are then in effect and that are being extended, refinanced, renewed or
replaced;
(ii) existing under or by reason of applicable law;
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41
(iii) existing with respect to any Person or the property or assets of
such Person acquired by the Company or any Restricted Subsidiary, existing
at the time of such acquisition and not incurred in contemplation thereof,
which encumbrances or restrictions are not applicable to any Person or the
property or assets of any Person other than such Person or the property or
assets of such Person so acquired;
(iv) in the case of clause (iv) of the first paragraph of this Section
4.05, (A) that restrict in a customary manner the subletting, assignment or
transfer of any property or asset that is a lease, license, conveyance or
contract or similar property or asset, (B) existing by virtue of any
transfer of, agreement to transfer, option or right with respect to, or
Lien on, any property or assets of the Company or any Restricted Subsidiary
not otherwise prohibited by this Indenture or (C) arising or agreed to in
the ordinary course of business, not relating to any Indebtedness, and that
do not, individually or in the aggregate, detract from the value of
property or assets of the Company or any Restricted Subsidiary in any
manner material to the Company or any Restricted Subsidiary;
(v) with respect to a Restricted Subsidiary and imposed pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or property and assets of, such
Restricted Subsidiary;
(vi) contained in the terms of any Indebtedness or any agreement
pursuant to which such Indebtedness was issued if (A) the encumbrance or
restriction applies only in the event of a payment default or a default
with respect to a financial covenant contained in such Indebtedness or
agreement, (B) the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary in comparable
financings (as determined by the Company) and (C) the Company determines
that any such encumbrance or restriction will not materially affect the
Company's ability to make principal or interest payments on the Notes; or
(vii) imposed in connection with a transaction described in clause (f)
of the proviso to the definition of "Asset Sale" and relating solely to a
Restricted Subsidiary that transfers assets to the special purpose entity
referred to therein; PROVIDED that the Company determines that any such
encumbrance or restriction will not materially affect the Company's ability
to make principal or interest payments on the Notes.
Nothing contained in this Section 4.05 shall prevent the Company or any
Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.09 hereof or (2) restricting
the sale or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 4.06. LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company will not sell, and will not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) except (i) to the Company or a
Wholly Owned Restricted Subsidiary; (ii) issuances of director's qualifying
shares or sales to foreign nationals of shares of Capital Stock of foreign
Restricted Subsidiaries, to the extent required by applicable law; (iii) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any Investment
<PAGE>
42
in such Person remaining after giving effect to such issuance or sale would have
been permitted to be made under Section 4.04 hereof if made on the date of such
issuance or sale; (iv) a pledge or hypothecation of or Lien on any Capital Stock
of a Subsidiary to the extent not prohibited under Section 4.09 hereof; or (v)
sales by the Company or Restricted Subsidiaries of Common Stock of a Restricted
Subsidiary, PROVIDED that the Company or such Restricted Subsidiaries apply the
Net Cash Proceeds, if any, of any such sale in accordance with clause (A) or (B)
of Section 4.11 hereof.
SECTION 4.07. LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED
SUBSIDIARIES. The Company will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee any Indebtedness of the Company which is PARI PASSU
with or subordinate in right of payment to the Notes ("Guaranteed
INDEBTEDNESS"), unless (i) such Restricted Subsidiary simultaneously executes
and delivers a supplemental indenture to this Indenture providing for a
Guarantee (a "SUBSIDIARY GUARANTEE") of payment of the Notes by such Restricted
Subsidiary and (ii) such Restricted Subsidiary waives, and will not in any
manner whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Subsidiary Guarantee; PROVIDED that this paragraph shall
not be applicable to any Guarantee of any Restricted Subsidiary that existed at
the time such Person became a Restricted Subsidiary and was not Incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary. If the Guaranteed Indebtedness is (A) PARI PASSU with the Notes,
then the Guarantee of such Guaranteed Indebtedness shall be PARI PASSU with, or
subordinated to, the Subsidiary Guarantee or (B) subordinated to the Notes, then
the Guarantee of such Guaranteed Indebtedness shall be subordinated to the
Subsidiary Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Notes.
Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary may provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Company, of all of the Company's
and each Restricted Subsidiary's Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by this Indenture) or (ii) the release or discharge of the
Guarantee which resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such Guarantee.
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH SHAREHOLDERS AND
AFFILIATES. The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any holder (or any
Affiliate of such holder) of 5% or more of any class of Capital Stock of the
Company or with any Affiliate of the Company or any Restricted Subsidiary,
except upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than could be obtained, at the time of such transaction
or, if such transaction is pursuant to a written agreement, at the time of the
execution of the agreement providing therefor, in a comparable arm's-length
transaction with a Person that is not such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to:
(i) transactions (A) approved by a majority of the disinterested
members of the Board of Directors or (B) for which the Company or a
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43
Restricted Subsidiary delivers to the Trustee a written opinion of a
nationally recognized investment banking firm stating that the transaction
is fair to the Company or such Restricted Subsidiary from a financial point
of view;
(ii) any transaction solely between the Company and any of its
Restricted Subsidiaries or solely between Restricted Subsidiaries;
(iii) the payment of reasonable and customary regular fees to
directors of the Company who are not employees of the Company;
(iv) any payments or other transactions pursuant to any tax-sharing
agreement between the Company and any other Person with which the Company
files a consolidated tax return or with which the Company is part of a
consolidated group for tax purposes;
(v) compensation, indemnification and other benefits paid or made
available to officers, directors and employees in the ordinary course of
business in connection with services actually rendered and consistent with
past practice;
(vi) transactions in accordance with the Existing Stockholder
Agreements as in effect on the Closing Date; or
(vii) any Restricted Payments not prohibited by Section 4.04 hereof.
Notwithstanding the foregoing, any transaction or series of related transactions
covered by the first paragraph of this Section 4.08 and not covered by clauses
(ii) through (v) of this paragraph, the aggregate amount of which exceeds $2.0
million in value, must be approved or determined to be fair in the manner
provided for in clause (i)(A) or (B) of this Section 4.08.
SECTION 4.09. LIMITATION ON LIENS. The Company will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist
any Lien on any of its assets or properties of any character (including, without
limitation, licenses), or any shares of Capital Stock or Indebtedness of any
Restricted Subsidiary, without making effective provision for all of the Notes
and all other amounts due under this Indenture to be directly secured equally
and ratably with (or, if the obligation or liability to be secured by such Lien
is subordinated in right of payment to the Notes, prior to) the obligation or
liability secured by such Lien.
The foregoing limitation does not apply to:
(i) Liens existing on the Closing Date;
(ii) Liens granted after the Closing Date on any assets or Capital
Stock of the Company or its Restricted Subsidiaries created in favor of the
Holders;
(iii) Liens with respect to the assets of a Restricted Subsidiary
granted by such Restricted Subsidiary to the Company or a Wholly Owned
Restricted Subsidiary to secure Indebtedness owing to the Company or such
other Restricted Subsidiary;
(iv) Liens securing Indebtedness permitted to be Incurred under clause
(iii) of the second paragraph of Section 4.03 hereof which is Incurred to
refinance secured Indebtedness; PROVIDED that such Liens do not extend to
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44
or cover any property or assets of the Company or any Restricted Subsidiary
other than the property or assets securing the Indebtedness being
refinanced;
(v) Liens on the Capital Stock of, or any property or assets of, a
Restricted Subsidiary securing Indebtedness of such Restricted Subsidiary
permitted under Section 4.03 hereof;
(vi) Liens on the Capital Stock of Restricted Subsidiaries that own a
substantial portion of assets financed with Indebtedness Incurred under
clause (vii) of Section 4.03 hereof, if such liens secure only such
Indebtedness; or
(vii) Permitted Liens.
SECTION 4.10. LIMITATION ON SALE-LEASEBACK TRANSACTIONS. The Company
will not, and will not permit any Restricted Subsidiary to, enter into any
sale-leaseback transaction involving any of its assets or properties whether now
owned or hereafter acquired, whereby the Company or a Restricted Subsidiary
sells or transfers such assets or properties and then or thereafter leases such
assets or properties or any part thereof or any other assets or properties which
the Company or such Restricted Subsidiary, as the case may be, intends to use
for substantially the same purpose or purposes as the assets or properties sold
or transferred; PROVIDED that a sale-leaseback transaction shall not include any
lease in connection with which the Company or a Restricted Subsidiary acquires
assets or property in anticipation of the substantially contemporaneous sale or
transfer to the lessor under such lease.
The foregoing restriction does not apply to any sale-leaseback
transaction if:
(i) the lease is for a period, including renewal rights, of not in
excess of three years;
(ii) the lease secures or relates to industrial revenue or pollution
control bonds;
(iii) the transaction is solely between the Company and any Restricted
Subsidiary or solely between Restricted Subsidiaries; or
(iv) the Company or such Restricted Subsidiary, within 12 months after
the sale or transfer of any assets or properties is completed, applies an
amount not less than the net proceeds received from such sale in accordance
with clause (A) or (B) of the first paragraph of Section 4.11 hereof.
SECTION 4.11. LIMITATION ON ASSET SALES. The Company will not, and
will not permit any Restricted Subsidiary to, consummate any Asset Sale, unless
(i) the consideration received by the Company or such Restricted Subsidiary is
at least equal to the fair market value of the assets sold or disposed of and
(ii) at least 75% of the consideration received consists of cash or Temporary
Cash Investments. In the event and to the extent that the Net Cash Proceeds
received by the Company or any of its Restricted Subsidiaries from one or more
Asset Sales occurring on or after the Closing Date in any period of 12
consecutive months exceed 10% of Adjusted Consolidated Net Tangible Assets
(determined as of the date closest to the commencement of such 12-month period
for which a consolidated balance sheet of the Company and its Subsidiaries has
been filed with the Commission pursuant to Section 4.18 hereof), then the
Company shall or shall cause the relevant Restricted Subsidiary to (i) within 12
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45
months after the date Net Cash Proceeds so received exceed 10% of Adjusted
Consolidated Net Tangible Assets, (A) apply an amount equal to such excess Net
Cash Proceeds to permanently repay unsubordinated Indebtedness of the Company,
or any Restricted Subsidiary providing a Subsidiary Guarantee pursuant to
Section 4.07 hereof or Indebtedness of any other Restricted Subsidiary, in each
case owing to a Person other than the Company or any of its Restricted
Subsidiaries or (B) invest an equal amount, or the amount not so applied
pursuant to clause (A) (or enter into a definitive agreement committing to so
invest within 12 months after the date of such agreement), either in property or
assets (other than current assets) of a nature or type or that are used in a
business, or in a company having property and assets of a nature or type, or
engaged in a business, in either case similar or related to the nature or type
of the property and assets of, or the business of, the Company or any of its
Restricted Subsidiaries existing on the date of such investment (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and evidenced by a Board Resolution) and (ii) apply (no later than the end of
the 12-month period referred to in clause (i)) such excess Net Cash Proceeds (to
the extent not applied pursuant to clause (i)) as provided in the following
paragraph of this Section 4.11. The amount of such excess Net Cash Proceeds
required to be applied (or to be committed to be applied) during such 12-month
period as set forth in clause (i) of the preceding sentence and not applied as
so required by the end of such period shall constitute "EXCESS PROCEEDS."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.11 totals at least $10 million, the Company must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders on a PRO RATA basis an aggregate principal amount of
Notes equal to the Excess Proceeds on such date, at a purchase price equal to
101% of the principal amount of the Notes on the relevant Payment Date, plus, in
each case, accrued interest (if any) to the Payment Date.
SECTION 4.12. REPURCHASE OF NOTES UPON A CHANGE OF CONTROL. The
Company must commence, within 30 days of the occurrence of a Change of Control,
and consummate an Offer to Purchase for all the Notes then outstanding, at a
purchase price equal to 101% of the principal amount of the Notes on the
relevant Payment Date, plus accrued interest (if any) to the Payment Date.
SECTION 4.13. EXISTENCE. Except as otherwise provided or permitted in
Articles Four and Five of this Indenture, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence and the existence of each of its Restricted Subsidiaries in accordance
with the respective organizational documents of the Company and each such
Subsidiary (as the same may be amended from time to time) and the rights
(whether pursuant to charter, partnership certificate, agreement, statute or
otherwise), material licenses and franchises of the Company and each such
Subsidiary; PROVIDED THAT the Company shall not be required to preserve any such
right, license or franchise, or the existence of any Restricted Subsidiary, if
the maintenance or preservation thereof is no longer desirable in the conduct of
the business of the Company and its Restricted Subsidiaries taken as a whole.
SECTION 4.14. Payment of Taxes and Other Claims. The Company will pay
or discharge and shall cause each of its Subsidiaries to pay or discharge, or
cause to be paid or discharged, before the same shall become delinquent (i) all
material taxes, assessments and governmental charges levied or imposed upon (a)
the Company or any such Subsidiary, (b) the income or profits of any such
Subsidiary which is a corporation or (c) the property of the Company or any such
Subsidiary and (ii) all material lawful claims for labor, materials and supplies
<PAGE>
46
that, if unpaid, might by law become a Lien upon the property of the Company or
any such Subsidiary; PROVIDED that the Company shall not be required to pay or
discharge, or cause to be paid or discharged, any such tax, assessment, charge
or claim the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings, for which adequate reserves have been
established.
SECTION 4.15. MAINTENANCE OF PROPERTIES AND INSURANCE. The Company
will cause all properties used or useful in the conduct of its business or the
business of any of its Restricted Subsidiaries, to be maintained and kept in
good condition, repair and working order (ordinary wear and tear excepted) and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED that nothing in this Section 4.15 shall prevent the Company or any such
Subsidiary from discontinuing the use, operation or maintenance of any of such
properties or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Company, desirable in the conduct of the business of the
Company or such Subsidiary.
The Company will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, with reputable insurers or with
the government of the United States of America, or an agency or instrumentality
thereof, in such amounts, with such deductibles and by such methods as shall be
customary for corporations similarly situated in the industry in which the
Company or such Restricted Subsidiary, as the case may be, is then conducting
business.
SECTION 4.16. NOTICE OF DEFAULTS. In the event that the Company
becomes aware of any Default or Event of Default, the Company, promptly after it
becomes aware thereof, will give written notice thereof to the Trustee.
SECTION 4.17. COMPLIANCE CERTIFICATES. The principal accounting
officer and the principal financial officer of the Company shall certify, on or
before a date not more than 90 days after the end of each fiscal year of the
Company, that a review has been conducted of the activities of the Company and
its Restricted Subsidiaries and the Company's and its Restricted Subsidiaries'
performance under this Indenture and that the Company has fulfilled all
obligations hereunder, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default and the nature and status thereof.
The Company shall also notify the Trustee of any default or defaults in the
performance of any covenants or agreements under this Indenture. The Company
shall also comply with the other provisions of Section 314(a) of the TIA.
