Exhibt 4.4
[Execution Copy]
INVESTMENT AND NOTE PURCHASE AGREEMENT
BY AND AMONG
VIATEL HOLDING (BERMUDA) LIMITED
AND
THE PURCHASERS LISTED ON SCHEDULE 1 HERETO
DATED AS OF
JUNE 23, 2005
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions............................................................... 1
ARTICLE II
SALE AND PURCHASE OF THE SECURITIES
Section 2.01. Offer to Sell and to Purchase; Purchaser Price............................ 8
Section 2.02. Delivery of and Payment for the Notes..................................... 8
ARTICLE III
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF THE COMPANY
Section 3.01. Organization and Standing................................................. 9
Section 3.02. Subsidiaries.............................................................. 10
Section 3.03. Capital Stock............................................................. 10
Section 3.04. Corporate Power........................................................... 11
Section 3.05. Authorization;Enforceability............................................. 11
Section 3.06. Securities Act; Trust Indenture Act....................................... 12
Section 3.07. No Violation; Consents.................................................... 12
Section 3.08. Financial Statements; SEC Reports......................................... 13
Section 3.09. No Litigation............................................................. 14
Section 3.10. Compliance with Constituent Documents; No Defaults........................ 14
Section 3.11. Licenses; Permits......................................................... 15
Section 3.12. Taxes..................................................................... 15
Section 3.13. Investment Company Act; Public Utility Holding Company Act................ 15
Section 3.14. Internal Controls......................................................... 15
Section 3.15. Insurance................................................................. 16
Section 3.16. Intellectual Property..................................................... 16
Section 3.17. Assets.................................................................... 16
Section 3.18. Labor Matters............................................................. 16
Section 3.19. Employee Matters.......................................................... 17
Section 3.20. Environmental Matters..................................................... 17
Section 3.21. Corrupt Practices Act..................................................... 18
Section 3.22. Solvency.................................................................. 18
Section 3.23. Regulation T, U, X........................................................ 18
Section 3.24. No Brokers................................................................ 19
Section 3.25. Securities Law Matters.................................................... 19
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Section 3.26. Absence of Changes........................................................ 19
Section 3.27. Compliance with Laws...................................................... 20
Section 3.28. Certain Contracts......................................................... 20
Section 3.29. No Materal Misstatements.................................................. 21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Section 4.01. Organization; Authorization; Enforceability............................... 22
Section 4.02. Private Placement......................................................... 22
Section 4.03. No Violation; Consents.................................................... 23
Section 4.04. ERISA..................................................................... 24
ARTICLE V
COVENANTS OF THE COMPANY
Section 5.01. Access to Books and Records............................................... 24
Section 5.02. Compliance with Conditions; Commercially Reasonable Efforts............... 25
Section 5.03. Consents and Approvals.................................................... 25
Section 5.05. Use of Proceeds........................................................... 25
Section 5.06. Rule 144A Information..................................................... 26
Section 5.07. Integration............................................................... 26
Section 5.08. No Public Offering........................................................ 26
Section 5.09. Communication............................................................. 26
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01. Conditions Precedent to Purchasers' Obligations........................... 27
Section 6.02. Conditions to the Company's Obligations in Respect of the Closing Date.... 29
ARTICLE VII
SURVIVAL; INDEMNIFICATION
Section 7.01. Survival of Representations and Warranties................................ 30
Section 7.02. Indemnification........................................................... 30
Section 7.03. Non-Exclusive Remedy...................................................... 32
Section 7.04. Deferral of Payment....................................................... 32
Section 7.05. Limitation on Indemnity................................................... 32
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ARTICLE VIII
TERMINATION; DEFAULTING PURCHASERS
Section 8.01. Termination............................................................... 33
Section 8.02. Defaulting Purchaser...................................................... 33
ARTICLE IX
MISCELLANEOUS
Section 9.01. Payment of Expenses....................................................... 34
Section 9.02. Expense Reimbursement..................................................... 34
Section 9.03. Persons Entitled to Benefit of Agreement.................................. 35
Section 9.04. Notices................................................................... 35
Section 9.05. GOVERNING LAW; WAIVER OF JURY TRIAL....................................... 36
Section 9.06. Counterparts.............................................................. 38
Section 9.07. Amendments or Waivers..................................................... 38
Section 9.08. Headings.................................................................. 38
Section 9.09. Entire Agreement.......................................................... 38
Section 9.10. Assignment................................................................ 39
Section 9.11. Severability.............................................................. 39
Section 9.12. Successors................................................................ 39
Section 9.13. Non-Waiver; Remedies Cumulative........................................... 39
Section 9.14. Injunctive Relief......................................................... 39
Section 9.15. Time of the Essence....................................................... 40
Schedule 1 - Purchasers
Schedule 2 - Guarantors
Schedules 3.02 - 3.28 - Disclosure Schedules
Exhibit A - Form of Certificates
Exhibit B - Opinion of Counsel
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INVESTMENT AND NOTE PURCHASE AGREEMENT dated as of June 23, 2005
(the "Agreement"), by and among Viatel Holding (Bermuda) Limited, a company
organized under the laws of Bermuda (the "Company"), and each of the Purchasers
listed on Schedule 1 hereto (individually, a "Purchaser" and collectively, the
"Purchasers").
WHEREAS, the Company proposes to issue and sell US$16,000,000
aggregate principal amount of its Senior Secured Increasing Rate Notes due 2007
(the "Notes") to the several Purchasers;
WHEREAS, the Notes will be subject to a Security Trust and
Intercreditor Deed, dated June 23, 2005 (as amended from time to time, the
"Security Trust Agreement"), by and among the Company, the Guarantors, and The
Law Debenture Trust Corporation p.l.c., as security trustee (the "Security
Trustee");
WHEREAS, the Notes will be guaranteed on a senior secured basis by
each of the Guarantors listed on Schedule 2 hereto;
WHEREAS, pursuant to the Deed of Priorities dated June 23, 2005, the
Company's existing 8% Convertible Senior Secured Notes due 2014 (the "Existing
Notes") will be subordinated and made junior in priority to the Notes;
WHEREAS, the Notes will be offered and sold to the Purchasers
without being registered under the Securities Act, in reliance upon an exemption
therefrom; and
WHEREAS, the Purchasers desire, subject to the terms and conditions
set forth herein, to purchase the Notes from the Company;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"affiliate" has the meaning set forth in Rule 405 under the
Securities Act.
"Actions" has the meaning set forth in Section 3.09.
"Additional Notes" means additional Notes which are issued in face
amount equal to interest that would otherwise be payable in cash on a Note or on
such Notes.
"Applicable Law" means (a) any United States Federal, state, local
or foreign or transnational law, statute, rule, regulation, order, writ,
injunction, judgment, decree or permit of any Governmental Authority and (b) any
rule or listing requirement
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of any national stock exchange or Commission recognized trading market on which
securities issued by the Company or any of the Subsidiaries are listed or
quoted.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" of any Person means any and all shares, partnership,
membership or other interests, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock (but excluding any debt securities convertible into such equity) and any
rights to purchase, warrants, options or similar interests with respect to the
foregoing.
"Closing Date" has the meaning set forth in Section 2.02(a).
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Shares" means the Common Shares of the Company, par value
$0.01 per share.
"Communications Laws" has the meaning set forth in Section 3.27.
"Communication Liabilities" has the meaning set forth in Section
3.27.
"Company" has the meaning set forth in the preamble.
"Consent and Instruction Letter" means the Consent and Instruction
Letter dated June 23, 2005, by and between The Law Debenture Company, as
security trustee for the holders of the Existing Notes.
"Deed of Priorities" means the Deed of Priorities dated June 23,
2005, by and between the Security Trustee, as security trustee for the
Purchasers, and The Law Debenture Company, as security trustee for the holders
of the Existing Notes.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, including the regulations and published interpretations thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the applicable rules and regulations promulgated thereunder.
"Existing Notes" has the meaning set forth in the recitals.
"Federal Reserve Board" has the meaning set forth in Section 3.23.
"FCC" means the U.S. Federal Communications Commission.
"GAAP" means generally accepted accounting principles in the United
States of America.
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"Governmental Authority" means (i) any transnational, foreign,
Federal, state or local court or governmental or regulatory agency or authority,
(ii) any arbitration board, tribunal or mediator and (iii) any national stock
exchange or Commission recognized trading market on which securities issued by
the Company or any of the Subsidiaries are listed or quoted.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for purposes of assuring
in any other manner the obligee of such indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, 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.
"Guarantor" means VTL (UK) Limited, Viatel Broadband Limited, Viatel
Internet Limited, and any other Subsidiary that may issue a Guarantee of the
Notes under the Security Trust Agreement or other guarantee agreement.
"including" means, unless the context otherwise requires, "including
without limitation."
"Indemnified Person" has the meaning set forth in Section 7.02(c).
"Indemnifying Person" has the meaning set forth in Section 7.02(c).
"Insolvency Event" in respect of any Person means:
(a) the initiation of a consent to Insolvency Proceedings by such
company or any other person or the presentation of a petition for the
making of an administration order and such proceedings not being disputed
in good faith with a reasonable prospect of success; or
(b) the making of an administration order in relation to such
Person; or
(c) an encumbrancer taking possession of the whole or any
substantial part of the undertaking or assets of such Person; or
(d) a distress, diligence, execution or other process being levied
or enforced upon or sued out against the whole or any substantial part of
the undertaking or assets of such Person and such order, appointment,
possession or process (as the case may be) not being discharged or
otherwise ceasing to apply within 30 days; or
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(e) the making of an arrangement, composition, reorganization with
or conveyance to or assignment for the creditors of such Person generally
or the making of an application to a court of competent jurisdiction for
protection from the creditors of such Person generally; or
(f) the passing by such Person of an effective resolution or the
making of an order by a court of competent jurisdiction for the winding up
or dissolution of such Person; or
(g) the appointment of an Insolvency Official in relation to such
Person or in relation to the whole or any substantial part of the
undertaking or assets of such Person.
