CONFORMED FILING COPY
RESTRUCTURING AGREEMENT
THIS RESTRUCTURING AGREEMENT (the "Agreement"), dated as of May 15,
2002, is entered into by and among CompleTel Europe N.V. (the "Company"),
CompleTel SAS ("SAS"), Xxxxx X.X. ("Xxxxx"), CompleTel Escrow B.V. ("Escrow"),
Meritage Private Equity Fund, L.P., Meritage Private Equity Parallel Fund,
L.P., Meritage Entrepreneurs Fund, L.P. (collectively, "Meritage"), XxXxxxxx
Telcom Holdings Limited Partnership ("XxXxxxxx"), and each of the entities set
forth on Exhibit A (each, a "Consenting Noteholder") (together, the
"parties").
RECITALS
WHEREAS:
(A) The parties have engaged in good faith negotiations with the
objective of achieving mutually agreeable terms on which a financial
restructuring of the Company might be achieved.
(B) The parties have agreed to seek to implement a financial
restructuring (the "Restructuring") of the Company on the terms set forth in
this Agreement and the term sheet attached hereto as Exhibit B (the "Term
Sheet").
(C) This Agreement and the Term Sheet contemplate that the
Restructuring will be implemented through (x) either (i) an Exchange, and/or
(ii) Dutch Proceedings together with a pre-arranged Akkoord, and/or (iii) a US
Case together with a pre-arranged US Plan, (y) together with (i) the
Reinvestment, and (ii) the Capital Infusion.
(D) Subject to the Restructuring being effected in a manner which is
consistent with this Agreement and the Term Sheet (including as to the amount,
allocation and distribution of the Consideration), each Consenting Noteholder
and each Reinvesting Noteholder is and the Equity Investors are, willing to
support the implementation of the Restructuring on the terms and subject to
the conditions of this Agreement, the Term Sheet and applicable law.
NOW THEREFORE, in consideration of the foregoing recitals, the terms
and conditions set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each of the undersigned parties agrees as follows:
1. Definitions.
(a) In this Agreement:
"Akkoord" means a binding composition plan (ontwerp van akkoord)
filed in the Dutch Proceedings under sections 252 sqq. of the Netherlands
Bankruptcy Act which provides that the Consideration (including as to the
amount, allocation and distribution thereof) to be received by the Noteholders
shall be as provided for in the Term Sheet and which otherwise is in a form
and substance reasonably satisfactory to each of the Consenting Noteholders
and the Company;
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of New York or such other court in the United States having
jurisdiction in a US Case;
"Business Day" means a day (other than a Saturday or a Sunday) on
which banks are open for general business in each of London, New York and
Amsterdam;
"Capital Infusion" means the purchase of an equity interest of
(euro)30 million in the Company by the Equity Investors on the terms set out
in Section 14 hereof;
"Company Termination Event" means an event which entitles the Company
to terminate this Agreement under Section 13;
"Consideration" means the stock and cash amount to be received by
Noteholders as set out in Section I (Debt Exchange) of the Term Sheet;
"Dutch Court" means the District Court of Amsterdam or such other
court in the Netherlands having jurisdiction in the Dutch Proceedings;
"Dutch Proceedings" means any proceedings commenced by the Company in
the Dutch Court under sections 213 sqq. of the Netherlands Bankruptcy Act
(Faillissementswet) for a moratorium of payments (surseance van betaling) and
relating to an Akkoord for the purpose of implementing the Restructuring;
"Equity Investors" means collectively, Meritage and XxXxxxxx;
"Equity Investor Termination Event" means an event which entitles the
Equity Investors to terminate this Agreement under Section 14;
"Escrow Amount" means in respect of any HY2 Noteholder, its pro rata
share (determined by reference to the amount of HY2 Notes which it holds) of
the proceeds of the HY2 Securities Account;
"Exchange" means an exchange offer, together with any solicitation
addressed to Noteholders that may be necessary, which is exempt from
registration under U.S. securities laws and which (i) provides that the
Consideration (including as to the amount, allocation and distribution
thereof) to be received by Noteholders is as provided for in the Term Sheet,
(ii) provides for the amendment of the Indentures so as to remove
substantially all covenants therein and events of default thereunder and (iii)
is otherwise in a form reasonably satisfactory to each of the Consenting
Noteholders and the Company, and (iv) is subject to the condition that valid
tenders (which have not been withdrawn as of the Expiration Date) from at
least 99% in aggregate principal face amount of each of the HY1 Notes and the
HY2 Notes currently outstanding have been received;
"Existing Shareholders" means the holders of the ordinary shares in
the Company at the time of the Existing Shareholders' Meeting;
"Existing Shareholders' Approval" means the approval required from
the Existing Shareholders' Meeting as provided for in Section 2(d);
"Existing Shareholders' Meeting" means a general meeting of Existing
Shareholders to be held prior to the consummation of the Restructuring;
"Expiration Date" means 5.00 p.m. New York time on the 20th Business
Day following commencement of an Exchange;
"German Subsidiary" means iPcenta German GmbH;
"Guaranty Claims" means any and all claims, suits, causes of action
and any other rights held by the Assigning Noteholders against CompleTel LLC,
a Delaware limited liability company, pursuant to the Amended and Restated
CompleTel LLC Guaranty Agreement entered into as of July 14, 1999 by the LLC
in favor of each holder from time to time of the HY1 Notes.
"HY1 Indenture" means the indenture dated as of February 16, 1999 by
and between the Company as issuer, CompleTel ECC B.V. as guarantor and the HY1
Trustee;
"HY2 Indenture" means the indenture dated as of April 13, 2000 by and
between the Company, as issuer and the HY2 Trustee;
"HY1 Noteholder" means any holder of a HY1 Note or HY1 Notes from
time to time;
"HY2 Noteholder" means any holder of a HY2 Note or HY2 Notes from
time to time;
"HY1 Notes" means the 14% Senior Discount Notes, due 2009 issued
pursuant to the HY1 Indenture;
"HY2 Notes" means the 14% Senior Notes, due 2010 issued pursuant to
the HY2 Indenture;
"HY2 Securities Account" means the account at JPMorgan Chase Bank (as
successor-in-interest to The Chase Manhattan Bank) in which are held certain
securities pursuant to a Pledge Agreement dated as of April 13, 2000 by and
between the Company, Escrow BV, the HY2 Trustee, and JPMorgan Chase Bank (as
successor-in-interest to The Chase Manhattan Bank) as securities intermediary;
"HY1 Trustee" means U.S. Bank Trust National Association, as trustee
under the HY1 Indenture;
"HY2 Trustee" means JPMorgan Chase Bank (as successor-in-interest to
The Chase Manhattan Bank), as trustee under the HY2 Indenture;
"Indentures" means collectively, the HY1 Indenture and the HY2
Indentures;
"Locked-Up Notes" means the Notes held by a Consenting Noteholder as
of the date it becomes a party to this Agreement as listed alongside its name
on the signature pages hereto;
"Xxxxx Wall Lease" means the lease relating to a property located
upon the second floor of the Innovation Centre, 225 Xxxxx Wall, London E14
"New Articles" means the form of new articles of association for the
Company attached at Exhibit D;
"New Shareholders' Meeting" means the general meeting of the holders
of Shares in the Company to be held in accordance with Section 18(i);
"Noteholder Approval" means the approval of at least 662/3% the
Consenting Noteholders, from whom such approval shall be solicited, and
communicated to the Company, through Noteholder Counsel;
"Noteholder Counsel" means Xxxxxxx Xxxx LLP, or any successor lead
legal counsel to the Consenting Noteholders and other Noteholders
collectively;
"Noteholders" means any holder of a Note or Notes from time to time;
"Noteholder Termination Event" means an event which entitles a
Consenting Noteholder to terminate its obligations under this Agreement
pursuant to Section 12;
"Notes" means collectively, the HY1 Notes and the HY2 Notes, and
"Note" means any one of them;
"Ordinary Shares" means the Ordinary Shares in the Company referred
to in the Term Sheet and which is to form part of the Shares;
"Payment Date" means the date on which the Noteholders shall receive
the Consideration in accordance with the Term Sheet;
"Preferred Shares" means the Series A Preferred Shares and the Series
B Preferred Shares;
"Qualified Investor" means a person that is either (a) an "accredited
investor" within the meaning of Rule 501(a) under the US Securities Act of
1933 (the "Securities Act"), (b) not a "US person" within the meaning of
Regulation S under the Securities Act or (c) a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act.
"Reinvestment Amount" means in respect of each Reinvesting Noteholder
the amount listed in Column 2 of Exhibit C being all or part of its Escrow
Amount which is to be reinvested in the Company by that Reinvesting Noteholder
pursuant to Section 7;
"Reinvestment Escrow Account" means an escrow account in the name of
an independent third party professional escrow agent (such as a bank or other
financial institution) which account is governed pursuant to a customary
escrow agreement to be reasonably agreed between the Company and the
Reinvesting Noteholders.
"Reinvesting Noteholders" means those Consenting Noteholders listed
in Column 1 of Exhibit C;
"Reinvestment" means a reinvestment in the Company by a Reinvesting
Noteholder of its Reinvestment Amount;
"Restructuring Documents" has the meaning set forth in Section 3(a);
"Required Holders" means holders of at least 75% of the aggregate
outstanding accreted or principal (as the case may be) amount of the Notes and
75% of the outstanding accreted principal of HY1 Notes;
"Required Reinvesting Holders" means Reinvesting Noteholders which in
aggregate have committed pursuant to Section 7 hereof Reinvestment Amounts of
at least (euro) 7 million in the aggregate;
"Series A Preferred Shares" means the Series A Preferred Shares in
the Company referred to in the Term Sheet and which is to form part of the
Shares;
"Series B Preferred Shares" means the Series B Preferred Shares in
the Company referred to in the Term Sheet and which is to form part of the
Shares;
"Shares" means the Preferred A Shares, the Preferred B Shares and the
Ordinary Shares to be held post-Restructuring by the Existing Shareholders,
the Bondholders, the Reinvesting Noteholders and the Equity Investors, in the
amounts and proportions set forth in the Term Sheet;
"Supervisory Board" means the supervisory board of the Company from
time to time;
"Trustees" means collectively the HY1 Trustee and the HY2 Trustee,
and "Trustee" means any one of them;
"UK Subsidiaries" means CompleTel UK Limited and iPcenta UK Limited;
"US Case" means a case commenced under Chapter 11 of Title 11 of the
United States Code, 11 U.S.C.ss.ss.101 et seq. and to be filed in the
Bankruptcy Court relating to a US Plan for the purpose of implementing the
Restructuring;
"US Plan" means a plan of reorganization in a US Case which provides
that the Consideration (including the amount, allocation and distribution
thereof) to be received by Noteholders is as provided for in the Term Sheet
and which is otherwise reasonably satisfactory in form and substance to each
of the Consenting Noteholders and the Company, and references to the "US Plan"
in this Agreement shall include the relevant disclosure statement required in
relation thereto.
