Exhibit 4.6
[Execution Version]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE SECURITIES LAWS OF ANY JURISDICTION. THIS NOTE MAY NOT BE
OFFERED, SOLD, HYPOTHECATED, GIVEN, BEQUEATHED, TRANSFERRED, ASSIGNED, PLEDGED,
ENCUMBERED, OR OTHERWISE DISPOSED OF ("TRANSFERRED") EXCEPT PURSUANT TO (I) A
REGISTRATION STATEMENT WITH RESPECT TO THIS NOTE THAT IS EFFECTIVE UNDER SUCH
ACT OR APPLICABLE STATE SECURITIES LAW, OR (II) ANY EXEMPTION FROM REGISTRATION
UNDER SUCH ACT, OR APPLICABLE STATE SECURITIES LAW, RELATING TO THE DISPOSITION
OF SECURITIES, PROVIDED THAT AN OPINION OF COUNSEL IS FURNISHED TO THE COMPANY,
TO THE EXTENT REASONABLY REQUESTED BY THE COMPANY, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND/OR APPLICABLE STATE SECURITIES LAW IS
AVAILABLE.
$________ New York, New York
June __, 2005
VIATEL HOLDING (BERMUDA) LIMITED
SENIOR SECURED INCREASING RATE NOTE DUE 2007
Viatel Holding (Bermuda) Limited, a company organized under the laws
of Bermuda (or its successor, the "Company"), hereby unconditionally promises to
pay to the order of _______________________ (the "Holder"), a
_________________________, the principal amount of ____________________ U.S.
Dollars (U.S.$_____________), on June __, 2007 (the "Maturity Date"), and to pay
interest at the time, in the form and at the rate set forth herein. Certain
capitalized terms used herein without definition shall have the meanings
assigned to them in Article 9 hereof. This Note is issued in accordance with and
subject to the following terms and conditions:
ARTICLE 1
PRINCIPAL AND INTEREST
Section 1.1. Principal and Interest.
(a) The Company shall on the Maturity Date pay to the order of the
Holder an amount equal to the aggregate principal amount of this Note
outstanding on the Maturity Date, plus accrued and unpaid interest thereon,
unless and to the extent that this Note is earlier redeemed, repurchased or
repaid in accordance with the terms of this Note.
(b) Interest shall be payable semi-annually, in arrears, on each
July 15 and January 15 after the issuance of this Note (the "Interest Payment
Dates"); provided, however, that the first Interest Payment Date shall be
January 15, 2006. Interest shall accrue on the unpaid principal amount of this
Note at the rate of 12% per annum from the Closing Date, or from the most recent
Interest Payment Date for which the applicable interest payment has been made,
until the principal amount of this Note is paid in full; provided, that such
interest rate shall increase by 0.50% per annum on each Interest Payment Date
beginning on January 15, 2006 (such interest rate as of any date of
determination, the "Applicable Rate"). Notwithstanding the foregoing, interest
accruing before July 15, 2006 may, at the election of the Company, be paid on
the applicable Interest Payment Date in the form of Additional Notes. Interest
on this Note shall be computed on the basis of a 360-day year composed of twelve
30-day months.
(c) If a date for payment of principal or interest is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and interest shall accrue for the intervening period.
(d) The Holder of this Note must surrender this Note to the Company
to collect principal payments.
(e) Except with respect to interest paid in the form of Additional
Notes as permitted under the penultimate sentence of Section 1.1(b) above and
Section 1.1(j) below, the Company will pay principal and interest in money of
the United States that at the time of payment is legal tender for payment of
public and private debts in immediately available funds (without any
counterclaim, setoff, recoupment or deduction whatsoever, and free and clear of,
and without any withholding or deduction for or on account of, any present or
future taxes, levies, imports, duties, charges or fees of any nature) and by
wire transfer to a U.S. dollar account maintained by the Holder with a bank in
the United States designated in writing by the Holder. All payments of interest
and principal in respect of this Note shall be made on the due date thereof no
later than 3:00 p.m., New York, New York time. Any payment received by the
Holder after 3:00 p.m., New York, New York time, on any day, will be deemed to
have been received on the following Business Day.
(f) The Company agrees that to the extent the Company makes a
payment or payments hereunder which payment or payments, or any part thereof,
are subsequently invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to the Company or its successors under any
Bankruptcy Law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, the obligations, or part thereof, under
this Note that have been paid, reduced or satisfied by such amount shall be
reinstated and continued in full force and effect as of the time immediately
preceding such initial payment, reduction or satisfaction.