"Insolvency Official" means, in respect of any Person, a liquidator,
provisional liquidator, administrator (whether appointed by the court or
otherwise), administrative receiver, receiver or managers, nominee, supervisor,
trustee in bankruptcy, conservator, guardian or similar official in respect of
such Person or in respect of all (or substantially all) of the Person's assets
or in respect of any arrangements or composition with creditors.
"Insolvency Proceedings" means the winding-up, dissolution,
voluntary arrangement or administration of a Person or corporation and shall be
construed so as to include any equivalent or analogous proceedings under the law
of the jurisdiction in which such Person or corporation carried on business
including the seeking of liquidation, winding-up, reorganization, dissolution,
administration, arrangement, adjustment, protection or relief from creditors or
the appointment of an Insolvency Official.
"Intellectual Property Rights" means patents, trade marks, service
marks, logos, getup, trade names, internet domain names, rights in designs,
copyright (including rights in computer software) and moral rights, data base
rights, semi-conductor topography rights, utility models, rights in know-how and
other intellectual property rights, in each case whether registered or
unregistered and including applications for registration, and all rights or
forms of protection having equivalent or similar effect anywhere in the world.
"Investment Company Act" has the meaning set forth in Section 3.13.
"knowledge of the Company" or "knowledge of the Company and its
Subsidiaries" means actual knowledge of any of Xxxx Xxxxx, Xxxxxx Xxxxxx and
Xxxxx XxXxxxxx Muscroft after due inquiry.
"Legal Holiday" is a Saturday, a Sunday or other day on which
banking institutions are not open for general business in London or New York.
"Liabilities" means, as to any Person, all debts, adverse claims,
liabilities and obligations of such Person, whether accrued, vested or
otherwise, fixed or unfixed, xxxxxx or inchoate, direct or indirect, liquidated
or unliquidated, secured or unsecured, accrued, absolute, contingent or
otherwise, whether in contract, tort, strict liability or
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otherwise and whether or not actually reflected, or required by applicable
accounting standards to be reflected, in such Person's balance sheets or other
books and records.
"Lien" means any mortgage, sub-mortgage, security assignment,
standard security, charge, sub-charge, pledge, lien, right of set-off or other
encumbrance or security interest of any kind, however created or arising.
"Material Adverse Effect" means a material adverse effect on the
assets, liabilities, business, condition (financial or otherwise), results of
operations or prospects of the Company and its Subsidiaries taken as a whole, or
any other circumstance that in any manner would be expected to materially
adversely affect the interests of the Purchasers.
"Network" means the telecommunications network in Belgium, France,
Germany, the Netherlands, Switzerland, United Kingdom and the United States
operated or to be operated by the Company and its Subsidiaries (including all
apparatus, equipment and telecommunications systems of every description which
is installed and operated in connection therewith).
"Notes" has the meaning set forth in the recitals.
"Permit" has the meaning set forth in Section 3.11.
"Permitted Liens" means the following: (a) Liens for taxes or
assessments or other governmental charges not yet due and payable or which are
being contested in good faith, by appropriate proceedings, provided, that
adequate reserves with respect to such contest are maintained on the books of
the applicable Company or Subsidiary, in accordance with GAAP; (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which the Company or any Subsidiary is a party as lessee
made in the ordinary course of business; (d) inchoate and unperfected workers',
mechanics' or similar Liens arising in the ordinary course of business; (e)
zoning restrictions, easements, licenses, or other restrictions on the use of
any real estate or other minor irregularities in title (including leasehold
title) thereto; and (f) Liens securing obligations under the Existing Notes; so
long as in each case set forth in (a) through (e) above the same do not
materially impair the use or marketability of the asset or property subject to
such Lien or materially impair the use, value or marketability of the Company's
and its Subsidiaries' assets and properties in the aggregate. For purposes of
clarity, the Permitted Liens described in clauses (a) through (e) above shall
include equivalent Liens under similar laws of jurisdictions outside the United
States.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Plans" has the meaning set forth in Section 3.19.
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"Preferred Stock," as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
"Purchaser" and "Purchasers" have the meaning set forth in the
preamble.
"regulation" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law, but if not having
the force of law, compliance with which is customary) of any governmental,
intergovernmental or supranational body, agency, department or regulatory,
self-regulatory or other authority or organization.
"Regulation D" has the meaning set forth in Section 3.25(c).
"Regulation S" has the meaning set forth in Section 3.25(b).
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Security Agreements" means the Security Agreements dated June 23,
2005, by and between the Security Trustee and each of the Guarantors,
respectively.
"Security Documents" means the Security Trust Agreements, the
Security Agreement, the Deed of Priorities, the Consent and Instruction Letter,
and any mortgages, charges, assignments or other security interests from time to
time granted by the Company or the Guarantors to the Security Trustee pursuant
to the Security Trust Agreement or any other such security document.
"Security Trust Agreement" has the meaning set forth in the
recitals.
"Security Trustee" has the meaning set forth in the recitals.
"Similar Law" means provisions under any federal, state, local,
non-US or other laws or regulations that are similar to Section 406 of ERISA or
Section 4975 of the Code.
"Special Share" means the Special Share of the Company, as defined
in the Company's bye-laws, and having the rights and privileges described
therein.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total Voting
Stock is at the time owned or controlled, directly or indirectly, by (a) such
Person, (b) such Person and one or more Subsidiaries of such Person or (c) one
or more Subsidiaries of such Person.
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"tax" means all taxes, imposts, duties, levies, charges, deductions
and withholdings in the nature or on account of tax, together with all interest
thereon and penalties with respect thereto.
"Transaction Documents" means this Agreement, the Security Trust
Agreement, the Notes, the Security Documents, and related agreements.
"Trust Indenture Act" means the Trust Indenture Act of 1935, as
amended.
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled at the time to vote in the election of
directors, managers or trustees thereof.
ARTICLE II
SALE AND PURCHASE OF THE SECURITIES
Section 2.01. Offer to Sell and to Purchase; Purchase Price. On the
basis of the representations, warranties and agreements contained herein, and
subject to the terms and conditions set forth herein, the Company agrees to
issue and sell to each of the Purchasers, severally and not jointly, and each of
the Purchasers, severally and not jointly, agrees to purchase from the Company,
the principal amount of Notes set forth opposite the name of such Purchaser on
Schedule 1 hereto at a purchase price equal to the principal amount thereof.
Section 2.02. Delivery of and Payment for the Notes. (a) Subject to
the terms and conditions set forth herein, delivery of and payment for the Notes
shall be made at the offices of Wachtell, Lipton, Xxxxx & Xxxx, or at such other
place as shall be agreed upon by the Purchasers and the Company, at 10:00 am
(New York time) on the first Business Day following the satisfaction or waiver
of all of the conditions set forth in Article VI hereof (other than those
conditions that by their nature are to be satisfied or waived on the Closing
Date, but subject to the satisfaction or waiver of those conditions), or at such
other time and date as shall be agreed upon by the Purchasers and the Company
(such date and time of payment and delivery being referred to herein as the
"Closing Date").
(b) On the Closing Date, payment of the purchase price for the Notes
shall be made to the Company by wire or book-entry transfer in immediately
available funds to such account or accounts as the Company shall specify prior
to the Closing Date or by such other means as the parties hereto shall agree
prior to the Closing Date against delivery to the Purchasers of the certificates
evidencing the Notes. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligations of the Purchasers hereunder. Upon delivery, the Notes shall be in
definitive certificated form, registered in such names and in such denominations
as the Purchasers shall have requested in writing not less than two full
Business Days prior to the Closing Date (or such shorter period as the
Purchasers and the Company may agree). The Company agrees to make one or more
certificates evidencing
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the Notes available for inspection by the Purchasers in New York, New York at
least 24 hours prior to the Closing Date.
(c) When delivered by the Company on the Closing Date, the Notes
shall be fully authorized, duly and validly issued, and free and clear of Liens
(other than Liens specifically contemplated by the Transaction Documents).
ARTICLE III
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF THE COMPANY
The Company represents and warrants to each of the Purchasers on and
as of the date hereof that:
Section 3.01. Organization and Standing. The Company and each of its
Subsidiaries have been duly incorporated or formed and are validly existing as
corporations or companies, as the case may be, in good standing under the laws
of their respective jurisdictions of incorporation or formation, as the case may
be, are duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified or have such power or authority
could not, singularly or in the aggregate, be reasonably expected to have a
Material Adverse Effect. The Company and each of its Subsidiaries has furnished
to the Purchasers true and correct copies of the Company's and each Subsidiary's
certificate of incorporation and bye-laws (and/or other organizational
documents) in substantially the form as will be in effect as of the Closing
Date. Phrases used in this Section 3.01 shall incorporate equivalent references
used in each relevant jurisdiction.
Section 3.02. Subsidiaries. The companies listed on SCHEDULE 3.02
hereto are all the Subsidiaries of the Company. Except as set forth in SCHEDULE
3.02, the Company does not own a majority of or control, directly or indirectly,
any corporation, association or other entity.