(b) Capitalized terms used but not defined in this Agreement have the
meanings set forth in the Term Sheet.
(c) Capitalized terms defined in this Agreement and used in the Term
Sheet but not otherwise defined therein, shall have the meanings set forth in
this Agreement.
(d) In this Agreement:
(i) references to a "Section", "Sub-Section", "Schedule" and
"Exhibit" are references to Sections, Sub-Sections, Schedules and
Exhibits to, this Agreement;
(ii) references to a "holder" when used in connection with a
Consenting Noteholder or Noteholder are references to such Consenting
Noteholder or Noteholder in its capacity as either the beneficial
owner of, or investment manager for or adviser to certain
discretionary accounts that own, Notes, and the term "held by" when
used in connection with a Consenting Noteholder or Noteholder shall
be construed accordingly;
(iii) references to the Exchange having been "commenced"
shall mean that the process of the Company seeking or requesting the
tendering of Notes by Noteholders shall have begun;
(iv) references to the "consummation" of the Restructuring
shall mean that a Restructuring on the terms set out in this
Agreement and the Term Sheet has been fully accomplished, including,
without limitation, that all the conditions to such Restructuring set
out in this Agreement and the Term Sheet have been satisfied; and
(v) where reference is made to Noteholder Counsel being
consulted or its views being obtained or considered in respect of any
matter, this shall be in its capacity only as legal counsel to, and
for and on behalf of, and subject always to the instructions of, the
Consenting Noteholders.
2. Means for Effecting the Restructuring of the Company. The parties
agree that the Restructuring shall be effected in accordance with this
Agreement and the terms set forth in the Term Sheet and shall be accomplished
by:
(a) Subject to Section 5(c) an Exchange; and/or
(b) in the event that there is no Exchange, or an Exchange is
unsuccessful, the commencement of Dutch Proceedings and the confirmation of an
Akkoord; and/or
(c) subject to Section 5(d), the commencement of a US Case and the
confirmation pursuant to a final court order of the Bankruptcy Court of a US
Plan; and
(d) a vote of the Existing Shareholders' Meeting which approves,
subject to consummation of the Restructuring, each of the following:
(i) an increase in and changes to the Company's share
capital as may be necessary to approve the issuance of the Shares,
and
(ii) amendments of the current articles of association of
the Company to a form consistent with the Term Sheet; and
(e) the Minimum Reinvestment (together with additional Reinvestments,
if any), and the corresponding issue to each of the Reinvesting Noteholders of
their proportionate share of the Shares in accordance with the Term Sheet; and
(f) the Capital Infusion, and the corresponding issue to the Equity
Investors of their proportionate share of the Shares in accordance with the
Term Sheet; and
(g) any other documents which the parties hereto agree between them
are reasonably required in order to implement the Restructuring.
3. Preparation of Restructuring Documents.
(a) Upon execution of this Agreement, the Company shall instruct its
counsel to prepare promptly after the date hereof, for the review and approval
of the Company, the Consenting Noteholders and the Equity Investors, the
following:
(i) a proxy statement as required in order to seek the
Existing Shareholders' Approval;
(ii) in the event that the implementation of the
Restructuring is to involve an Exchange, the appropriate exchange
offer circular and consent solicitation;
(iii) the necessary documents and filings for the
commencement of Dutch Proceedings, and a draft Akkoord;
(iv) in the event that the implementation of the
Restructuring is to involve a US Plan, (x) a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code in respect of the
Company (the "Petition"); (y) the US Plan; (z) all schedules,
motions, pleadings, and other documents and filings necessary or
useful in connection with the filing of the Petition; and
(v) all other agreements and documents required to implement
the Restructuring in accordance with this Agreement and the Term
Sheet.
The documents referred to in sub-Clauses (i) through (v) above and the New
Articles are collectively referred to herein as the "Restructuring Documents".
(b) The Company, the Equity Investors and the Consenting Noteholders
shall, subject to Sections 5 and 13, reasonably cooperate with one another in
good faith in the preparation of the Restructuring Documents and with a view
to adhering to the timings set forth in Section 9.
(c) It is hereby acknowledged that the attached draft of the New
Articles at Exhibit D is substantially in the agreed form, provided that it
shall be subject to any amendments that the parties may deem necessary or
appropriate to comply with the Term Sheet, particularly the headings "Terms of
Liquidation Preference" and "Takeover Protection", as well as the redemption
provisions.
4. Subsidiaries and offices.
(a) The Company (i) confirms that from the date hereof it will not,
(ii) confirms that CompleTel ECC B.V. has undertaken to the Company that from
the date hereof it will not, and (iii) shall procure that its subsidiaries
will not from the date hereof, invest any further funds whatsoever in, or
grant any guarantees in respect of or otherwise agree (contractually or
otherwise) to be liable for, any obligations or liabilities of, the German
Subsidiary, the UK Subsidiaries, and their respective businesses and
operations; provided that the foregoing shall not prohibit the funding of
reasonable expenses to effect the release of the Company's obligations under
the Xxxxx Wall Lease.
(b) As soon as commercially practicable after the date hereof, the
Company shall, to the extent applicable, procure the sale or liquidation
(including, if necessary, a liquidation through appropriate insolvency
procedures) of the German Subsidiary, the UK Subsidiaries, CompleTel
Headquarters Europe SAS and all of the Company's direct and indirect
subsidiaries and their respective businesses and operations except for SAS,
Xxxxx, Escrow and CableTel Management Inc. The Consenting Noteholders agree to
desist from taking any remedial action in respect to any effect such sales or
liquidations may cause under the Indentures.
(c) The Company shall close its London office by May 20, 2002 and its
Denver office by June 24, 2002, or as soon after such dates as is commercially
practical.
5. Conditions to Exchange and Akkoord. The Company shall not execute,
finalize or distribute to the public any Restructuring Document or commence
any Exchange, Dutch Proceedings, Akkoord, US Case or a US Plan, unless and
until:
(a) the relevant Restructuring Documents (i) are in all material
respects consistent and in accordance with this Agreement and the Term Sheet,
(ii) (insofar as is applicable) do not include terms that are different from
the Term Sheet and this Agreement or omit terms that are included in the Term
Sheet in a manner that is materially adverse to the Noteholders, and (iii)
have prior Noteholder Approval (which approval shall not be unreasonably
withheld or delayed);
(b) at least 50.1% of the Existing Shareholders (but in any event at
least the Undersigned Holders) have agreed in writing with the Company that
they on their part will provide the required Existing Shareholders' Approval;
(c) in respect of an Exchange, at least 97% in principal amount of
the Notes outstanding have signed this Agreement within 7 Business Days of
(but not including) the date hereof and the Company in good faith following
consultation with Noteholder Counsel determines that it is reasonably likely
that an Exchange will achieve a Restructuring;
(d) in respect of a US Case, unless the Company in good faith after
consultation with Noteholder Counsel determines that there is a substantial
risk that an Akkoord will not be sufficient to effect the Restructuring and it
is reasonably likely that a US Case will achieve a Restructuring;
6. LLC Guarantee. Those Consenting Noteholders who hold HY1 Notes
(the "Assigning Noteholders") hereby assign to XxXxxxxx Telcom, on behalf of
the members of Completel LLC, all right, title and interest of the Assigning
Noteholders in the Guaranty Claims. Upon termination by any Assigning
Noteholder pursuant to Section 12 and prior to the consummation of the
Restructuring, the Guaranty Claims shall be deemed reassigned to the Assigning
Noteholders.
7. Reinvestments.
(a) Subject to Section 37, each Reinvesting Noteholder hereby
confirms that, subject to receipt of its Escrow Amount, it will make
available, and commit to provide to the Company, on the terms of Sub-Section
7(d) the Reinvestment Amount.
(b) The Company shall offer the ability to make a Reinvestment only
to such Consenting Noteholders that are Qualified Investors and that hold HY2
Notes and which within seven Business Days of (but not including) the date
hereof, execute this Agreement, and have specified their Reinvestment Amount.
(c) It shall be a condition of the Exchange, Akkoord and/or US Case,
that each HY2 Noteholder will receive its Escrow Amount provided that upon
receipt of its Escrow Amount each Reinvesting Noteholder shall, and hereby
commits to, promptly deliver and transfer its Reinvestment Amount to the
Reinvestment Escrow Account provided that if no Reinvestment Escrow Account is
in existence at the date a Reinvesting Noteholder receives its Escrow Amount,
then that Reinvesting Noteholder shall have no such obligation to deliver and
transfer to the Reinvestment Escrow Account without limiting however in any
way the Reinvesting Noteholder's obligations under sub-Section 7(a).
(d) Upon consummation of the Restructuring (other than in respect of
the Reinvestments and the Capital Infusion), and subject to Section 37, the
property in the Reinvestment Escrow Account, or in the event no such account
exists then each Reinvesting Noteholder's Reinvestment Amount, will be
delivered to the Company, in return for and in consideration of, the relevant
Reinvesting Noteholders receiving the appropriate proportionate amount of
Units as is set forth in the Term Sheet.
(e) If the Restructuring is not consummated by October 7, 2002, the
property in the Reinvestment Escrow Account will promptly be returned and
released to the respective Reinvesting Noteholders, and the Reinvesting
Noteholders shall have no obligations therefrom to make any Reinvestments
under this Section 7.
(f) In the event that prior to the transfer and delivery of the
property in the Reinvestment Escrow Account under Section 7(d), a Reinvesting
Noteholder validly terminates its obligations under this Agreement pursuant to
Section 12, that Reinvesting Noteholders' property in the Reinvestment Escrow
Account will promptly be returned to such Reinvesting Noteholder.
8. Issuance of Physical Notes. If reasonably requested by the
Company, the Consenting Noteholders shall each use their respective reasonable
best efforts to cause their beneficial interest in the Notes to be exchanged
for physical Notes, including without limitation, by consenting or providing
their consent to amendments to the Indentures to permit physical Notes to be
issued.