(g) To the extent lawful, the Company shall pay interest on (i)
overdue principal and (ii) overdue installments (without regard to any
applicable grace period or payment blockage) of interest, in each case at a rate
equal to the Applicable Rate plus 2% per annum, compounded semi-annually.
(h) To guarantee the due and punctual payment of the principal and
interest, if any, on this Note and all other amounts payable by the Company
under this Note when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of this Note, the
Guarantors have, jointly and severally, unconditionally guaranteed the
Obligations pursuant to the terms of the Security Trust Agreement.
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(i) This Note and the other Senior Secured Increasing Rate Notes are
secured on a first-priority basis by the Security Interest created by the
Security Documents pursuant to, and subject to the terms of, the Security Trust
Agreement.
(j) If any deduction or withholding for any present or future taxes,
assessments or other governmental charges of (x) Bermuda or any political
subdivision or governmental authority thereof or therein having power to tax,
(y) any jurisdiction, other than the United States, from or through which
payment on this Note is made by the Company or Guarantors, or any political
subdivision or governmental entity thereof or therein having the power to tax or
(z) or any other jurisdiction, other than the United States, in which the
Company or Guarantors are organized, or any political subdivision or
governmental authority thereof or therein having power to tax, shall at any time
be required by such jurisdiction (or any such political subdivision or taxing
authority) in respect of any amounts to be paid by the Company or Guarantors
under this Note, the Company or Guarantors will pay to the Holder any additional
amounts as may be necessary in order that the net amounts paid to such Holder
who, with respect to any such tax, assessment or other governmental charge, is
not resident in, or a citizen of, such jurisdiction, after such deduction or
withholding, shall be not less than the amount specified in this Note to which
the Holder is entitled; provided, that the Company may elect to pay any such
additional amounts that become due prior to July 15, 2006 in the form of
Additional Notes.
ARTICLE 2
TRANSFER
The Company and, by acceptance of this Note, the Holder hereby agree
that the following provisions shall govern the registration, sale, assignment,
pledge, transfer, encumbrance or other disposition of this Note.
Section 2.1. Note Registration. The Company shall keep at its
principal office a register (the "Register") in which the Company shall enter
the name and address of the registered holder of this Note. References to the
"Holder" of this Note shall mean the person listed in the Register as the payee
of this Note unless the payee shall have presented this Note to the Company for
transfer and the transferee shall have been entered in the Register as a
subsequent holder, in which case the term shall mean such subsequent holder. The
registered holder of this Note may be treated as the owner of it for all
purposes.
Section 2.2. Disposition. (a) This Note may, directly or indirectly,
be sold, assigned, pledged, transferred, encumbered or otherwise disposed of
(each, a "transfer") in accordance with applicable law.
(b) A transfer of this Note permitted by paragraph (a) of this
Section shall only be effected by the Holder hereof by delivery of this Note to
the Company (with the instrument of assignment provided on this Note properly
completed in accordance with the terms and conditions of this Note), accompanied
by an opinion of counsel, in form and substance, and from counsel, reasonably
satisfactory to the Company, and by such other evidence as the Company may
reasonably require of compliance with the Securities Act and applicable state
securities laws and with the provisions of this Note, at the Company's principal
office or at such
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other location as the Company shall designate in writing to the Holder;
provided, however, that such transfer of this Note shall become effective only
upon, and shall not be effective for any purpose until, the Company has received
this Note.
(c) No service charge will be made for any such transfer or
assignment.
ARTICLE 3
OUTSTANDING NOTES
Section 3.1. (a) Outstanding Notes. The Senior Secured Increasing
Rate Notes outstanding at any time are all the Senior Secured Increasing Rate
Notes issued by the Company except for those cancelled by it and those
surrendered to it for cancellation. A Note also ceases to be outstanding because
the Company or any direct or indirect Subsidiary of the Company holds the Note.
(b) Direction, Waiver and Consent Requirements. In determining
whether the Noteholders of the required principal amount of Senior Secured
Increasing Rate Notes have concurred in any direction, waiver or consent, Senior
Secured Increasing Rate Notes owned by the Company or any direct or indirect
Subsidiary of the Company shall not be considered as though they are
outstanding.
ARTICLE 4
INTENTIONALLY OMITTED
ARTICLE 5
REDEMPTION OF SECURITIES
Section 5.1. Optional Redemption. This Note along with all other
Senior Secured Increasing Rate Notes shall be redeemable at the option of the
Company, in whole and not in part, on not less than 5 nor more than 20 days
prior notice, in cash by wire transfer to a U.S. dollar account maintained by
the Holder with a bank in the United States designated in writing by the Holder
at 100% of the principal amount, plus accrued and unpaid interest to the
Redemption Date; provided, that in the event of a Change of Control prior to or
in connection with any such optional redemption, the Redemption Price will be
the greater of the price set forth above and the Change of Control Put Price.
