AMENDMENT NO. 3 TO SUBORDINATION AGREEMENT
Exhibit 8
AMENDMENT NO. 3 TO SUBORDINATION AGREEMENT
This AMENDMENT NO. 3 TO SUBORDINATION AGREEMENT (this “Amendment”), is dated as August
[Ÿ], 2007, among VIATEL HOLDING (BERMUDA) LIMITED (the “Company”) and the holders
(the “2004 Noteholders”) of the Company’s 8% Convertible Senior Secured Notes Due 2014 and
is made with reference to that certain Subordination Agreement (as amended, the “Subordination
Agreement”) dated as of March 14, 2006, among the Company and the 2004 Noteholders, Amendment
No. 1 thereto, dated as of December 21, 2006, and Amendment No. 2 thereto, dated as of April 3,
2007. Terms used but not defined herein shall have the meaning assigned thereto in the
Subordination Agreement.
WHEREAS, the Company and the 2005 Noteholders have agreed that the parties set forth on
Schedule I hereto will purchase August 2007 Notes in an aggregate principal amount equal to
$13,011,120.00;
WHEREAS, in order to induce the Senior Secured Noteholders to enter into Amendment No. 6 and
all other documents related thereto and to purchase the August 2007 Notes, the parties wish to
provide for the subordination of the obligations and liabilities that the Company and the
Guarantors have granted in favor of the Junior Secured Noteholders to the obligations and
liabilities that the Company and the Guarantors have granted in favor of the Senior Secured
Noteholders;
WHEREAS, the parties have agreed, subject to and upon the terms and conditions set forth
herein, to amend the Subordination Agreement as set forth herein in order to account for the
issuance of the August 2007 Notes;
WHEREAS, each of the 2004 Noteholders has determined that this Amendment is in its best
interests and has approved this Amendment;
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows.
A. Amendment to the Recitals
1. Each paragraph of the recitals to the Subordination Agreement beginning with the third
paragraph of such recitals is hereby amended by deleting such paragraph in its entirety and
substituting in place of all such paragraphs the following:
WHEREAS, the Company has executed in favor of Xxxxxx Xxxxxxx & Co.
Incorporated, Värde Partners, Inc., and Stonehill Institutional Partners, L.P.
(together, the “2005 Noteholders”) those certain Senior Secured Increasing
Rate Notes Due 2007 in the aggregate principal amount of $16,000,000 issued on June
23, 2005 (as amended, amended and restated, replaced or otherwise modified from time
to time, the “2005 Notes”);
WHEREAS, the Company has executed in favor of Xxxxxx Xxxxxxx & Co.
Incorporated, Värde Partners, Inc., and Stonehill Institutional Partners, L.P.
(together, the “2006 Noteholders”) those certain Tranche A Senior Secured
Increasing Rate Notes Due 2007 in the aggregate principal amount of $8,802,600
issued on March 14, 2006 (as amended, amended and restated, replaced or otherwise
modified from time to time, the “March 2006 Notes”);
WHEREAS, the Company has executed in favor of Xxxxxx Xxxxxxx & Co.
Incorporated, Värde Partners, Inc., and Stonehill Institutional Partners, L.P.
(together, the “December 2006 Noteholders”) those certain Tranche B Senior
Secured Increasing Rate Notes Due 2007 in the aggregate principal amount of
$13,011,120.00 issued on December 21, 2006 (as amended, amended and restated,
replaced or otherwise modified from time to time, the “December 2006
Notes”);
WHEREAS, the Company has executed in favor of Xxxxxx Xxxxxxx & Co.
Incorporated, Värde Partners, Inc., and Stonehill Institutional Partners, L.P.