SECTION 4.18. COMMISSION REPORTS AND REPORTS TO HOLDERS. At all times
from and after the earlier of (i) the date of the commencement of an Exchange
Offer or the effectiveness of a Shelf Registration Statement (the
"REGISTRATION") and (ii) the date that is six months after the Closing Date, in
either case, whether or not the Company is then required to file reports with
the Commission, the Company shall file with the Commission all such reports and
other information as it would be required to file with the Commission by
Sections 13(a) or 15(d) under the Securities Exchange Act of 1934 if it were
subject thereto. The Company shall supply the Trustee and each Holder or shall
supply to the Trustee for forwarding to each such Holder, without cost to such
Holder, copies of such reports and other information. In addition, at all times
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47
prior to the earlier of the date of the Registration and the date that is six
months after the Closing Date, the Company shall, at its cost, deliver to each
Holder of the Notes quarterly and annual reports substantially equivalent to
those which would be required by the Exchange Act. In addition, at all times
prior to the Registration, upon the request of any Holder or any prospective
purchaser of the Notes designated by a Holder, the Company shall supply to such
Holder or such prospective purchaser the information required under Rule 144A
under the Securities Act.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.19. WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC. The Company shall not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into the
Company unless:
(i) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the
Company is merged or that acquired or leased such property and assets of
the Company shall be a corporation organized and validly existing under the
laws of the United States of America or any jurisdiction thereof and shall
expressly assume, by a supplemental indenture, executed and delivered to
the Trustee, all of the obligations of the Company on all of the Notes and
under this Indenture;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a PRO
FORMA basis, the Company or any Person becoming the successor obligor of
the Notes shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such
transaction;
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48
(iv) immediately after giving effect to such transaction on a PRO
FORMA basis, the Company, or any Person becoming the successor obligor of
the Notes and the Dollar Notes, as the case may be, could Incur at least
$1.00 of Indebtedness under the first paragraph of Section 4.03 hereof;
PROVIDED that this clause (iv) shall not apply to (1) a consolidation,
merger or sale of all (but not less than all) of the assets of the Company
if all Liens and Indebtedness of the Company or any Person becoming the
successor obligor on the Notes, as the case may be, and its Restricted
Subsidiaries outstanding immediately after such transaction would, if
Incurred at such time, have been permitted to be Incurred (and all such
Liens and Indebtedness, other than Liens and Indebtedness of the Company
and its Restricted Subsidiaries outstanding immediately prior to the
transaction, shall be deemed to have been Incurred) for all purposes of
this Indenture or (2) a consolidation, merger or sale of all or
substantially all of the assets of the Company if, immediately after giving
effect to such transaction on a PRO FORMA basis, the Company or any Person
becoming the successor obligor of the Notes shall have a Consolidated
Leverage Ratio equal to or less than the Consolidated Leverage Ratio of the
Company immediately prior to such transaction; and
(v) the Company delivers to the Trustee an Officers' Certificate
(attaching the arithmetic computations to demonstrate compliance with
clauses (iii) and (iv) of this Section 5.01) and Opinion of Counsel, in
each case stating that such consolidation, merger or transfer and such
supplemental indenture complies with this provision and that all conditions
precedent provided for herein relating to such transaction have been
complied with;
PROVIDED, HOWEVER, that clauses (iii) and (iv) of this Section 5.01 do not apply
if, in the good faith determination of the Board of Directors, whose
determination shall be evidenced by a Board Resolution, the principal purpose of
such transaction is to change the state of incorporation of the Company; and
PROVIDED FURTHER that any such transaction shall not have as one of its purposes
the evasion of the foregoing limitations.
SECTION 5.02. SUCCESSOR SUBSTITUTED. Upon any consolidation or merger,
or any sale, conveyance, transfer or other disposition of all or substantially
all of the property and assets of the Company in accordance with Section 5.01 of
this Indenture, the successor Person formed by such consolidation or into which
the Company is merged or to which such sale, conveyance, transfer or other
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such successor Person had been named as the Company herein.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall occur
with respect to the Notes if:
(a) the Company defaults in the payment of principal of (or premium,
if any, on) any Note when the same becomes due and payable at maturity,
upon acceleration, redemption or otherwise;
(b) the Company defaults in the payment of interest on any Note when
the same becomes due and payable, and such default continues for a period
of 30 days; PROVIDED that a failure to make any of the first four scheduled
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49
interest payments on the Notes in a timely manner will constitute an Event
of Default with no grace or cure period;
(c) the Company defaults in the performance or breach of the
provisions of Article Five hereof or fails to make or consummate an Offer
to Purchase in accordance with Section 4.11 or Section 4.12 hereof;
(d) the Company defaults in the performance of or breaches any other
covenant or agreement of the Company in this Indenture or under the Notes
(other than a default specified in clause (a), (b) or (c) of this Section
6.01) and such default or breach continues for a period of 30 consecutive
days after written notice by the Trustee or the Holders of 25% or more in
aggregate principal amount of the Notes;
(e) there occurs with respect to any issue or issues of Indebtedness
of the Company or any Significant Subsidiary having an outstanding
principal amount of $10 million or more in the aggregate for all such
issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (I) an event of default that has caused the holder
thereof to declare such Indebtedness to be due and payable prior to its
Stated Maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled within 30 days of such
acceleration and/or (II) the failure to make a principal payment at the
final (but not any interim) fixed maturity and such defaulted payment shall
not have been made, waived or extended within 30 days of such payment
default;
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $10 million in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Significant Subsidiary and shall not be
paid or discharged, and there shall be any period of 60 consecutive days
following entry of the final judgment or order that causes the aggregate
amount for all such final judgments or orders outstanding and not paid or
discharged against all such Persons to exceed $10 million during which a
stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (B) appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary and, in each case, such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(h) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
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50
assets of the Company or any Significant Subsidiary or (C) effects any
general assignment for the benefit of creditors.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to the Company) occurs and is continuing under this Indenture, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, by written notice to the Company (and to the Trustee if
such notice is given by the Holders), may, and the Trustee at the request of
such Holders shall, declare the principal amount of, premium, if any, and
accrued interest on the Notes to be immediately due and payable. Upon a
declaration of acceleration, such principal amount of, premium, if any, and
accrued interest shall be immediately due and payable. In the event of a
declaration of acceleration because an Event of Default set forth in clause (e)
of Section 6.01 has occurred and is continuing, such declaration of acceleration
shall be automatically rescinded and annulled if the event of default triggering
such Event of Default pursuant to clause (e) shall be remedied or cured by the
Company or the relevant Significant Subsidiary or waived by the holders of the
relevant Indebtedness within 60 days after the declaration of acceleration with
respect thereto. If an Event of Default specified in clause (g) or (h) of
Section 6.01 occurs with respect to the Company, the principal amount of,
premium, if any, and accrued interest on the Notes then outstanding shall IPSO
FACTO become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder.
The Holders of at least a majority in principal amount of the
outstanding Notes, by written notice to the Company and to the Trustee, may
waive all past defaults and rescind and annul a declaration of acceleration and
its consequences if (i) all existing Events of Default, other than the
nonpayment of the principal of, premium, if any, and interest on the Notes that
have become due solely by such declaration of acceleration, have been cured or
waived and (ii) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium, if any, or interest
on the Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding.
SECTION 6.04. WAIVER OF PAST DEFAULTS. Subject to Section 9.02, at any
time after such a declaration of acceleration, but before a judgment or decree
for the payment of the money due has been obtained by the Trustee, the Holders
of at least a majority in aggregate principal amount of the outstanding Notes by
written notice to the Company and to the Trustee may waive all past Defaults and
rescind and annul a declaration of acceleration and its consequences (except a
Default in the payment of principal of premium, if any, or interest on any Note
as specified in clause (a) or (b) of Section 6.01 (but not as a result of such
acceleration) or in respect of a covenant or provision of this Indenture which
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected) if (i) all existing Events of Default, other than the
nonpayment of the principal amount of, premium, if any, and interest on the
Notes that have become due solely by such declaration of acceleration, have been
cured or waived and (ii) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction. Upon any such waiver, such Default
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51
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereto.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of at least a majority
in aggregate principal amount of the outstanding Notes may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of the Notes, not joining in the giving of such direction and may take
any other action it deems proper that is not inconsistent with any such
direction received from Holders of the Notes.
SECTION 6.06. LIMITATION ON SUITS. A Holder may not pursue any remedy
with respect to this Indenture or the Notes unless:
(i) the Holder gives the Trustee written notice of a continuing Event
of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(iii) such Holder or Holders offer the Trustee indemnity satisfactory
to the Trustee against any costs, liability or expense;
(iv) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in aggregate
principal amount of the outstanding Notes do not give the Trustee a
direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section 6.06,
the Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Notes have concurred in any request or direction of the Trustee to pursue any
remedy available to the Trustee or the Holders with respect to this Indenture or
the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal of, premium, if any, or interest on such Holder's
Note on or after the respective due dates expressed on such Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default in
payment of principal, premium or interest specified in clause (a) or (b) of
Section 6.01 of this Indenture occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor of the Notes for the whole amount of principal, premium, if
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any, and accrued interest remaining unpaid, together with interest on overdue
principal, premium, if any, and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
specified in the Notes, and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Notes), its creditors or its property
and the Trustee shall be entitled and empowered to collect and receive any
monies, securities or other property payable or deliverable upon conversion or
exchange of the Notes or upon any such claims and to distribute the same, and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.07. Nothing herein contained shall be
deemed to empower the Trustee to authorize or consent to, or accept or adopt on
behalf of any Holder, any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant
to this Article Six, it shall pay out the money in the following order:
FIRST: to the Trustee for all amounts due under Section 7.07;
SECOND: to Holders for amounts then due and unpaid for principal of,
premium, if any, and interest on the Notes in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Notes for principal, premium, if any, and interest, respectively; and
THIRD: to the Company as its interests may appear.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
6.10.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of the suit, and
the court may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit having due regard to the merits
and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 of this Indenture, or a suit by Holders of more than
10% in principal amount of the outstanding Notes.
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53
SECTION 6.12. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then,
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Company, the Trustee and the Holders shall continue as though no
such proceeding had been instituted.
SECTION 6.13. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.09, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.14. DELAY OR OMISSION NOT WAIVER. No delay or omission of
the Trustee or of any Holder to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article Six or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. GENERAL. The duties and responsibilities of the Trustee
shall be as provided by the TIA and as set forth herein. Notwithstanding the
foregoing, no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Article Seven.
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE. Subject to TIA Sections
315(a) through (d):
(i) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document (whether in its original or facsimile form) believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document and
may in good faith conclusively rely as to the truth of the statements and
the correctness of the opinions therein;
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54
(ii) before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, which shall conform to
Section 10.04 of this Indenture. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate, opinion and/or an accountants' certificate if required under
the TIA;
(iii) the Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care;
(iv) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses and liabilities that might be incurred by it in complying
with such request or direction;
(v) the Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its
rights or powers or for any action it takes or omits to take in accordance
with the direction of the Holders of a majority in principal amount of the
outstanding Notes relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture; PROVIDED that
the Trustee's conduct does not constitute negligence or bad faith;
(vi) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting to take any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate;
(vii) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled at the sole cost of the Company to examine the books,
records and premises of the Company personally or by agent or attorney and
shall incur no liability or additional liability of any kind by reason of
such inquiry or investigation;
(viii) the Trustee shall not be charged with knowledge of any Default
or Event of Default, the identity of any Restricted Subsidiary or of the
existence of any Change of Control or Asset Sale unless either (i) a
Responsible Officer shall have actual knowledge thereof, or (ii) the
Trustee shall have received written notice thereof from the Company or any
Holder of the Notes; and
(ix) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted to be taken by it hereunder in good faith and in reliance thereon.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
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55
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not the Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee (a) makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(b) shall not be accountable for the Company's use or application of the
proceeds of the Notes and (c) shall not be responsible for any statement in the
Notes other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULT. If any Default or any Event of
Default occurs and is continuing and if such Default or Event of Default is
known to a Responsible Officer of the Trustee, the Trustee shall mail to each
Holder in the manner and to the extent provided in TIA Section 313(c) notice of
the Default or Event of Default within 90 days after it occurs, unless such
Default or Event of Default has been cured; provided, however, that, except in
the case of a default in the payment of the principal of, premium, if any, or
interest on any Note, the Trustee shall be protected in withholding such notice
if and as long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the Holders.
If an Event of Default has occurred and is continuing, the Trustee shall use the
same degree of care and skill in its exercise of the rights and powers invested
in it under this Indenture as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each
May 15, beginning with May 15, 1999, the Trustee shall mail to each Holder as
provided in TIA Section 313(c) a brief report that complies with TIA Section
313(a) dated as of such May 15, if required by TIA Section 313(a).
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee such compensation as shall be agreed upon from time to time in writing
for its services. The compensation of the Trustee shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses and
advances incurred or made by the Trustee. Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee and any predecessor trustee
for, and hold it harmless against, any and all loss, claim, damage or liability
or expense (including taxes other than taxes based upon the income of the
Trustee) incurred by it without negligence or bad faith on its part in
connection with the acceptance or administration of this Indenture and its
duties under this Indenture and the Notes, including the costs and expenses of
defending itself against any claim or liability and of complying with any
process served upon it or any of its officers in connection with the exercise or
performance of any of its powers or duties under this Indenture and the Notes.
The Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall provide reasonable cooperation at the Company's expense in the
defense. The Trustee may have separate counsel of its selection and the Company
shall pay the reasonable fees and expenses of such counsel; provided, that the
Company will not be required to pay such fees and expenses if it assumes the
Trustee's defense and there is no conflict of interest between the Company and
the Trustee in connection with such defense. The Company need not pay for any
settlement made without its written consent.
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56
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Noteholders on all money or property held
or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of, premium, if any, and interest on
particular Notes.
If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in clause (h) or (i) of Section
6.01, the expenses and the compensation for the services will be intended to
constitute expenses of administration under Title 11 of the United States
Bankruptcy Code or any applicable federal or state law for the relief of
debtors.
The rights, privileges, protections and benefits given to the Trustee,
including, without limitation, its rights to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder.
The provisions of this Section 7.07 shall survive the resignation or
removal of the Trustee and the defeasance or other termination of this
Indenture.
SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of its appointment as provided in this
Section 7.08.
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Trustee in writing and may appoint a successor
Trustee with the consent of the Company. The Company may at any time remove the
Trustee, by Company Order given at least 30 days prior to the date of the
proposed removal; provided that, at such date, no Event of Default shall have
occurred and be continuing.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount of the outstanding Notes may petition at the
expense of the Company any court of competent jurisdiction for the appointment
of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07 of this Indenture, (i) the retiring Trustee shall transfer all property
held by it as Trustee to the successor Trustee, (ii) the resignation or removal
of the retiring Trustee shall become effective and (iii) the successor Trustee
shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
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57
If the Trustee is no longer eligible under Section 7.10 of this
Indenture, any Holder who satisfies the requirements of TIA Section 310(b) may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
The Company shall give notice of any resignation and any removal of
the Trustee and each appointment of a successor Trustee to all Holders. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
SECTION 7.10. ELIGIBILITY. This Indenture shall always have a Trustee
who satisfies the requirements of TIA Sections 310(a)(1) and 310(a)(5). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition.
SECTION 7.11. MONEY HELD IN TRUST. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company in writing. Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law and except for money held
in trust under Article Eight of this Indenture.
SECTION 7.12. WITHHOLDING TAXES. The Trustee, as agent for the
Company, shall exclude and withhold from each payment of principal and interest
and other amounts due hereunder or under the Notes any and all withholding taxes
applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any amounts
payable in respect of the Notes, to withhold such amounts and timely pay the
same to the appropriate authority in the name of and on behalf of the Holders of
the Notes, that it will file any necessary withholding tax returns or statements
when due, and that, as promptly as possible after the payment thereof, it will
deliver to each Holder of a Note appropriate documentation evidencing the
payment thereof, together with such additional documentary evidence as such
Holders may reasonably request from time to time.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF THE COMPANY'S OBLIGATIONS. Except as
otherwise provided in this Section 8.01, the Company may terminate its
obligations under the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes that have been replaced or Notes that are
paid pursuant to Section 4.01 hereof or Notes for whose payment money or
securities have theretofore been held in trust and thereafter repaid to the
Company, as provided in Section 8.05 hereof) have been delivered to the
Trustee for cancellation and the Company has paid all sums payable by it
hereunder; or
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(ii) (A) all of the Notes mature within one year or all of them are to
be called for redemption within one year under arrangements satisfactory to
the Trustee for giving the notice of redemption, (B) the Company deposits
in trust with the Trustee during such one-year period, under the terms of
an irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds solely for the benefit of the Holders for that
purpose, money or European Government Obligations sufficient to pay
principal, premium, if, any, and interest on the Notes to maturity or
redemption, as the case may be, and to pay all other sums payable by it
hereunder, (C) no Default or Event of Default with respect to the Notes
shall have occurred and be continuing on the date of such deposit, (D) such
deposit will not result in a breach or violation of, or constitute a
default under, this Indenture or any other agreement or instrument to which
the Company is a party or by which it is bound, (E) if at such time the
Notes are listed on a national securities exchange, the Notes will not be
delisted as a result of such deposit, defeasance or discharge and (F) the
Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, in each case stating that all conditions precedent
provided for herein relating to the satisfaction and discharge of this
Indenture have been complied with.
