THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE SECURITIES LAWS OF ANY JURISDICTION. THIS NOTE MAY NOT BE
OFFERED, SOLD, HYPOTHECATED, GIVEN, BEQUEATHED, TRANSFERRED, ASSIGNED, PLEDGED,
ENCUMBERED, OR OTHERWISE DISPOSED OF ("TRANSFERRED") EXCEPT PURSUANT TO (I) A
REGISTRATION STATEMENT WITH RESPECT TO THIS NOTE THAT IS EFFECTIVE UNDER SUCH
ACT OR APPLICABLE STATE SECURITIES LAW, OR (II) ANY EXEMPTION FROM REGISTRATION
UNDER SUCH ACT, OR APPLICABLE STATE SECURITIES LAW, RELATING TO THE DISPOSITION
OF SECURITIES, PROVIDED THAT AN OPINION OF COUNSEL IS FURNISHED TO THE COMPANY,
TO THE EXTENT REASONABLY REQUESTED BY THE COMPANY, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND/OR APPLICABLE STATE SECURITIES LAW IS
AVAILABLE.
IN ADDITION, THIS NOTE MAY NOT BE TRANSFERRED UNLESS SUCH TRANSFER COMPLIES WITH
THE PROVISIONS OF (A) THIS NOTE AND (B) THE SHAREHOLDERS AGREEMENT DATED AS OF
APRIL 21, 2004 (THE "SHAREHOLDERS AGREEMENT"), A COPY OF WHICH IS ON FILE AND
MAY BE INSPECTED AT THE REGISTERED OFFICE OF THE COMPANY. NO TRANSFER OF THIS
NOTE WILL BE MADE ON THE BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY EVIDENCE OF
COMPLIANCE WITH THE TERMS OF THIS NOTE AND THE SHAREHOLDERS AGREEMENT. THIS NOTE
IS ALSO SUBJECT TO OTHER RIGHTS AND OBLIGATIONS AS SET FORTH IN THIS NOTE AND
THE SHAREHOLDERS AGREEMENT.
$________ New York, New York
April 21, 2004
VIATEL HOLDING (BERMUDA) LIMITED
8% CONVERTIBLE SENIOR SECURED NOTE DUE 2014
Unless otherwise converted pursuant to Section 4 hereof,
Viatel Holding (Bermuda) Limited, a company organized under the laws of Bermuda
(or its successor, the "Company"), hereby unconditionally promises to pay to the
order of _______________________ (the "Holder"), a _________________________,
the principal amount of ____________________ U.S. Dollars (U.S.$_____________),
on April 21, 2014 (the "Maturity Date"), and to pay interest at the time, in the
form and at the rate set forth herein. Certain capitalized terms used herein
without definition shall have the meanings assigned to them in Article 9 hereof.
This Note is issued in accordance with and subject to the following terms and
conditions:
ARTICLE 1
PRINCIPAL AND INTEREST
Section 1.1. Principal and Interest.
(a) The Company shall on the Maturity Date pay to the
order of the Holder an amount equal to the aggregate principal amount of this
Note outstanding on the Maturity Date, plus accrued and unpaid interest thereon,
unless and to the extent that this Note is earlier redeemed, repurchased, repaid
or converted in accordance with the terms of this Note.
(b) Interest shall be payable semi-annually, in arrears,
on each July 15 and January 15 after the issuance of this Note (the "Interest
Payment Dates"). Interest shall accrue on the unpaid principal amount of this
Note at the rate of 8% per annum from the Closing Date, or from the most recent
Interest Payment Date for which the applicable interest payment has been made,
until the principal amount of this Note is paid in full or the full principal
amount of this Note has been converted as provided in Section 4 hereof;
provided, that the Company may elect to pay any such interest on any Interest
Payment Date in the form of Additional Notes. Interest on this Note shall be
computed on the basis of a 360-day year composed of twelve 30-day months.
(c) If a date for payment of principal or interest is a
Legal Holiday, payment shall be made on the next succeeding day that is not a
Legal Holiday, and interest shall accrue for the intervening period.
(d) The Holder of this Note must surrender this Note to
the Company to collect principal payments.
(e) Except with respect to interest paid in the form of
Additional Notes as permitted under the provisos to Section 1.1(b) above and
Section 1.1(j) below, the Company will pay principal and interest in money of
the United States that at the time of payment is legal tender for payment of
public and private debts in immediately available funds (without any
counterclaim, setoff, recoupment or deduction whatsoever, and free and clear of,
and without any withholding or deduction for or on account of, any present or
future taxes, levies, imports, duties, charges or fees of any nature) and by
wire transfer to a U.S. dollar account maintained by the Holder with a bank in
the United States designated in writing by the Holder. All payments of interest
and principal in respect of this Note shall be made on the due date thereof no
later than 3:00 p.m., New York, New York time. Any payment received by the
Holder after 3:00 p.m., New York, New York time, on any day, will be deemed to
have been received on the following Business Day.