9. Restructuring Timetable. Subject to satisfaction of the relevant
conditions set forth in Section 5, the Restructuring shall be effected on the
basis of, and the Consenting Noteholders and the Equity Investors shall,
subject to the other terms of this Agreement, use their best reasonable
endeavours to assist the Company in achieving, the timetable for the
Restructuring set out below:
(a) If, in accordance with Section 18(d) the Company will seek to
implement the Restructuring by means of an Exchange (x) the Company shall
commence such Exchange within 7 Business Days after the later of (i) the date
of this Agreement, or (ii) the date that the condition in Section 5(c) is
satisfied, and (y) the Exchange must terminate 20 Business Days after its
commencement;
(b) In the event that the Exchange has not been declared successful
by the Company (or the appropriate agents) within 3 Business Days after the
Expiration Date, the Company shall within 5 Business Days after the Expiration
Date commence Dutch Proceedings and file a Dutch Plan with the Dutch Court;
(c) In the event that the Company does not commence an Exchange
within the time-frame set forth in Section 9(a), the Company shall, within 7
Business Days after the later of (i) the date of this Agreement, or, (ii) the
date that the conditions in Section 5 are satisfied, commence Dutch
Proceedings and file an Akkoord with the Dutch Court;
(d) In the event that the Company commences Dutch Proceedings and
files an Akkoord with the Dutch Court, (i) the Dutch Court shall confirm the
Akkoord prior to September 15, 2002 or, in the event the confirmation of the
Akkoord by the Dutch Court has become subject to appeal proceedings, October
7, 2002 and (ii) the Restructuring as contemplated by the Term Sheet and this
Agreement shall be consummated within 5 Business Days after the date (and on
the assumption that) the Dutch Court confirms the Akkoord.
(e) If the Company will seek to implement the Restructuring by means
of a US Case together with a US Plan, the US Case must be commenced, within 45
days of the Company having commenced the Dutch Proceedings. The US Plan must
be confirmed and become effective pursuant to a final order of the Bankruptcy
Court within 60 days after the US Case is filed with the Bankruptcy Court.
10. Support for the Restructuring.
(a) The Company will take all necessary and appropriate actions to
effectuate the Restructuring as contemplated by this Agreement and the Term
Sheet, including (without limitation, and if applicable) to achieve
confirmation of the Akkoord and (if applicable) the US Plan.
(b) Subject to Sections 5 and 14, the Equity Investors agree to use
all reasonable efforts to assist in implementing the Restructuring (without
any obligation to incur any out of pocket expense other than as expressly
provided for in this Agreement and, the Term Sheet).
(c) Subject to Sections 5 and 12, the Consenting Noteholders agree
(in so far as is applicable) in relation to their Locked-Up Notes to exchange
such notes, consent to waivers, exercise all votes which they are entitled to
exercise in favour of an Akkoord and/or a US Plan and to approve any other
document (without any obligation to incur any out of pocket expense) or take
any other action that may be reasonably necessary to implement the
Restructuring on the terms set out in this Agreement and the Term Sheet.
(d) Subject to the provisions of Sections 5, 12, 13 and 14 the
Company, each of the Consenting Noteholders (in its capacity as such) and each
of the Equity Investors shall not:
(i) object to the consummation of the Restructuring or
commence any proceeding to oppose the Restructuring or any of the
Restructuring Documents so long as the Company, the Consenting
Noteholders and the Equity Investors have complied with their
obligations in this Agreement;
(ii) vote for, consent to, support or participate in the
formulation of any out-of-court restructuring or court-supervised
insolvency or reorganization proceeding in respect of the Company
proposed or filed or to be proposed or filed (other than one agreed
to in writing by the Company, the Equity Investors and the Consenting
Noteholders) that is inconsistent with this Agreement and the Term
Sheet;
(iii) directly or indirectly seek, solicit, support or
encourage any other out-of-court or court supervised or sanctioned
restructuring, plan, proposal, offer of dissolution, winding up,
liquidation, reorganization, merger or restructuring of the Company
(other than one agreed to in writing by the Company, the Equity
Investors and the Consenting Noteholders) that is inconsistent with
this Agreement and the Term Sheet; or
(iv) take any other action, including but not limited to
initiating any legal proceedings that is inconsistent with, or that
would delay consummation of, the Restructuring.
11. Acknowledgment. This Agreement and the terms of the Restructuring
are the product of negotiations between the Company, certain of the Consenting
Noteholders and the Equity Investors. This Agreement is not and shall not be
deemed to be a solicitation for the tender or exchange of Notes, amendments or
waivers to the Indentures, consents to an Akkoord, a US Plan or to the
Restructuring. Acceptance of the Restructuring will not be solicited from any
holder of the Notes until it has received any disclosures required under or
otherwise in compliance with applicable law.
12. Termination of the Consenting Noteholder's Obligations.
(a) Each of the Consenting Noteholders may terminate its obligations
hereunder and rescind any consent by it to acceptance of the Restructuring (so
that such consent shall be null and void and have no further force or effect),
by and immediately upon giving written notice to the Company (copied to the
other Consenting Noteholders), in the event that any of the following events
occur:
(i) the Restructuring or the necessary steps to achieve the
Restructuring contemplated by this Agreement and the Term Sheet are
not effected or completed in accordance with the timings set forth in
Section 9 of this Agreement;
(ii) the Company, SAS, Xxxxx, Escrow or any Equity Investor
breaches or fails to satisfy any material term of this Agreement or
the Term Sheet;
(iii) the Restructuring Documents (i) are not in all
material respects consistent and in accordance with this Agreement
and the Term Sheet, (ii) (insofar as is applicable) include terms
that are different from the Term Sheet and this Agreement or omit
terms that are included in the Term Sheet in a manner that is
materially adverse to the Noteholders. For the purposes of this
sub-paragraph, any change to the Consideration (including as to the
amount, allocation and distribution thereof) to be received by
Noteholders to that provided for in the Term Sheet, shall be
considered materially adverse other than due to rounding or the
elimination of fractional shares;
(iv) except as contemplated by the terms of the
Restructuring, the Company shall re-purchase Notes from any
Noteholder or shall provide, or agree to provide, any Noteholder, on
account of its Notes, any distribution or benefit;
(v) the Company shall have disclaimed in writing its
intention to, or any of its management shall publicly state that the
Company will not, pursue the Restructuring;
(vi) in the event the Company commences Dutch Proceedings,
(A) an Akkoord is not approved by the Dutch Court and the Dutch
Court's failure to approve such Akkoord is final and non-appealable,
and (B) the Company is unable to pursue a US Case because the
condition set forth in Section 5(d) is not satisfied.
(vii) at the Existing Shareholders' Meeting, the Existing
Shareholders' do not provide the Existing Shareholders' Approval;
(viii) any representation or warranty of the Company or the
Equity Investors set forth in this Agreement, the Term Sheet or any
Restructuring Document shall prove to have been false or misleading
in any material respect; or
(ix) except for any action taken by the Company as
contemplated by this Agreement, (y) the Company shall have filed or
initiated a voluntary proceeding, or (z) the Company shall have
consented to relief, failed to contest an involuntary proceeding
initiated by a third-party, or a court of competent jurisdiction
grants non-appealable relief for such third-party initiated
proceeding, under any applicable insolvency, bankruptcy or
reorganization law, and such relief or failure to contest shall
prevent the Company's ability to implement the Restructuring on the
terms set forth in this Agreement and the Term Sheet.
(x) prior to the consummation of the Restructuring, Xxxxxx
xx Xxxxx shall cease to be employed by the Company or its
subsidiaries or the Company is without appropriate persons in the
role of general counsel and vice president of finance.
(xi) a termination of this Agreement by an Equity Investor
pursuant to Section 14.
(b) If any Noteholder Termination Event occurs at a time when
permission of the Dutch Court and/or the Bankruptcy Court is required for a
Consenting Noteholder who has provided written notice under this Section 12 to
change or withdraw (or cause to be changed or withdrawn) its vote(s) in favour
of the Akkoord and/or a US Plan, the Company shall not oppose any attempt by
such Consenting Noteholder to change or withdraw (or cause to be changed or
withdrawn) such vote(s) at such time.
(c) Termination of this Agreement by a Consenting Noteholder shall
occur automatically upon the date valid notice thereof is given by such
Consenting Noteholder, solely with respect to such Consenting Noteholder, and
any Consenting Noteholder who fails to provide such notice shall continue to
be bound hereby. No Consenting Noteholder shall have any liability to the
Company, the Equity Investors, any other Noteholder or any other person solely
on account of such Consenting Noteholder's termination of its obligations
under this Agreement in accordance with the terms hereof.
(d) Upon any valid termination of this Agreement by any Consenting
Noteholder, such Consenting Noteholder shall immediately cease to be a
Consenting Noteholder for the purposes hereof (including, without limitation,
for the purposes of providing any consent or approval hereunder).
(e) Upon the sale by a Consenting Noteholder of all of its Locked-Up
Notes, such Consenting Noteholder shall immediately cease to be a Consenting
Noteholder for the purposes hereof (including, without limitation, for the
purposes of providing any consent or approval hereunder).
13. Termination by the Company. Each of the Company and SAS, shall
have the right to terminate this Agreement, by the giving of written notice to
each of the Consenting Noteholders, if (a) the amount of Consenting
Noteholders that have not materially breached or terminated this Agreement or
failed to satisfy any of the material terms or conditions of the Term Sheet,
falls 10% or more below the thresholds set for Required Holders or (b) any
Equity Investor materially breaches or terminates this Agreement or fails to
satisfy any of the material terms or conditions of the Term Sheet.
14. Commitment by the Equity Investors.
(a) The Equity Investors hereby confirm that they, or their
affiliates, will have available, and commit to provide to the Company subject
to the terms of this Section 14 and Section 37 and the Capital Infusion.
(b) Immediately after, and subject to, consummation of all other
steps in the Restructuring contemplated by Section 2 in accordance with this
Agreement and the Term Sheet (other than the Reinvestments and the Capital
Infusion), subject to Section 37, the Equity Investors shall provide to the
Company in full, contemporaneous with the Reinvestments, the sum of Euro 30
million in relation to the Capital Infusion, in consideration for the issue by
the Company to the Equity Investors of their proportionate share of the Shares
in accordance with the Term Sheet.