With respect to the foregoing clause (i), the Company's obligations
under Section 7.07 hereof shall survive. With respect to the foregoing clause
(ii), the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07,
2.08, 2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 of this Indenture
shall survive until the Notes are no longer outstanding. Thereafter, only the
Company's obligations in Sections 7.07, 8.05 and 8.06 of this Indenture shall
survive. After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations, as the case
may be, under the Notes and this Indenture, except for those surviving
obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The Company will
be deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the 123rd day after the deposit referred to below, and
the provisions of this Indenture will no longer be in effect with respect to the
Notes if:
(A) the Company has deposited with the Trustee, in trust, money and/or
European Government Obligations that through the payment of interest and
principal in respect thereof in accordance with their terms will provide
money in an amount sufficient to pay the principal of, premium, if any, and
accrued interest on the Notes on the Stated Maturity of such payments in
accordance with the terms of this Indenture and the Notes;
(B) the Company has delivered to the Trustee (i) either (1) an Opinion
of Counsel to the effect that Holders will not recognize income, gain or
loss for federal income tax purposes as a result of the Company's exercise
of its option under this Section 8.02 and will be subject to federal income
tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit, defeasance and discharge had not
occurred, which Opinion of Counsel must be based upon (and accompanied by a
copy of) a ruling of the Internal Revenue Service to the same effect unless
there has been a change in applicable federal income tax law after the
Closing Date such that a ruling is no longer required or (2) a ruling
directed to the Trustee received from the Internal Revenue Service to the
same effect as the aforementioned Opinion of Counsel and (ii) an Opinion of
Counsel to the effect that the creation of the defeasance trust does not
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59
violate the Investment Company Act of 1940 and after the passage of 123
days following the deposit, the trust fund will not be subject to the
effect of Section 547 of the United States Bankruptcy Code or Section 15 of
the New York Debtor and Creditor Law;
(C) immediately after giving effect to such deposit on a PRO FORMA
basis, no Event of Default, or event that after the giving of notice or
lapse of time or both would become an Event of Default, shall have occurred
and be continuing on the date of such deposit or during the period ending
on the 123rd day after the date of such deposit, and such deposit shall not
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound; and
(D) if at such time the Notes are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge.
Notwithstanding the foregoing, prior to the end of the 123-day period
referred to in clause (B)(ii) of this Section 8.02, none of the Company's
obligations under this Indenture shall be discharged. Subsequent to the end of
such 123-day period with respect to this Section 8.02, the Company's obligations
in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02,
4.17, 7.07, 7.08, 8.05 and 8.06 shall survive until the Notes are no longer
outstanding. Thereafter, only the Company's obligations in Sections 7.07, 8.05
and 8.06 shall survive. If and when a ruling from the Internal Revenue Service
or an Opinion of Counsel referred to in clause (B)(i) of this Section 8.02 may
be provided specifically without regard to, and not in reliance upon, the
continuance of the Company's obligations under Section 4.01, then the Company's
obligations under such Section 4.01 shall cease upon delivery to the Trustee of
such ruling or Opinion of Counsel and compliance with the other conditions
precedent provided for herein relating to the defeasance contemplated by this
Section 8.02.
After the 123 day period referred to in clause (B)(ii) of this Section
8.02, the Trustee upon Company Order shall acknowledge in writing the discharge
of the Company's obligations under the Notes and this Indenture except for those
surviving obligations in the immediately preceding paragraph.
SECTION 8.03. DEFEASANCE OF CERTAIN OBLIGATIONS. The Company may omit
to comply with any term, provision or condition set forth in clauses (iii) and
(iv) of Section 5.01 and Sections 4.03 through 4.11 of this Indenture, and
clause (c) of Section 6.01 with respect to clauses (iii) and (iv) of Section
5.01 of this Indenture and clause (d) of Section 6.01 with respect to Sections
4.01, 4.02 and 4.12 through 4.19 hereof, and clauses (e) and (f) of Section 6.01
hereof shall be deemed not to be Events of Default, upon:
(a) the deposit, in trust, with the Trustee (or another trustee
satisfying the requirements of Section 7.10 hereof) of money and/or
European Government Obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will provide
money in an amount sufficient to pay the principal of, premium, if any, and
accrued interest on the Notes on the Stated Maturity of such payments in
accordance with the terms of this Indenture and the Notes;
(b) the satisfaction of the provisions described in clauses B(ii), (C)
and (D) of Section 8.02 hereof;
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(c) delivery by the Company to the Trustee of an Opinion of Counsel to
the effect that, the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance and
will be subject to federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred; and
(d) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. APPLICATION OF TRUST MONEY. Subject to Section 8.06, the
Trustee or Paying Agent shall hold in trust money or European Government
Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the
case may be, and shall apply the deposited money and the money from European
Government Obligations in accordance with the Notes and this Indenture to the
payment of principal of, premium, if any, and interest on the Notes; but such
money need not be segregated from other funds except to the extent required by
law.
SECTION 8.05. REPAYMENT TO COMPANY. Subject to Sections 7.07, 8.01,
8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Company any excess money, as determined by a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, and held by them at any time and thereupon shall be
relieved from all liability with respect to such money. The Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal, premium, if any, or interest that remains unclaimed
for two years; provided that the Trustee or such Paying Agent before being
required to make any payment may cause to be published at the expense of the
Company once in a newspaper of general circulation in the City of New York or
mail to each Holder entitled to such money at such Holder's address (as set
forth in the Note Register) notice that such money remains unclaimed provided
that the Trustee or such Paying Agent before being required to make any payment
may give notice in accordance with Section 11.02(b) that such money remains
unclaimed and that after a date specified therein (which shall be at least 30
days from the date of such publication or mailing) any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to such money must look to the Company for payment as
general creditors unless an applicable law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
SECTION 8.06. REINSTATEMENT. If the Trustee or the Paying Agent is
unable to apply any money or European Government Obligations in accordance with
Section 8.01, 8.02 or 8.03, as the case may be, by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01, 8.02 or
8.03, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money or European Government Obligations in
accordance with Section 8.01, 8.02 or 8.03, as the case may be; provided that,
if the Company has made any payment of principal of, premium, if any, or
interest on any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or European Government Obligations held by
the Trustee or Paying Agent.
<PAGE>
61
SECTION 8.07. DEFEASANCE AND CERTAIN OTHER EVENTS OF DEFAULT. In the
event that the Company exercises its option to omit compliance with certain
covenants and provisions of this Indenture with respect to the Notes pursuant to
Section 8.03 and such Notes are declared due and payable because of the
occurrence of an Event of Default that remains applicable, the amount of money
and/or European Government Obligations on deposit with the Trustee will be
sufficient to pay amounts due on such Notes at the time of their Stated
Maturity. If, in the event the Company exercises its option to omit compliance
with certain covenants and provisions of this Indenture with respect to the
Notes pursuant to Section 8.03 and such Notes are declared due and payable
because of the occurrence of an Event of Default that remains applicable, the
amount of money and/or European Government Obligations on deposit with the
Trustee is insufficient to pay amounts due on the Notes at the time of the
acceleration resulting from such Events of Default pursuant to Section 6.02, the
Company will remain liable for such payments.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company, when authorized
by resolutions of its Board of Directors (as evidenced by a Board Resolution),
and the Trustee may amend or supplement this Indenture or the Notes without
notice to, or the consent of, any Holder:
(a) to cure any ambiguity, defect or inconsistency in this Indenture;
provided that, in the good faith opinion of the Board of Directors of the
Company evidenced by a Board Resolution, such amendments or supplements do
not adversely affect the interests of the Holders in any material respect;
(b) to comply with Article Five;
(c) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA;
(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee; or
(e) to make any change that, in the good faith opinion of the Board of
Directors of the Company evidenced by a Board Resolution, does not
materially and adversely affect the rights of any Holder.
SECTION 9.02. WITH CONSENT OF HOLDERS. Subject to Sections 6.07 and
without prior notice to the Holders, the Company, when authorized by its Board
of Directors (as evidenced by a Board Resolution), and the Trustee may amend
this Indenture and the Notes with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding, and the
Holders of a majority in aggregate principal amount of the Notes then
outstanding by written notice to the Trustee may waive compliance by the Company
with any provision of this Indenture or the Notes.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected thereby, an amendment or waiver, including a
waiver pursuant to Section 6.04 hereof, may not:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Note;
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62
(b) reduce the principal amount of, or premium, if any, or interest
on, any Note;
(c) change the place or currency of payment of principal of, or
premium, if any, or interest on, any Note;
(d) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of a redemption,
on or after the Redemption Date) of any Note;
(e) reduce the above-stated percentage of outstanding Notes, the
consent of whose Holders is necessary to modify or amend this Indenture;
(f) waive a default in the payment of principal of, premium, if any,
or interest on the Notes; or
(g) reduce the percentage or aggregate principal amount of outstanding
Notes the consent of whose Holders is necessary for waiver of compliance
with certain provisions of this Indenture or for waiver of certain
defaults.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Trustee shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. The Company will
mail supplemental indentures to Holders upon request. Any failure of the Company
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. REVOCATION AND EFFECT OF CONSENT. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies) and only those
Persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in any of clauses (i)
through (vii) of Section 9.02. In case of an amendment or waiver of the type
described in clauses (i) through (vii) of Section 9.02, the amendment or waiver
<PAGE>
63
shall bind each Holder who has consented to it and every subsequent Holder of a
Note that evidences the same indebtedness as the Note of the consenting Holder.
SECTION 9.04. NOTATION ON OR EXCHANGE OF NOTES. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Note about the changed terms and return it to the Holder and the
Trustee may place an appropriate notation on any Note thereafter authenticated.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms.
SECTION 9.05. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, in addition
to the documents required by Section 11.03, an Opinion of Counsel stating that
the execution of any amendment, supplement or waiver authorized pursuant to this
Article Nine is authorized or permitted by this Indenture. Subject to the
preceding sentence, the Trustee shall sign such amendment, supplement or waiver
if the same does not adversely affect the rights of the Trustee. The Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver that affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 9.06. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
ARTICLE TEN
SECURITY
SECTION 10.01. SECURITY. (a) On the Closing Date, the Company shall
(i) enter into the Pledge Agreement and comply with the terms and provisions
thereof and (ii) purchase the Euro Pledged Securities to be pledged to the
Trustee for the benefit of the Holders in such amount as will be sufficient upon
receipt of scheduled interest and/or principal payments of such Euro Pledged
Securities to provide for payment in full of the first four scheduled interest
payments due on the Notes. The Euro Pledged Securities shall be pledged by the
Company to the Trustee for the benefit of the Holders and shall be held by the
Trustee in the Euro Pledge Account pending disposition pursuant to the Pledge
Agreement.
(b) Each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Pledge Agreement (including, without limitation, the provisions
providing for foreclosure and release of the Euro Pledged Securities) as the
same may be in effect or may be amended from time to time in accordance with its
terms, and authorizes and directs the Trustee to enter into the Pledge Agreement
and to perform its respective obligations and exercise its respective rights
thereunder in accordance therewith. The Company will do or cause to be done all
such acts and things as may be necessary or reasonably requested by the Trustee,
or as may be required by the provisions of the Pledge Agreement, to assure and
confirm to the Trustee the security interest in the Euro Pledged Securities
contemplated hereby, by the Pledge Agreement or any part thereof, as from time
to time constituted, so as to render the same available for the security and
benefit of this Indenture and of the Notes secured hereby, according to the
intent and purposes herein and therein expressed. The Company shall take, or
shall cause to be taken, upon request of the Trustee, any and all actions
reasonably required to cause the Pledge Agreement to create and maintain, as
<PAGE>
64
security for the obligations of the Company under this Indenture and the Notes,
valid and enforceable first priority liens in and on all the Euro Pledged
Securities, in favor of the Trustee, superior to and prior to the rights of
third Persons and subject to no other Liens.
(c) The release of any Euro Pledged Securities pursuant to the Pledge
Agreement will not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Euro Pledged
Securities are released pursuant to this Indenture and the Pledge Agreement. To
the extent applicable, the Company shall cause TIA Section 314(d) relating to
the release of property or securities from the Lien and security interest of the
Pledge Agreement and relating to the substitution therefor of any property or
securities to be subjected to the Lien and security interest of the Pledge
Agreement to be complied with. Any certificate or opinion required by TIA
Section 314(d) may be made by an Officer of the Company, except in cases where
TIA Section 314(d) requires that such certificate or opinion be made by an
independent Person, which Person shall be an independent engineer, appraiser or
other expert selected by the Company.
(d) The Company shall cause TIA Section 314(b), relating to opinions
of counsel regarding the Lien under the Pledge Agreement, to be complied with.
The Trustee may accept, to the extent permitted by Sections 4.18 and 7.06 as
conclusive evidence of compliance with the foregoing provisions, the appropriate
statements contained in such instruments.
(e) The Trustee may, in its sole discretion and without the consent of
the Holders, on behalf of the Holders, take all reasonable actions in accordance
with the Pledge Agreement necessary or appropriate in order to (i) enforce any
of the terms of the Pledge Agreement and (ii) collect and receive any and all
amounts payable in respect of the obligations of the Company thereunder. The
Trustee shall have power to institute and to maintain such suits and proceedings
as the Trustee may reasonably deem expedient to preserve or protect its
interests and the interests of the Holders in the Euro Pledged Securities
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of the
Holders or of the Trustee).
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT OF 1939. Prior to the effectiveness
of the Registration Statement, this Indenture shall incorporate and be governed
by the provisions of the TIA that are required or deemed to be part of and to
govern indentures qualified under the TIA. After the effectiveness of the
Registration Statement, this Indenture shall be subject to the provisions of the
TIA that are required or deemed to be a part of this Indenture and shall, to the
extent applicable, be governed by such provisions.
SECTION 11.02. NOTICES. (a) Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail, commercial courier service or telecopier communication, addressed as
follows:
<PAGE>
65
if to the Company:
-----------------
Viatel, Inc.
685 Third Avenue
New York, NY 10017
Telecopier Number: (212) 350-9250
Attention: Sheldon M. Goldman
With, in the case of any notice given pursuant to Article Six, a copy to:
Kelley Drye & Warren LLP
101 Park Avenue
New York, NY 10178
Telecopier Number: (212) 808-7897
Attention: James P. Prenetta, Jr.
if to the Trustee:
-----------------
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Telecopier Number: (212) 815-5915
Attention: Corporate Trust Administration
With a copy to:
Emmet, Marvin & Martin
120 Broadway
New York, NY 10271
Attention: Anthony Harvin
The Company, the Trustee, or the Depository by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
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 the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
(b) Any notice or communication mailed to a Holder shall be mailed to
him at his address as it appears on the Note Register by first class mail and
shall be sufficiently given to him if so mailed within the time prescribed.
Copies of any such communication or notice to a Holder shall also be mailed to
the Trustee and each Agent at the same time.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except for a
notice to the Trustee, which is deemed given only when received, and except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided in this Section 11.02, it is duly given, whether or not the
addressee receives it.