Section 5.2. Mandatory Redemption.
(a) Asset Sales. Not later than the second Business Day following
receipt by the Company or any of its Subsidiaries of any Net Asset Sale
Proceeds, except with respect to certain possible asset sales disclosed to the
Noteholders prior to the date hereof, the Company shall send a notice of
redemption in accordance with Section 5.3 below to redeem the Notes in an
aggregate amount equal to such Net Asset Sale Proceeds.
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(b) Insurance/Condemnation Proceeds. Not later than the second
Business Day following the date of receipt by the Company or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds, the Company shall send
a notice of redemption in accordance with Section 5.3 below to redeem the Notes
in an aggregate amount equal to such Net Insurance/Condemnation Proceeds.
(c) Issuance of Equity Securities. Not later than the second
Business Day following the date of receipt by the Company or any of its
Subsidiaries of any cash proceeds from a capital contribution to, or the
issuance of any Capital Stock of, the Company or any of its Subsidiaries to any
Person other than the Company or any of its Subsidiaries, the Company shall send
a notice of redemption in accordance with Section 5.3 below and redeem the Notes
in an aggregate amount equal to 100% of such proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses.
(d) Issuance of Debt. Not later than the second Business Day
following the date of receipt by the Company or any of its Subsidiaries of any
cash proceeds from incurrence of any indebtedness of the Company or any of its
Subsidiaries, the Company shall send a notice of redemption in accordance with
Section 5.3 below and shall redeem the Notes in an aggregate amount equal to
100% of such proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including reasonable legal
fees and expenses.
(e) Redemption Price; Redemption Date. Each redemption pursuant to
this Section 5.2 shall be made at 100% of the principal amount, plus accrued and
unpaid interest to the redemption date. The redemption date for each such
redemption shall be a date that is not less than 5 days nor more than 10 days
after the date the respective notice of redemption shall have been required to
be sent.
Section 5.3. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 10 nor more than 40 days prior to the Redemption
Date, to the Holder at the Holder's address appearing in the Register.
All notices of redemption shall state:
(i) the date on which this Note will be redeemed (the
"Redemption Date");
(ii) that on the Redemption Date the amount required to be
paid in respect of such redemption in accordance with Section 5.1 or
5.2, as applicable (the "Redemption Price") will become due and
payable in respect of this Note and all other Senior Secured
Increasing Rate Notes, the amount of the Redemption Price, and that
interest thereon will cease to accrue on and after said date; and
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(iii) the place or places (which shall in no event be outside
the continental United States) where the Note is to be surrendered
for payment of the Redemption Price.
Section 5.4. Notes Payable on Redemption Date. A notice of
redemption having been given as aforesaid, this Note shall on the Redemption
Date become due and payable at the Redemption Price therein specified, and from
and after such date (unless the Company shall default in the payment of the
Redemption Price) shall cease to bear interest. Upon surrender of this Note for
redemption in accordance with said notice, this Note shall be paid by the
Company at the Redemption Price.
If this Note is called for redemption and the Redemption Price for
the Note is not paid in full on the Redemption Date upon surrender thereof for
redemption, then the Redemption Date shall be deemed not to have occurred and in
that case (x) the Company will be required to comply with all provisions of this
Article 5 in order to redeem this Note as if the notice required by this Section
5.3 had not been delivered, (y) all payments of the Redemption Price shall be
allocated first to any accrued and unpaid interest to the Redemption Date and
then to the unpaid principal amount of this Note and (z) the unpaid principal
amount of this Note shall, until paid, continue to bear interest at the rate
prescribed herein, and all other terms and conditions of this Note shall
continue to apply.
ARTICLE 6
CHANGE OF CONTROL OFFER
Section 6.1. Change of Control Offer. (a) Upon a Change of Control,
the Holder shall have the right to require that the Company repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of the Note at a
purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest thereon, if any, to the date of repurchase (the
"Change of Control Put Price") (subject to the right of the Holder to receive
interest due on the relevant interest payment date) in accordance with the terms
contemplated in Section 6.1(b).