Section 3.03. Capital Stock. (a) The Company has authorized
250,000,000 Common Shares and the Special Share, of which (i) 10,630,000 Common
Shares and the Special Share are issued and outstanding as of the date hereof,
(ii) 69,666,666 Common Shares are reserved for issuance upon conversion of the
Existing Notes, and (iii) no other Common Shares are issued, outstanding or
reserved for issuance. As of the date hereof, all of the Common Shares are
identical in all respects and, except with respect to the Special Share, there
are no other types of Capital Stock or other securities of the Company
authorized, issued or outstanding. As of the Closing Date, the Company will have
authorized 250,000,000 Common Shares, of which 10,630,000 will be issued and
outstanding, and the Special Share.
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(b) All of the outstanding shares of Capital Stock of the Company
and each of the Company's Subsidiaries have been (and immediately after the
Closing Date will be) duly and validly authorized and issued, fully paid and
non-assessable and (except as set forth in Section 4.1 of the Shareholders
Agreement or with respect to Capital Stock of the Company's Subsidiaries under
Applicable Law) free of preemptive rights.
(c) Except as set forth in SCHEDULE 3.03(c), all of the shares of
Capital Stock of each of the Company's Subsidiaries are owned directly or
indirectly by the Company, free and clear of any Lien, restriction upon voting
or transfer or any other claim of any third party.
(d) Except for Common Shares issuable upon conversion of the
Existing Notes, there are no outstanding subscriptions, rights, warrants, calls
or options to acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of, any shares
of Capital Stock of or other equity or other ownership interest in the Company
or any of its Subsidiaries, or any other contracts, commitments, agreements,
understandings or arrangements of any kind to which the Company or any
Subsidiary is a party obligating the Company or any Subsidiary under any
circumstance to issue any Capital Stock, or any securities convertible into or
exchangeable for or rights to purchase any Capital Stock. Except as set forth in
SCHEDULE 3.03(d) and the Registration Rights Agreement dated as of April 21,
2004, neither the Company nor any Subsidiary is a party to or bound by any
agreement with respect to any of its securities which grants registration rights
to any Person. Except for the Shareholders Agreement dated as of April 21, 2004,
and as otherwise set forth on SCHEDULE 3.03(d), neither the Company nor any
Subsidiary is, and to the knowledge of the Company no stockholder is, a party to
any voting trust or other agreement or understanding affecting the voting or
transfer of the Capital Stock of the Company or any Subsidiary.
Section 3.04. Corporate Power. The Company and each of its
Subsidiaries has full right, power and authority to execute and deliver each
Transaction Document to which it is a party, and to perform their respective
obligations hereunder and thereunder; and all corporate or company action
required to be taken for the due and proper authorization, execution and
delivery of each of the Transaction Documents and the consummation of the
transactions contemplated hereby and thereby have been duly and validly taken.
Section 3.05. Authorization; Enforceability. (a) This Agreement has
been duly authorized, executed and delivered by the Company and constitutes a
valid and legally binding agreement of the Company, except as may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity or at
law).
(b) The Security Trust Agreement, including the amendments thereto,
has been duly authorized by the Company and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will constitute a
valid and legally
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binding agreement of the Company and each of the Guarantors, enforceable against
the Company and each of the Guarantors in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law).
(c) The Notes have been duly authorized by the Company and, when
duly executed, issued and delivered by the Company and paid for as provided
herein, will be duly and validly issued and outstanding and will constitute
valid and legally binding obligations of the Company enforceable against the
Company in accordance with their terms and entitled to the benefits of the
Security Trust Agreement, except as may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(d) The Security Documents, including the amendments thereto, have
been duly authorized by each of the Company and the Guarantors party thereto
and, when the Notes have been duly executed, authenticated, issued and delivered
as provided in the Security Trust Agreement and paid for as provided herein,
will be valid and legally binding obligations of the Company and each of the
Guarantors, except as may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
Section 3.06. Securities Act; Trust Indenture Act. Assuming the
accuracy of the representations and warranties of the Purchasers contained in
Article IV, it is not necessary, in connection with the issuance and sale of the
Notes to the Purchasers in the manner contemplated by this Agreement, to
register the Notes under the Securities Act or to qualify the Notes under the
Trust Indenture Act.
Section 3.07. No Violation; Consents. Except as set forth in
SCHEDULE 3.07, the execution, delivery and performance by the Company and each
of its Subsidiaries of each of the Transaction Documents to which each is a
party, the issuance, authentication, sale and delivery of the Notes and
compliance by the Company and each of its Subsidiaries party thereto with the
terms thereof and the consummation of the transactions contemplated by the
Transaction Documents will not (with or without due notice or lapse of time or
both) (i) conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or cause or give rise to the
acceleration or increase of any benefits or any termination right, or result in
the creation or imposition of any Lien (other than the Liens created in favor of
the Security Trustee) upon any property or assets of the Company or any of its
Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument, including any lease or employment agreement,
or any Permit, to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound or to which any of the
property or assets of the Company or any of its Subsidiaries is subject, (ii)
result in any violation of the provisions of the charter or bye-laws or similar
organizational documents of the Company or any of its Subsidiaries or (iii)
result in the violation
10
of any law or statute or any judgment, order, rule or regulation of any court
or arbitrator or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their properties or assets; and no
consent, approval, authorization or order of, or filing or registration with, or
notification of, any such court or arbitrator or governmental agency or body
under any such statute, judgment, order, decree, rule or regulation is required
for the execution, delivery and performance by the Company and each of its
Subsidiaries of each of the Transaction Documents to which each is a party, the
issuance, authentication, sale and delivery of the Notes and compliance by the
Company and each of its Subsidiaries with the terms thereof and the consummation
of the transactions contemplated by the Transaction Documents.
Section 3.08. Financial Statements; SEC Reports. (a) The financial
statements (including the related notes) that will be included in the Form 20-F
for the fiscal year ended December 31, 2004 that will be filed on or before June
30, 2005 (the "Financial Statements"), shall be in accordance with the books and
records of the Company and each of its Subsidiaries, will have been prepared in
accordance with GAAP consistently applied throughout the periods covered thereby
and will fairly present the consolidated financial position, results of
operations and cash flows of the entities purported to be covered thereby as of
the respective dates and for the respective periods indicated.
(b) Except as set forth in SCHEDULE 3.08(b), since March 23, 2004,
the Company has filed all forms, reports and documents required to be filed by
it with the Commission pursuant to the Exchange Act (collectively, and including
any documents filed by the Company at any time with the Commission that were not
at the time of filing required to be so filed, the "SEC Reports"). As of the
respective dates they were filed (or, if amended or superseded by a filing prior
to the date hereof, on the date of such filing), (i) the SEC Reports were
prepared, and all forms, reports and documents filed with the Commission after
the date of this Agreement will be prepared, in all material respects in
accordance with the requirements of Applicable Law and (ii) none of the SEC
Reports contained, nor will any forms, reports and documents filed after the
date of this Agreement contain, any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading. None of the Company's Subsidiaries is required
to make any filing with the Commission pursuant to the Exchange Act.
(c) As of December 31, 2004 and as of the date hereof, neither the
Company nor any of its Subsidiaries had, and as of the Closing Date neither the
Company nor any of its Subsidiaries will have, any Liabilities, except (i)
Liabilities fully and adequately reflected or noted on the balance sheet as of
December 31, 2004 that will be included in the Financial Statements (to the
extent quantified in such balance sheet or the notes thereto); (ii) Liabilities
incurred since December 31, 2004 in the ordinary course of business and
consistent with past practice which are not material individually or in the
aggregate; and (iii) as set forth in SCHEDULE 3.08(c).
11
Section 3.09. No Litigation. (a) Except as set forth in SCHEDULE
3.09(a) (to the extent quantified therein), there is no action, order, writ,
injunction, investigation, judgment or decree outstanding or claim, suit,
litigation, proceeding, labor dispute, arbitral action or investigation
(collectively, "Actions") pending and as to which the Company or any Subsidiary
has received notice or, to the knowledge of the Company and its Subsidiaries,
otherwise pending or threatened against (i) the Company or any of its
Subsidiaries, (ii) any benefit plan for personnel of the Company or any of its
Subsidiaries or any fiduciary or administrator thereof, or (iii) any officers or
directors of the Company or any Subsidiary which relates to the business of the
Company and its Subsidiaries. Except as set forth in SCHEDULE 3.09, there is, to
the knowledge of the Company and its Subsidiaries, no basis for any Action of
the nature described in the previous sentence arising from events, occurrences,
actions or omissions prior to the Closing Date. None of the Company or any of
its Subsidiaries is in default with respect to any judgment, order, writ,
injunction or decree of any court of governmental agency and there are not
unsatisfied judgments against the Company or any of its Subsidiaries.
(b) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency or body
which prevents the issuance of the Notes or suspends the sale of the Notes in
any jurisdiction; no injunction, restraining order or order of any nature by any
federal or state court of competent jurisdiction has been issued with respect to
the Company or any of its Subsidiaries which would prevent or suspend the
issuance or sale of the Notes in any jurisdiction; no action, suit or proceeding
is pending against or, to the best knowledge of the Company and each of its
Subsidiaries, threatened against or affecting the Company or any of its
Subsidiaries before any court or arbitrator or any governmental agency, body or
official, domestic or foreign, which could reasonably be expected to interfere
with or adversely affect the issuance of the Notes or in any manner draw into
question the validity or enforceability of any of the Transaction Documents or
any action taken or to be taken pursuant thereto.