(c) Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
<PAGE>
66
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 11.03. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
Counsel, all such conditions precedent have been complied with.
SECTION 11.04. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(a) a statement that each person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statement or opinion contained in such
certificate or opinion is based;
(c) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided,
however, that, with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 11.05. RULES BY TRUSTEE, PAYING AGENT OR REGISTRAR. The
Trustee may make reasonable rules for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.06. PAYMENT DATE OTHER THAN A BUSINESS DAY. If an Interest
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of maturity
of any Note shall not be a Business Day, then payment of principal of, premium,
if any, or interest on such Note, as the case may be, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Payment Date, or Redemption
Date, or at the Stated Maturity or date of maturity of such Note; provided that
no interest shall accrue for the period from and after such Interest Payment
Date, Payment Date, Redemption Date, Stated Maturity or date of maturity, as the
case may be.
<PAGE>
67
SECTION 11.07. GOVERNING LAW; SUBMISSION TO JURISDICTION; AGENT FOR
SERVICE. This Indenture and the Notes shall be governed by the laws of the State
of New York. The Company hereby appoints CT Corporation System as its agent for
service of process in any suit, action or proceeding with respect to this
Indenture or the Notes and for actions brought under the U.S. federal or state
securities laws brought in any federal or state court located in the City of New
York and the Company agrees to submit to the jurisdiction of any such court.
SECTION 11.08. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any Subsidiary of the Company. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 11.09. NO RECOURSE AGAINST OTHERS. No recourse for the payment
of the principal of, premium, if any, or interest on any of the Notes, or for
any claim based thereon or otherwise in respect thereof, and no recourse under
or upon any obligation, covenant or agreement of the Company contained in this
Indenture, or in any of the Notes, or because of the creation of any
Indebtedness represented thereby, shall be had against any incorporator or
against any past, present or future partner, stockholder, other equity holder,
officer, director, employee or controlling person, as such, of the Company or of
any successor Person, either directly or through the Company or any successor
Person, whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
SECTION 11.10. SUCCESSORS. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors.
SECTION 11.11. DUPLICATE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 11.12. SEPARABILITY. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC. The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms and provisions hereof.
SECTION 11.14. METHOD OF PAYMENT. (a) Euro is the sole currency of
account and payment for all sums payable by the Company under or in connection
with the Notes, including damages, except as otherwise set forth in this Section
11.14.
(b) Investors who hold beneficial interests in the Notes, directly or
indirectly, through DTC ("DTC NOTEHOLDERS") will be paid in U.S. dollars
converted from such payments in Euro by the Paying Agent unless the registered
holder, on behalf of any such owner of beneficial interests, elects to receive
payments in Euro.
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68
Upon receipt of notice of such election and wire transfer instructions
on or prior to the fourth New York Business Day (as defined in clause (c) below)
after the record date for any payment of interest and on or prior to the sixth
New York Business Day prior to the payment of principal, the Paying Agent will
make such payments in Euro to the Euro accounts of the relevant Holders.
The Paying Agent shall convert the remainder of the aggregate amount
of such payments into U.S. dollars, based on the Paying Agent's bid quotation,
at or prior to 11:00 a.m., New York Time, on the second New York Business Day
preceding the date of such payment, for the purchase of U.S. dollars with Euro,
for settlement on the date of such payment. If such bid quotation is not
available, all such payments will be made in Euro, outside DTC to Euro accounts
maintained by such DTC Noteholders.
(c) All costs of conversion, if any, will be borne by such DTC
Noteholders, by deduction from such payments. All costs of payment by wire
transfer referred to in paragraph (b) above will be borne by registered holders
receiving such payments by deduction from such payments. For purposes of the
foregoing, "NEW YORK BUSINESS DAY" means a day all banking institutions are not
authorized or obligated by law or executive order to be closed in the City of
New York.
SECTION 11.15. JUDGMENT CURRENCY. Subject to Section 7.07, the Company
hereby agrees to indemnify the Trustee and any predecessor trustee (acting on
behalf of the Holders or otherwise) against any loss incurred by such person as
a result of any judgment or order being made or given against the Company for
any Euro amount due under this Indenture. The Company hereby also agrees to
indemnify such Trustee and any predecessor trustee against any loss incurred by
such person if such judgment or order is being expressed and paid in a currency
other than Euro (the "JUDGMENT CURRENCY"), as a result of any variation as
between (i) the rate of exchange at which the Euro amount is converted into the
Judgment Currency for the purpose of such judgment or order and (ii) the spot
rate of exchange in the City of New York on which such party on the date of
payment of such judgment or order is able to purchase Euro with the amount of
the Judgment Currency actually received by such party. The foregoing indemnity
shall continue in full force and effect notwithstanding any such judgment or
order. The term "spot rate of exchange" shall include any premiums or costs of
exchange payable in connection with the purchase of, or conversion into the
Euro.
<PAGE>
69
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
VIATEL, INC.
By: /s/ ALLAN L. SHAW
-------------------------------------
Name: Allan L. Shaw
Title: Senior Vice President and
Chief Financial Officer
THE BANK OF NEW YORK,
as Trustee
By: /s/ MING J. SHIANG
-------------------------------------
Name: Ming J. Shiang
Title: Vice President
<PAGE>
EXHIBIT A
FORM OF REGISTERED GLOBAL NOTE
[FACE OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, 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 FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND
IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OF
REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT, WITHIN THE
TIME PERIOD REFERRED TO IN RULE 144(k) AS IN EFFECT ON THE DATE OF SUCH
TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO VIATEL, INC. OR
ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF EURO NOTES OF LESS THAN EURO 100,000, AN OPINION
OF COUNSEL ACCEPTABLE TO VIATEL, INC. THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT, (D) TO A PERSON OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO EACH OF
THE TRUSTEE AND VIATEL, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUCH PERSONS MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO VIATEL, INC. OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE>
A-2
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.08 OF
THE INDENTURE.
<PAGE>
A-3
VIATEL, INC.
11-1/2% Senior Euro Note Due 2009
[CUSIP][CINS][ISIN][___]
No. __________ Euro[_______]
Issue date: March 19, 1999
VIATEL, INC., a Delaware corporation (the "Company", which term includes
any successor under the Indenture hereinafter referred to), for value received,
promises to pay to ________________, or its registered assigns, upon surrender
hereof the principal sum of Euro _________ on March 15, 2009.
Interest Payment Dates: March 15 and September 15, commencing September 15,
1999.
Record Dates: March 1 and September 1.
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.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
Date: March 19, 1999 VIATEL, INC.
By-------------------------------------------
Name:
Title:
By-------------------------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 11-1/2% Senior Euro Notes due 2009 described in the
within-mentioned Indenture.
Date: March 19, 1999 THE BANK OF NEW YORK, as Trustee
By------------------------------
Authorized Signatory
<PAGE>
A-4
[REVERSE SIDE OF NOTE]
VIATEL, INC.
11-1/2% Senior Euro Note due 2009
1. PRINCIPAL AND INTEREST.
The Company will pay the principal of this Note on March 15, 2009.
The Company promises to pay interest on the principal amount of this Note
on each Interest Payment Date, as set forth below, at the rate per annum shown
above.
Interest will be payable semiannually in cash (to the holders of record of
the Notes at the close of business on the March 1 or September 1 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
September 15, 1999. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
If an exchange offer registered under the Securities Act is not
consummated, and a shelf registration statement under the Securities Act with
respect to resales of the Notes is not declared effective by the Commission, on
or before the date that is six months after the Closing Date in accordance with
the terms of the Registration Rights Agreement, dated March 12, 1999, between
the Company and Morgan Stanley & Co. Incorporated, as the manager for itself and
the several initial purchasers named on Schedule I to the Purchase Agreement,
dated March 12, 1999, annual interest (in addition to interest otherwise due on
the Notes) will accrue, at an annual rate of .5% per annum of the principal
amount, payable in cash semiannually, in arrears on March 15 and September 15 of
each year, commencing March 15, 2000 until the consummation of a registered
exchange offer or the effectiveness of a shelf-registration statement with
respect to resale of this Note. The Holder of this Note is entitled to the
benefits of such Registration Rights Agreement.
The Holder of this Note is entitled to the benefits of a Pledge Agreement,
dated March 19, 1999, between the Company and The Bank of New York, as trustee
(the "Trustee"), pursuant to which the Company has placed in the Euro Pledge
Account cash or Government Securities sufficient to provide for the payment of
the first four interest payments on this Note.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum that is 11-1/2% per annum.
2. METHOD OF PAYMENT.
The Company will pay principal as provided above and interest (except
defaulted interest) on the principal amount of the Notes as provided above on
each March 15 and September 15 to the Persons who are Holders (as reflected in
the Note Register at the close of business on such March 1 and September 1,
immediately preceding the Interest Payment Date), in each case, even if the Note
is cancelled on registration of transfer or registration of exchange after such
record date; provided that, with respect to the payment of principal, the
<PAGE>
A-5
Company will not make payment to the Holder unless this Note is surrendered to a
Paying Agent.
The Company will pay principal, premium, if any, and as provided above,
interest in the currency of the United States that at the time of payment is
legal tender for the payment of public and private debts. However, the Company
may pay principal, premium, if any, and interest by its check payable in such
currency. It may mail an interest check to a Holder's registered address (as
reflected in the Note Register). If a payment date is a date other than a
Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
3. PAYING AGENT AND REGISTRAR.
Initially, the Trustee will act as Paying Agent and Registrar and the
Trustee (through its London Branch) will act as Euro Paying Agent. The Company
will maintain a paying agent in Frankfurt in the event the Notes are listed on
the Frankfurt over-the-counter market. The Company may change any Paying Agent
or Registrar without notice. The Company, any Subsidiary or any Affiliate of any
of them may act as Paying Agent, Registrar or co-Registrar.
4. INDENTURE; ISSUANCE OF ADDITIONAL NOTES.
This Note is one of a duly authorized issue of Notes of the Company
designated its 11-1/2% Senior Notes due 2009, issued and to be issued under an
Indenture, dated as of March 19, 1999 (the "Indenture"), between the Company and
the Trustee. Capitalized terms used herein are used as defined in the Indenture
unless otherwise indicated. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Notes are subject to all such terms, and Holders are referred
to the Indenture and the Trust Indenture Act for a statement of all such terms.
To the extent permitted by applicable law, in the event of any inconsistency
between the terms of this Note and the terms of the Indenture, the terms of the
Indenture shall control.
5. REDEMPTION.
The Notes will be redeemable, at the Company's option, in whole or in part,
at any time and from time to time on or after March 15, 2004 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holders' last address as it appears in the Note
Register, at the following Redemption Prices (expressed in percentages of their
principal amount), plus accrued and unpaid interest, if any, to the Redemption
Date (subject to the right of Holders of record on the relevant Regular Record
Date that is on or prior to the Redemption Date to receive interest due on an
Interest Payment Date), if redeemed during the 12-month period commencing on
March 15 of the years set forth below:
Redemption
Year Price
---- ----------
2004 105.750%
2005 103.833%
2006 101.917%
2007 and thereafter 100.000%
<PAGE>
A-6
In addition, at any time or from time to time on or prior to March 15,
2002, the Company may, at its option, redeem up to 35% of the aggregate
principal amount of the Notes with the net proceeds of one or more Public Equity
Offerings, at a Redemption Price (expressed as a percentage of principal amount)
of 111.500%, provided, (i) that Notes and Dollar Notes representing at least 65%
of the principal amount of the Notes and Dollar Notes originally issued remain
outstanding after each such redemption and (ii) that notice of each such
redemption is mailed within 60 days of each such Public Equity Offering.
6. NOTICE OF REDEMPTION.
Notice of any optional redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at such Holder's last address as it appears in the Note Register. Notes
in original denominations larger than Euro 1,000 of principal amount may be
redeemed in part. On and after the Redemption Date, interest ceases to accrue on
Notes or portions of Notes called for redemption, unless the Company defaults in
the payment of the Redemption Price.
7. REPURCHASE UPON CHANGE IN CONTROL.
Upon the occurrence of any Change of Control, each Holder shall have the
right to require the repurchase of its Notes by the Company in cash pursuant to
the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30 days after any
Change of Control occurs to each Holder at his last address as it appears in the
Note Register. Notes in original denominations larger than Euro 1,000 of
principal amount may be sold to the Company in part. On and after the date of
the Change of Control Payment, interest ceases to accrue on Notes or portions of
Notes surrendered for purchase by the Company, unless the Company defaults in
the payment of the Change of Control Payment.
8. REGISTRATION RIGHTS
Pursuant to the Registration Rights Agreement, the Company will be
obligated, within 180 days after the issue date of this Note, to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right to
exchange this Note for the Company's Exchange Notes (as defined in the
Registration Rights Agreement) which have been registered under the Securities
Act, in like principal amount and having terms identical in all material
respects as the initial Notes. The Holders of the initial Notes shall be
entitled to receive certain additional interest payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant and in accordance with the terms of the Registration Rights Agreement.
9. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form without coupons in denominations of Euro
1,000 of principal amount and any integral multiples of Euro 1,000 in excess
thereof. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer or exchange of any Notes selected for redemption. Also, it
need not register the transfer or exchange of any Notes for a period of 15 days
before a selection of Notes to be redeemed is made.
<PAGE>
A-7
10. PERSONS DEEMED OWNERS.
A Holder shall be treated as the owner of a Note for all purposes.
11. UNCLAIMED MONEY.
If money for the payment of principal, premium, if any, or interest remains
unclaimed for two years, the Trustee and the Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Company deposits with the Trustee money and/or European Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in certain
circumstances for certain sections thereof, and (b) to Stated Maturity, the
Company will be discharged from certain covenants set forth in the Indenture.
13. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding, and any existing default or compliance
with any provision may be waived with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding. Without notice to or
the consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency and make any change that does not materially and adversely affect
the rights of any Holder.
14. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the Company and
its Restricted Subsidiaries, among other things, to Incur Indebtedness, make
Restricted Payments, use the proceeds from Asset Sales, engage in transactions
with Affiliates or, with respect to the Company, merge, consolidate or transfer
substantially all of its assets. Within 90 days after the end of the last fiscal
quarter of each year, the Company must report to the Trustee on compliance with
the terms of the Indenture.
15. SUCCESSOR PERSONS.
When a successor Person or other entity assumes all the obligations of its
predecessor under the Notes and the Indenture, the predecessor Person will be
released from those obligations.
16. DEFAULTS AND REMEDIES.
The following events constitute "Events of Default" under the Indenture:
(a) default in the payment of principal of (or premium, if any, on) any Note
when the same becomes due and payable at maturity, upon acceleration, redemption
or otherwise; (b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days;
provided that a failure to make any of the first four scheduled interest
<PAGE>
A-8
payments on this Note in a timely manner will constitute an Event of Default
with no grace or cure period; (c) default in the performance or breach of the
provisions of the Indenture applicable to mergers, consolidations and transfers
of all or substantially all of the assets of the Company or the failure to make
or consummate an Offer to Purchase in accordance with Section 4.11 of the
Indenture or Section 4.12 of the Indenture; (d) the Company defaults in the
performance of or breaches any other covenant or agreement of the Company in the
Indenture or under the Notes (other than a default specified in clause (a), (b)
or (c) of Section 6.01 of the Indenture) and such default or breach continues
for a period of 30 consecutive days after written notice by the Trustee or the
Holders of 25% or more in aggregate principal amount or principal amount of
Notes; (e) there occurs with respect to any issue or issues of Indebtedness of
the Company or any Significant Subsidiary having an outstanding principal amount
of $10 million or more in the aggregate for all such issues of all such Persons,
whether such Indebtedness now exists or shall hereafter be created, (I) an event
of default that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such defaulted
payment shall not have been made, waived or extended within 30 days of such
payment default; (f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $10 million in the aggregate for all such
final judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Significant Subsidiary and shall not be paid or discharged, and
there shall be any period of 60 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such Persons to
exceed $10 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; (g) a
court having jurisdiction in the premises enters a decree or order for (A)
relief in respect of the Company or any Significant Subsidiary in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or (h) the Company or any Significant Subsidiary (A)
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors.