(c) Each of the Equity Investors may terminate its obligations
hereunder and rescind any consent by it to acceptance of the Restructuring (so
that such consent shall be null and void and have no further force or effect),
by and immediately upon giving written notice to the Company (copied to the
Consenting Noteholders), in the event that any of the following events occur
(each an "Equity Investor Termination Event"):
(i) the Restructuring or the necessary steps to achieve the
Restructuring contemplated by this Agreement and the Term Sheet are
not consummated within 200 days of the date hereof;
(ii) the Company, SAS, Xxxxx or Escrow breaches or fails to
satisfy any material term of this Agreement or the Term Sheet;
(iii) (a) if the amount of Consenting Noteholders which have
not materially breached or terminated this Agreement or failed to
satisfy any of the material terms or conditions of the Term Sheet,
falls 10% or more below the thresholds set for Required Holders or
(b) the amount of Reinvesting Noteholders, which have not materially
breached or terminated this Agreement or failed to satisfy any of the
material terms or conditions of the Term Sheet, falls 10% or more
below the thresholds set for Required Reinvesting Holders;
(iv) any Restructuring Document provides, or is modified to
provide for any terms which are materially adverse to or are
materially inconsistent with any of the terms or conditions of this
Agreement and the Term Sheet. For the purposes of this sub-paragraph,
any material change to the consideration (including as to the amount
and allocation thereof) to be received by the Equity Investors to
that provided for in the Term Sheet, shall be considered materially
adverse and/or materially inconsistent;
(v) except as contemplated by the terms of the
Restructuring, the Company shall re-purchase Notes from any
Noteholder or shall provide, or agree to provide, any Noteholder, on
account of its Notes, any distribution or benefit;
(vi) the Company shall have disclaimed in writing its
intention to, or any of its management shall publicly state that the
Company will not, pursue the Restructuring;
(vii) at the Existing Shareholders' Meeting, the Existing
Shareholders' do not provide the Existing Shareholders' Approval;
(viii) any representation or warranty of the Company set
forth in this Agreement, the Term Sheet or any Restructuring Document
shall prove to have been false or misleading in any material respect;
(ix) any representation or warranty of the Consenting
Noteholders set forth in this Agreement, the Term Sheet or any
Restructuring Document shall prove to have been false or misleading
in any material respect;
(x) except for any action taken by the Company as
contemplated by this Agreement, (x) the Company shall have filed or
initiated a voluntary proceeding, (y) a Consenting Noteholder shall
have initiated an involuntary proceeding or (z) the Company shall
have consented to relief, failed to contest an involuntary proceeding
initiated by a third-party, or a court of competent jurisdiction
grants non-appealable relief for such third-party initiated
proceeding, under any applicable insolvency, bankruptcy or
reorganization law, and such relief or failure to contest shall
prevent the Company's ability to implement the Restructuring on the
terms set forth in this Agreement and the Term Sheet; or
(xi) prior to the consummation of the Restructuring, Xxxxxx
xx Xxxxx shall cease to be employed by the Company or its
subsidiaries or the Company is without appropriate persons in the
role of general counsel and a vice president of finance.
(d) Termination of this Agreement by an Equity Investor shall occur
automatically upon the date valid notice thereof is given by such Equity
Investor, and such notice shall terminate the obligations of all Equity
Investors hereunder. No Equity Investor shall have any liability to the
Company, the Consenting Noteholders, any other Equity Investor or any other
person solely on account of such Equity Investor's termination of its
obligations under this Agreement in accordance with the terms hereof.
15. Effects of Termination. Subject to Section 38 (Survival) hereof,
upon the occurrence of a Noteholder Termination Event, a Company Termination
Event, or an Equity Investor Termination Event in each case resulting in the
termination of a Consenting Noteholders' obligations or any of the Company's,
SAS', Escrow's and Estel's obligations or of an Equity Investors' obligations
(as the case may be) under the terms of Section 12, Section 13 or Section 14
above, no such terminating party hereto shall have any continuing liability or
obligation to any other party in relation to this Agreement; provided,
however, that no such termination shall relieve any party from liability for
its breach or non-performance of its obligations hereunder prior to the date
of such termination; provided, further, that the Company shall reimburse the
reasonable fees and expenses up to Euro one million incurred by the Equity
Investors in negotiating the Term Sheet and the Agreement or in implementing
the Restructuring.
16. Impact of Appointment to Creditors' Committee. Notwithstanding
anything in this Agreement or the Term Sheet to the contrary, if any
Consenting Noteholder is appointed to and serves on an official committee duly
appointed in the Akkoord proceedings or in the US Case, the terms of this
Agreement shall not be construed so as to limit such Consenting Noteholders'
exercise (in its sole discretion) of its fiduciary duties to any person
arising from its service on such committee, and any such exercise (in the sole
discretion of such Consenting Noteholder) of such fiduciary duties shall not
be deemed to constitute a breach of the terms of this Agreement, and the fact
of such service on such committee shall not otherwise affect the continuing
validity or enforceability of this Agreement. So long as no Noteholder
Termination Event or Company Termination Event shall have occurred and this
Agreement remains in effect, the foregoing shall not modify or limit
obligations of the Consenting Noteholders to comply with Section 10.
17. Forbearance; Restrictions on Transfers.
(a) So long as its obligations under this Agreement have not been
terminated under Section 12:
(i) each of the Consenting Noteholders agrees that it will
not file a notice of default or sale or take any other action to
collect on its Notes or foreclose on any collateral in respect of its
Notes, including, without limitation, instructing the Trustee on how
to proceed in the exercise of any and all remedies; and
(ii) each of the Consenting Noteholders agrees that it will
not, directly or indirectly, sell, assign, transfer, hypothecate or
otherwise dispose of:
(1) any Locked-Up Notes held by such Consenting Noteholder (for
the purposes of this Section only, a "Transferring
Noteholder"), except in accordance with the Restructuring,
unless the person to which the Notes are sold, transferred,
hypothecated or otherwise disposed of, is (x) also a
Consenting Noteholder, or (y) (A) delivers to the Company a
counterpart of this Agreement, and in each case agrees to be
bound by this Agreement, including to the same extent as the
Transferring Noteholder as regards any Reinvestment that
such Transferring Noteholder has agreed to make under this
Agreement and (B) a Qualified Investor;
(2) any claim (as that term is defined in section 101(5) of the
Bankruptcy Code) arising from, based on or related to the
Notes or the LLC Guaranty (except pursuant to Section 6), or
(3) any option, interest in, or right to acquire any Notes or
claim referred to in clauses (i) and (ii) above, unless the
transferee is (x) a Qualified Investor and (y) agrees in
writing to be bound by the terms of this Agreement and such
writing is subsequently delivered to the Company.
18. The Company's Undertakings. Unless the Company has obtained prior
written Noteholder Approval, the Company shall (and, where applicable, shall
procure that its subsidiaries shall also):
(a) not take any action materially inconsistent with this Agreement
or the Term Sheet, including, but not limited to, not selling any substantial
portion of the assets of the Company and its subsidiaries (other than in
accordance with Section 4) and not obtaining any additional external financing
not expressly permitted by the Term Sheet;
(b) without limiting the generality of Section 10(a), insofar as is
applicable under the other terms of this Agreement take all reasonable steps
necessary and desirable to obtain an order of the Dutch Court confirming the
Akkoord and/or the Bankruptcy Court confirming the US Plan, as expeditiously
as possible, and use reasonable best efforts to obtain any and all required
regulatory and/or third party approvals for the Restructuring;
(c) commence a Dutch Case and file a Dutch Plan with the Dutch Court
if an Exchange has not been commenced within 7 Business Days of (but not
including) the date of this Agreement, or if at the Expiration Date, an
Exchange has proved unsuccessful;
(d) not issue any press release or make any public announcement to
the news media or financial markets regarding the negotiation and execution of
this Agreement or the Term Sheet, unless the terms of such press release or
public announcement have prior Noteholder Approval, which approval shall not
be unreasonably withheld, conditioned or delayed; provided, however, that such
approval shall not be required if such press release or public announcement is
required by applicable law or stock exchange rule, in which case, if
reasonably practicable, prior to making such press release or public
announcement, the Company shall consult with and consider in good faith the
views of the Consenting Noteholders in connection therewith;
(e) except as contemplated by this Agreement or the Term Sheet not
purchase or redeem or agree to purchase or redeem any Notes from any
Noteholder or make any repayment or prepayment to any Noteholder in respect of
its Notes;
(f) procure that (x) two nominees of, and whose identity shall be
determined by, the Consenting Noteholders, and (y) two nominees mutually
acceptable to, and whose identity shall be determined by, the Consenting
Noteholders and the Equity Investors together, shall, subject to them having
executed a confidentiality agreement in form reasonably acceptable to the
Company and Noteholder Counsel, be entitled to attend and speak at all
meetings of the Supervisory Board from the date hereof until the four persons
referred to in this Section (f) have been appointed as members of the
Supervisory Board;
(g) procure that the Supervisory Board post-Restructuring shall
consist of six persons, and at the New Shareholders' Meeting, to nominate for
election as the members of the Supervisory Board post-Restructuring, two
individuals nominated by the Consenting Noteholders, two individuals nominated
by and mutually acceptable to the Consenting Noteholders and the Equity
Investors together, and two individuals nominated by the Equity Investors;
(h) not issue after the date of the consummation of the Restructuring
through the date of the New Shareholders' Meeting, any shares in the Company
other than shares to be issued pursuant to or otherwise in connection with the
Restructuring. The provisions of this Section 18(h) shall survive the
termination of this Agreement.
(i) procure that the costs of the Restructuring shall not exceed
those set forth in Exhibit F; and
(j) ensure that its Shares remain listed in Euronext Paris for a
period of at least 3 years after the consummation of the Restructuring;
(k) in respect of intercompany financing of the Company's
subsidiaries existing or future, maintain such financing in the form of debt
and, not equity, from the date of this Agreement until the date which is 1
year after the consummation of the Restructuring provided that maintaining
such intercompany debt financing has no material adverse tax consequences and
that commercial requirements do not dictate otherwise.
19. Conduct of business post-restructuring. The Company, SAS and
Xxxxx agree that, from the date hereof until the Restructuring has been
consummated, and after the Restructuring has been consummated until such time
as the Supervisory Board determines otherwise, the business of SAS and Xxxxx,
and any other business in France of the Company and its subsidiaries, shall be
operated in accordance with the business plan attached hereto as Exhibit E.