Section 3.10. Compliance with Constituent Documents; No Defaults.
Neither the Company nor any of its Subsidiaries is (i) in violation of its
charter or bye-laws (or similar organizational documents), (ii) in default in
any material respect, and, to the knowledge of the Company, no event has
occurred that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or 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 or to which
the property or assets of the Company or any of its Subsidiaries is subject or
(iii) except as set forth on SCHEDULE 3.10, to the knowledge of the Company, in
violation in any material respect of any law, ordinance, governmental rule or
regulation to which it or its property or assets are subject.
Section 3.11. Licenses; Permits. Except as set forth on SCHEDULE
3.11, the Company and each of its Subsidiaries possess all material licenses,
certificates, authorizations and permits (collectively, "Permits") issued by,
and have made all declarations and filings with, the appropriate federal, state
or foreign regulatory agencies or bodies that are necessary or, in the
reasonable judgment of the Company, desirable for
12
the ownership or lease of their respective properties or the conduct of their
respective businesses, and neither the Company nor any of its Subsidiaries has
received notification of any revocation or modification of any such Permit or
has any reason to believe that any such Permit will not be renewed in the
ordinary course.
Section 3.12. Taxes. Except as set forth on SCHEDULE 3.12, the
Company and each of its Subsidiaries have properly filed all federal, state,
local and foreign income, sales, turnover and franchise tax returns required to
be filed through the date hereof and have paid all taxes due thereon (other than
those taxes being contested in good faith or those taxes currently payable
without penalty or interest, in each case for which adequate reserves have been
provided in accordance with generally accepted accounting principles), and no
tax deficiency, including, without limitation, any underpayment or incorrect
filing, has been determined adversely to the Company or any of its Subsidiaries,
and no such tax deficiency is known to the Company or any of its Subsidiaries.
Section 3.13. Investment Company Act; Public Utility Holding Company
Act. Neither the Company nor any of its Subsidiaries is (and immediately after
giving effect to the offering and sale of the Notes and the application of the
proceeds thereof, none of them will be) (i) an "investment company" or (assuming
none of the Purchasers is an investment company) a company "controlled by" an
investment company within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations of the
Commission thereunder or (ii) a "holding company" or (assuming none of the
Purchasers is a holding company) a "subsidiary company" of a holding company or
an "affiliate" thereof within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
Section 3.14. Internal Controls. The Company and each of its
Subsidiaries maintain systems of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Section 3.15. Insurance. The Company and each of its Subsidiaries
have insurance covering their respective properties, operations, personnel and
businesses, which insurance is in amounts and insures against such losses and
risks as are, in the reasonable judgment of the Company, adequate to protect the
Company, its Subsidiaries and their respective businesses. Neither the Company
nor any of its Subsidiaries has received notice from any insurer or agent of
such insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance.
Section 3.16. Intellectual Property. Except as set forth in SCHEDULE
3.16, the Company and each of its Subsidiaries own or has licensed to it, all
Intellectual Property
13
Rights which are necessary to carry on their respective businesses as they are
carried on at the date of this Agreement and in accordance with the current
documented plans for the businesses; and the conduct of their respective
businesses will not conflict in any respect with, and the Company and its
Subsidiaries have not received any notice of any claim of conflict with, any
Intellectual Property Rights of others.
Section 3.17. Assets. Except as set forth on SCHEDULE 3.17, the
Company and each of its Subsidiaries have good and marketable title in fee
simple to, or have valid rights to lease or otherwise use, all items of real and
personal property that are material to the business of the Company and its
Subsidiaries, including without limitation the Network, in each case free and
clear of all Liens (other than under the Security Documents and Permitted
Liens), claims and defects and imperfections of title except such as do not
materially interfere with the use made of such property. The rights, properties
and other assets presently owned, leased or licensed by the Company include all
rights, properties and other assets (i) used by the Company in the conduct of
its business prior to the date hereof, and (ii) necessary or convenient to
permit the Company to conduct its business from and after the date hereof in the
same manner in all respects as such business has been conducted prior to the
date hereof.
Section 3.18. Labor Matters. Except as set forth in SCHEDULE 3.18,
no labor disturbance by or dispute with the employees of the Company or any of
its Subsidiaries exists or, to the best knowledge of the Company and each of its
Subsidiaries, is contemplated or threatened. There are no agreements with labor
unions or associations representing employees of the Company or any of the
Subsidiaries (save for the Subsidiaries organized under the laws of France) and
to the knowledge of the Company and its Subsidiaries, there has not been any
organizing effort by any such union or association.
Section 3.19. Employee Matters. Each employee benefit or
compensation plan, agreement or arrangement maintained or contributed to by the
Company or any of its Subsidiaries or with respect to which the Company or any
of its Subsidiaries could be subject to Liabilities (the "Plans") has been
maintained and operated in accordance with Applicable Law and with its terms
(including contribution requirements and requirements for tax qualification or
registration). Each Plan that is intended to be funded or book reserved is fully
funded or book reserved, as applicable, based upon reasonable actuarial
assumptions. Other than for benefit payments in the ordinary course, there are
no pending, or to the Company's knowledge, threatened claims (against the Plans
or any fiduciaries of the Plans or against the Company or any of its
Subsidiaries with respect to the Plans) and no event has occurred or is
reasonably expected to occur which could result in the Plans or the Company or
any of its Subsidiaries being subject to any Liabilities, taxes or penalties
under the Plans. The Company and its Subsidiaries have complied with all
applicable employment laws with respect to their employees and employment
practices.
Section 3.20. Environmental Matters. Except as set forth on SCHEDULE
3.20, there has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission or other release of any kind of toxic
or other wastes or other hazardous substances by, due to or caused by the
Company or any of its Subsidiaries (or, to the
14
best knowledge of the Company or any of its Subsidiaries, any other entity
(including any predecessor) for whose acts or omissions the Company or any of
its Subsidiaries is or could reasonably be expected to be liable) upon any of
the property now or previously owned or leased by the Company or any of its
Subsidiaries, or upon any other property, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree or permit that would, under
any statute or any ordinance, rule (including rule of common law), regulation,
order, judgment, decree or permit, give rise to any material liability; and
there has been no disposal, discharge, emission or other release of any kind
onto such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to which the
Company or any of its Subsidiaries has knowledge, except for any such disposal,
discharge, emission or other release of any kind which could not reasonably be
expected to result in any material liability or obligation on the part of the
Company and its Subsidiaries.
Section 3.21. Corrupt Practices Act. None of the Company or any of
its Subsidiaries or any director, officer, or, to the knowledge of the Company,
any agent, employee or other person acting on behalf of the Company or any of
its Subsidiaries has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
Section 3.22. Solvency. Except as set forth in SCHEDULE 3.22, on and
immediately after the Closing Date, the Company and each of the Guarantors
(after giving effect to the issuance of the Notes and to the other transactions
related thereto) will be Solvent and no Insolvency Event has occurred in respect
of the Company or any of its Subsidiaries. As used in this paragraph, the term
"Solvent" shall have the meaning given in any relevant jurisdiction by or
construed in accordance with the applicable law of that jurisdiction, or if
there is no such meaning or such meaning cannot be construed, means, with
respect to a particular date, that on such date (i) the fair value and present
fair saleable value of the assets of the Company or such Guarantor, as the case
may be, exceeds: (x) the total liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities) of the Company or such Guarantor, as the
case may be, and (y) the amount required to pay such liabilities as they become
absolute and mature in the normal course of business; (ii) the Company or such
Guarantor, as the case may be, has the ability to pay its debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities) as
they become absolute and mature in the normal course of business; and (iii)
neither the Company nor such Guarantor, as the case may be, has an unreasonably
small amount of capital with which to conduct its business. In computing the
amount of such contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all the facts
and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
15
Section 3.23. Regulation T, U, X. Neither the Company nor any of its
Subsidiaries owns any "margin securities" as that term is defined in Regulation
U of the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), and none of the proceeds of the sale of the Notes will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any margin security or for any other
purpose which would cause any of the Notes to be considered a "purpose credit"
within the meanings of Regulation T, U or X of the Federal Reserve Board.
Section 3.24. No Brokers. Neither the Company nor any of its
Subsidiaries is a party to any contract, agreement or understanding with any
person that would give rise to a valid claim against the Company, its
Subsidiaries or the Purchasers for a brokerage commission, finder's fee or like
payment in connection with the offering and sale of the Notes.
Section 3.25. Securities Law Matters. (a) The Notes satisfy the
eligibility requirements of Rule 144A(d)(3) under the Securities Act.
(b) None of the Company, any of its Subsidiaries, any of their
respective affiliates or any person (other than the Purchasers or their
affiliates) acting on its or their behalf has engaged or will engage in any
"directed selling efforts" (as such term is defined in Regulation S under the
Securities Act ("Regulation S")), and all such persons have complied and will
comply with the offering restrictions requirement of Regulation S to the extent
applicable.
(c) None of the Company, any of its Subsidiaries or any of their
respective affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act ("Regulation D")) has, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as such term is defined in the Securities Act), which is or could
be integrated with the sale of the Notes in a manner that would require
registration of the Notes under the Securities Act.
(d) None of the Company, any of its Subsidiaries or any of their
respective affiliates or any other person acting on its or their behalf (other
than the Purchasers) has solicited offers for, or offered or sold, the Notes by
means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
(e) Neither the Company nor any of its Subsidiaries has taken or
will take, directly or indirectly, any action prohibited by Regulation M under
the Exchange Act in connection with the offering of the Notes.