If an Event of Default (other than an Event of Default specified in clause
(g) or (h) above that occurs with respect to the Company) occurs and is
continuing under the Indenture, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes, then outstanding, by written notice to
the Company (and to the Trustee if such notice is given by the Holders) may, and
the Trustee at the request of such Holders shall, declare the principal amount
of, premium, if any, and accrued interest on the Notes to be immediately due and
payable.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
<PAGE>
A-9
amount of the Notes then outstanding may declare all the Notes to be due and
payable. If a bankruptcy or insolvency default with respect to the Company or
any Restricted Subsidiary occurs and is continuing, the Notes automatically
become due and payable. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of at least a majority in principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power.
17. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from and perform services for the Company or
its Affiliates and may otherwise deal with the Company or its Affiliates as if
it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No incorporator or any past, present or future partner, stockholder, other
equity holder, officer, director, employee or controlling person as such, of the
Company or of any successor Person shall have any liability for any obligations
of the Company under the Notes or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
19. AUTHENTICATION.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).
This Note shall be governed by the laws of the State of New York.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to Viatel, Inc., 685 Third
Avenue, New York, New York, 10017, Attention: Sheldon M. Goldman.
<PAGE>
A-10
SCHEDULE OF PRINCIPAL AMOUNT OF INDEBTEDNESS
EVIDENCED BY THIS NOTE
The initial principal amount of indebtedness evidenced by this Note shall
be Euro [_______]. The following decreases/increases in the principal amount
evidenced by this Note have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Decrease in Increase in
Principal Principal Total Principal Amount of
Date of Decrease/ Amount of this Amount of this this Global Note Following Notation Made by or on
Increase Global Note Global Note such Decrease/Increase Behalf of Trustee
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
</TABLE>
<PAGE>
A-11
[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 said Note on the books of
the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
UNLEGENDED REGULATION S GLOBAL AND
UNLEGENDED REGULATION S CERTIFICATED NOTES]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of an effective Registration or (ii) the
end of the period referred to in Rule 144(k) under the Securities Act, 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 (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 2.08 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.
TO BE COMPLETED BY PURCHASER IF (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
<PAGE>
A-12
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 executive officer
<PAGE>
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.11 or Section 4.12 of the Indenture, check the Box: _
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.11 or Section 4.12 of the Indenture, state the amount (in
principal amount): Euro -----------.
Date:---------------
Your Signature:-----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:----------------------------
<PAGE>
B-1
EXHIBIT B
FORM OF REGULATION S GLOBAL NOTE
[FACE OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, 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 FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND
IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OF
REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT, WITHIN THE
TIME PERIOD REFERRED TO IN RULE 144(k) AS IN EFFECT ON THE DATE OF SUCH
TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO VIATEL, INC. OR
ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF EURO NOTES OF LESS THAN EURO 100,000, AN OPINION
OF COUNSEL ACCEPTABLE TO VIATEL, INC. THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT, (D) TO A PERSON OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO EACH OF
THE TRUSTEE AND VIATEL, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUCH PERSONS MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.
THIS NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING THIS
NOTE) IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE
MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.08 OF
THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED
TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND
(4) THIS GLOBAL NOTE MAY BE DELIVERED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR
WRITTEN CONSENT OF VIATEL, INC.
<PAGE>
B-2
VIATEL, INC.
11-1/2% Senior Euro Note Due 2009
[CUSIP][CINS][ISIN][Common Code] ---------
No. -------------- Euro ---------
Issue date: March 19, 1999
VIATEL, INC., a Delaware corporation (the "Company", which term includes
any successor under the Indenture hereinafter referred to), for value received,
promises to pay to ___________, or its registered assigns, the principal sum of
Euro _________ on March 15, 2009.
Interest Payment Dates: March 15 and September 15, commencing September 15,
1999.
Record Dates: March 1 and September 1.
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.
<PAGE>
B-3
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
Date: March 19, 1999 VIATEL, INC.
By------------------------
Name:
Title:
By------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 11-1/2% Senior Euro Notes due 2009 described in the
within-mentioned Indenture.
Date: March 19, 1999 THE BANK OF NEW YORK, as Trustee
By------------------------------
Authorized Signatory
<PAGE>
B-4
[REVERSE SIDE OF NOTE]
VIATEL, INC.
11-1/2% Senior Euro Note due 2009
1. PRINCIPAL AND INTEREST.
The Company will pay the principal of this Note on March 15, 2009.
The Company promises to pay interest on the principal amount of this Note
on each Interest Payment Date, as set forth below, at the rate per annum shown
above.
Interest will be payable semiannually in cash (to the holders of record of
the Notes at the close of business on the March 1 or September 1 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
September 15, 1999. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
If an exchange offer registered under the Securities Act is not
consummated, and a shelf registration statement under the Securities Act with
respect to resales of the Notes is not declared effective by the Commission, on
or before the date that is six months after the Closing Date in accordance with
the terms of the Registration Rights Agreement, dated March 12, 1999, between
the Company and Morgan Stanley & Co. Incorporated, as the manager for itself and
the several initial purchasers named on Schedule I to the Purchase Agreement,
dated March 12, 1999, annual interest (in addition to interest otherwise due on
the Notes) will accrue, at an annual rate of 0.5% per annum of the principal
amount, payable in cash semiannually, in arrears on March 15 and September 15 of
each year, commencing March 15, 2000 until the consummation of a registered
exchange offer or the effectiveness of a shelf-registration statement with
respect to resale of this Note. The Holder of this Note is entitled to the
benefits of such Registration Rights Agreement.
The Holder of this Note is entitled to the benefits of a Pledge Agreement,
dated March 19, 1999 between the Company and The Bank of New York, as trustee
(the "Trustee"), pursuant to which the Company has placed in the Euro Pledge
Account cash or Government Securities sufficient to provide for the payment of
the first four interest payments on this Note.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum that is 11-1/2% per annum.
2. METHOD OF PAYMENT.
The Company will pay principal as provided above and interest (except
defaulted interest) on the principal amount of the Notes as provided above on
each March 15 and September 15 to the Persons who are Holders (as reflected in
the Note Register at the close of business on such March 1 and September 1,
immediately preceding the Interest Payment Date), in each case, even if the Note
is cancelled on registration of transfer or registration of exchange after such
record date; provided that, with respect to the payment of principal, the
<PAGE>
B-5
Company will not make payment to the Holder unless this Note is surrendered to a
Paying Agent.
The Company will pay principal, premium, if any, and as provided above,
interest in the currency of the United States that at the time of payment is
legal tender for the payment of public and private debts. However, the Company
may pay principal, premium, if any, and interest by its check payable in such
currency. It may mail an interest check to a Holder's registered address (as
reflected in the Note Register). If a payment date is a date other than a
Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
3. PAYING AGENT AND REGISTRAR.
Initially, the Trustee will act as Paying Agent and Registrar and the
Trustee (through its London Branch) will act as Euro Paying Agent. The Company
will maintain a paying agent in Frankfurt in the event the Notes are listed on
the Frankfurt over-the-counter market. The Company may change any Paying Agent
or Registrar without notice. The Company, any Subsidiary or any Affiliate of any
of them may act as Paying Agent, Registrar or co-Registrar.
4. INDENTURE; ISSUANCE OF ADDITIONAL NOTES.
This Note is one of a duly authorized issue of Notes of the Company
designated its 11-1/2% Senior Notes due 2009, issued and to be issued under an
Indenture, dated as of March 19, 1999 (the "Indenture"), between the Company and
the Trustee. Capitalized terms herein are used as defined in the Indenture
unless otherwise indicated. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Notes are subject to all such terms, and Holders are referred
to the Indenture and the Trust Indenture Act for a statement of all such terms.
To the extent permitted by applicable law, in the event of any inconsistency
between the terms of this Note and the terms of the Indenture, the terms of the
Indenture shall control.
5. REDEMPTION.
The Notes will be redeemable, at the Company's option, in whole or in part,
at any time and from time to time on or after March 15, 2004 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holders' last address as it appears in the Note
Register, at the following Redemption Prices (expressed in percentages of their
principal amount), plus accrued and unpaid interest, if any, to the Redemption
Date (subject to the right of Holders of record on the relevant Regular Record
Date that is on or prior to the Redemption Date to receive interest due on an
Interest Payment Date), if redeemed during the 12-month period commencing on
March 15 of the years set forth below:
Redemption
Year Price
---- ----------
2004 105.750%
2005 103.833%
2006 101.917%
2007 and thereafter 100.000%
In addition, at any time or from time to time on or prior to March 15,
2002, the Company may, at its option, redeem up to 35% of the aggregate
<PAGE>
B-6
principal amount of the Notes with the net proceeds of one or more Public Equity
Offerings, at a Redemption Price (expressed as a percentage of principal amount)
of 111.500%, provided, (i) that Notes and Dollar Notes representing at least 65%
of the principal amount of the Notes and Dollar Notes originally issued remain
outstanding after each such redemption and (ii) that notice of each such
redemption is mailed within 60 days of each such Public Equity Offering.
6. NOTICE OF REDEMPTION.
Notice of any optional redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at his last address as it appears in the Note Register. Notes in
original denominations larger than Euro 1,000 of principal amount may be
redeemed in part. On and after the Redemption Date, interest ceases to accrue on
Notes or portions of Notes called for redemption, unless the Company defaults in
the payment of the Redemption Price.
7. REPURCHASE UPON CHANGE IN CONTROL.
Upon the occurrence of any Change of Control, each Holder shall have the
right to require the repurchase of its Notes by the Company in cash pursuant to
the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30 days after any
Change of Control occurs to each Holder at his last address as it appears in the
Note Register. Notes in original denominations larger than Euro 1,000 of
principal amount may be sold to the Company in part. On and after the date of
the Change of Control Payment, interest ceases to accrue on Notes or portions of
Notes surrendered for purchase by the Company, unless the Company defaults in
the payment of the Change of Control Payment.
8. REGISTRATION RIGHTS
Pursuant to the Registration Rights Agreement, the Company will be
obligated, within 180 days after the issue date of this Note, to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right to
exchange this Note for the Company's Exchange Notes (as defined in the
Registration Rights Agreement) which have been registered under the Securities
Act, in like principal amount and having terms identical in all material
respects as the initial Notes. The Holders of the initial Notes shall be
entitled to receive certain additional interest payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant and in accordance with the terms of the Registration Rights Agreement.
9. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form without coupons in denominations of Euro
1,000 of principal amount and any integral multiples of Euro 1,000 in excess
thereof. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer or exchange of any Notes selected for redemption. Also, it
need not register the transfer or exchange of any Notes for a period of 15 days
before a selection of Notes to be redeemed is made.
<PAGE>
B-7
10. PERSONS DEEMED OWNERS.
A Holder shall be treated as the owner of a Note for all purposes.
11. UNCLAIMED MONEY.
If money for the payment of principal, premium, if any, or interest remains
unclaimed for two years, the Trustee and the Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Company deposits with the Trustee money and/or European Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in certain
circumstances for certain sections thereof, and (b) to Stated Maturity, the
Company will be discharged from certain covenants set forth in the Indenture.
13. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding, and any existing default or compliance
with any provision may be waived with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding. Without notice to or
the consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency and make any change that does not materially and adversely affect
the rights of any Holder.
14. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the Company and
its Restricted Subsidiaries, among other things, to Incur Indebtedness, make
Restricted Payments, use the proceeds from Asset Sales, engage in transactions
with Affiliates or, with respect to the Company, merge, consolidate or transfer
substantially all of its assets. Within 90 days after the end of the last fiscal
quarter of each year, the Company must report to the Trustee on compliance with
the terms of the Indenture.
15. SUCCESSOR PERSONS.
When a successor Person or other entity assumes all the obligations of its
predecessor under the Notes and the Indenture, the predecessor Person will be
released from those obligations.
16. DEFAULTS AND REMEDIES.
The following events constitute "Events of Default" under the Indenture:
(a) default in the payment of principal of (or premium, if any, on) any Note
when the same becomes due and payable at maturity, upon acceleration, redemption
or otherwise; (b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days;
provided that a failure to make any of the first four scheduled interest
<PAGE>
B-8
payments on this Note in a timely manner will constitute an Event of Default
with no grace or cure period; (c) default in the performance or breach of the
provisions of the Indenture applicable to mergers, consolidations and transfers
of all or substantially all of the assets of the Company or the failure to make
or consummate an Offer to Purchase in accordance with Section 4.11 of the
Indenture or Section 4.12 of the Indenture; (d) the Company defaults in the
performance of or breaches any other covenant or agreement of the Company in the
Indenture or under the Notes (other than a default specified in clause (a), (b)
or (c) of Section 6.01 of the Indenture) and such default or breach continues
for a period of 30 consecutive days after written notice by the Trustee or the
Holders of 25% or more in aggregate principal amount or principal amount of
Notes; (e) there occurs with respect to any issue or issues of Indebtedness of
the Company or any Significant Subsidiary having an outstanding principal amount
of $10 million or more in the aggregate for all such issues of all such Persons,
whether such Indebtedness now exists or shall hereafter be created, (I) an event
of default that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such defaulted
payment shall not have been made, waived or extended within 30 days of such
payment default; (f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $10 million in the aggregate for all such
final judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Significant Subsidiary and shall not be paid or discharged, and
there shall be any period of 60 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such Persons to
exceed $10 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; (g) a
court having jurisdiction in the premises enters a decree or order for (A)
relief in respect of the Company or any Significant Subsidiary in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or (h) the Company or any Significant Subsidiary (A)
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors.
If an Event of Default (other than an Event of Default specified in clause
(g) or (h) above that occurs with respect to the Company) occurs and is
continuing under the Indenture, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes, then outstanding, by written notice to
the Company (and to the Trustee if such notice is given by the Holders) may, and
the Trustee at the request of such Holders shall, declare the principal amount
of, premium, if any, and accrued interest on the Notes to be immediately due and
payable.
<PAGE>
B-9
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding may declare all the Notes to be due and
payable. If a bankruptcy or insolvency default with respect to the Company or
any Restricted Subsidiary occurs and is continuing, the Notes automatically
become due and payable. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of at least a majority in principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power.
17. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from and perform services for the Company or
its Affiliates and may otherwise deal with the Company or its Affiliates as if
it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No incorporator or any past, present or future partner, stockholder, other
equity holder, officer, director, employee or controlling person as such, of the
Company or of any successor Person shall have any liability for any obligations
of the Company under the Notes or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
19. AUTHENTICATION.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).
This Note shall be governed by the laws of the State of New York.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to Viatel, Inc., 685 Third
Avenue, New York, New York, 10017, Attention: Sheldon M. Goldman.
<PAGE>
B-10
SCHEDULE OF PRINCIPAL AMOUNT OF INDEBTEDNESS
EVIDENCED BY THIS NOTE
The initial principal amount of indebtedness evidenced by this Note shall
be Euro[__________ ]. The following decreases/increases in the principal amount
evidenced by this Note have been made:
<TABLE>
<CAPTION>
Decrease in Increase in
Principal Principal Total Principal Notation Made
Date of Amount of Amount of Amount of this Global by or on
Decrease/ this Global this Global Note Following such Behalf of
Increase Note Note Decrease/Increase Trustee
<S> <C> <C> <C> <C>
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
</TABLE>
<PAGE>
B-11
[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 said Note on the
books of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
UNLEGENDED REGULATION S GLOBAL AND
UNLEGENDED REGULATION S CERTIFICATED NOTES]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of an effective Registration or (ii) the
end of the period referred to in Rule 144(k) under the Securities Act, 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 (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 2.08 of the Indenture shall have
been satisfied.