(b) Within five Business Days following any Change of Control, the
Company shall mail a notice to the Holder (the "Change of Control Offer")
stating:
(i) that a Change of Control has occurred and that the Holder
has the right to require the Company to purchase all or a portion
(equal to $1,000 or an integral multiple thereof) of the Note at a
purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest to the date of repurchase
(subject to the right of the Holder to receive interest due on the
relevant interest payment date if prior to the date of repurchase);
(ii) the circumstances and relevant facts and financial
information regarding such Change of Control;
(iii) the repurchase date (which shall be no earlier than 30
days (or such shorter time period as may be permitted under
applicable laws, rules and regulations) nor later than 60 days from
the date such notice is mailed); and
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(iv) the instructions reasonably determined by the Company,
consistent with this Section 6.01, that the Holder must follow in
order to have this Note purchased.
(c) If the Holder elects to have the Note purchased, the Holder
shall be required to (1) complete and manually sign the notice on the back of
this Note (or complete and manually sign a facsimile of such notice) and deliver
such notice to the Company and (2) surrender the Note to the Company at the
address specified in the notice at least three Business Days prior to the
purchase date. The Holder shall be entitled to withdraw its election if the
Company receives not later than one Business Day prior to the purchase date a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note which was delivered for purchase by the
Holder and a statement that the Holder is withdrawing his election to have the
Note purchased. The Company will issue to the Holder a new Note equal in
principal amount to such unpurchased portion.
(d) On the purchase date, the Note, or any portion thereof,
purchased by the Company under this Section 6.1 shall be cancelled, and the
Company shall pay the purchase price determined pursuant to Section 6.1(b)(i) to
the Holder.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of the Note pursuant to this
Section 6.1. To the extent that the provisions of any applicable securities laws
or regulations require the Company to act in a manner that conflicts with
provisions of this Note relating to Change of Control Offers, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 6.1 by virtue
thereof.
ARTICLE 7
EVENTS OF DEFAULT
Section 7.1. Events of Default. The following shall be Events of
Default:
(a) the Company or any Guarantor defaults in any payment of interest
on any Senior Secured Increasing Rate Note, and such default continues for a
period of 3 days;
(b) the Company or any Guarantor (i) defaults in the payment of the
principal of any Senior Secured Increasing Rate Note when the same becomes due
and payable at its Maturity Date, upon required redemption or repurchase, upon
declaration or otherwise, or (ii) fails to redeem or purchase Notes when
required pursuant to the terms hereof;
(c) the Company or any Guarantor fails to comply with Article 6 or
Section 5.2 hereof;
(d) the Company or any Guarantor fails to comply with any of its
covenants in this Note or any Transaction Document (other than those referred to
in paragraphs (a), (b) or (c) above) and such failure continues for 60 days
after written notice of such failure shall have been delivered to the Company by
a Noteholder or the Security Trustee;
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(e) the Company or any Subsidiary pursuant to or within the meaning
of any Bankruptcy Law or otherwise shall be liquidated, dissolved, adjudicated
insolvent, or shall fail to pay, or shall admit in writing its inability to pay
its debts as they mature, or shall make a general assignment for the benefit of
creditors; or the Company or any Subsidiary shall apply for or consent to the
appointment of any receiver, custodian, trustee or similar officer for it or for
all or any substantial part of its property, or such receiver, custodian,
trustee or similar officer shall be appointed without the application or consent
of the Company or any Subsidiary; or the Company or any Subsidiary shall
institute (by petition, application, answer, consent or otherwise), or take any
action to authorize the institution of, any bankruptcy, insolvency,
reorganization, dissolution, liquidation or similar proceeding relating to the
Company or any Subsidiary under the laws of any jurisdiction or takes any
comparable action under any foreign laws relating to insolvency; or any such
proceeding shall be instituted (by petition, application or otherwise) against
the Company or any Subsidiary and such proceeding shall not be dismissed within
60 days after being instituted;
(f) (i) any Security Document or any security interest granted
thereby shall be held in any judicial proceeding to be unenforceable or invalid,
or not perfected, or shall cease or fail for any reason to be in full force and
effect or to create or constitute a security interest with the priority and
effect required under the Security Trust Agreement and such default or failure
continues for 10 days after written notice, or (ii) the Company or any
Guarantor, or any Person acting on behalf of such Guarantor, shall deny or
disaffirm its obligations under this Note or any Security Document;
(g) A representation or warranty made or repeated by the Company or
any Guarantor in or in connection with this Note or any Security Document or in
any certificate or statement delivered by or on behalf of the Company or any
Guarantor under or in connection with this Note or any Security Document is
incorrect in any material respect when made or deemed to have been made or
repeated;
(h) The Company and its Subsidiaries (taken as a whole) cease to
carry on all or a substantial part of its business;
(i) Any litigation, arbitration or administrative proceedings of or
before any court, arbitral body or agency have been started against the Company
or any Subsidiary where there is a reasonable likelihood of an adverse outcome
to the Company or any Subsidiary where that outcome is of a nature which would
have a Material Adverse Effect; or
(j) All or a material part of the undertakings, assets, rights or
revenues of, or shares or other ownership interests in, the Company or any
material Subsidiary are seized, expropriated, nationalised or otherwise
compulsory acquired by or under the authority of any government or government
entity.