20. Provision of Information by the Company. The Company hereby
agrees that it shall:
(a) on at least a weekly basis throughout the period of any Exchange,
and in any event immediately after the Expiration Date, confirm to Noteholder
Counsel the extent to which Noteholders have tendered their Notes in the
Exchange;
(b) in the event of Dutch Proceedings and/or any US Case, keep
Noteholder Counsel informed on a running basis as to the progress of, and all
significant developments in, such Dutch Proceedings and any US Case, as
applicable;
(c) notify Noteholder Counsel in writing promptly if the Company or
any of the management of the company or its Subsidiaries should obtain actual
knowledge that an event has occurred or will occur that would entitle the
Consenting Noteholders to terminate this Agreement in accordance with Section
12 hereof;
(d) promptly notify all other Consenting Noteholders in the event
that it receives a notice of termination from any one or more Consenting
Noteholder; and
(e) from the date of this Agreement until the Restructuring has been
consummated, and provided that this Agreement remains in existence, provide to
any Consenting Noteholder who enters into a reasonably suitable
confidentiality agreement with the Company, with its financial statements
(including balance sheet, income statement, and statement of cash flows) at
the same time as they are delivered to the Supervisory Board.
(f) make public its financial statements (including balance sheet,
income statement, and statement of cash flows) no later than 45 days after the
end of each of the first three quarters, and 90 days after the end, of each
fiscal year.
21. Effectiveness The obligations of the parties hereto shall become
effective upon the execution and delivery by
(a) the Company, SAS, Xxxxx, Escrow, the Equity Investors of this
Agreement;
(b) the Undersigned Holders with respect to the Agreement and
Acceptance;
(c) the Required Holders of this Agreement; and
(d) the Required Reinvesting Holders of this Agreement.
22. Fees and Expenses.
(a) Within 5 (five) Business Days after the date of this Agreement,
the Company shall pay in full the outstanding bills and the costs of the
Noteholders' legal advisers incurred up to (and including) the date of this
Agreement provided such bills and costs are reviewed by any two Consenting
Noteholders.
(b) Within 14 days after the date of this Agreement, the Company
shall transfer to the client account of Xxxxxxx Xxxx LLP, three amounts of,
respectively, (i) (euro)300,000 as a fee reserve in respect of general legal
advice for the Consenting Noteholders, (ii) (euro)150,000 as a fee reserve in
respect of Dutch legal advice for the Consenting Noteholders, and (iii)
(euro)50,000 as a fee reserve in respect of French legal advice for the
Consenting Noteholders, in accordance with the terms of the letters from
Xxxxxxx Xxxx LLP, Van Doorne and Xx Xxxxxxx to the Company dated the date of
this Agreement. The Consenting Noteholders shall instruct their legal counsel
to repay to the Company any amounts remaining from such fee reserves promptly
after the date of the consummation of the Restructuring (after payment of all
outstanding fees, costs and disbursements of the respective counsel from the
applicable fee reserves through and including such date).
(c) The Company shall pay all the reasonable bills and costs of the
legal advisors to the Equity Investors.
23. Official Unsecured Creditors Committee. In the event of a US Case
and pursuant to either Sections 1102(a)(1) or (a)(2) of the Bankruptcy Code,
the Company shall support the appointment of an official committee comprised
of the Consenting Noteholders and such other holders of the Notes as may be
appointed by the Office of United States Trustee (the "Official Committee").
The Official Committee shall, subject to compliance with the applicable
provisions of the Bankruptcy Code, be entitled to retain the law firm of
Xxxxxxx Xxxx LLP, to assist in the confirmation of the US Plan and related
matters. In the event the Consenting Noteholders do not become the Official
Committee in the US Case, the Company shall actively support the approval,
under Section 503(b) of the Bankruptcy Code, of the payment of the reasonable
costs and fees incurred by the professionals retained by the Consenting
Noteholders.
24. Notices. Notices given under this Agreement shall be to:
For the Company:
CompleTel Europe N.V.
0-00 xxxx xx x'Xxxxx
00000 Xxxxxxxxxx
XXXXX Xxxxxx
Attention: Xxxxx Xxxxx Xxxxxxxx
Telecopy: x00 0.00.00.00.00
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
One Canada Square
Xxxxxx Xxxxx
Xxxxxx X00 0XX, Xxxxxxx
Attention: Xxxxxxx X. Xxx/Xxxxxxx XxXxxxxx
Telecopy: +44.(0)20.7519.7070
And with a copy to:
Stibbe
Strawinskylaan 2001
1077 ZZ Amsterdam
The Netherlands
Attention: Marius Xxxxxxxx Xxxxx
Telecopy: x00 00 000 00 00
For the Consenting Noteholders:
At the addresses and telephone numbers set forth on
the signature pages.
With a copy to :
c/o Xxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxx LLP
0-00 Xxxxxxx Xxxxx Xxxxx
Xxxxxx XX0X 0XX
Telecopy: +44.(0)20.7220.7431
For the Equity Investors:
Xxxx Xxxxxxx
Meritage Private Equity Funds
0000 Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Telephone: x0 (000) 000-0000
Facsimile: x0 (000) 000-0000
Xxxxxxxx X. XxXxxxxx
LPL Investments Group, Inc.
Xxxxxxxx Point, East Tower
000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
Telephone: x0 (000) 000 0000
Facsimile: x0 (000) 000 0000
25. Reservation of Rights. This Agreement, the Term Sheet, the
Restructuring Documents and the Restructuring are part of a proposed
settlement of a dispute among certain of the parties hereto. Except as
expressly provided in this Agreement, nothing herein is intended to, or does,
in any manner waive, limit, impair or restrict the ability of any Consenting
Noteholder or either of the Trustees to protect and preserve its rights,
remedies and interests, including without limitation, its claims against the
Company. Nothing herein shall be deemed an admission of any kind. Without
prejudice to Section 4, nothing contained herein effects a modification of the
Consenting Noteholders' or the Trustee's rights under the Indenture, the Notes
or other documents and agreements unless and until the Restructuring becomes
effective. If the transactions contemplated herein are not consummated, or if
this Agreement is terminated for any reason, the parties hereto fully reserve
any and all of their rights. Pursuant to Federal Rule of Evidence 408 and any
applicable state rules of evidence, this Agreement and all negotiations
relating thereto shall not be admissible into evidence in any proceeding other
than a proceeding to enforce its terms.
26. Good Faith Negotiations of Restructuring Documents. The Company,
the Equity Investors and each of the Consenting Noteholders covenant and
agree, without prejudice to their rights under this Agreement, to negotiate
the definitive documents relating to the Restructuring, including, without
limitation, the Restructuring Documents, in good faith.
27. Counterparts. This Agreement may be executed by one or more of
the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts when taken together shall
constitute one and the same instrument. Except as expressly provided for
herein, no modification, amendment or waiver of any provision of this
Agreement or the Term Sheet shall be effective unless such modification,
amendment or waiver is in writing and signed by each of the parties hereto.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; provided, however, that
nothing contained in this Section shall be deemed to permit sales, assignments
or transfers other than in accordance with Section 17.
28. General Representations and Warranties. The Company, SAS, Xxxxx
and Escrow and each of the Equity Investors represents and warrants that the
following statements are true, correct and complete as of the date hereof:
(a) Power, Authority and Authorization. Execution, delivery and
performance of this Agreement by each such party has been duly authorized by
all necessary corporate action on the part of such party (subject to Section
28(c) below), and the person executing this Agreement on behalf of such party
is duly authorized to do so;
(b) No Conflicts. The execution, delivery and performance of this
Agreement by each such party does not and shall not (i) violate any provision
of law, rule or regulation applicable to it or any of its subsidiaries or its
organizational documents or those of any of its subsidiaries or (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any material contractual obligations to which it or any
of its subsidiaries is a party or under its organizational documents;
(c) Binding Obligation. This Agreement is the legally valid and
binding obligation of each such party, enforceable against it in accordance
with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
limiting creditors' rights generally or by equitable principles relating to
enforceability.
29. Warranties by the Company. The Company represents and warrant
that the following statements are true, correct and complete as of the date
hereof:
(a) Governmental Consents. The execution, delivery and performance by
it of this Agreement does not and shall not require any registration or filing
with, consent or approval of, or notice to, or other action with respect to,
with or by, any governmental authority or regulatory body, except such filings
as may be necessary, and/or required to be disclosed by the French, US and/or
Netherlands securities regulation authorities, with regard to an Exchange or
an Akkoord or a US Plan, in each case to the extent applicable.
(b) Litigation. There is no material litigation that has been
commenced against the Company or any of its subsidiaries.
(c) Claims. Other than with regard to the Xxxxx Wall Lease, there is
no claim against the Company which, if asserted or filed in a Dutch Case, is
reasonably likely to adversely affect the Akkoord or approval thereof by the
Dutch Court.
30. Warranties of the Consenting Noteholders. Each Consenting
Noteholder represents and warrants to each of the other parties that the
following statements are true, correct and complete as of the date hereof:
(a) Authority with Respect to the Notes. It is a Qualified Investor
and it or its Affiliates (as that term is defined in Rule 12b-2 under the
Securities Exchange Act of 1934, and over whom the Consenting Noteholder
exercises sufficient control to insure enforcement of the provisions of this
Agreement) holds or has investment authority or discretion with respect to the
Notes that represent a beneficial interest in the total principal amount of
Notes set forth next to its name on the signature pages hereof.
(b) Power, Authority and Authorization. Execution, delivery and
performance of this Agreement by each such party has been duly authorized by
all necessary corporate action on the part of such party (subject to Section
30(c) below), and the person executing this Agreement on behalf of such party
is duly authorized to do so;
(c) Binding Obligation. This Agreement is the legally valid and
binding obligation of each such party, enforceable against it in accordance
with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
limiting creditors' rights generally or by equitable principles relating to
enforceability.
31. Indemnity: The Company will indemnify and hold harmless each
Consenting Noteholder and its officers, directors, partners, agents, employees
and advisors, and each of its respective successors and assigns, from and
against any and all third-party claims, actions, suits, liabilities,
judgments, and any costs and expenses related thereto, arising by reason of or
resulting from such Consenting Noteholder's execution or performance of this
Agreement or the Term Sheet, but excluding any claims, actions, suits
liabilities judgments, costs or expenses to the extent arising from or related
to the negligence, fraud or willful misconduct of such Consenting Noteholder.