(together, the “April 2007 Noteholders”) those certain Tranche C Senior
Secured Increasing Rate Notes Due 2007 in the aggregate principal amount of
$13,011,120.00 issued on April 3, 2007 (as amended, amended and restated, replaced
or otherwise modified from time to time, the “April 2007 Notes”);
WHEREAS, each 2004 Noteholder has been asked to purchase a pro rata portion of
the 2005 Notes from the 2005 Noteholders, to purchase a pro rata portion of the 2006
Notes from the 2006 Noteholders, to purchase a pro rata portion of the December 2006
Notes from the December 2006 Noteholders, to purchase a pro rata portion of the
April 2007 Notes from the April 2007 Noteholders and to participate in an additional
issuance of certain increasing rate notes of the Company in an aggregate principal
amount of $13,011,120.00 (as amended, amended and restated, replaced or otherwise
modified from time to time, the “August 2007 Notes”, and together with the
March 2006 Notes, the December 2006 Notes and the April 2007 Notes the
“2006-2007 Notes”). Those 2004 Noteholders listed on Schedule I hereto have
elected to purchase the principal amount of 2006-2007 Notes listed next to such 2004
Noteholder’s name on Schedule I and either hold or will purchase the principal
amount of 2005 Notes listed next to such 2004 Noteholder’s name on Schedule I. The
2004 Noteholders listed on Schedule I hereto will be referred to as the “Senior
Secured Noteholders” for purposes of this Agreement and the 2004 Notes that they
hold will be referred to as the “Senior Notes”;
WHEREAS, each 2004 Noteholder that is not a Senior Secured Noteholder and that
is listed on Schedule II hereto will be referred to as a “Junior Secured
Noteholder” for purposes of this Agreement and hereby agrees to have its 2004
Note(s) subordinated to the Senior Notes in accordance with the terms
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and conditions of this Agreement. The 2004 Notes held by the Junior Secured
Noteholders will be referred to as the “Junior Notes”;
WHEREAS, in order to induce the Senior Secured Noteholders to enter into the
Basic Documents and to purchase the 2006-2007 Notes, the parties wish to provide for
the subordination of the obligations and liabilities that the Company and the
Guarantors have granted in favor of the Junior Secured Noteholders to the
obligations and liabilities that the Company and the Guarantors have granted in
favor of the Senior Secured Noteholders;
B. Amendment to Section 1
1. Section 1 of the Subordination Agreement is hereby amended by inserting the following new
definition in alphabetical order:
“Amendment No. 6” means Amendment No. 6, Waiver and Consent to the
Investment and Note Purchase Agreement, dated June 23, 2005, by and among
the Company and the 2005 Noteholders.
2. Section 1 of the Subordination Agreement is hereby amended by deleting in its entirety the
definition of “Basic Documents” and substituting therefor the following:
“Basic Documents” means the 2006-2007 Notes, Amendment No. 3,
Amendment Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0 and all other documents
relating thereto.
C. Amendment to Schedules
1. Schedule I to the Subordination Agreement is hereby amended by deleting Schedule I in its
entirety and substituting therefor Schedule I hereto.
2. Schedule II to the Subordination Agreement is hereby amended by deleting Schedule II in its
entirety and substituting therefor Schedule II hereto.
D. Conditions to Effectiveness
This Amendment shall take effect on the date (the “Amendment Effective Date”) when all
of the following shall have occurred: (a) each of the Company and the Noteholders shall have signed
a counterpart hereof (whether the same or different counterparts) and shall have delivered
(including by way of e-mail or telecopier) the same to each other; and (b) the Company shall have
paid in full all outstanding statements for fees and expenses of the Noteholders (including,
without limitation, the fees and disbursements of Wachtell, Lipton, Xxxxx & Xxxx), incurred in
connection with this Amendment, the Waiver, and all other documents delivered in connection
herewith and therewith.
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E. Miscellaneous Provisions
1. Except as expressly waived hereby, all of the terms, covenants and other provisions of the
Subordination Agreement shall remain unamended and unwaived and shall continue to be, and shall
remain, in full force and effect in accordance with their respective terms. The amendment set
forth herein shall be limited precisely as provided for herein to the provisions expressly amended
hereby and shall not be deemed to be an amendment to, waiver of, consent to, or modification of any
other term or provision of the Subordination Agreement or any other document referred to therein or
herein or of any transaction or further or future action on the part of the Company or any
Guarantor that would require the consent of the 2004 Noteholders (or any subset thereof) under the
Subordination Agreement or any other document referred to therein or herein.
2. The Company hereby agrees that it will take any action that from time to time may be
reasonably necessary to effectuate the agreements contemplated herein.
3. This Amendment may be executed in any number of separate counterparts, each of which, when
so executed, shall be deemed an original, and all of said counterparts taken together shall be
deemed to constitute but one and the same instrument.
4. This Amendment shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns.
5. This Amendment shall be construed in accordance with the internal laws of the State of New
York without regard to the conflicts of laws provisions thereof. Each party hereto 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
“U.K. Court”), for the purpose of any suit, action or other proceeding arising out of or
relating to this Amendment or under any applicable securities laws and arising out of the
foregoing, which is brought by or against such party, and each such party hereby irrevocably agrees
that all claims in respect of any such suit, action or proceeding will be heard and determined in
any New York Court or U.K. Court. Each such party hereby agrees not to commence any action, suit
or proceeding relating to this Amendment other than in a New York Court except to the extent
mandated by applicable law. Each such party hereby waives any objection that it may now or
hereafter have to the venue of any such suit, action or proceeding in any such 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 AMENDMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AMENDMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS
AMENDMENT, 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
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COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AMENDMENT AND CONSENT 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.
7. If any one or more of the provisions contained in this Amendment 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 Amendment and such provision shall
be interpreted to the fullest extent permitted by the law; provided that the Company and
each 2004 Noteholder 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.