Section 7.2. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default (other than an Event of Default specified in Section 7.1(e))
occurs and is continuing, then and in every such case the Majority Noteholders
may declare the principal of, and all accrued and unpaid interest under, all
Senior Secured Increasing Rate Notes, including this Note, to be due and payable
immediately, by a notice in writing to the Company, and upon any such
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declaration such principal and interest shall become due and payable
immediately. If an Event of Default specified in Section 7.1(e) occurs, the
principal of and interest on this Note shall ipso facto become and be
immediately due and payable in cash without any declaration or other act on the
part of any Holders.
Notwithstanding any of the foregoing, at any time after such a
declaration of acceleration has been made and before a judgment or decree for
payment of the money due has been obtained, the Majority Noteholders may rescind
and annul such declaration and its consequences by notice to the Company in
writing of their desire to do so. No such rescission and annulment shall affect
any subsequent default or impair any right consequent thereon.
ARTICLE 8
COVENANTS
Section 8.1. Payment of Notes. The Company shall promptly pay the
principal of and interest on this Note on the dates and in the manner provided
herein. The Company shall, to the extent lawful, pay interest on overdue
principal and overdue installments of interest to the extent and in the manner
set forth in Section 1.1(g) of this Note.
Section 8.2. Compliance with Bye-Laws. The Company shall, and shall
cause all of its Subsidiaries to, comply with all of the terms and conditions of
Section 76A and Schedule 2 of the Bye-Laws.
Section 8.3. Compliance Certificate. The Company shall deliver to
the Holder within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto.
ARTICLE 9
DEFINITIONS
Section 9.1. Definitions. The following terms shall have the
meanings set forth below:
"Additional Notes" means additional Senior Secured Increasing Rate
Notes due 2007, having terms and conditions identical to those of this Note, and
which are issued in face amount equal to interest that would otherwise be
payable in cash on this Note or on such Notes or any other Senior Secured
Increasing Rate Note.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person
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means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Bye-Laws" means the Bye-Laws of the Company.
"Asset Sale" means the sale by the Company or any of its
Subsidiaries to any Person other than Company or any of its wholly-owned
Subsidiaries of (i) any of the Capital Stock of any of the Company's
Subsidiaries, (ii) all or substantially all of the assets of any division or
line of business of the Company or any of its Subsidiaries, or (iii) any other
assets (whether tangible or intangible) of the Company or any of its
Subsidiaries (other than inventory sold in the ordinary course of business).
"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors or any committee
thereof duly authorized to act on behalf of the Board of Directors.
"Business Day" means each day which is not 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.
"Change of Control" means the occurrence (x) of a Liquidity Event
(as defined in the Existing Notes), (y) of the adoption of a plan relating to
the liquidation or dissolution of the Company, or (z) at any time following the
occurrence of a Liquidity Event, of any of the following events:
(a) (i) any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act), other than one or more Permitted Holders, becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 40% of the total voting power of the Voting Stock of
the Company, whether as a result of issuance of securities of the Company, any
merger, consolidation, liquidation or dissolution of the Company, any direct or
indirect transfer of securities by any Permitted Holder or otherwise, and (ii)
the Permitted Holders "beneficially own" (as defined in clause (i) above),
directly or indirectly, in the aggregate a lesser percentage of the total voting
power of the Voting Stock of the Company, than such other person and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors; or
(b) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (together with
any new directors or members of such governing body, as the case may be, whose
designation or election to such
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Board of Directors, or whose nomination for election by the shareholders of the
Company, (x) was approved by a vote of a majority of the directors of the
Company then still in office who were either directors or members of such
governing body, as the case may be, at the beginning of such period or whose
election or nomination for election was previously so approved or (y) was
effected in accordance with Sections 83A, 83B and 83C of the Bye-Laws), cease
for any reason to constitute a majority of the Board of Directors, then in
office; or
(c) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the sale of
all or substantially all the assets of the Company to another Person (other than
a Person that is controlled by the Permitted Holders), and, in the case of any
such merger or consolidation, the securities of the Company that are outstanding
immediately prior to such transaction and which represent 100% of the aggregate
voting power of the Voting Stock of the Company are changed into or exchanged
for cash, securities or property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving Person or transferee that represent
immediately after such transaction, at least a majority of the aggregate voting
power of the Voting Stock of the surviving Person or transferee or a Person
controlling such surviving Person or transferee.