32. Securities Act Warranties. Each Equity Investor and Reinvesting
Noteholder represents that it is a Qualified Investor and acknowledges and
agrees that the Shares have not been registered under the Securities Act and
may not be offered or sold in the United States except (x) pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, or (y) pursuant to an effective
registration statement under the Securities Act. Each Equity Investor and
Reinvesting Noteholder further represents that it (i) has such knowledge and
experience in financial and business matters that it is capable of evaluating
the risks and merits of an investment in the Shares; (ii) has the financial
ability to bear the economic risk of an investment in the Shares; (iii) has
been given access to such financial and other information regarding the
affairs of the Company and regarding the Shares as it deems necessary in
connection with its decision with respect to the an investment in the Shares;
(iv) acknowledges that such information does not constitute a representation
or warranty by the Company with respect to its affairs or the Shares, which
are limited to those representations and warranties expressly set forth in
this Agreement; and (iv) will not offer or resell the Shares except in
compliance with applicable law.
33. Confidentiality. Unless required by applicable law or regulation,
the parties shall not disclose to any other person (i) the amount of a
Consenting Noteholder's holding of Notes without the prior written consent of
such Consenting Noteholder, or (ii) the terms of this Agreement (including the
Exhibits hereto) without the prior written consent of the Company, each of the
Equity Investors and each of the Consenting Noteholders. If such announcement
or disclosure is so required by law or regulation, the Company and the Equity
Investors shall afford each other and Noteholder Counsel, a reasonable
opportunity to review and comment upon any such announcement or disclosure
prior to such announcement or disclosure. The foregoing shall not prohibit the
Company from disclosing the approximate aggregate amount of Notes held by the
Consenting Noteholders or the holders of the Notes as a group.
34. Entire Agreement. This Agreement, the exhibits hereto and the
Term Sheet constitute the entire agreement among the parties pertaining to the
subject matter hereof and supersedes all prior agreements and understandings
of the parties in connection therewith.
35. Representation by Counsel. Each party hereto acknowledges that it
has been represented by counsel in connection with this Agreement and the
transactions contemplated by this Agreement. Accordingly any rule of law or
any legal decision that would provide any party hereto with a defense to the
enforcement of the terms of this Agreement against such party shall have no
application and is expressly waived. The provisions of this Agreement shall be
interpreted in a reasonable manner to effect the intent of the parties hereto.
36. Further Acquisition of Securities. This Agreement shall in no way
be construed to preclude any of the Consenting Noteholders from buying and
selling Notes in addition to its Locked-Up Notes. Nothing in this Agreement
shall limit the ability of a Consenting Noteholder to buy and sell in its
capacity as a trader, or its ordinary trading activities in respect of, any
Notes which are not Locked-up Notes.
37. Certificate Regarding Business Plan. Prior to the making of the
Reinvestments and the Capital Infusion, the Company shall deliver to the
Reinvesting Noteholders and the Equity Investors a certificate that in the
good faith opinion of the Company at that time, the Company is still capable
of achieving the business plan at Schedule E in all material respects.
38. Governing Law; Jurisdiction. This Agreement is governed by and
construed in accordance with the internal laws of the State of New York,
without regard to any conflicts of law provision that would require the
application of the law of any other jurisdiction. By its execution and
delivery of this Agreement, each of the parties hereto hereby irrevocably and
unconditionally agrees for itself that any legal action, suit or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit or proceeding, may be brought on a non-exclusive
basis in a federal court of competent jurisdiction in the Southern District of
New York. By execution and delivery of this Agreement, each of the parties
hereto hereby irrevocably accepts and submits to the nonexclusive jurisdiction
of such court, generally and unconditionally, with respect to any such action,
suit or proceeding. Notwithstanding the foregoing consent to jurisdiction,
upon the commencement of the Akkoord proceeding and/or the US Case, each of
the parties hereto herby agrees that the Dutch Court and/or the Bankruptcy
Court, as applicable, shall have nonexclusive jurisdiction over all matters
arising out of or in connection with this Agreement and relating directly to
the Dutch case or the US case, as the case may be. Notwithstanding the
foregoing consent to jurisdiction, any dispute relating to the validity of
corporate resolutions of the Company or its articles of association shall be
governed by Dutch law and exclusively be heard by the Amsterdam Court.
39. Specific Performance. It is understood and agreed by each of the
parties hereto that money damages would not be a sufficient remedy for any
breach of this Agreement by any party (other than a breach by the Company of
Section 22 (Fees and Expenses)) and each non-breaching party shall be entitled
to specific performance and injunctive or other equitable relief as a remedy
of any such breach.
40. Survival. Notwithstanding the sale of Locked-Up Notes in
accordance with Section 17 hereof, the termination of the Consenting
Noteholders' obligations hereunder in accordance with Section 12, the
termination of this Agreement by the Company, SAS or Xxxxx in accordance with
Section 13, or the termination of an Equity Investors' obligations hereunder,
the Company's obligations and agreements set forth in Sections 22 (with
respect to expenses incurred through the date of such termination) and the
obligations of the parties set forth in Section 31 (with respect to indemnity)
shall survive such termination and shall continue in full force and effect for
the benefit of the relevant party or parties, as the case may be, in
accordance with the terms hereof.
41. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of the parties and their respective successors, assigns,
heirs, executors, administrators and representatives (although this provision
is not intended to conflict with Section 17 hereof (restrictions on
transfer)). The agreements, representations and obligations of the Consenting
Noteholders under this Agreement are, in all respects, several and not joint.
42. Third Party Beneficiaries. Unless expressly stated herein,
(including, without limitation, as regards Section 30 (with respect to
indemnity) this Agreement shall be solely for the benefit of the parties
hereto and no other person or entity. Each Undersigned Holder that agrees and
accepts this Agreement shall be an express third party beneficiary of the
obligations of the Consenting Noteholders hereunder.
43. Several, Not Joint. The agreements, representations and
obligations of each of the Consenting Noteholders are, in all respects,
several and not joint.
44. Headings. The headings of the sections, paragraphs and
subparagraphs of this Agreement are inserted for convenience only and shall
not affect the interpretation thereof.
IN WITNESS WHEREOF, each of the parties below have executed a
counterpart of this Agreement.
Dated: May 15, 2002 COMPLETEL EUROPE N.V.
By: /s/ Xxxxx-Xxxxx Xxxxxxxx
Xxxxx-Xxxxx Xxxxxxxx
Tel.:00 0 00 00 00 00
Fax:
COMPLETEL SAS
By: /s/ Jehan Coquebert de Xxxxxxxx
Xxxxx Coquebert xx Xxxxxxxx
Tel.: 00 00 00 00 00
Fax: 00 00 00 00 00
COMPLETEL ESCROW BV
By: /s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
By: /s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
Tel.: 00 00 000 0000
Fax: 00 00 000 0000
XXXXX XX
By: /s/ Jehan Coquebert de Xxxxxxxx
Xxxxx Coquebert xx Xxxxxxxx
Tel.: 00 00 00 00 00
Fax: 00 00 00 00 00
Meritage Private Equity Fund, L.P.
Meritage Private Equity Parallel Fund,
L.P.
Meritage Entrepreneurs Fund, L.P.
By: Meritage Investment Partners, LLC,
its general partner
By: /s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
Tel.: 000 000 00 00
Fax: 000 000 00 00
Amount of Capital Infusion: (euro)22.86 million
XxXxxxxx Telcom Holdings Limited
Partnership
By: XxXxxxxx Telecom, LLC, its general partner
By: /s/ Xxxxxxxx X. Xx Xxxxxx
Xxxxxxxx X. XxXxxxxx, its Manager
Tel.: 000 000 0000
Fax: 000 000 0000
Amount of Capital Infusion: (euro)7.14 million
[FORM OF NOTEHOLDER SIGNATURE PAGE]
/s/ NAME OF NOTEHOLDER
By: /s/ AUTHORIZED SIGNATORY
Name:
Title:
Holds: US$ in aggregate
Stated principal amount at maturity
of HY1 Notes
Holds:(euro) in aggregate stated
principal amount of HY2 Notes.
Is a Reinvesting Holder with respect
to (euro) representing in aggregate
stated principal amount of HY2 Notes
of (euro)
AGREED AND ACCEPTED
Subject to the provisions below, in consideration of the entry by the
parties thereto into the Restructuring Agreement, dated as of May 14, 2002
(the "Restructuring Agreement"), by and among CompleTel Europe N.V., CompleTel
SAS, Xxxxx X.X., CompleTel Escrow B.V., Meritage Private Equity Funds,
XxXxxxxx Telcom Holdings and the Consenting Noteholder, as defined therein;
the undersigned holders ("Undersigned Holders") of ordinary shares of the
Company agree to exercise all votes to which they are entitled in order to
ensure the implementation of the Restructuring, of the achievement of the
Existing Shareholders' Approval and to approve any other action or document
necessary to implement the Restructuring. Capitalized terms used in this
Agreement and Acceptance without definition shall have the meaning assigned to
them in or pursuant to the Restructuring Agreement.
This Agreement is not and shall not be deemed to be a solicitation
for consents to or votes in favor of the Restructuring. Acceptance of or
consent to the Restructuring will not be solicited from any Undersigned Holder
until it has received the disclosures required under or otherwise in
compliance with applicable law.
Each of the Undersigned Holders may, prior to consummation of the
Restructuring, terminate its obligations hereunder and rescind its acceptance
of the Restructuring (which acceptance or vote shall be null and void and have
no further force or effect) by giving written notice thereof to the Company,
if the Company, the Equity Investors or the Consenting Noteholders materially
breach the Restructuring Agreement or fail to satisfy any of the material
terms or conditions of the Term Sheet.
Each of the Undersigned Holders will not, directly or indirectly,
sell, assign, transfer, hypothecate or otherwise dispose of (i) any equity
securities beneficially owned by it or as to which it has investment authority
or discretion (including equity securities acquired after the date hereof), or
(ii) any option, interest in, or right to acquire any equity securities,
unless the transferee is (x) an "accredited investor" within the meaning of
Rule 501 under the Securities Act of 1933 and (y) agrees in writing to be
bound by the terms of this Agreement and Acceptance and such writing is
subsequently delivered to the Company.