[Remainder of Page Left Intentionally Blank]
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IN WITNESS WHEREOF, the Senior Secured Noteholders, the Junior Secured Noteholders and the Company
have caused this Agreement to be duly executed all as of the date first above written.
| JUNIOR SECURED NOTEHOLDERS: | AHAB PARTNERS, L.P. | |||||||||||
| By: | ||||||||||||
| Name: | ||||||||||||
| Title: | ||||||||||||
| ORE HILL HUB FUND LTD. | ||||||||||||
| By: | Ore Hill Partners LLC, its Investment Advisor | |||||||||||
| By: | ||||||||||||
| Name: | ||||||||||||
| Title: | ||||||||||||
| WAYLAND DISTRESSED OPPORTUNITIES FUND I-B, LLC | ||||||||||||
| By: | , | its | ||||||||||
| By: | ||||||||||||
| Name: | ||||||||||||
| Title: | ||||||||||||
| WAYLAND DISTRESSED OPPORTUNITIES FUND I-C, LLC | ||||||||||||
| By: | , | its | ||||||||||
| By: | ||||||||||||
| , | ||||||||||||
| Name: | ||||||||||||
| Title: | ||||||||||||
[SIGNATURE PAGE TO AMENDMENT NO. 3 TO SUBORDINATION AGREEMENT]
| XXXX XXXXX | |||||
| Name: | Xxxx Xxxxx | ||||
| XXXX XXXXXX | |||||
| Name: | Xxxx Xxxxxx | ||||
| XXXXXXX XXXXXXXX | |||||
| Name: | Xxxxxxx Xxxxxxxx | ||||
| EB TRUSTEES LIMITED, as Trustees of the VTL Employee Benefit Trust |
|||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| By: | |||||
| Name: | |||||
| Title: | |||||
[SIGNATURE PAGE TO AMENDMENT NO. 3 TO SUBORDINATION AGREEMENT]
SENIOR SECURED NOTEHOLDERS:
| XXXXXX XXXXXXX & CO. INCORPORATED |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| VÄRDE PARTNERS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| STONEHILL INSTITUTIONAL PARTNERS, L.P. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[SIGNATURE PAGE TO AMENDMENT NO. 3 TO SUBORDINATION AGREEMENT]
ACKNOWLEDGED AND AGREED:
VIATEL HOLDING (BERMUDA) LIMITED
| By: | ||||
| Name: | ||||
| Title: | ||||
[SIGNATURE PAGE TO AMENDMENT NO. 3 TO SUBORDINATION AGREEMENT]
THE LAW DEBENTURE TRUST CORPORATION P.L.C.
| By: | ||||
| Name: | ||||
| Title: | ||||
[SIGNATURE PAGE TO AMENDMENT NO. 3 TO SUBORDINATION AGREEMENT]
Schedule I
| Original | Original | Original | Original | |||||||||||||||||
| Original | Principal | Principal | Principal | Principal | ||||||||||||||||
| Principal | Amount | Amount | Amount of | Amount of | ||||||||||||||||
| Amount | of March 2006 | of December | April 2007 | August 2007 | ||||||||||||||||
| of 2005 Notes | Notes (not | 2006 Notes (not | Notes (not | Notes (not | ||||||||||||||||
| Name of | (not including | including PIK | including PIK | including PIK | including PIK | |||||||||||||||
| 2004 Noteholder | PIK interest) | interest) | interest) | interest) | interest) | |||||||||||||||
Xxxxxx Xxxxxxx &
Co. Incorporated |
$ | 12,631,579 | $ | 6,949,421 | $ | 10,271,936.84 | $ | 10,271,936.84 | $ | 10,271,936.84 | ||||||||||
Värde Partners, Inc. |
$ | 3,062,201 | $ | 1,684,708 | $ | 2,490,166.51 | $ | 2,490,166.51 | $ | 2,490,166.51 | ||||||||||
Stonehill
Institutional
Partners, L.P. |
$ | 306,220 | $ | 168,471 | $ | 249,016.65 | $ | 249,016.65 | $ | 249,016.65 | ||||||||||
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Schedule II
| Original Principal Amount | ||||
| Name of | of 2004 Notes (not including PIK | |||
| Junior Secured Noteholder | interest) | |||
Ahab Partners, L.P. |
$ | 2,650,000 | ||
Ore Hill Hub Fund Ltd. |
$ | 1,000,000 | ||
Xxxx Xxxxx |
$ | 250,000 | ||
Wayland
Distressed Opportunities Fund I-B, LLC |
$ | 500,000 | ||
Wayland
Distressed Opportunities Fund I-C, LLC |
$ | 500,000 | ||
Xxxx Xxxxxx |
$ | 250,000 | ||
Xxxxxxx Xxxxxxxx |
$ | 100,000 | ||
EB Trustees
Limited as Trustees of the VTL Employee Benefit Trust |
$ | 270,000 | ||
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