- ------------- ------------------------------------------------------------
Date: NOTICE: The signature to this assignment must correspond
with the name as written upon the face of the
within-mentioned instrument in every particular, without
alteration or any change whatsoever.
<PAGE>
B-12
TO BE COMPLETED BY PURCHASER IF (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 executive officer
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.11 or Section 4.12 of the Indenture, check the Box: /_/
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.11 or Section 4.12 of the Indenture, state the amount (in
principal amount): Euro ----------.
Date: -----------------
Your Signature:-----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: -----------------------------
<PAGE>
C-1
EXHIBIT C
FORM OF U.S. CERTIFICATED NOTE
[FACE OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, 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 FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND
IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OF
REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT, WITHIN THE
TIME PERIOD REFERRED TO IN RULE 144(k) AS IN EFFECT ON THE DATE OF SUCH
TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO VIATEL, INC. OR
ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF EURO NOTES OF LESS THAN EURO 100,000, AN OPINION
OF COUNSEL ACCEPTABLE TO VIATEL, INC. THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT, (D) TO A PERSON OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO EACH OF
THE TRUSTEE AND VIATEL, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUCH PERSONS MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.
<PAGE>
C-2
VIATEL, INC.
11-1/2% Senior Euro Note Due 2009
[CUSIP][CINS][ISIN][Common Code]
No.------------------ Euro------------
Issue Date: March 19, 1999
VIATEL, INC., a Delaware corporation (the "Company", which term includes
any successor under the Indenture hereinafter referred to), for value received,
promises to pay to _____________________, or its registered assigns, the
principal sum of Euro__________ on March 15, 2009.
Interest Payment Dates: March 15 and September 15, commencing September 15,
1999.
Record Dates: March 1 and September 1.
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.
<PAGE>
C-3
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
Date: March 19, 1999 VIATEL, INC.
By----------------------------------------
Name:
Title:
By----------------------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 11-1/2% Senior Euro Notes due 2009 described in the
within-mentioned Indenture.
Date: March 19, 1999 THE BANK OF NEW YORK, as Trustee
By------------------------------------
Authorized Signatory
<PAGE>
C-4
[REVERSE SIDE OF NOTE]
VIATEL, INC.
11-1/2% Senior Euro Note due 2009
1. PRINCIPAL AND INTEREST.
The Company will pay the principal of this Note on March 15, 2009.
The Company promises to pay interest on the principal amount of this Note
on each Interest Payment Date, as set forth below, at the rate per annum shown
above.
Interest will be payable semiannually in cash (to the holders of record of
the Notes at the close of business on the March 1 or September 1 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
September 15, 1999. Interest will be computed on the basis of a 360 day year of
twelve 30 day months.
If an exchange offer registered under the Securities Act is not
consummated, and a shelf registration statement under the Securities Act with
respect to resales of the Notes is not declared effective by the Commission, on
or before the date that is six months after the Closing Date in accordance with
the terms of the Registration Rights Agreement dated March 12, 1999 between the
Company and Morgan Stanley & Co. Incorporated, as the manager for itself and the
several initial purchasers named on Schedule I to the Purchase Agreement dated
March 12, 1999, annual interest (in addition to interest otherwise due on the
Notes) will accrue, at an annual rate of 0.5% per annum of the principal amount,
payable in cash semiannually, in arrears on March 15 and September 15 of each
year, commencing March 15, 2000 until the consummation of a registered exchange
offer or the effectiveness of a shelf-registration statement with respect to
resale of this Note. The Holder of this Note is entitled to the benefits of such
Registration Rights Agreement.
The Holder of this Note is entitled to the benefits of a Pledge Agreement
dated March 19, 1999 between the Company and The Bank of New York, as trustee
(the "Trustee"), pursuant to which the Company has placed in the Euro Pledge
Account cash or Government Securities sufficient to provide for the payment of
the first four interest payments on this Note.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum that is 11-1/2% per annum.
2. METHOD OF PAYMENT.
The Company will pay principal as provided above and interest (except
defaulted interest) on the principal amount of the Notes as provided above on
each March 15 and September 15 to the Persons who are Holders (as reflected in
the Note Register at the close of business on such March 1 and September 1,
immediately preceding the Interest Payment Date), in each case, even if the Note
is cancelled on registration of transfer or registration of exchange after such
record date; PROVIDED that, with respect to the payment of principal, the
<PAGE>
C-5
Company will not make payment to the Holder unless this Note is surrendered to a
Paying Agent.
The Company will pay principal, premium, if any, and as provided above,
interest in the currency of the United States that at the time of payment is
legal tender for the payment of public and private debts. However, the Company
may pay principal, premium, if any, and interest by its check payable in such
currency. It may mail an interest check to a Holder's registered address (as
reflected in the Note Register). If a payment date is a date other than a
Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
3. PAYING AGENT AND REGISTRAR.
Initially, the Trustee will act as U.S. Paying Agent and Registrar and the
Trustee (through its London Branch) will act as Euro Paying Agent. The Company
will maintain a paying agent in Frankfurt in the event the Notes are listed on
the Frankfurt over-the-counter market. The Company may change any Paying Agent
or Registrar without notice. The Company, any Subsidiary or any Affiliate of any
of them may act as Paying Agent, Registrar or co-Registrar.
4. INDENTURE; ISSUANCE OF ADDITIONAL NOTES.
This Note is one of a duly authorized issue of Notes of the Company
designated its 11-1/2% Senior Euro Notes due 2009, issued and to be issued under
an Indenture dated as of March 19, 1999 (the "Indenture"), between the Company
and the Trustee. Capitalized terms herein are used as defined in the Indenture
unless otherwise indicated. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Notes are subject to all such terms, and Holders are referred
to the Indenture and the Trust Indenture Act for a statement of all such terms.
To the extent permitted by applicable law, in the event of any inconsistency
between the terms of this Note and the terms of the Indenture, the terms of the
Indenture shall control.
5. REDEMPTION.
The Notes will be redeemable, at the Company's option, in whole or in part,
at any time and from time to time on or after March 15, 2004 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holders' last address as it appears in the Note
Register, at the following Redemption Prices (expressed in percentages of their
principal amount), plus accrued and unpaid interest, if any, to the Redemption
Date (subject to the right of Holders of record on the relevant Regular Record
Date that is on or prior to the Redemption Date to receive interest due on an
Interest Payment Date), if redeemed during the 12-month period commencing on
March 15, of the years set forth below:
Redemption
Year Price
---- ----------
2004 105.750%
2005 103.833%
2006 101.917%
2007 and thereafter 100.000%
<PAGE>
C-6
In addition, at any time or from time to time on or prior to March 15,
2002, the Company may, at its option, redeem up to 35% of the aggregate
principal amount of the Notes with the net proceeds of one or more Public Equity
Offerings, at a Redemption Price (expressed as a percentage of principal amount
of 111.500%, provided, (i) that Notes and Dollar Notes representing at least 65%
of the principal amount of the Notes and Dollar Notes originally issued remain
outstanding after each such redemption and (ii) that notice of each such
redemption is mailed within 60 days of each such Public Equity Offering.
6. NOTICE OF REDEMPTION.
Notice of any optional redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at his last address as it appears in the Note Register. Notes in
original denominations larger than Euro 1,000 of principal amount may be
redeemed in part. On and after the Redemption Date, interest ceases to accrue on
Notes or portions of Notes called for redemption, unless the Company defaults in
the payment of the Redemption Price.
7. REPURCHASE UPON CHANGE IN CONTROL.
Upon the occurrence of any Change of Control, each Holder shall have the
right to require the repurchase of its Notes by the Company in cash pursuant to
the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30 days after any
Change of Control occurs to each Holder at his last address as it appears in the
Note Register. Notes in original denominations larger than Euro 1,000 of
principal amount may be sold to the Company in part. On and after the date of
the Change of Control Payment, interest ceases to accrue on Notes or portions of
Notes surrendered for purchase by the Company, unless the Company defaults in
the payment of the Change of Control Payment.
8. REGISTRATION RIGHTS
Pursuant to the Registration Rights Agreement, the Company will be
obligated, within 180 days after the issue date of this Note, to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right to
exchange this Note for the Company's Exchange Notes (as defined in the
Registration Rights Agreement) which have been registered under the Securities
Act, in like principal amount and having terms identical in all material
respects as the initial Notes. The Holders of the initial Notes shall be
entitled to receive certain additional interest payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant and in accordance with the terms of the Registration Rights Agreement.
9. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form without coupons in denominations of Euro
1,000 of principal amount and any integral multiples of Euro 1,000 in excess
thereof. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer or exchange of any Notes selected for redemption. Also, it
need not register the transfer or exchange of any Notes for a period of 15 days
before a selection of Notes to be redeemed is made.
<PAGE>
C-7
10. PERSONS DEEMED OWNERS.
A Holder shall be treated as the owner of a Note for all purposes.
11. UNCLAIMED MONEY.
If money for the payment of principal, premium, if any, or interest remains
unclaimed for two years, the Trustee and the Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Company deposits with the Trustee money and/or European Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in certain
circumstances for certain sections thereof, and (b) to Stated Maturity, the
Company will be discharged from certain covenants set forth in the Indenture.
13. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding, and any existing default or compliance
with any provision may be waived with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding. Without notice to or
the consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency and make any change that does not materially and adversely affect
the rights of any Holder.
14. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the Company and
its Restricted Subsidiaries, among other things, to Incur Indebtedness, make
Restricted Payments, use the proceeds from Asset Sales, engage in transactions
with Affiliates or, with respect to the Company, merge, consolidate or transfer
substantially all of its assets. Within 90 days after the end of the last fiscal
quarter of each year, the Company must report to the Trustee on compliance with
the terms of the Indenture.
15. SUCCESSOR PERSONS.
When a successor Person or other entity assumes all the obligations of its
predecessor under the Notes and the Indenture, the predecessor Person will be
released from those obligations.
16. DEFAULTS AND REMEDIES.
The following events constitute "Events of Default" under the Indenture:
(a) default in the payment of principal of (or premium, if any, on) any Note
when the same becomes due and payable at maturity, upon acceleration, redemption
or otherwise; (b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days;
PROVIDED that a failure to make any of the first four scheduled interest
<PAGE>
C-8
payments on this Note in a timely manner will constitute an Event of Default
with no grace or cure period; (c) default in the performance or breach of the
provisions of the Indenture applicable to mergers, consolidations and transfers
of all or substantially all of the assets of the Company or the failure to make
or consummate an Offer to Purchase in accordance with Section 4.11 of the
Indenture or Section 4.12 of the Indenture; (d) the Company defaults in the
performance of or breaches any other covenant or agreement of the Company in the
Indenture or under the Notes (other than a default specified in clause (a), (b)
or (c) of Section 6.01 of the Indenture) and such default or breach continues
for a period of 30 consecutive days after written notice by the Trustee or the
Holders of 25% or more in aggregate principal amount or principal amount of
Notes; (e) there occurs with respect to any issue or issues of Indebtedness of
the Company or any Significant Subsidiary having an outstanding principal amount
of $10 million or more in the aggregate for all such issues of all such Persons,
whether such Indebtedness now exists or shall hereafter be created, (I) an event
of default that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such defaulted
payment shall not have been made, waived or extended within 30 days of such
payment default; (f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $10 million in the aggregate for all such
final judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Significant Subsidiary and shall not be paid or discharged, and
there shall be any period of 60 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such Persons to
exceed $10 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; (g) a
court having jurisdiction in the premises enters a decree or order for (A)
relief in respect of the Company or any Significant Subsidiary in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or (h) the Company or any Significant Subsidiary (A)
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors.
If an Event of Default (other than an Event of Default specified in clause
(g) or (h) above that occurs with respect to the Company) occurs and is
continuing under the Indenture, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes, then outstanding, by written notice to
the Company (and to the Trustee if such notice is given by the Holders) , may,
and the Trustee at the request of such Holders shall, declare the principal
amount of, premium, if any, and accrued interest on the Notes to be immediately
due and payable.
<PAGE>
C-9
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding may declare all the Notes to be due and
payable. If a bankruptcy or insolvency default with respect to the Company or
any Restricted Subsidiary occurs and is continuing, the Notes automatically
become due and payable. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of at least a majority in principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power.
17. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from and perform services for the Company or
its Affiliates and may otherwise deal with the Company or its Affiliates as if
it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No incorporator or any past, present or future partner, stockholder, other
equity holder, officer, director, employee or controlling person as such, of the
Company or of any successor Person shall have any liability for any obligations
of the Company under the Notes or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
19. AUTHENTICATION.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to Viatel, Inc., 685 Third
Avenue, New York, New York, 10017, Attention: Sheldon M. Goldman.
<PAGE>
C-10
SCHEDULE OF PRINCIPAL AMOUNT OF INDEBTEDNESS EVIDENCED BY THIS NOTE
The initial principal amount of indebtedness evidenced by this Note
shall be Euro [_____]. The following decreases/increases in principal amount
evidenced by this Note have been made.
<TABLE>
<CAPTION>
Decrease in Increase in
Principal Principal Total Principal Notation Made
Date of Amount of Amount of Amount of this Global by or on
Decrease/ this Global this Global Note Following such Behalf of
Increase Note Note Decrease/Increase Trustee
<S> <C> <C> <C> <C>
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
________________ _______________ ______________ __________________________ ______________________
</TABLE>
<PAGE>
C-11
[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
- ----------------------------------------------------------------------------
within Note and all rights thereunder, hereby irrevocably constituting and
the appointing ------------------------- attorney to transfer said Note on the
books of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
UNLEGENDED REGULATION S GLOBAL AND
UNLEGENDED REGULATION S CERTIFICATED NOTES]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of an effective Registration or (ii) the
end of the period referred to in Rule 144(k) under the Securities Act, 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 (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 2.08 of the Indenture shall have
been satisfied.
Date:---------------- ----------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
<PAGE>
C-12
TO BE COMPLETED BY PURCHASER IF (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 executive officer
<PAGE>
C-13
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.11 or Section 4.12 of the Indenture, check the Box: /_/
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.11 or Section 4.12 of the Indenture, state the amount (in
principal amount):
Euro-------------.
Date:------------------
Your Signature:-----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:------------------------------
<PAGE>
D-1
EXHIBIT D
FORM OF CERTIFICATE
The Bank of New York [DATE]
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: Viatel, Inc. (the "Company")
11-1/2% Senior Euro Notes
due 2009 (the "Notes")
---------------------------
Ladies and Gentlemen:
This letter relates to Euro ----------- principal amount of Notes
represented by a Note (the "Legended Note") which bears a legend outlining
restrictions upon transfer of such Legended Note. Pursuant to Section 2.02 of
the Indenture (the "Indenture") dated as of March 19, 1999 relating to the
Notes, we hereby certify that we are (or we will hold such Notes on behalf of) a
person outside the United States to whom the Notes could be transferred in
accordance with Rule 904 of Regulation S promulgated under the U.S. Securities
Act of 1933, as amended. Accordingly, you are hereby requested to exchange the
legended certificate for an unlegended certificate representing an identical
principal amount of Notes, all in the manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:------------------------------------------
Authorized Signature
<PAGE>
E-1
EXHIBIT E
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
--------------------------------
The Bank of New York [DATE]
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: Viatel, Inc. (the "Company")
11-1/2% Senior Euro Notes
due 2009 (the "Notes")
----------------------------
Ladies and Gentlemen:
In connection with our proposed sale of Euro ----------- aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended, and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:-------------------------------------
Authorized Signature
<PAGE>
F-1
EXHIBIT F
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
The Bank of New York [DATE]
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: Viatel, Inc. (the "Company")
11-1/2% Senior Euro Notes
due 2009 (the "Notes")
----------------------------
Dear Sirs:
In connection with our proposed purchase of Euro ------------- aggregate
principal amount of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture dated as
of March 19, 1999 relating to the Notes (the "Indenture") and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities
Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered
or sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Notes, we will do so only (A) to the
Company or any subsidiary thereof, (B) in accordance with Rule 144A under
the Securities Act to a "qualified institutional buyer" (as defined
therein), (C) to an institutional "accredited investor" (as defined below)
that, prior to such transfer, furnishes (or has furnished on its behalf by
a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter, (D) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144 under the Securities Act, or (F)
pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing any of the Notes
from us a notice advising such purchaser that resales of the Notes are
restricted as stated herein.