"Change of Control Offer" has the meaning set forth in Section
6.1(b).
"Change of Control Put Price" has the meaning set forth in Section
6.1(a).
"Closing Date" means June __, 2005.
"Common Shares" means the Common Shares of the Company, par value
$0.01 per share.
"Company" has the meaning set forth in the preamble.
"Deed of Priorities" means the Deed of Priorities dated June __,
2005 by and between the Security Trustee, as security trustee for the Initial
Purchasers, and The Law Debenture Trust Company, p.l.c., as security trustee for
the holders of the Existing Notes.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Event of Default" has the meaning set forth in Section 7.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Notes" means the Company's 8% Convertible Senior Secured
Notes due 2014.
"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
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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.
"Guarantors" means VTL (UK) Limited, Viatel Broadband Limited,
Viatel Internet Limited, and each other Subsidiary that may issue a Guarantee of
this Note under the Security Trust Agreement or other guarantee agreement.
"Holder" has the meaning set forth in the preamble, as further
described in Section 2.1.
"Initial Purchasers" means the "Purchasers" as defined in the
Purchase Agreement.
"Interest Payment Date" has the meaning set forth in Section 1.1(b).
"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.
"Letter Agreement" means that certain Letter Agreement dated as of
June __, 2005, by and between the Company, the holders of the Existing Notes and
the Initial Purchasers.
"Majority Noteholders" means, at any time, the Noteholders holding a
majority of the principal amount of the Senior Secured Increasing Rate Notes
outstanding at such time.
"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 Holder in the Note.
"Maturity Date" has the meaning set forth in the preamble.
"Xxxxxx Xxxxxxx" means Xxxxxx Xxxxxxx & Co. Incorporated.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, an
amount equal to: (i) cash payments (including any Cash received by way of
deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received by the Company or any of
its Subsidiaries from such Asset Sale, minus (ii) any bona fide direct costs
(including, without limitation, transaction costs) incurred in connection with
such Asset Sale, including (a) all income or gains taxes payable at any time by
the seller as a result of any gain recognized in connection with such Asset
Sale, (b) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Senior Secured Increasing
Rate Notes) that is secured by a Security Interest on the stock or assets in
question and that is required to be repaid under the terms thereof as a result
of such Asset Sale
12
and (c) a reasonable reserve for any indemnification payments (fixed or
contingent) attributable to seller's indemnities and representations and
warranties to purchaser in respect of such Asset Sale undertaken by the Company
or any of its Subsidiaries in connection with such Asset Sale.
"Net Insurance/Condemnation Proceeds" means an amount equal to: (i)
any cash payments or proceeds received by the Company or any of its Subsidiaries
(a) under any casualty insurance policy in respect of a covered loss thereunder
or (b) as a result of the taking of any assets of the Company or any of its
Subsidiaries by any Person pursuant to the power of eminent domain, condemnation
or otherwise, or pursuant to a sale of any such assets to a purchaser with such
power under threat of such a taking, minus (ii) (a) any actual and reasonable
costs incurred by the Company or any of its Subsidiaries in connection with the
adjustment or settlement of any claims of the Company or such Subsidiary in
respect thereof, and (b) any bona fide direct costs incurred in connection with
any sale of such assets as referred to in clause (i)(b) of this definition,
including income taxes payable as a result of any gain recognized in connection
therewith and (c) any amounts required to be applied to the repayment of any
indebtedness secured by a lien which is prior to any liens of the Noteholders on
the asset or assets that are subject to the taking, condemnation or casualty but
excluding, however, an aggregate of $1,000,000 of such proceeds.
"Note Documents" means this Note, the Security Trust Agreement, the
Deed of Priorities and the Security Documents.
"Noteholders" means all registered owners of the Senior Secured
Increasing Rate Notes.
"Note" means this Note, as amended, supplemented, extended,
restated, renewed, replaced, refinanced or otherwise modified, in each case from
time to time and whether in whole or in part.