Section 3.26. Absence of Changes. Since December 31, 2004, and
except as set forth on SCHEDULE 3.26, (i) there has not been any change in the
Capital Stock or long-term debt of the Company or any of its Subsidiaries, or
any dividend or distribution
16
of any kind declared, set aside for payment, paid or made by the Company on any
class of Capital Stock, or any Material Adverse Effect, or any development
involving a prospective Material Adverse Effect, in the Company and its
Subsidiaries taken as a whole, (ii) neither the Company nor any of its
Subsidiaries has entered into any transaction or agreement that is material to
the Company and its Subsidiaries taken as a whole, other than in the ordinary
course of business, or incurred any liability or obligation, direct or
contingent, that is material to the Company and its Subsidiaries taken as a
whole, other than in the ordinary course of business and (iii) neither the
Company nor any of its Subsidiaries has taken any action described in Section
76A(3) of the Company's bye-laws, except as and to the extent specifically
permitted by this Agreement.
Section 3.27. Compliance with Laws. Except as set forth in SCHEDULE
3.27, the Company and each of its Subsidiaries are in compliance in all material
respects with all Applicable Laws of any Governmental Authority. Neither the
Company nor any of its Subsidiaries has received any notice that it is not
incompliance with any of the foregoing. Without limitation of any of the
foregoing, neither the Company nor any of its Subsidiaries (i) has failed to
comply with any law, rule, regulation, code, ordinance, order, decree, judgment,
injunction, notice or binding agreement issued, promulgated or entered into by
any governmental authority (including but not limited to the FCC, the U.K.
Office of Communications, the U.K. Director General of Telecommunications, and
the U.K. Department of Trade and Industry) relating in any way to the offering
or provision of communications (collectively, "Communications Laws") or to
obtain, maintain or comply with any permit, license, authorization or other
approval required under any of the Communications Laws, (ii) has become subject
to any liability, contingent or otherwise (including any liability for damages,
costs, fines, penalties or indemnities) directly or indirectly resulting from or
based upon (w) a violation of any of the Communications Laws, (x) the generation
or use of communications, (y) exposure to communications or radio frequency
emissions or (z) any contract, agreement or other consensual agreement pursuant
to which liability is assumed or imposed with respect to any of the foregoing
(collectively, "Communication Liabilities"), (iii) has received notice of any
claim with respect to any Communication Liability or (iv) knows of any basis for
any Communication Liability.
Section 3.28. Certain Contracts. Except as set forth on SCHEDULE
3.28, neither the Company nor any of its Subsidiaries is a party to or otherwise
bound by any written or oral contract, agreement, arrangement or understanding
that was entered into after April 21, 2004:
(a) containing any covenant or restriction limiting the freedom of
the Company or its Subsidiaries to engage in any line of business in any
geographic area or to compete with any person or contract or agreement
with third parties limiting the freedom of any officer, director or
stockholder of the Company or any Subsidiary so to engage or compete;
(b) that binds, restricts or applies to, or purports to bind,
restrict or apply to, any affiliate of the Company that is not a
Subsidiary of the Company or
17
any Purchaser, including without limitation in any area of mutual
interest, exclusivity, non-competition or otherwise;
(c) concerning employment or severance involving severance or annual
compensation in excess of (pound) 100,000, or under which any rights
or benefits would accrue, become due, be paid, accelerate or otherwise
arise as a result of any of the transactions contemplated hereby;
(d) concerning debt for money borrowed;
(e) relating to the issuance of securities by the Company or any
Subsidiary; or
(f) entered into outside of the usual course of business.
The Company has provided the Purchasers with a true and complete
copy of each agreement described above. None of the Company or any of its
Subsidiaries is (and to the best knowledge of the Company no other party is) in
material breach or violation under any contract that is material to the Company
or such Subsidiary; there is no event which with the lapse of time or notice or
both would constitute such a default; and no defenses, offsets or counterclaims
have been asserted by any party thereto.
Section 3.29. No Material Misstatements. This Agreement, including
the schedules and exhibits attached hereto, and the financial statements and
financial data furnished to the Purchasers by or at the direction of the Company
or any of its Subsidiaries in connection with the evaluation of the transactions
contemplated by this Agreement do not contain any material misstatement of
material fact or omit to state a material fact or any fact necessary to make the
statements contained therein not misleading. The circumstances and events that
are not required to be identified on schedules to this Agreement by reason of
the materiality qualifications contained in the representations and warranties
in this Article III, or which are otherwise within such qualifications, in the
aggregate do not have, and could not reasonably be expected to have, a Material
Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser severally as to itself only, and not jointly, hereby
represents and warrants to the Company on the date hereof that:
Section 4.01. Organization; Authorization; Enforceability. Such
Person that is a legal entity is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite power and authority to own its properties and assets and to carry on
its business as it is now being conducted except where the failure to have such
power or authority could not, singularly or in the aggregate, be reasonably
expected to have a material adverse effect on the assets, liabilities
18
business, condition (financial or otherwise), results of operating or prospects
of such Person. Such Person has the power to execute, deliver and perform its
obligations under each of the Transaction Documents to which it is a party and
has taken all necessary action to authorize the execution, delivery and
performance by it of such Transaction Documents and to consummate the
transactions contemplated thereby. No other proceedings on the part of such
Person are necessary for such authorization, execution, delivery and
consummation. Such Person has duly executed and delivered this Agreement and, on
the Closing Date, such Person will have duly executed and delivered each of the
other Transaction Documents to be executed and delivered by it on or prior to
the Closing Date. This Agreement constitutes, and each of the other Transaction
Documents to which such Person is a party, when executed and delivered by such
Person, will constitute, a legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms , except as may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law) and except to the extent that the
indemnification or contribution provisions contained in any such Transaction
Document may be unenforceable.
Section 4.02. Private Placement. (a) Such Person understands that
(i) the offering and sale of the Notes is intended to be exempt from
registration under the Securities Act pursuant to Section 4(2) thereof, and (ii)
there is no existing public or other market for the Notes.
(b) Such Person (i) is a "qualified institutional buyer," as such
term is defined in Rule 144A under the Securities Act or (ii) is an "accredited
investor," as such term is defined in Rule 501(a) of Regulation D under the
Securities Act.
(c) Such Person is acquiring the Notes to be acquired hereunder for
its own account (or for accounts over which it exercises investment authority),
for investment and not with a view to the resale or distribution thereof.
(d) Such Person understands that the Notes will be issued in a
transaction exempt from the registration or qualification requirements of the
Securities Act and applicable state securities laws and that the Company's
reliance on such exemption is predicated upon the Purchasers' representations
contained herein, In addition, such Person understands that such securities must
be held indefinitely unless a subsequent disposition thereof is registered or
qualified under the Securities Act and such laws or is exempt from such
registration or qualification.
(e) Such Person (A) has been furnished with or has had full access
to all the information that it considers necessary or appropriate to make an
informed investment decision with respect to the Notes, (B) has had an
opportunity to discuss with management of the Company the intended business and
financial affairs of the Company and to obtain information (to the extent the
Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify any information furnished to it or to
which it had access, (C) can bear the economic risk of (x) an
19
investment in the Notes indefinitely and (y) a total loss in respect of such
investment, and (D) has such knowledge and experience in business and financial
matters so as to enable it to understand and evaluate the risks of and form an
investment decision with respect to its investment in the Notes to protect its
own interest in connection with such investment.
Section 4.03. No Violation; Consents. (a) Subject to the
governmental filings and other matters referred to in Section 4.03(b), the
execution, delivery and performance by such Person of each of the Transaction
Documents to which it is a party and the consummation by such Person of the
transactions contemplated thereby do not and will not contravene any Applicable
Law, except for any such contravention that would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of such Person to timely perform its obligations under the Transaction
Documents. The execution, delivery and performance by such Person of each of the
Transaction Documents to which it is a party and the consummation of the
transactions contemplated thereby (i) will not (A) violate, result in a breach
of or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration) under
any contract, lease or other agreement to which such Person is party or by which
such Person is bound or to which any of its assets is subject, or (B) result in
the creation or imposition of any Lien upon any of the assets of such Person,
except for any such violations, breaches, defaults or Liens that would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Person to timely perform its obligations
under this Agreement; and (ii) if it is a legal entity, will not conflict with
or violate any provision of the certificate of incorporation or bylaws or other
organizational documents of such Person.
(b) Except for applicable filings, if any, with the Commission
pursuant to the Exchange Act, no consent, authorization or order of, or filing
or registration with, any Governmental Authority or other Person is required to
be obtained or made by such Person for the execution, delivery and performance
of any of the Transaction Documents or the consummation of any of the
transactions contemplated thereby, except where the failure to obtain such
consents, authorizations or orders, or make such filings or registrations, would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Person or the Company to timely perform
their respective obligations under the Transaction Documents.
(c) Such Person has not taken nor will take, directly or indirectly,
any action prohibited by Regulation M under the Exchange Act in connection with
the offering of the Notes.
Section 4.04. ERISA. Such Person acknowledges that either (a) no
portion of the assets used by such Person to acquire and hold the Notes
constitutes "plan assets" within the meaning of U.S. Department of Labor
Regulation 29 CFR Section 2510.3-101 of any employee benefit plan subject to
ERISA, any plan, individual retirement account or other arrangement subject to
Section 4975 of the Code or any applicable Similar Law, or any entity whose
underlying assets are considered to include "plan assets" or any such plan,
account or arrangement; or (b) the purchase and holding of the Notes by such
Person will not constitute a non-exempt prohibited transaction under
20
Section 406 of ERISA or Section 4975 of the Code or a violation under any
applicable Similar Law.