3. We understand that, on any proposed resale of any Notes, we will be
required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will
bear a legend to the foregoing effect.
<PAGE>
F-2
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or its investment.
5. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:---------------------------------
Authorized Signature
Exhibit 4.11
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated March 12, 1999
between
VIATEL, INC.
and
MORGAN STANLEY & CO. INCORPORATED
ING BARING FURMAN SELZ LLC
- --------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into March 12, 1999 between VIATEL, INC., a Delaware corporation (the
"Company"), and MORGAN STANLEY & CO. INCORPORATED AND ING BARING FURMAN SELZ LLC
(the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated the
date hereof, between the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of an aggregate of $200 million of 11 1/2% Senior Dollar Notes Due
2009 of the Company (the "Senior Dollar Notes") and an aggregate of Euro 150
million of 11 1/2% Senior Euro Notes Due 2009 of the Company (the "Senior Euro
Notes"; together with the Senior Dollar Notes, collectively, the "Notes"). In
order to induce the Initial Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide to the Initial Purchasers and their direct and
indirect transferees the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"CLOSING DATE" shall mean the Closing Date as defined in the Purchase
Agreement.
"COMPANY" shall have the meaning set forth in the Preamble to this
Agreement and shall also include the Company's successors.
"EXCHANGE DATES" shall have the meaning set forth in Section 2(a)(ii)
hereof.
"EXCHANGE NOTES" shall mean notes issued in the Exchange Offer
pursuant to Section 2(a) hereof.
"EXCHANGE OFFER" shall mean the exchange offer by the Company of
Exchange Notes for Registrable Notes pursuant to Section 2(a)hereof.
<PAGE>
2
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933
Act effected pursuant to Section 2(a)hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form) and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"HOLDER" shall mean any Initial Purchasers, for so long as it owns any
Registrable Notes, and the successors, assigns and direct and indirect
transferees of any Initial Purchaser who become a registered owner of
Registrable Notes under the Indentures; PROVIDED that for purposes of
Sections 4 and 5 of this Agreement, the term "Holder" shall include
Participating Broker-Dealers (as defined in Section 4(a) hereof).
"INDENTURES" shall mean the Senior Dollar Notes Indenture and the
Senior Euro Notes Indenture.
"INITIAL PURCHASERS" shall have the meaning set forth in the Preamble
to this Agreement.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Notes; PROVIDED that
the principal amount of the Senior Euro Notes shall be calculated in
dollars based upon an exchange rate of Euro 0.9065 per U.S.$1.00; PROVIDED
that whenever the consent or approval of Holders of a specified percentage
of Registrable Notes is required hereunder, Registrable Notes held by the
Company or any of its affiliates (as such term is defined in Rule 405 under
the 1933 Act) (other than the Initial Purchasers or subsequent holders of
Registrable Notes if such subsequent holders are deemed to be such
affiliates solely by reason of their holding of such Registrable Notes)
shall not be counted in determining whether such consent or approval was
given by the Holders of such required percentage or amount.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"1933 ACT" shall mean the Securities Act of 1933, as amended from time
to time.
"NOTES" shall have the meaning set forth in the Preamble to this
Agreement.
<PAGE>
3
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, joint venture, association, joint stock company, trust
or unincorporated organization or other entity, or a government or agency
or political subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Notes covered by a Shelf Registration Statement,
and by all other amendments and supplements to such prospectus, and in each
case including all material incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the Preamble
to this Agreement.
"REGISTRABLE NOTES" shall mean the Notes; PROVIDED, HOWEVER, that a
particular Note shall cease to be a Registrable Note when the earliest of
the following events occurs (i) a Registration Statement with respect to
such Note shall have been declared effective under the 1933 Act and such
Note shall have been disposed of pursuant to such Registration Statement,
(ii) such Note has been sold to the public pursuant to Rule 144 (or any
similar rule then in force, but not Rule 144A) under the 1933 Act or (iii)
such Note shall have ceased to be outstanding.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or
blue sky laws (including reasonable fees and disbursements of counsel for
any underwriters or Holders in connection with blue sky qualification of
any of the Exchange Notes or Registrable Notes), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing
and distributing any Registration Statement, any Prospectus, any amendments
or supplements thereto, any underwriting agreements, securities sales
agreements and other documents relating to the performance of and
compliance with this Agreement, (iv) all rating agency fees, (v) all fees
and disbursements relating to the qualification of the Indentures under
applicable securities laws, (vi) the fees and disbursements of the Trustee
and its counsel, (vii) the fees and disbursements of counsel for the
Company and, in the case of a Shelf Registration Statement, the reasonable
fees and disbursements of one counsel for the Holders (which counsel shall
be selected by the Majority Holders and which counsel may also be counsel
for the Initial Purchasers) and (viii) the fees and disbursements of the
independent public accountants of the Company,
<PAGE>
4
including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, but excluding
fees and expenses of counsel to the underwriters (other than reasonable
fees and expenses set forth in clause (ii) above) or the Holders and
underwriting discounts and commissions and transfer taxes, if any, relating
to the sale or disposition of Registrable Notes by a Holder.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company that covers any of the Exchange Notes or Registrable Notes pursuant
to the provisions of this Agreement and all amendments and supplements to
any such Registration Statement, including post-effective amendments, in
each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"SENIOR DOLLAR NOTES INDENTURE" shall mean the Indenture relating to
the Senior Dollar Notes, to be dated the Closing Date, between the Company
and The Bank of New York, as trustee, as the same may be amended from time
to time in accordance with the terms thereof.
"SENIOR DOLLAR NOTES" shall have the meaning set forth in the Preamble
to this Agreement.
"SENIOR EURO NOTES INDENTURE" shall mean the Indenture relating to the
Senior Euro Notes, to be dated the Closing Date, between the Company and
The Bank of New York, as trustee, as the same may be amended from time to
time in accordance with the terms thereof.
"SENIOR EURO NOTES" shall have the meaning set forth in the Preamble
to this Agreement.
"SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) of this
Agreement which covers all of the Registrable Notes (but no other
securities unless approved by the Majority Holders) on an appropriate form
under Rule 415 under the 1933 Act, or any similar rule that may be adopted
by the SEC which will accomplish a similar objective, and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
<PAGE>
5
"TRUSTEE" shall mean the trustee with respect to the Notes under the
Indentures.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall mean a
registration in which Registrable Notes are sold to an Underwriter (as
hereinafter defined) for reoffering to the public.
2. REGISTRATION UNDER THE 1933 ACT.
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the staff of the SEC, the Company shall use its best efforts
to cause to be filed an Exchange Offer Registration Statement covering the offer
by the Company to the Holders to exchange all of the Registrable Notes for
Exchange Notes and to have such Registration Statement remain effective until
the closing of the Exchange Offer. The Company shall commence the Exchange Offer
promptly after the Exchange Offer Registration Statement has been declared
effective by the SEC and use its best efforts to have the Exchange Offer
consummated not later than 60 days after such effective date. The Company shall
commence the Exchange Offer by mailing the related exchange offer Prospectus and
accompanying documents to each Holder stating, in addition to such other
disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Registration Rights Agreement and that all Registrable Notes validly
tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a period of
at least 20 business days from the date such notice is mailed) (the
"Exchange Dates");
(iii) that any Registrable Note not tendered will remain outstanding
and continue to accrue interest, but will not retain any rights under this
Registration Rights Agreement;
(iv) that Holders electing to have a Registrable Note exchanged
pursuant to the Exchange Offer will be required to surrender such
Registrable Note, together with the enclosed letters of transmittal, to the
institution and at the address (located in the Borough of Manhattan, The
City of New York) specified in the notice prior to the close of business on
the last Exchange Date; and
(v) that Holders will be entitled to withdraw their election, not
later than the close of business on the last Exchange Date, by sending to
the institution and at the address (located in the Borough of Manhattan,
The City of New York) specified in the notice a telegram, telex, facsimile
transmission or letter setting forth the name of such
<PAGE>
6
Holder, the principal amount of Registrable Notes delivered for exchange
and a statement that such Holder is withdrawing his or her election to have
such Notes exchanged.
As soon as practicable after the last Exchange Date, the Company
shall:
(i) accept for exchange Registrable Notes or portions thereof tendered
and not validly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Notes or portions thereof so accepted for
exchange by the Company and issue, and cause the Trustee to promptly
authenticate and mail to each Holder, an Exchange Note of the same series
equal in principal amount and of like terms to the Registrable Notes
surrendered by such Holder.
The Company shall use its best efforts to complete the Exchange Offer as
provided above and shall comply with the applicable requirements of the 1933
Act, the 1934 Act and other applicable laws and regulations in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate applicable law or any
applicable interpretation of the staff of the SEC. The Company shall inform the
Initial Purchasers of the names and addresses of the Holders to whom the
Exchange Offer is made, and the Initial Purchasers shall have the right, subject
to applicable law, to contact such Holders and otherwise facilitate the tender
of Registrable Notes in the Exchange Offer.
(b) In the event that (i) the Company determines that the Exchange
Offer Registration provided for in Section 2(a) above is not available or may
not be consummated as soon as practicable after the last Exchange Date because
it would violate applicable law or the applicable interpretations of the staff
of the SEC, (ii) the Exchange Offer is not for any other reason consummated by
the date that is six months after the Closing Date or (iii) the Exchange Offer
has been completed and in the opinion of counsel for the Initial Purchasers a
Registration Statement must be filed and a Prospectus must be delivered by the
Initial Purchasers in connection with any offering or sale of Registrable Notes
by such Initial Purchasers, of Registrable Notes that were acquired by the
Initial Purchasers from the Company, the Company shall use its best efforts to
cause to be filed as soon as practicable after such determination, date or
notice of such opinion of counsel is given to the Company, as the case may be, a
Shelf Registration Statement providing for the sale by the Holders of all of the
Registrable Notes and to have such Shelf Registration Statement declared
effective by the SEC. The Company agrees to use its best efforts to keep the
Shelf Registration Statement continuously effective until the expiration of the
period referred to in Rule 144(k) under the 1933 Act with respect to all
Registrable Notes covered by the Shelf Registration
<PAGE>
7
Statement, or such shorter period that will terminate when all of the
Registrable Notes covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement or as would be permitted by the
current rules and regulations. The Company further agrees to supplement or amend
the Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the 1933 Act or by any other applicable rules
and regulations thereunder for shelf registration or if reasonably requested by
a Holder with respect to information relating to such Holder, and to use its
best efforts to cause any such amendment to become effective and such Shelf
Registration Statement to become usable as soon as thereafter practicable. The
Company agrees to furnish to the Holders of Registrable Notes copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) The Company shall pay all Registration Expenses in connection with
the registration pursuant to Section 2(a) or Section 2(b). Each Holder shall pay
all underwriting discounts and commissions and transfer taxes, if any, relating
to the sale or disposition of such Holder's Registrable Notes pursuant to the
Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC unless such action by the SEC is no longer required; PROVIDED, HOWEVER,
that, if, after it has been declared effective, the offering of Registrable
Notes pursuant to a Shelf Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
have become effective during the period of such interference until the offering
of Registrable Notes pursuant to such Registration Statement may legally resume.
In the event that the Exchange Offer is not consummated and, if a Shelf
Registration Statement is required hereby, the Shelf Registration Statement is
not declared or permitted to go effective on or prior to the date that is six
months after the Closing Date, (i) the annual interest rate borne by the Notes
will increase by 0.5% per annum, until the date the Exchange Offer is
consummated or a Shelf Registration Statement is declared effective.
(e) Without limiting the remedies available to the Initial Purchasers
and the Holders, the Company acknowledges that any failure by the Company to
comply with its obligations under Section 2(a) and Section 2(b) hereof may
result in material irreparable injury to the Initial Purchasers or the Holders
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 may obtain such relief as may be
required to specifically enforce the Company's obligations under Section 2(a)
and Section 2(b) hereof.