"Obligations" means all obligations of the Company and the
Guarantors under this Note and the other Note Documents, including obligations
to the Security Trustee, whether for payment of principal of or interest on this
Note and all other monetary obligations of the Company and the Guarantors under
this Note and the other Note Documents, whether for fees, expenses,
indemnification or otherwise.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company. "Officer" of a Guarantor has a correlative meaning.
"Officers' Certificate" means a certificate signed by two Officers
of each Person issuing such certificate. For the avoidance of doubt, any
Officers' Certificate to be delivered by the Company pursuant to this Note shall
be signed by two Officers of the Company.
"Permitted Holders" means Xxxxxx Xxxxxxx and its Affiliates and any
Person acting in the capacity of an underwriter in connection with a public or
private offering of the Company's Capital Stock.
13
"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.
"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.
"Purchase Agreement" means the Investment and Note Purchase
Agreement, dated as of June __, 2005, by and among the Company and the Initial
Purchasers.
"Redemption Date" has the meaning set forth in Section 5.3(i).
"Redemption Price" has the meaning set forth in Section 5.1.
"Register" has the meaning set forth in Section 2.1.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Documents" means the Security Trust Agreement 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 Interest" 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.
"Senior Secured Increasing Rate Notes" means this Note and each
other Senior Secured Increasing Rate Note of the Company issued on the date of
issuance set forth above pursuant to the Purchase Agreement, as well as the
Additional Notes.
"Security Trust Agreement" means the Security Trust and
Intercreditor Deed, dated as of June __, 2005, as amended, by and among the
Company, the Guarantors, the Security Trustee and the Noteholders.
"Security Trustee" means The Law Debenture Trust Corporation p.l.c.
and its successors and assigns under the Security Trust Agreement.
"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.
"Transaction Documents" means the Senior Secured Increasing Rate
Notes, the Purchase Agreement, the Security Documents, and the Letter Agreement,
the Deed of Priorities.
14
"transfer" has the meaning set forth in Section 2.2.
"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.
Section 9.2. Interpretation. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles;
(iii) references to "generally accepted accounting principles"
shall mean generally accepted accounting principles in effect as of
the time when and for the period as to which such accounting
principles are to be applied;
(iv) "or" is not exclusive;
(v) words in the singular include the plural, and in the
plural include the singular;
(vi) provisions apply to successive events and transactions;
(vii) "including" means including without limitation; and
(viii) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified.
ARTICLE 10
MISCELLANEOUS
Section 10.1. Notices. Any notice or communication to be given
according to the terms of this Note shall be governed by the terms and
conditions for the giving of notices under Section 9.04 of the Purchase
Agreement. Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
Section 10.2. No Recourse Against Others. A director, officer,
employee, creditor or shareholder, as such, of the Company shall not have any
liability for any obligations of the Company under this Note or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Noteholder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of this Note.
Section 10.3. Amendment. The provisions of this Note may be amended,
modified or waived if the Majority Noteholders shall, by written consent
delivered to the
15
Company, consent to such amendment, modification or waiver; provided, however,
that no such waiver shall extend to or affect any covenant set forth herein
except to the extent so expressly waived and, until such waiver shall become
effective, the obligations of the Company in respect of any such covenant shall
remain in full force and effect; and provided further that no such amendment,
modification or waiver (i) which would modify any requirement hereunder that any
particular action be taken by all of the Noteholders, or by Noteholders of a
specified percentage of the aggregate principal amount of the outstanding Senior
Secured Increasing Rate Notes, shall be effective unless consented to by all of
the Noteholders or by Noteholders of such specified percentage, respectively, or
(ii) which would extend the due date for, or reduce the amount of, or form of,
any payment of principal of or interest on any Senior Secured Increasing Rate
Note shall be made without the consent of the Noteholder of such Senior Secured
Increasing Rate Note. Any such amendment, modification or waiver consented to by
the Majority Noteholders shall be binding on all Noteholders.
Section 10.4. Governing Law; Jurisdiction; Waiver of Trial by Jury.
(a) This Note 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 "U.K. Court"), for the purpose of any suit, action or other
proceeding arising out of or relating to this Note 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 New York Court or U.K. Court. The Company hereby agrees not to commence any
action, suit or proceeding relating to this Note 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 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 NOTE HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS NOTE OR IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT THIS NOTE, 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 NOTE 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.
(a) The submission to the jurisdiction referred to in the preceding
paragraph shall not limit the right of the Holder to take proceedings against
the Company in courts of any other competent jurisdiction nor shall the taking
of proceedings against the Company in any one
16
or more jurisdictions preclude the taking of proceedings against the Company in
any other jurisdiction (whether concurrently or not) if and to the extent
permitted by applicable law.