Each Undersigned Holder represents and warrants to the Company, the
Equity Investors, the Consenting Noteholders and each other that it is an
accredited investor and beneficially owns or has sufficient investment
authority or discretion over the amount of shares set forth next to its name
on the below signature pages to ensure enforcement of the provisions of this
Agreement and Acceptance.
The agreements, representations and obligations of the Undersigned
Holder are, in all respects, several and not joint.
Each of the Undersigned Holders agrees that each of the parties to
the Restructuring Agreement is an intended express third-party beneficiary of
this Agreement and Acceptance.
This Agreement and Acceptance will be governed by the laws of The
State of New York without reference to the conflicts of law principles
thereof.
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement and
Acceptance to be executed and delivered as of May 15, 2002.
MADISON DEARBORN CAPITAL PARTNERS II, L.P.
By: Madison Dearborn Partners II, L.P.,
its general partner
By: Madison Dearbon Partners, Inc.,
its general partner
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Its: Managing Director
Tel:
Fax:
Holds: 64,573,990 Ordinary Shares
XXXXXXXX TELCOM HOLDINGS LIMITED PARTNERSHIP
By: XxXxxxxx Telecom, LLC, its general partner
By: /s/ Xxxxxxxx X. XxXxxxxx
Xxxxxxxx X. XxXxxxxx
Its: Manager
Tel.: 000 000 0000
Fax: 000 000 0000
Holds: 26,208,676 Ordinary Shares
MERITAGE PRIVATE EQUITY FUND, L.P.
MERITAGE PRIVATE EQUITY PARALLEL FUND, L.P.
MERITAGE ENTREPRENEURS FUND, L.P.
By: Meritage Investment Partners, LLC,
its general partner
By: /s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
Tel: 000 000 0000
Fax: 000 000 0000
Holds: 5,862,449 Ordinary Shares
EXHIBIT A
Consenting Noteholders
[OMITTED]
Exhibit B
Restructuring of CompleTel Europe N.V.
Term Sheet
Capitalized terms not otherwise defined in this Term Sheet have the
meanings set forth in the Restructuring Agreement to which
this Exhibit B is part.
I. DEBT EXCHANGE To be effected through an Exchange, Akkoord and/or
US Plan, as the case may be.
HY1 Notes.........The HY1 Notes, representing an aggregate accreted
value of $94,074,350 as of April 15, 2002, will be
exchanged for Preferred B Shares and Ordinary
Shares at the following rate: each $1,000 of
accreted value of HY1 Notes will be converted into
3,933 Preferred B Shares and 3,933 Ordinary Shares
(such that the equivalent of(euro)1,000 of accreted
value of HY1 Notes shall convert into: (i) 4,402
Preferred B Shares and 4,402 Ordinary Shares) and
(ii) additional Preferred B Shares and Ordinary
Shares as described below, with any fractional
entitlement to shares in respect of a holder's
aggregate holdings of Notes rounded to the nearest
share.
HY2 Notes.........The HY2 Notes, representing an aggregate principal
amount of euro)121.9 million, will be exchanged
for: (i) Preferred B Shares and Ordinary Shares at
the following rate: each(euro)1,000 principal
amount of HY2 Notes shall convert into 4,094
Preferred B Shares and 4,094 Ordinary Shares; and
(ii) additional Preferred B Shares and Ordinary
Shares as described below, with any fractional
entitlement to shares in respect of a holder's
aggregate holdings of Notes rounded to the nearest
share.
In connection with such exchange, the remaining
balance of the HY2 Securities Account (approx.
(euro)17.0 million as of April 22, 2002) will be
paid to each of the HY2 Noteholders.
Allocation of Additional
Preferred B Shares and
Ordinary Shares...HY1 Notes and HY2 Notes will receive 37,552,934
additional Preferred B Shares and 37,552,934
additional Ordinary Shares using the following
two-step allocation mechanism:
Step 1
Holders of each (euro)1,000 principal amount of HY2
Notes, to the extent that the full amount of the
corresponding portion of the HY2 Securities Account
has been reinvested, will receive 308 additional
Preferred B shares and 308 additional Ordinary
Shares.
Step 2
After the Preferred B Shares and Ordinary Shares
have been allocated under step 1, the remaining
Preferred B shares and Ordinary Shares will be
allocated to all HY1 and HY2 Notes pro-rata for the
accreted value and principal amount that each Note
represents, respectively.
II. ADDITIONAL FINANCING
Source............To take place in the form of (a) the Capital
Infusion of (euro)30.0 million, and (b)
Reinvestments of not less than (euro)7.0 million,
but no greater than (euro)17.0 million.
Securities........Preferred A Shares, Ordinary Shares and C Shares.
Offering..........1,233,333,333 Units, each consisting of one
Preferred A Share and . one Ordinary Share, on the
basis of an aggregate investment of (euro)37.0
million. To be increased proportionately in the
event that Reinvestments in the aggregate are
greater than (euro)7.0 million in the aggregate.
Purchase Price....(euro)0.03 per Unit.
In addition to the Units, in return for the Capital
Infusion the Equity Investors will be issued on a
pro rata basis that number of C Shares that will
cause the Equity Investors to have the same number
of shares for voting purposes as the (former)
Noteholders.
Reinvestments.....Reinvestments of a minimum of(euro)7.0 million
representing all or part of their share of the HYII
Securities Account by certain of the Consenting
Noteholders that hold HY2 Notes (the "Minimum
Reinvestment") shall be a condition to the
Restructuring. HY2 Noteholders will have the option
to agree by 22 May 2002 to make further
Reinvestments of up to an additional(euro)10.0
million, involving the issue of up to a further
333,333,333 Units.
Investors.........The Capital Infusion shall be an investment by both
Meritage Private Equity Funds and XxXxxxxx Telecom
Holdings of(euro)30 million in the aggregate.
The Minimum Reinvestment shall be made by certain
of the Consenting Noteholders that hold HYII Notes.
Any additional Reinvestments may be made by any HY2
Noteholders (including the Consenting Noteholders).
Alternative
Financing.........If the total amount of the Reinvestments is less
than(euro)17.0 million, as regards and to the
extent of the difference between the total amount
of Reinvestments and the Minimum Reinvestment, the
Company either (a) issue additional Units (i) to
Noteholders who commit within thirty days of the
date of the Restructuring Agreement to so invest,
or, (ii) failing that, to third-party investors in
either case for issuance within 60 days following
consummation of the Restructuring, or (b) raise
such amount in the form of term debt on
commercially reasonable terms approved as such by
the Supervisory Board; provided, that the Company
has obtained a customary written funding commitment
with respect to such term debt no later than ninety
days following consummation of the Restructuring.
III. MANAGEMENT STOCK OPTION PLAN
General...........Post consummation of the Restructuring, the Company
will put into place the stock option plan (the
"Management Stock Option Plan") on the terms set
out below. No greater than 8% of the Stock shall be
available under the Management Stock Option Plan.
Changes to the Management Stock Option Plan will be
subject to a two-thirds majority of the Supervisory
Board.
Tranche 1.........33% of the Management Stock Options granted at
closing as follows:
o 8.25% vesting June 30, 2003, strike at(euro)0.0173
o 8.25% vesting June 30, 2004, strike at(euro)0.0198
o 8.25% vesting June 30, 2005, strike at(euro)0.0228
o 8.25% vesting June 30, 2006, strike at(euro)0.0262
Tranche 2.........67% options granting and vesting as follows:
o 30% granted at closing and, if following the
consummation of the Restructuring the Company has
achieved two consecutive quarters of positive
EBITDA, then
o 50% of which shall vest on June 30, 2003, strike
at (euro)0.0173
o 50% of which shall vest on June 30, 2004, strike
at (euro)0.0198
o 37% granted at closing and, if following the
consummation of the Restructuring the Company has
achieved 2 consecutive quarters of positive Free
Cash Flow, then
o 50% of which shall vest on June 30, 2005,
strike at (euro)0.0228
o 50% of which shall vest on June 30, 2006,
strike at (euro)0.0262
For the purposes of this Section III:
"EBITDA" shall mean, for any period, consolidated
net income for such period, adjusted to deduct any
extraordinary and nonrecurring gains), plus, to the
extent such amount was deducted in calculating such
adjusted consolidated net income,
(1) consolidated interest expense,
(2) income taxes (other than income taxes
attributable to extraordinary and
nonrecurring gains),
(3) depreciation expense, and
(4) amortization expense.
all as determined on a consolidated basis in
conformity with applicable GAAP.
"Free Cash Flow" shall mean EBITDA less cash tax
payments, cash interest payments and capital
expenditures, plus decreases and minus increases in
working capital, as the case may be, all as
determined on a consolidated basis in conformity
with applicable GAAP.
IV. POST-RESTRUCTURING OWNERSHIP
Giving effect to the Debt Exchange as contemplated
in Section I hereof, and the Capital Infusion and
all Reinvestments contemplated in Section II
hereof, the percentage ownership of the Company pre
the issue of any Management Stock Options on
as-converted basis will be as follows:
Summary Escrow reinvested
at closing 7.0 10.0 13.0 17.0
Investors 43.2% 41.4% 39.8% 37.8%
Escrow 10.1% 13.8% 17.2% 21.4%
Noteholders 43.2% 41.4% 39.8% 37.8%
Existing 3.5% 3.3% 3.2% 3.0%
Mgt Pool 0.0% 0.0% 0.0% 0.0%
---------------------------------------------------------------------------
Total 100.0% 99.9% 100.0% 100.0%
---------------------------------------------------------------------------
In the event of the exercise of all the Management
Stock Options contemplated in Section III hereof,
ownership of the Company on an as-converted basis
will be as follows:
Summary Escrow reinvested
Year 4 7.0 10.0 13.0 17.0
Investors 39.8% 38.2% 36.8% 35.1%
Escrow 9.3% 12.7% 16.0% 19.9%
Noteholders 39.8% 38.2% 36.8% 35.1%
Existing 3.2% 3.1% 3.0% 2.8%
Mgt Pool 8.0% 7.7% 7.4% 7.1%
---------------------------------------------------------------------------
Total 100.1% 99.9% 100.0% 100.0%
---------------------------------------------------------------------------
All Stock issued shall be freely tradable upon
consummation of the Restructuring.
V. TERMS OF THE PREFERRED SHARES
This sets out the in principle terms of the
Preferred Shares.