<PAGE>
8
3. REGISTRATION PROCEDURES.
In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the
Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the 1933 Act, which form (x) shall be selected by
the Company and (y) shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Notes by the selling Holders
thereof and (z) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and use its best efforts to
cause such Registration Statement to become effective and remain effective
in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period and cause each
Prospectus to be supplemented by any required prospectus supplement and, as
so supplemented, to be filed pursuant to Rule 424 under the 1933 Act; to
keep each Prospectus current during the period described under Section 4(3)
and Rule 174 under the 1933 Act that is applicable to transactions by
brokers or dealers with respect to the Registrable Notes or Exchange Notes;
(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Notes, to counsel for the Initial Purchasers, to counsel for
the Holders and to each Underwriter of an Underwritten Offering of
Registrable Notes, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or Underwriter
may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Notes; and the Company consents to the use
of such Prospectus and any amendment or supplement thereto in accordance
with applicable law by each of the selling Holders of Registrable Notes and
any such Underwriters in connection with the offering and sale of the
Registrable Notes covered by and in the manner described in such Prospectus
or any amendment or supplement thereto in accordance with applicable law;
(d) use its reasonable best efforts to register or qualify the
Registrable Notes under all applicable state securities or "blue sky" laws
of such jurisdictions as any Holder of Registrable Notes covered by a
Registration Statement shall reasonably request in writing by the time the
applicable Registration Statement is declared effective by the
<PAGE>
9
SEC, to cooperate with such Holders in connection with any filings required
to be made with the National Association of Securities Dealers, Inc. and do
any and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Notes owned by such Holder; PROVIDED,
HOWEVER, that the Company shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would
not otherwise be required to qualify but for this Section 3(d), (ii) file
any general consent to service of process or (iii) subject itself to
taxation in any such jurisdiction if it is not so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Notes, counsel for the Holders and counsel for the Initial
Purchasers promptly and, if requested by any such Holder or counsel,
confirm such advice in writing (i) when a Registration Statement has become
effective and when any post-effective amendment thereto has been filed and
becomes effective, (ii) of any request by the SEC or any state securities
authority for amendments and supplements to a Registration Statement and
Prospectus or for additional information after the Registration Statement
has become effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of a Registration Statement
and the closing of any sale of Registrable Notes covered thereby, the
representations and warranties of the Company contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to the offering cease to be true and correct in all material
respects or if the Company receives any notification with respect to the
suspension of the qualification of the Registrable Notes for sale in any
jurisdiction or the initiation of any proceeding for such purpose, (v) of
the happening of any event during the period a Shelf Registration Statement
is effective which makes any statement made in such Registration Statement
or the related Prospectus untrue in any material respect or which requires
the making of any changes in such Registration Statement or Prospectus in
order to make the statements therein not misleading in any material respect
and (vi) of any determination by the Company that a post-effective
amendment to a Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment and provide prompt notice to each Holder of the withdrawal
of any such order;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Notes, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
<PAGE>
10
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Notes to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold and not
bearing any restrictive legends and enable such Registrable Notes to be in
such denominations (consistent with the provisions of the respective
Indenture) and registered in such names as the selling Holders may
reasonably request at least two business days prior to the closing of any
sale of Registrable Notes;
(i) in the case of a Shelf Registration, upon the occurrence of any
event contemplated by Section 3(e)(v) hereof, use its best efforts to
prepare and file with the SEC a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Notes,
such Prospectus will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The Company agrees to notify the Holders to suspend use of the Prospectus
as promptly as practicable after the occurrence of such an event, and the
Holders hereby agree to suspend use of the Prospectus until the Company has
amended or supplemented the Prospectus to correct such misstatement or
omission;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document that is to be
incorporated by reference into a Registration Statement or a Prospectus
after initial filing of a Registration Statement, provide copies of such
document to the Initial Purchasers and their counsel (and, in the case of a
Shelf Registration Statement, the Holders and their counsel) and make such
of the representatives of the Company as shall be reasonably requested by
the Initial Purchasers or their counsel (and, in the case of a Shelf
Registration Statement, the Holders or their counsel) available for
discussion of such document, and shall not at any time file or make any
amendment to the Registration Statement, any Prospectus or any amendment of
or supplement to a Registration Statement or a Prospectus or any document
(other than a document which the Company is legally required to file under
the Exchange Act) which is to be incorporated by reference into a
Registration Statement or a Prospectus, of which the Initial Purchasers and
their counsel (and, in the case of a Shelf Registration Statement, the
Holders and their counsel) shall not have previously been advised and
furnished a copy or to which the Initial Purchasers or their counsel (and,
in the case of a Shelf Registration Statement, the Holders or their
counsel) shall reasonably object;
<PAGE>
11
(k) obtain a CUSIP number and, in the case of the Senior Euro Notes, a
Common Code, for all Exchange Notes or Registrable Notes, as the case may
be, not later than the effective date of a Registration Statement;
(l) cause the Indentures to be qualified under the Trust Indenture Act
of 1939, as amended (the "TIA"), in connection with the registration of the
Exchange Notes or Registrable Notes, as the case may be, cooperate with the
Trustee and the Holders to effect such changes to the Indentures as may be
required for the Indentures to be so qualified in accordance with the terms
of the TIA and execute, and use its reasonable best efforts to cause the
Trustee to execute, all documents as may be required to effect such changes
and all other forms and documents required to be filed with the SEC to
enable the Indentures to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, upon execution of customary
confidentiality agreements reasonably satisfactory to the Company and its
counsel, make available for inspection by a representative of the Holders
of the Registrable Notes, any Underwriter participating in any disposition
pursuant to such Shelf Registration Statement, and attorneys and
accountants designated by the Holders, at reasonable times and in a
reasonable manner, all financial and other records, pertinent documents and
properties of the Company, and cause the respective officers, directors and
employees of the Company to supply all information reasonably requested by
any such representative, Underwriter, attorney or accountant in connection
with a Shelf Registration Statement;
(n) in the case of a Shelf Registration, if reasonably requested by
any Holder of Registrable Notes covered by such Registration Statement, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment
such information with respect to such Holder as is legally required to be
included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as the Company has
received notification of the matters to be incorporated in such filing; and
(o) in the case of a Shelf Registration, use its reasonable best
efforts to enter into such customary agreements and take all such other
actions in connection therewith (including those requested by the Holders
of a majority in principal amount of the Registrable Notes being sold) in
order to expedite or facilitate the disposition of such Registrable Notes
including, but not limited to, an Underwritten Offering and in such
connection, (i) to the extent possible, make such representations and
warranties to the Holders and any Underwriters of such Registrable Notes
with respect to the business of the Company and its subsidiaries, the Shelf
Registration Statement, Prospectus and documents incorporated by reference
therein or deemed incorporated by reference therein, if any, in each case,
in form, substance and scope
<PAGE>
12
as are customarily made by issuers to underwriters in underwritten
offerings and confirm the same if and when requested, (ii) use its
reasonable best efforts to obtain opinions of counsel to the Company (which
counsel and opinions, in form, scope and substance, shall be reasonably
satisfactory to the Holders and such Underwriters and their respective
counsel) addressed to each selling Holder and Underwriter of Registrable
Notes, covering the matters customarily covered in opinions requested in
underwritten offerings, (iii) use its reasonable best efforts to obtain
"cold comfort" letters from the independent certified public accountants of
the Company (and, if necessary, any other certified public accountant of
any subsidiary of the Company, or of any 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 to each selling
Holder and Underwriter of Registrable Notes, such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings, and (iv)
deliver such documents and certificates as may be reasonably requested by
the Holders of a majority in principal amount of the Registrable Notes
being sold or the Underwriters, and which are customarily delivered in
underwritten offerings, to evidence the continued validity of the
representations and warranties of the Company made pursuant to clause (i)
above and to evidence compliance with any customary conditions contained in
an underwriting agreement.
In the case of a Shelf Registration Statement, the Company may require
each Holder of Registrable Notes to furnish to the Company such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Notes as the Company may from time to time reasonably request in
writing. No Holder of Registrable Notes may include its Registrable Notes in
such Shelf Registration Statement unless and until such Holder furnishes such
information to the Company. Each Holder including Registrable Notes in a Shelf
Registration shall agree to furnish promptly to the Company any information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Notes required to make any information previously furnished to the
Company by such Holder not materially misleading.
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 3(e)(v) hereof, such Holder will forthwith
discontinue disposition of Registrable Notes pursuant to a Shelf Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(i) hereof, and, if so directed by
the Company, such Holder will deliver to the Company (at its expense) all copies
in its possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Notes current at the
time of receipt of such notice. If the Company shall give any such notice to
suspend the disposition of Registrable Notes pursuant to a Shelf Registration
Statement, the Company shall extend the period during which the
<PAGE>
13
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions. There may not be more than two such suspensions during any
365 day period and any such suspensions may not exceed 30 days for each
suspension.
The Holders of Registrable Notes covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Notes in an Underwritten
Offering; PROVIDED that the Company shall be required to use its reasonable best
efforts to effect an underwritten offering only upon the request of Holders of
at least 25% in aggregate principal amount of the Registrable Notes (assuming an
exchange rate equal to Euro .9065 per U.S.$1.00 in the case of the Senior Euro
Notes) outstanding at the time such request is delivered to the Company. In any
such Underwritten Offering, the investment banker or investment bankers and
manager or managers (the "Underwriters") that will administer the offering will
be selected by the Majority Holders of the Registrable Notes included in such
offering, subject to approval by the Company, which approval will not be
unreasonably withheld.
4. PARTICIPATION OF BROKER-DEALERS IN EXCHANGE OFFER.
(a) The staff of the SEC has taken the position that any broker-dealer
that receives Exchange Notes for its own account in the Exchange Offer in
exchange for Notes that were acquired by such broker-dealer as a result of
market-making or other trading activities (a "Participating Broker-Dealer") may
be deemed to be an "underwriter" within the meaning of the 1933 Act and must
deliver a prospectus meeting the requirements of the 1933 Act in connection with
any resale of such Exchange Notes.
The Company understands that it is the position of the staff of the
SEC that if the Prospectus contained in the Exchange Offer Registration
Statement includes a plan of distribution containing a statement to the above
effect and the means by which Participating Broker-Dealers may resell the
Exchange Notes, without naming the Participating Broker-Dealers or specifying
the amount of Exchange Notes owned by them, such Prospectus may be delivered by
Participating Broker-Dealers to satisfy their prospectus delivery obligation
under the 1933 Act in connection with resales of Exchange Notes for their own
accounts, so long as the Prospectus otherwise meets the requirements of the 1933
Act.
(b) In light of the above, notwithstanding the other provisions of
this Agreement, the Company agrees that the provisions of this Agreement as they
relate to a Shelf Registration shall also apply to an Exchange Offer
Registration to the extent, and with such reasonable modifications thereto as
may be, reasonably requested by the Initial Purchasers or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
<PAGE>
14
order to expedite or facilitate the disposition of any Exchange Notes by
Participating Broker-Dealers consistent with the positions of the staff of the
SEC recited in Section 4(a) above; PROVIDED that:
(i) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement, as would
otherwise be contemplated by Section 3(i), for a period exceeding 180 days
after the last Exchange Date (as such period may be extended pursuant to
the penultimate paragraph of Section 3 of this Agreement) and Participating
Broker-Dealers shall not be authorized by the Company to deliver and shall
not deliver such Prospectus after such period in connection with the
resales contemplated by this Section 4; and
(ii) the application of the Shelf Registration procedures set forth in
Section 3 of this Agreement to an Exchange Offer Registration, to the
extent not required by the positions of the staff of the SEC or the 1933
Act and the rules and regulations thereunder, will be in conformity with
the reasonable request to the Company by the Initial Purchasers or with the
reasonable request in writing to the Company by one or more broker-dealers
who certify to the Initial Purchasers and the Company in writing that they
anticipate that they will be Participating Broker-Dealers; and PROVIDED
FURTHER that, in connection with such application of the Shelf Registration
procedures set forth in Section 3 to an Exchange Offer Registration, the
Company shall be obligated (x) to deal only with one entity representing
the Participating Broker-Dealers, which shall be Morgan Stanley & Co.
Incorporated unless it elects not to act as such representative, (y) to pay
the fees and expenses of only one counsel representing the Participating
Broker-Dealers, which shall be counsel to the Initial Purchasers unless
such counsel elects not to so act, and (z) to cause to be delivered only
one, if any, "cold comfort" letter with respect to the Prospectus in the
form existing on the last Exchange Date and with respect to each subsequent
amendment or supplement, if any, effected during the period specified in
clause (i) above.
(c) the Initial Purchasers shall have no liability to the Company or
any Holder with respect to any request that it may make pursuant to Section 4(b)
above.
5. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless the Initial
Purchasers, each Holder and each person, if any, who controls any Initial
Purchaser or any Holder within the meaning of either Section 15 of the 1933 Act
or Section 20 of the 1934 Act, or is under common control with, or is controlled
by, any Initial Purchaser or any Holder, from and against all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Initial Purchaser, any Holder or any
<PAGE>
15
such controlling or affiliated person in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Exchange Notes or
Registrable Notes were registered under the 1933 Act, including all documents
incorporated therein by reference, 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, or caused by any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except insofar
as such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Initial Purchasers or any Holder furnished to the
Company in writing by any Initial Purchaser or any selling Holder expressly for
use therein; PROVIDED that the foregoing indemnity agreement shall not inure to
the benefit of any Holder or any Person controlling such Holder, with respect to
any sale or disposition of Registrable Notes by such Holder in violation of the
penultimate paragraph of Section 3 of this Agreement. In connection with any
Underwritten Offering permitted by Section 3, the Company will also indemnify
the Underwriters, if any, selling brokers, dealers and similar securities
industry professionals participating in the distribution, their officers and
directors and each Person who controls such Persons (within the meaning of
either Section 15 of the 1933 Act or Section 20 of the 1934 Act) to the same
extent as provided above with respect to the indemnification of the Holders, if
requested in connection with any Registration Statement.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, each Initial Purchaser and the other selling Holders,
and each of their respective directors, officers who sign the Registration
Statement and each Person, if any, who controls the Company, any Initial
Purchaser and any other selling Holder within the meaning of either Section 15
of the 1933 Act or Section 20 of the 1934 Act to the same extent as the
foregoing indemnity from the Company to the Initial Purchasers and the Holders,
but only with reference to information relating to such Holder furnished to the
Company in writing by such Holder expressly for use in any Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto).
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may be
sought pursuant to either paragraph (a) or paragraph (b) above, such person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing (but the failure
to so notify an indemnifying party shall not relieve it from any liability which
it may have under this Section, except to the extent that it has been prejudiced
in any material respect by such failure, or from any liability it may otherwise
have) and the indemnifying party, upon request of the
<PAGE>
16
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (A) the reasonable fees and expenses of more than one separate
firm (in addition to any local counsel) for the Initial Purchasers and all
Persons, if any, who control the Initial Purchasers within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, (B) the reasonable
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and each Person, if any, who controls the Company within the meaning
of either such Section and (C) the reasonable fees and expenses of more than one
separate firm (in addition to any local counsel) for all Holders and all
Persons, if any, who control any Holders within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred. In such case involving any Initial Purchasers and Persons who control
such Initial Purchaser, such firm shall be designated in writing by Morgan
Stanley & Co. Incorporated. In such case involving the Holders and such Persons
who control Holders, such firm shall be designated in writing by the Majority
Holders. In all other cases, such firm shall be designated by the Company. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but, if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (x) such settlement is entered into more than 60
days after receipt by such indemnifying party of the aforesaid request and (y)
such indemnifying party shall not have reimbursed the indemnified party for such
fees and expenses of counsel in accordance with such request prior to the date
of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent may not be unreasonably
withheld), effect any settlement of any pending or threatened proceeding in
respect of which such indemnified party is or could have been a party and
indemnity could have been sought hereunder (whether or not any indemnified party
<PAGE>
17
is an actual or potential party to such proceeding) by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or
paragraph (b) of this Section 5 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or parties, on the one hand, and of the
indemnified party or parties, on the other hand, in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company and the Holders shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Holders and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders' respective
obligations to contribute pursuant to this Section 5(d) are several in
proportion to the respective principal amount of Registrable Notes of such
Holder that were registered pursuant to a Registration Statement.
(e) The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by PRO RATA
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5, no Holder shall be required to indemnify or contribute any amount in
excess of the amount by which the total price at which Registrable Notes were
sold by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 5 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf
<PAGE>
18
of any Initial Purchaser, any Holder or any Person controlling any Initial
Purchaser or any Holder, or by or on behalf of the Company, its officers or
directors or any Person controlling the Company, (iii) acceptance of any of the
Exchange Notes and (iv) any sale of Registrable Notes pursuant to a Shelf
Registration Statement.
6. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company has not entered into, and
on or after the date of this Agreement will not enter into, any agreement which
is inconsistent with the rights granted to the Holders of Registrable Notes in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Notes (assuming an exchange rate equal to Euro 0.9065 per U.S.
Dollar in the case of the Senior Euro Notes), in each case, which are affected
by such amendment, modification, supplement, waiver or consent; PROVIDED,
HOWEVER, that no amendment, modification, supplement, waiver or consent to any
departure from the provisions of Section 5 hereof shall be effective as against
any Holder of Registrable Notes unless consented to in writing by such Holder.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 6(c), which address initially is, with respect to the Initial
Purchasers, the address set forth in the Purchase Agreement; and (ii) if to the
Company, initially at the Company's address set forth in the Purchase Agreement
and thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 6(c).
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
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
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19
Copies of all such notices, demands or other communications shall be
concurrently delivered by the person giving the same to the Trustee, at the
address specified in the Indentures.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees 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 Registrable Notes in
violation of the terms of the Purchase Agreement. If any transferee of any
Holder shall acquire Registrable Notes, in any manner, whether by operation of
law or otherwise, such Registrable Notes shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Notes 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 such person shall be
entitled to receive the benefits hereof. The Initial Purchasers (in their
capacity as Initial Purchasers) shall have no liability or obligation to the
Company with respect to any failure by a Holder to comply with, or any breach by
any Holder of, any of the obligations of such Holder under this Agreement.
(e) PURCHASES AND SALES OF NOTES. The Company shall not, and shall use
its best efforts to cause its affiliates (as defined in Rule 405 under the 1933
Act) not to, purchase and then resell or otherwise transfer any Notes.
(f) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.
(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.
<PAGE>
20
(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.
<PAGE>
21
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
VIATEL, INC.
By: __________________________
Name:
Title:
Confirmed and accepted as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED
ING BARING FURMAN SELZ LLC
By: MORGAN STANLEY & CO. INCORPORATED
In its individual capacity and as representative
of the other Initial Purchasers
By: ______________________________
Name:
Title:
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Stockholders
Viatel, Inc.:
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the registration statement.
/s/KPMG LLP
New York, New York
April 5, 1999