ARTICLE V
COVENANTS OF THE COMPANY
The Company covenants and agrees with each Purchaser as follows:
Section 5.01. Access to Books and Records. The Company and each
Guarantor shall, and the Company shall cause each Subsidiary to, afford to each
of the Purchasers and the Purchasers' accountants, counsel and representatives
full access during normal business hours throughout the period prior to the
Closing Date (or the earlier termination of this Agreement pursuant to Section
8.01) to all of its properties, books, contracts, leases, agreements,
commitments and records and, during such period, shall, upon request, furnish
promptly to each of the Purchasers all other information as the Purchasers may
reasonably request, provided that no investigation or receipt of information
pursuant to this Section 5.01 shall affect any representation or warranty of the
Company or the conditions to the obligations of the Purchasers.
Section 5.02. Compliance with Conditions; Commercially Reasonable
Efforts. The Company shall, and shall cause each of its Subsidiaries to, use all
commercially reasonable efforts to cause all conditions precedent to the
obligations of the Company and its Subsidiaries to be satisfied. Upon the terms
and subject to the conditions of this Agreement, the Company and each of its
Subsidiaries will use all commercially reasonable efforts to take, or cause to
be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable consistent with Applicable Law to consummate and make
effective in the most expeditious manner practicable the issuance of the Notes
in accordance with the terms of the Transaction Documents.
Section 5.03. Consents and Approvals. The Company shall, and shall
cause each of its Subsidiaries to (a) use all commercially reasonable efforts to
obtain all necessary consents, waivers, authorizations and approvals of all
Governmental Authorities and of all other Persons required in connection with
the execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby and (b) diligently assist and cooperate
with the Purchasers in preparing and filing all documents required to be
submitted by the Purchasers to any Governmental Authority in connection with the
issuance of the Notes (which assistance and cooperation shall include, without
limitation, timely furnishing to the Purchasers all information concerning the
Company and its Subsidiaries that counsel to the Purchasers reasonably
determines is required to be included in such documents or would be helpful in
obtaining any such required consent, waiver, authorization or approval).
Section 5.04. Intentionally Omitted.
Section 5.05. Use of Proceeds. The Company shall, and shall cause
each of its Subsidiaries to, use the proceeds from the sale of the Notes for
payment of expenses
21
incurred in connection with the transactions contemplated by the Transaction
Documents and for working capital and general corporate purposes, in particular
the implementation of the Company's current business plan as disclosed to the
Purchasers and as may be amended from time to time by the Board.
Section 5.06. Rule 144A Information. The Company shall furnish to
holders of the Notes (and Additional Notes), and to prospective purchasers of
Notes (and Additional Notes) from such Persons, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act, in each case
subject to the receipt of appropriate confidentiality agreements (the foregoing
agreement being for the benefit of the Company, the holders from time to time of
the Notes (and Additional Notes) and such prospective purchasers).
Section 5.07. Integration. The Company shall not, and shall cause
its affiliates (as defined in Rule 501(b) of Regulation D) not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as such term is defined in the Securities Act) which could be
integrated with the sale of the Notes in a manner which would require
registration of the Notes under the Securities Act.
Section 5.08. No Public Offering. The Company shall not, and shall
cause its affiliates not to, authorize or knowingly permit any person acting on
their behalf (other than the Purchasers, as to which no covenant is given) to
(i) solicit any offer to buy or offer to sell the Notes by means of any form of
general solicitation or general advertising within the meaning of Regulation D
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act; (ii) engage in any directed selling efforts within the
meaning of Regulation S or fail to comply with the offering restrictions
requirement of Regulation S; or (iii) offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any securities under circumstances where
such offer, sale, contract or disposition would cause the exemption afforded by
Section 4(2) of the Securities Act to cease to be applicable to the offering and
sale of the Notes as contemplated by this Agreement.
Section 5.09. Communication. Prior to the Closing Date, the Company
shall not (and shall not permit any Subsidiary to) issue any press release or
other communication directly or indirectly or hold any press conference with
respect to the condition, financial or otherwise, or earnings, business affairs
or business prospects of the Company or its Subsidiaries, as the case may be
(except for routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company or its
Subsidiaries, as the case may be, and of which the Purchasers are notified),
without the prior written consent of the Purchasers, unless and to the extent
that in the judgment of the Company or its Subsidiaries and their counsel, and
after notification to the Purchasers, such press release or communication is
required by law.
22
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01. Conditions Precedent to Purchasers' Obligations. The
respective obligations of the several Purchasers hereunder are subject to the
performance by the Company of its covenants and other obligations hereunder, to
the accuracy of the statements of the Company and each of its Subsidiaries and
their respective officers made in any certificates delivered pursuant hereto and
to each of the following additional terms and conditions:
(a) All corporate proceedings and other legal matters incident to
the authorization, form and validity of each of the Transaction Documents,
and all other legal matters relating to the Transaction Documents and the
transactions contemplated thereby, shall be reasonably satisfactory in all
material respects to the Purchasers, and the Company and its Subsidiaries
shall have furnished to the Purchasers all documents and information that
they or their counsel may reasonably request to enable them to pass upon
such matters.
(b) Xxxxxxx Xxxxxxxx Xxxxxx shall have furnished to the Purchasers
their written opinion, as counsel for the Company, addressed to the
Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Purchasers, substantially in the form set forth in
Exhibit B hereto. The Purchasers shall have received such other opinions
of counsel with regard to New York law and English law as they may
request, in form and substance reasonably satisfactory to the Purchasers.
(c) The representations and warranties of the Company contained
herein and in each of the Transaction Documents (i) that are qualified by
materiality shall be true and correct and (ii) that are not qualified by
materiality shall be true and correct in all material respects, in each
case, as of the date of this Agreement and as of the Closing Date as
though made on the Closing Date, the Company and each of its Subsidiaries
shall have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied hereunder on or prior to the
Closing Date and subsequent to December 31, 2004 there shall have been no
Material Adverse Effect, and the Company shall have furnished to the
Purchasers a certificate, dated the Closing Date, signed by each of the
Chief Executive Officer and the Chief Financial Officer of the Company and
in the form attached as Exhibit A hereto, stating that, to his/her best
knowledge based on the investigation described therein, the foregoing is
true and correct.
(d) The Security Trust Agreement shall have been duly executed and
delivered by the Company, the Guarantors, the Security Trustee, and the
Purchasers, and, simultaneously with the payment of the purchase price,
the Notes shall have been duly executed and delivered by the Company.
23
(e) The Security Documents shall have been duly executed and
delivered.
(f) The Letter Agreement shall have been duly executed and delivered
by the Company and each of the holders of the Existing Notes.
(g) The Company shall have filed its Form 20-F with the Commission
for the fiscal year ended December 31, 2004, which shall be in form and
substance satisfactory to the Purchasers (including, without limitation,
the Purchasers being fully satisfied with respect to the Financial
Statements in their entirety).
(h) No judgment, order, decree, statute, law, ordinance, rule or
regulation, entered, enacted, promulgated, enforced or issued by any court
or other Governmental Authority of competent jurisdiction or other legal
restraint or prohibition shall be in effect preventing the consummation of
the transactions contemplated by this Agreement.
(i) No action, suit or proceeding is pending against or, to the
knowledge of the Company and its Subsidiaries, threatened against or
affecting the Company or any of its Subsidiaries or any of the Purchasers
before any court or arbitrator or any governmental agency, body or
official, domestic or foreign, which could reasonably be expected to
interfere with or adversely affect the issuance or exercise of any rights
of the Notes or in any manner draw into question the validity or
enforceability of any of the Transaction Documents or any action taken or
to be taken pursuant thereto or, in the reasonable judgment of any
Purchaser, makes it inadvisable for such Purchaser to proceed with the
consummation of the transactions contemplated hereby.
(j) Subsequent to the execution and delivery of this Agreement, no
event or condition of a type described in Section 3.26 hereof shall have
occurred or shall exist, the effect of which in the reasonable judgment of
the Purchasers is so material and adverse as to make it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Notes on
the terms and in the manner contemplated by this Agreement.
(k) All consents, waivers, approvals and authorizations required to
be obtained from any Governmental Authority or any other Person to
consummate all transactions contemplated by the Transaction Documents
shall have been obtained, in each case in form and substance satisfactory
to the Purchasers.
(l) On or prior to the Closing Date, the Company and its
Subsidiaries shall have furnished to the Purchasers such further customary
certificates and documents as the Purchasers may reasonably request to
evidence the accuracy of the representations and warranties or the
satisfaction of the agreements and conditions contained herein.
(m) The Company shall have appointed CT Corporation as its agent for
service of process in accordance with Section 9.05(c) hereof.
24
All agreements, opinions, letters, evidence and certificates
mentioned above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in form and substance
reasonably satisfactory to counsel for the Purchasers.
Section 6.02. Conditions to the Company's Obligations in Respect of
the Closing Date. The obligations of the Company to issue and sell the Notes
hereunder shall be subject, at the election of the Company, to the satisfaction
or waiver, on the Closing Date, of the following conditions:
(a) The representations and warranties of each Purchaser contained
in this Agreement shall have been true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as
though made on the Closing Date.
(b) Each Purchaser shall have performed in all material respects all
obligations and agreements to be performed and complied with by such
Purchaser on or prior to the Closing Date.