Ranking in
Liquidation.......The Preferred A Shares will rank senior in right of
payment to the Preferred B Shares and the Ordinary
Shares. The Preferred B Shares will rank junior to
the Preferred A Shares in right of payment and
senior to the Ordinary Shares.
Conversion
Rights............Each Preferred Share shall be convertible into
Ordinary Shares at any time at the option of the
holder of the Preferred Share. The Preferred Shares
shall initially be convertible on a share-for-share
basis, subject to customary anti-dilution
adjustments in relation to share dividends and
share splits and similar transactions. All
Preferred Shares shall at any time be subject to
mandatory conversion at the election of the holders
of two-thirds in aggregate of the outstanding
Preferred Shares.
Terms of Liquidation
Preference........
Upon a sale or liquidation of the Company (each a
"Liquidation Event") each holder of Preferred
Shares shall be entitled to receive, prior to any
distribution to the holder of any other equity
security of the Company, an amount in cash equal to
(euro)0.03 per share (the "Liquidation Amount").
Notwithstanding the foregoing, in the event that
the assets available for distribution on a
Liquidation Event are insufficient to pay the full
Liquidation Amount of the Preferred Shares, the
holders of Preferred A Shares shall be entitled to
receive full payment of their Liquidation Amount
prior to any payment with respect to the
Liquidation Amount payable to Preferred B Shares.
Once the holders of Preferred Shares have received
full payment of their Liquidation Amount, all
subsequent distributions shall be made pro-rata to
the holders of Preferred Shares and Ordinary Shares
on an as-converted basis.
Voting Rights.....The Preferred Shares shall vote with the Ordinary
Shares on an as-converted basis on all matters
submitted for approval by the Company's
shareholders, with each share entitled to one vote.
In addition, the affirmative vote of a majority of
each of the Preferred A Shares and Preferred B
Shares voting as separate classes of Shares shall
be required to approve a sale of the Company
(including by way of a merger or a sale of
substantially all its assets), to which the Company
is a party (a "Company Sale"), at a value less than
the full Liquidation Amount of all the Preferred
Shares.
Dividends.........The Preferred Shares will pay the same dividends as
the Ordinary Shares until June 30, 2004 and shall
accrue dividends starting July 1, 2004 at the rate
of 11.0% of Liquidation Amount per annum, payable
in cash. To the extent not paid when due, accrued
dividends will accumulate and compound on a
quarterly basis.
Redemption
Rights............The Company shall be obligated to redeem the
Preferred Shares for cash on June 30, 2007 at a
redemption price equal to three times the
Liquidation Amount and, subject to the feasibility
of structuring such an arrangement under Dutch law,
at the option of the holder upon the occurrence of
a Company Sale, at a redemption price equal to the
Liquidation Amount, in each case adjusted for any
accrued and unpaid dividends.
Upon the occurrence of a Company Sale, the holders
of the Preferred A Shares shall each have the right
to subscribe, at their nominal value, to that
number of C Shares that, when taken together with
such Preferred A Shares, would give such holders
sufficient voting rights to cause the Company to
effect a voluntary liquidation; provided, however
that if such Company Sale is not consummated or is
unwound or if the holders of the Preferred A Shares
attempt to exercise their voting rights with
respect to such C Shares for any other purpose, the
Company shall have the right to reacquire such C
Shares at their original subscription price.
Notwithstanding the foregoing, in the event the
Company does not have sufficient funds to redeem
all Preferred Shares, the holders of Preferred A
Shares shall be entitled to receive one times the
Liquidation Amount (adjusted for any accrued and
unpaid dividends) prior to any payment to the
holders of Preferred B Shares. Any surplus shall
then be used to repay one times the Liquidation
Amount of the Preferred B Shares (adjusted for any
accrued and unpaid dividends). In the case of a
redemption that is not in connection with a Company
Sale, any surplus shall then be distributed
proportionally to the holders of the Preferred
Shares up to the remaining balance of three times
its Liquidation Amount (adjusted for any accrued
and unpaid dividends).
V. TERMS OF THE C SHARES This sets out the in principle terms of the C Shares.
Voting Rights
and Par Value.....The C Shares shall have the same par value as the
other classes of shares and will therefore carry
the same voting rights as the other classes.
Ranking...........The C Shares will be subordinate in respect of the
other classes of shares in the sense that:
o the C Shares shall only be entitled to dividends
equal to, for example, 0.01% of the par value of
shares and will only be entitled thereto after
all classes of shares other than Ordinary shares
have been paid out.
o the C Shares shall only be entitled in the
liquidation surplus to an amount not exceeding
the par value of the C shares and will only be
entitled thereto after the holders of the
Preferred Shares have been paid the (euro) 0.03
per share to which they are entitled.
o the C Shares shall not be entitled to any
distributions from any general reserve of the
Company.
Redemption........The C Shares other than any C Shares issued in the
circumstances described above under "V. Terms of
the Preferred Shares - Redemption Rights" may be
cancelled as an entire class with redemption of the
par value of the C Shares upon the occurrence of
the Threshold Event described below.
Restrictions
on Transfer.......
The articles will provide for a restriction clause
to the effect that if a registered holder of such
shares wishes to transfer his C Shares, such
transfer will require the prior approval of the
Supervisory Board of the Company.
C Share Trust.....The C Shares other than any C Shares issued in the
circumstances described above under "V. Terms of
the Preferred Shares - Redemption Rights" will be
held by a reputable financial institution or other
entity (the "C Share Trustee") mutually agreed by
the Equity Investors and a Noteholder Approval. The
C Share Trustee will hold the C Shares pursuant to
a trust instrument that will provide as follows:
o The C Share Trustee will undertake, for the
benefit of the Company and the holders of the
Preferred B Shares, that it will not transfer the
C Shares to any party other than to the Company
or, in the event the C Share Trustee resigns, a
replacement C Share Trustee of recognized
standing agreed by the Company.
o In the event of any distribution in respect of
the C shares, the C Share Trustee will first pay
any outstanding fees and expenses of the C Share
Trustee and then pay over the remainder of such
distribution to the Company or, in the event of
liquidation of the Company, to the other
shareholders of the Company, pro rata.
o Upon the conversion into ordinary shares or the
sale to a party other than an Equity Investor of
50 % of the Preferred A Shares initially issued
to the Equity Investors (the "Threshold Event"),
the C Share Trustee will tender the C Shares to
the Company for nil consideration.
o Until the Threshold Event, the C Share Trustee
will vote the C Shares in accordance with the
directions of the Equity Investors, in proportion
to their respective holdings of the Preferred A
shares.
o The fees and expenses of the C Share Trustee will
be for the account of the Company
VII MISCELLANEOUS
Board
Composition.......
Post-Restructuring the Supervisory Board will be
reconstituted as a six-member board comprising two
designees of the Preferred A Shares, two designees
of the Preferred B Shares, and two independent
directors mutually acceptable to the Equity
Investors and the Consenting Noteholders.
The Supervisory Board will form a three-member
Committee comprised of the two designees of the
Preferred A Shares and one other director to be
appointed by a two-thirds majority of the
Supervisory Board (as constituted
post-Restructuring), which Committee shall have
authority to make binding nominations for the
appointment of the Company's executive officers and
shall have authority to act on behalf of the
Supervisory Board with respect to day-to-day
operational matters.
Notwithstanding the foregoing, a two-thirds vote of
the Supervisory Board shall be required to approve
the following:
o Any sale or liquidation of the Company or any
sale of substantially all the Company's assets
outside ordinary course of business;
o Any merger or consolidation in which the Company
is not the surviving entity, or any acquisition,
merger or consolidation in which the Company is
the surviving entity and which is effected for a
total consideration in excess of (euro)10
million;
o The incurrence of indebtedness for borrowed
money, other than the term debt contemplated
above under "Alternative Financing" and up to
(euro)20.0 million of working capital debt
conditional upon such there being no working
capital debt outstanding at least once in every
12 month period; and
o The issuance of additional equity or
equity-linked securities, other than the issuance
of Shares under the Management Stock Option Plan.
Anti-Takeover
Provisions........The Articles of Association shall provide that any
person or group acting in concert, other than an
Equity Investor, acquiring directly or indirectly
the beneficial ownership of 25% of the Company's
outstanding shares shall be required to commence a
tender offer for all of the Company's outstanding
equity securities, other than any outstanding C
Shares, at a price equal to the highest price paid
by such person or group acting in concert for any
share in the capital of the Company during the
preceding 12 months.
Registration
Rights............The holders of Preferred A Shares will have the
right to two long-form registrations and unlimited
short-form and "piggyback" registrations at the
Company's expense, subject in the case of piggyback
registrations to customary underwriter cutbacks.
The holders of Preferred B Shares will have the
right to participate on a pro-rata basis in all
demand registrations by the holders of the
Preferred A Shares.
Preemptive
Rights............The holders of Preferred Shares will have the
preemptive right to subscribe for their pro-rata
portion of any future offerings of equity or
equity-linked securities by the Company, other than
issuances to management of Ordinary Shares
authorized under the Management Stock Option Plan,
and issuance for non-cash consideration.
EXHIBIT C
Reinvestment
Column 1 Column 2
-------- --------
[OMITTED]
EXHIBIT D
New Articles
[OMITTED]
EXHIBIT E
Business Plan
[OMITTED]
EXHIBIT F
Restructuring Costs
[OMITTED]
SCHEDULE I
The following listed items have been omitted from this filing of the
Registrant's Restructuring Agreement. The Registrant hereby agrees to furnish
supplementally a copy of these items to the Commission upon request.
o Signature pages in respect of holders of high-yield (HY1) notes of
an aggregate principal amount at maturity of $95,301,000 and
high-yield (HY2) notes of an aggregate principal amount currently
outstanding of (euro)86,194,000.
o Exhibit A, a list of Noteholders that have consented to this
Agreement.
o Exhibit C, a list of Noteholders that have agreed to reinvest
proceeds of the high-yield (HY2) securities account in the
Registrant, and the amounts that those Noteholders have agreed to
reinvest, totaling (euro)8,292,935.
o Exhibit D, a hand xxxx-up of the Registrant's proposed Articles of
Association, the material elements of which are set forth in the
Term Sheet set forth as Exhibit B.
o Exhibit E, the Registrant's Business Plan, the material elements
of which were disclosed in its press release, dated May 15, 2002,
filed with the Commission on that date under cover of Form 8-K.
o Exhibit F, the Registrant's schedule of projected restructuring
costs, estimated at (euro)4,534,451 in the aggregate.