(b) The Company agrees that the process by which any suit, action or
proceeding is begun in connection with this Note 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 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 Company or the Holder 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 Note 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 Note.
Section 10.5. Successors. All agreements of the Company in this Note
shall bind its successor.
Section 10.6. Severability. If any one or more of the provisions
contained in this Note 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 Note and such provision shall be
interpreted to the fullest extent permitted by the law; provided that the
Company and the Holder 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 10.7. Headings, etc. The headings of the Articles and
Sections of this Note 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 10.8. Enforcement. The Company agrees to pay all fees
(including legal fees) and expenses which the Holder may reasonably incur as a
result of any contest by the Holder of the liability of the Company under any
provision of this Note in which a final and non-appealable decision or
settlement is made that the Company is liable to the Holder in substantially
such a manner as is claimed by the Holder.
Section 10.9. Specific Performance. The Company acknowledges that
the Holder would not have an adequate remedy at law for money damages in the
event that the terms of this Note were not performed in accordance with its
terms, and therefore agrees that the Holder shall be entitled to (in addition to
any other remedy to which the Holder may be entitled, at law or in equity)
injunctive relief, including specific performance, to enforce such obligations,
without the
17
posting of any bond and if any action should be brought in equity to enforce any
of the provisions of this Note, the Company shall not raise the defense that
there is an adequate remedy at law.
Section 10.10. Non-Waiver; Remedies Cumulative. Holder shall not, 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 Xxxxxx 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 Holder by this Note shall be cumulative and none is
exclusive, and such remedies may be exercised concurrently or consecutively at
Holder's option.
Section 10.11. Waiver. The Company hereby waives presentment for
payment, protest and demand, and, except as specifically set forth or required
herein or hereunder, notice of protest, intent, demand, dishonor and nonpayment
of this Note and all other notices of any kind.
Section 10.12. Assignment. This Note and the rights, duties and
obligations hereunder may not be assigned or delegated by the Company without
the prior written consent of the Holder. Section 10.13. Entire Agreement. This
Note and the agreements, documents and instruments executed in connection
herewith, constitutes the entire agreement of the Company and the Holder with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations, understandings, negotiations and
discussions between the Company and the Holder, whether oral or written, with
respect to the subject matter hereof.
Section 10.14. Time of the Essence. Time is of the essence with
respect to all of the obligations and agreements specified in this Note.
VIATEL HOLDING (BERMUDA) LIMITED
By: __________________________
Name:
Title:
18
[FORM OF ASSIGNMENT]
The undersigned Holder, hereby * to _________ (herein called the "Assignee"), **
interest of the undersigned in this Note, with the effect and subject to the
provisions set forth in this Note, such assignment to be effected by delivery of
this Note to the Company with this assignment properly completed in accordance
with the terms and conditions of this Note, such transfer or assignment to
become effective on, and not to be effective for any purpose until, the Company
has acknowledged such transfer or assignment and executed and delivered a new
Note to the (partial) Assignee registered in the name of the (partial) Assignee
(and, in the case of a partial assignment, a new Note to the undersigned
Holder).
Dated: ____________ ______________________________________________
Signature
(Use exact name of Xxxxxx as shown on this Note)
Fill in for registration of new Note:
_______________________
_______________________
_______________________
Please print address of Assignee (including zip code)
The undersigned, [insert name of assignee], xxxxxx agrees to execute any
documents reasonably requested by the Company or the Majority Noteholders to
effect the foregoing.
___________________________
Signature of Assignee
-----------------
* Insert, as appropriate, the words "transfers", "assigns", or followed by a
description of the obligation, "pledges as security for".
** Insert, as appropriate, the words "(100%) the entire" or, preceded by a
percentage less than 100% in parentheses, "a partial".
Notice of the foregoing assignment is hereby acknowledged and
approved.
VIATEL HOLDING (BERMUDA) LIMITED
By __________________________
Dated: ______________
A-1
[FORM OF OPTION OF HOLDER TO ELECT PURCHASE PURSUANT TO SECTION 6.1 - CHANGE OF
CONTROL]
TO VIATEL HOLDING (BERMUDA) LIMITED:
The undersigned Holder hereby elects to have the Company repurchase [all]
[ * principal amount] of this Note pursuant to Section 6.1 of this Note.
Dated: ____________ ___________________________________________
Signature
(Use exact name of Xxxxxx as shown on this Note)
* If Note to be repurchased in part, state the amount ($1,000 or integral
multiple thereof)
A-2