(c) Each Purchaser shall have delivered to the Company a certificate
executed by it or on its behalf by a duly authorized representative, dated
the Closing Date, to the effect that each of the conditions specified in
paragraph (a) and (b) of this Section 6.02 has been satisfied.
(d) No judgment, order, decree, statute, law, ordinance, rule or
regulation, entered, enacted, promulgated, enforced or issued by any court
or other Governmental Entity of competent jurisdiction or other legal
restraint or prohibition shall be in effect preventing the consummation of
the transactions contemplated by this Agreement.
ARTICLE VII
SURVIVAL; INDEMNIFICATION
Section 7.01. Survival of Representations and Warranties. The
respective representations and warranties of the Company and of the Purchasers
contained in this Agreement shall survive the transactions contemplated hereby
until the first anniversary of the Closing Date; provided, however, that the
representations contained in Sections 3.03, 3.04 and 3.05 hereof shall survive
until the expiration of the applicable statute of limitations. The respective
indemnities, covenants and agreements of the Company, its Subsidiaries and the
Purchasers contained in this Agreement or made by or on behalf of the Company,
its Subsidiaries or the Purchasers pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the
Notes and shall remain in full force and effect, regardless of any termination
of this Agreement or any investigation made by or on behalf of the Company, its
Subsidiaries or the Purchasers.
25
Section 7.02. Indemnification. (a) The Company agrees to indemnify
and hold harmless each Purchaser, each of such Purchaser's officers, directors,
trustees, employees and each person, if any, who controls such Purchaser within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, legal fees and other expenses reasonably
incurred in connection with any suit, action or proceeding or any claim
asserted, as such fees and expenses are incurred), joint or several, to the
extent arising out of, or based upon, (i) the negotiation, execution, delivery
or compliance with this Agreement or pursuit of any of the transactions
connected with or contemplated by this Agreement, and (ii) any failure to be
true of any representation or warranty made by the Company set forth in this
Agreement.
(b) The obligations to indemnify and hold harmless pursuant to
Section 7.02(a) hereof shall survive the consummation of the transactions
contemplated by this Agreement indefinitely except that such indemnification
obligations which are based upon any representation or warranty as set forth in
Section 7.02(a)(ii) shall survive only for the applicable periods of time set
forth in the first sentence of Section 7.01, except for claims asserted in
writing prior to the expiration of such applicable periods, which claims shall
survive until final resolution thereof.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnification may be sought pursuant to Section
7.01(a), such person (the "Indemnified Person") shall promptly notify the person
against whom such indemnification may be sought (the "Indemnifying Person") in
writing; provided that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have under this Article VII except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided, further, that the
failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this
Article VII. If any such proceeding shall be brought or asserted against an
Indemnified Person and it shall have notified the Indemnifying Person thereof,
the Indemnifying Person shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Article VII that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding, as incurred. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed in
writing to the contrary; (ii) the Indemnifying Person has failed within a
reasonable time after receiving notice of the commencement of the action to
retain counsel reasonably satisfactory to the Indemnified Person; (iii) the
Indemnified Person shall have reasonably concluded, based on the advice of
counsel to the Indemnified Person, that there may be legal defenses available to
it that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and, based on the advice of counsel to the Indemnified Person,
representation
26
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Indemnified Persons, and that all such fees and expenses shall be reimbursed
as they are incurred. Each Indemnified Person shall use all reasonable efforts
to cooperate with the Indemnifying Person in the defense of any such action or
claim; provided that if an Indemnified Person has retained its own counsel,
whether at the Indemnifying Person's expense or at the Indemnified Person's
expense, such Indemnified Person shall only be required to cooperate to the
extent such Indemnified Person reasonably believes such cooperation would not
impair its defense of such action or claim. Any such separate firm for any
Purchaser, and their respective affiliates, directors and officers and any
control persons of such Purchaser shall be designated in writing by the
Purchasers, as the case may be, and any such separate firm for the Company, its
Subsidiaries and any control persons of the Company and its Subsidiaries shall
be designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. No Indemnifying Person
shall, without the written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnification could have
been sought hereunder by such Indemnified Person, unless such settlement (x)
includes an unconditional release of such Indemnified Person from all liability
on claims that are the subject matter of such proceeding and (y) does not
include any statement as to or any admission of fault, culpability or a failure
to act by or on behalf of any Indemnified Person.
Section 7.03. Non-Exclusive Remedy. The remedies provided for in
this Article VII are not exclusive and shall not limit any rights or remedies
that may otherwise be available to any Indemnified Person at law or in equity.
Section 7.04. Deferral of Payment. The Company shall be permitted to
defer payment of any indemnification amount, other than indemnity-related fees
and expenses (which shall be reimbursed by the Company on a current basis as
provided below), until the earlier of (i) the date that is 12 months following
the Closing Date and (ii) the date on which the Company becomes subject to any
bankruptcy, insolvency, liquidation or similar proceeding. Interest will accrue
on all payment amounts deferred pursuant to this Section 7.04 at a rate of 10%
per annum, which amount shall be payable along with the indemnification amount
upon termination of the deferral period. To the extent permitted under Section
7.02, the Company shall reimburse a Purchaser for all indemnity-related fees and
expenses (including but not limited to legal fees) within five Business Days of
such Purchaser's request for reimbursement.
Section 7.05. Limitation on Indemnity. Notwithstanding anything to
the contrary in this Article VII, the liability of the Company in respect of
Section 7.01(a)(i)
27
hereof shall not extend to or include any liability or sum which would, but for
this proviso, cause such liability to be unlawful or prohibited by section 39 of
the Bermuda Companies Xxx 0000.
ARTICLE VIII
TERMINATION; DEFAULTING PURCHASERS
Section 8.01. Termination. (a) This Agreement may be terminated in
the absolute discretion of the Purchasers, by notice given to the Company, if
after the execution and delivery of this Agreement and prior to the Closing Date
any of the following shall have occurred and be continuing: (i) trading
generally shall have been suspended or materially limited on the New York Stock
Exchange or the over-the-counter market; (ii) a general moratorium on commercial
banking activities shall have been declared by federal or New York State
authorities; or (iii) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis, either
within or outside the United States, that, in the reasonable judgment of the
Purchasers, is material and adverse and makes it impracticable or inadvisable to
proceed with the offering, sale or delivery of the Notes on the terms and in the
manner contemplated by this Agreement.
(b) This Agreement may be terminated (i) at any time prior to the
Closing Date by mutual written agreement of the Company and the Purchasers, (ii)
if the Closing Date shall not have occurred on or prior to June 30, 2005, by
either the Company or the Purchasers, at any time after June 30, 2005, provided
that the right to terminate this Agreement under this Section 8.01(b)(ii) shall
not be available to any party whose failure to fulfill any obligation under this
Agreement was the cause of or resulted in the failure of the Closing Date to
occur on or before such date, or (iii) if any Governmental Authority shall have
issued a nonappealable final order, decree or ruling or taken any other action
having the effect of permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement by either the Company or the
Purchasers; provided, that the right to terminate this Agreement under this
Section 8.01(b)(iii) shall not be available to any party whose failure to
fulfill any obligation under this Agreement was the cause of or resulted in,
such final order, decree or ruling.
Section 8.02. Defaulting Purchaser. (a) If, on the Closing Date, any
Purchaser defaults on its obligation to purchase the Notes that it has agreed to
purchase hereunder, the non-defaulting Purchasers may in their discretion
arrange for the purchase of such Notes by other persons satisfactory to the
Company on the terms contained in this Agreement. If, within 36 hours after any
such default by any Purchaser, the non-defaulting Purchasers do not arrange for
the purchase of such Notes, then the Company shall be entitled to a further
period of 36 hours within which to procure other persons satisfactory to the
non-defaulting Purchasers to purchase such Notes on such terms. If other persons
become obligated or agree to purchase the Notes of a defaulting Purchaser,
either the non-defaulting Purchasers or the Company may postpone the Closing
Date for up to five full Business Days in order to effect any changes that in
the opinion of counsel for the Company or counsel for the Purchasers may be
necessary in any document or
28
arrangement. As used in this Agreement, the term "Purchaser" includes, for all
purposes of this Agreement unless the context otherwise requires, any person not
listed in Schedule 1 hereto that, pursuant to this Article VIII, purchases Notes
that a defaulting Purchaser agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of
the Notes of a defaulting Purchaser or Purchasers by the non-defaulting
Purchasers and the Company as provided in Section 8.02(a) above, the aggregate
principal amount of such Notes that remains unpurchased exceeds one-eleventh of
the aggregate principal amount of all the Notes, then this Agreement shall
terminate without liability on the part of the non-defaulting Purchasers. Any
termination of this Agreement pursuant to this Article VIII shall be without
liability on the part of the Company or its Subsidiaries, except that the
Company will continue to be liable for the payment of expenses as set forth in
Article IX hereof and except that the provisions of Article VII hereof shall not
terminate and shall remain in effect.
(c) Nothing contained herein shall relieve a defaulting Purchaser of
any liability it may have to the Company, its Subsidiaries or any non-defaulting
Purchaser for damages caused by its default.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company agrees to pay or cause to be paid all costs and expenses incident to
the performance of its obligations hereunder, including without limitation, (i)
the costs incident to the authorization, issuance, sale, preparation and
delivery of the Notes and any taxes payable in that connection; (ii) the costs
of reproducing and distributing each of the Transaction Documents; (iii) the
fees and expenses of the Company's and its Subsidiaries' counsel and independent
accountants; and (iv) the fees and expenses of the Security Trustee and any
paying agent (including related reasonable fees and expenses of any counsel to
such parties).