(f) The Company agrees that to the extent the Company
makes a payment or payments hereunder which payment or payments, or any part
thereof, are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to the Company or its
successors under any Bankruptcy Law, state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, the
obligations, or part thereof, under this Note that have been paid, reduced or
satisfied by such amount shall be
2
reinstated and continued in full force and effect as of the time immediately
preceding such initial payment, reduction or satisfaction.
(g) To the extent lawful, the Company shall pay interest
on (i) overdue principal and (ii) overdue installments (without regard to any
applicable grace period or payment blockage) of interest, in each case at a rate
equal to 10% per annum, compounded semi-annually.
(h) To guarantee the due and punctual payment of the
principal and interest, if any, on this Note and all other amounts payable by
the Company under this Note when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of
this Note, the Guarantors have, jointly and severally, unconditionally
guaranteed the Obligations pursuant to the terms of the Security Trust
Agreement.
(i) This Note and the other Investor Notes are secured on
a first-priority basis by the Security Interest created by the Security
Documents pursuant to, and subject to the terms of, the Security Trust
Agreement.
(j) If any deduction or withholding for any present or
future taxes, assessments or other governmental charges of (x) Bermuda or any
political subdivision or governmental authority thereof or therein having power
to tax, (y) any jurisdiction, other than the United States, from or through
which payment on this Note is made by the Company or Guarantors, or any
political subdivision or governmental entity thereof or therein having the power
to tax or (z) or any other jurisdiction, other than the United States, in which
the Company or Guarantors are organized, or any political subdivision or
governmental authority thereof or therein having power to tax, shall at any time
be required by such jurisdiction (or any such political subdivision or taxing
authority) in respect of any amounts to be paid by the Company or Guarantors
under this Note, the Company or Guarantors will pay to the Holder any additional
amounts as may be necessary in order that the net amounts paid to such Holder
who, with respect to any such tax, assessment or other governmental charge, is
not resident in, or a citizen of, such jurisdiction, after such deduction or
withholding, shall be not less than the amount specified in this Note to which
the Holder is entitled; provided, that the Company may elect to pay any such
additional interest in the form of Additional Notes.
ARTICLE 2
TRANSFER
The Company and, by acceptance of this Note, the Holder hereby
agree that the following provisions shall govern the registration, sale,
assignment, pledge, transfer, encumbrance or other disposition of this Note.
Section 2.1. Note Registration. The Company shall keep at its
principal office a register (the "Register") in which the Company shall enter
the name and address of the registered holder of this Note. References to the
"Holder" of this Note shall mean the person listed in the Register as the payee
of this Note unless the payee shall have presented this Note to the Company for
transfer in accordance with the Shareholders Agreement and the transferee shall
have been entered in the Register as a subsequent holder, in which case the term
shall mean such
3
subsequent holder. The registered holder of this Note may be treated as the
owner of it for all purposes.
Section 2.2. Disposition. (a) This Note may not be, in whole
or in part, directly or indirectly, sold, assigned, pledged, transferred,
encumbered or otherwise disposed of (each, a "transfer"), except pursuant to the
terms and conditions of the Shareholders Agreement. Any purported transfer other
than in accordance with the terms hereof and thereof shall be void and without
force or effect.
(b) A transfer of this Note permitted by paragraph (a) of
this Section shall only be effected by the Holder hereof by delivery of this
Note to the Company (with the instrument of assignment provided on this Note
properly completed in accordance with the terms and conditions of this Note),
accompanied by an opinion of counsel, in form and substance, and from counsel,
reasonably satisfactory to the Company, and by such other evidence as the
Company may reasonably require of compliance with the Securities Act and
applicable state securities laws and with the provisions of this Note and the
Shareholders Agreement, at the Company's principal office or at such other
location as the Company shall designate in writing to the Holder; provided,
however, that such transfer of this Note shall become effective only upon, and
shall not be effective for any purpose until, the Company has received this
Note.
(c) No service charge will be made for any such transfer
or assignment.
ARTICLE 3
OUTSTANDING NOTES
Section 3.1. (a) Outstanding Notes. The Investor Notes
outstanding at any time are all the Investor Notes issued by the Company except
for those cancelled by it and those surrendered to it for cancellation. A Note
also ceases to be outstanding because the Company or any direct or indirect
Subsidiary of the Company holds the Note.
(b) Direction, Waiver and Consent Requirements. In
determining whether the Noteholders of the required principal amount of Investor
Notes have concurred in any direction, waiver or consent, Investor Notes owned
by the Company or any direct or indirect Subsidiary of the Company shall not be
considered as though they are outstanding.
ARTICLE 4
CONVERSION RIGHTS
Section 4.1. Conversion of Notes
(a) Conversion by ▇▇▇▇▇▇. The Holder may convert this
Note in whole or in part for Common Shares at the then-applicable Conversion
Price at any time during which at least one of the following conditions are
satisfied:
(i) a Liquidity Event shall have occurred; or
4
(ii) if no Liquidity Event shall have occurred prior to
such time, from and after April 21, 2013; or
(iii) this Note shall have been called for redemption by
the Company in accordance with Section 5.1 hereof, in which case the
Holder may convert this Note into Common Shares at any time prior to
the close of business on the Business Day prior to the Redemption Date.