Section 9.02. Expense Reimbursement. The Company agrees to reimburse
the Purchasers for all out-of-pocket expenses and fees, including the fees and
expenses of attorneys, accountants and consultants employed in connection with
the Purchasers' consideration, negotiation and consummation of the investment,
including the Purchasers' due diligence on the Company and any documentation
relating to the transactions contemplated by this Agreement and any of the
Transaction Documents. The liability of the Company under this Section 9.02
shall not extend to or include any liability or sum which would, but for this
proviso, cause such liability to be unlawful or prohibited by section 39 of the
Bermuda Companies Xxx 0000.
Section 9.03. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the sole benefit of and be binding upon the parties
hereto and their respective
29
successors and, for purposes of Section 5.06 hereof, holders from time to time
of Notes, and, for purposes of Article VII hereof, any controlling persons
referred to therein, and the affiliates, officers, trustees and directors of
each Purchaser referred to in Article VII hereof. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 9.03, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein. No
purchaser of Notes from any Purchaser shall be deemed to be a successor by
reason of such purchase.
Section 9.04. Notices. All notices, demands, requests, consents,
approvals or other communications (collectively, "Notices") required or
permitted to be given hereunder or which are given with respect to this
Agreement shall be in writing and shall be personally served, delivered by
reputable air courier service with charges prepaid, or transmitted by hand
delivery, telegram, telex or facsimile, addressed as set forth below, or to such
other address as such party shall have specified most recently by written
notice. Notice shall be deemed given on the date of service or transmission if
personally served or transmitted by telegram, telex or facsimile. Notice
otherwise sent as provided herein shall be deemed given on the next business day
following delivery of such notice to a reputable air courier service. Any party
may change its address for Notice by Notice given to the Company in accordance
with the foregoing. No objection may be made to the method of delivery of any
Notice actually and timely received.
To the Company:
Viatel Holding (Bermuda) Limited
Xxxxxxx Xxxxx
Xxxx Xxxx
Xxxxx, Xxxxxx XX00 XXX
Xxxxxx Xxxxxxx
Attn: General Counsel
Telephone: 00-0000-000-000
Fax: 00-0000-000-000
and
To the Purchasers:
To the addresses specified on Schedule 1 hereto,
Section 9.05. GOVERNING LAW; WAIVER OF JURY TRIAL. (a) This
Agreement shall be construed in accordance with the internal laws of the State
of New York without regard to the conflicts of laws provisions thereof. The
Company hereby irrevocably submits to the jurisdiction of any court of the State
of New York located in the County of New York or the United States District
Court for the Southern District of the State of New York, any appellate courts
from any thereof (any such court, a "New York Court") or any court of the United
Kingdom located in London, or any appellate courts from any thereof (any such
court, a "UK Court"), but shall not be
30
required to submit to the jurisdiction of a court other than a New York Court or
UK Court, for the purpose of any suit, action or other proceeding arising out of
or relating to this Agreement or under any applicable securities laws and
arising out of the foregoing, which is brought by or against the Company, and
the Company hereby irrevocably agrees that all claims in respect of any such
suit, action or proceeding will be heard and determined in any such court. Each
party hereto (other than the Company) hereby irrevocably submits to the
jurisdiction of any New York Court, but shall not be required to submit to the
jurisdiction of a court other than a New York Court, for the purpose of any
suit, action or other proceeding arising out of or relating to this Agreement or
under any applicable securities laws and arising out of the foregoing, which is
brought by or against such party, and such party hereby irrevocably agrees that
all claims in respect of any such suit, action or proceeding will be heard and
determined in any such court. The Company hereby agrees not to commence any
action, suit or proceeding relating to this Agreement other than in a New York
Court except to the extent mandated by applicable law. The Company hereby waives
any objection that it may now or hereafter have to the venue of any such suit,
action or proceeding in any New York Court or any UK Court or that such suit,
action or proceeding was brought in an inconvenient court and agree not to plead
or claim the same. Each party hereto (other than the Company) hereby waives any
objection that it may now or hereafter have to the venue of any such suit,
action or proceeding in any New York Court or that such suit, action or
proceeding was brought in an inconvenient court and agree not to plead or claim
the same. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS
AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT THIS AGREEMENT, OR THE
TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(b) The submission to the jurisdiction referred to in the preceding
paragraph shall not limit the right of any Purchaser to take proceedings against
any other party hereto in courts of any other competent jurisdiction nor shall
the taking of proceedings against such other party in any one or more
jurisdictions preclude the taking of proceedings against such other party in any
other jurisdiction (whether concurrently or not) if and to the extent permitted
by applicable law.
(c) The Company agrees that the process by which any suit, action or
proceeding is begun in connection with this Agreement may be served on it at its
principal place of business in the United Kingdom for the time being. If the
Company ceases to have a principal place of business in the United Kingdom, it
shall immediately appoint
31
a further person in the United Kingdom to accept service of process on its
behalf in such jurisdiction. Nothing contained herein shall affect the right of
the parties hereto to serve process in any other manner permitted by law. In
addition, the Company acknowledges and agrees that (a) it has, by separate
letter, irrevocably appointed CT Corporation System, as its authorized agent
upon which process may be served in any suit or proceeding against the Company
arising out of or relating to this Agreement or under any securities laws of the
United States or any state thereof and arising out of the foregoing, (b) it has,
prior to the date hereof, paid such agent an amount in cash sufficient to
procure such agent's services for three years from the date hereof and (c)
service of process upon such agent, and written notice of said service to the
Company by the person serving the same to the address provided above, shall be
deemed in every respect effective service of process upon the Company in any
such suit or proceeding. The Company agrees to take any and all action as may be
necessary to maintain such designation and appointment of such agent in full
force and effect for a period of at least three years from the date of this
Agreement.
Section 9.06. Counterparts. This Agreement may be signed in
counterparts (which may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which together
shall constitute one and the same instrument.
Section 9.07. Amendments or Waivers. No amendment or waiver of any
provision of this Agreement, nor any consent or approval to any departure
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Company and Purchasers representing a majority in principal
amount of the Notes to be purchased pursuant to this Agreement; provided, that
to the extent that any amendment, waiver or departure would adversely affect the
rights or obligations of, or impose additional obligations on, any Purchaser in
a manner that is materially different from the manner in which it affects the
rights or obligations of the other Purchasers, or that would increase the amount
of Notes that such Purchaser is required to purchaser hereunder, then the
written consent of such Purchaser shall be required. No waiver of any breach of
any agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or provision
herein contained. No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
Section 9.08. Headings. The headings of the Articles and Sections of
this Agreement 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 or provisions hereof.
Section 9.09. Entire Agreement. This Agreement and the Transaction
Documents (including all agreements entered into pursuant hereto and thereto and
all certificates and instruments delivered pursuant hereto and certificates and
instruments delivered pursuant hereto and thereto) constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
all prior and contemporaneous agreement, representations, understandings,
negotiations and discussions between the parties, whether oral or written, with
respect to the subject matter hereof.
32
Section 9.10. Assignment. This Agreement and the rights, duties and
obligations hereunder may not be assigned or delegated by the Company without
the prior written consent of the Purchasers, and may not be assigned or
delegated by any Purchaser. Except as set forth above, any assignment or
delegation of rights, duties or obligations hereunder made without the prior
written consent of the Purchasers, shall be void and of no effect.
Section 9.11. Severability. If any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement and
such provision shall be interpreted to the fullest extent permitted by the law;
provided that the parties hereto shall use their reasonable best efforts to find
and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such provision.
Section 9.12. Successors. All agreements of the Company in this
Agreement shall bind its successor.
Section 9.13. Non-Waiver; Remedies Cumulative. None of the Company
or any Purchaser shall, by any act of omission or commission, be deemed to waive
any of its rights or remedies hereunder unless such waiver be in writing and
signed by such Person and then only to the extent specifically set forth
therein; a waiver on one occasion shall not, except as specifically set forth
therein, be construed as continuing or as a bar to or waiver of a right or
remedy on any other occasion. All remedies conferred upon each such Person by
this Agreement shall be cumulative and none is exclusive, and such remedies may
be exercised concurrently or consecutively at such Person's option.
Section 9.14. Injunctive Relief. It is hereby agreed and
acknowledged that it will be impossible to measure in money the damages that
would be suffered if the parties fail to comply with any of the obligations
herein imposed on them and that, in the event of any such failure, an aggrieved
Person will be irreparably damaged and will not have an adequate remedy at law.
Any such Person shall, therefore, be entitled to (in addition to any other
remedy to which the Person may be entitled, at law or in equity) injunctive
relief, including specific performance, to enforce such obligations, without the
posting of any bond and if any action should be brought in equity to enforce any
of the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law.
Section 9.15. Time of the Essence. Time is of the essence with
respect to all of the obligations and agreements specified in this Agreement.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and the several
Purchasers in accordance with its terms.
VIATEL HOLDING (BERMUDA) LIMITED
By: /s/ Xxxxx XxXxxxxx Muscroft
-----------------------------
Name: Xxxxx XxXxxxxx Muscroft
Title: Chief Financial Officer
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxx Xxxxx
-----------------------------
Name: Xxx Xxxxx
Title: Managing Director
VARDE PARTNERS, INC.
By: /s/ Xxxxxx Xxxxx
-----------------------------
Name: Xxxxxx Xxxxx
Title: Managing Partner