To convert this Note the Holder must (1) complete and manually
sign the irrevocable conversion notice on the back of this Note (or complete and
manually sign a facsimile of such notice) and deliver such notice to the
Company, (2) surrender this Note to the Company, (3) furnish appropriate
endorsements and transfer documents if required by the Company, and (4) pay any
transfer or similar tax, if required.
The Holder may convert a portion of this Note only if the
principal amount of such portion is $1,000 or a multiple of $1,000, or is the
full principal amount of all Investor Notes held by such Holder.
(b) Conversion by Company. The Company shall be entitled,
at its option and upon 30 days' prior written notice to the Holder, to convert
this Note in whole but not in part into Common Shares at the then-applicable
Conversion Price, at any time:
(i) prior to the Majority Conversion Date, if (i) there
has occurred a Liquidity Event and (ii) the Company has received
written consent to the conversion of Investor Notes from the Majority
Noteholders; or
(ii) on or following the Majority Conversion Date;
provided, however, that if a Change of Control shall have
occurred, the Company shall not be so permitted to require the conversion of
this Note until after the Holder has had the opportunity to sell this Note to
the Company pursuant to the Change of Control Put, unless the Board of Directors
has determined in good faith that the aggregate applicable Change of Control Put
Price that would be received by the Holder could not reasonably be considered to
be equal to or greater than the aggregate value of the Common Shares that would
be received by the Holder upon such conversion, and the Company has given
written notice of such determination to the Holder.
(c) Conversion Price. Subject to adjustment as set forth
in Section 4.2 below, this Note and accrued and unpaid interest hereon may be
converted, in whole or in part, as provided in this Section 4.1, at a conversion
price (the "Conversion Price") per Common Share:
(i) in the case of any conversion (A) in the absence of a
Liquidity Event, or (B) upon the occurrence of a Liquidity Event
described in clause (6) of the definition of Liquidity Event, or (C)
upon the giving by the Company of a notice of redemption pursuant to
Article 5 hereof prior to a Conversion Price being finally determined
pursuant to Section 4.3 hereof, equal to US$0.75 (the "Base Conversion
Price"); or
5
(ii) in the case of any other conversion upon the
occurrence of a Liquidity Event, as determined as set forth in Section
4.3; provided, however, that if the Conversion Price has not been
finally determined pursuant to Article 4 prior to the Maturity Date,
the Conversion Price shall be the Base Conversion Price.
(d) Conversion Procedures. The date on which the Holder
converts this Note, in whole or in part, following satisfaction of the
applicable conditions set forth in Section 4.1(a) is the "Conversion Date";
provided, however, that any conversion notice may provide that conversion of
this Note is conditional upon the consummation of any event or circumstance that
has been proposed by or with respect to the Company or its securities, and in
such event such conversion shall be applicable only immediately prior to,
simultaneously with or immediately after (as specified in such notice) the
effective time of such referenced event or circumstance). As soon as
practicable, but in no event later than the fifth Business Day following the
Conversion Date, the Company shall deliver, at its expense, to the Holder, a
certificate for the number of full Common Shares issuable upon the conversion
and cash in lieu of any fractional share determined pursuant to Section 4.2(f).
The Person in whose name the certificate is registered shall be treated as a
shareholder of record on and after the Conversion Date; provided, however, that
no surrender of this Note on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the Person or Persons
entitled to receive the Common Shares upon such conversion as the record holder
or holders of such Common Shares on such date, but such surrender shall be
effective to constitute the Person or Persons entitled to receive such Common
Shares as the record holder or holders thereof for all purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
provided further, that such conversion shall be at the Conversion Price in
effect on the date that this Note shall have been surrendered for conversion, as
if the stock transfer books of the Company had not been closed. Upon conversion
of this Note in full, such Person shall no longer be a Holder of this Note.
If this Note is surrendered and converted in part, the Company
shall execute a new Note in a denomination equal in principal amount to the
unconverted portion of the Note surrendered.
If the last day on which Notes may be converted is a Legal
Holiday, this Note may be surrendered to the Company on the next succeeding day
that it is not a Legal Holiday.
(e) Taxes on Conversion. If the Holder converts this
Note, the Company shall pay any documentary, stamp or similar issue or transfer
tax due on the issue of Common Shares upon the conversion; provided, that if any
such payment shall be unlawful under the laws of Bermuda, the Company shall
first use all reasonable efforts to take any actions necessary to make such
payment lawful and shall not be obligated to make such payment until those
actions have been taken. However, the Holder shall pay any such tax which is due
because the Holder requests the shares to be issued in a name other than the
Holder's name. The Company may refuse to deliver the certificates representing
the Common Shares being issued in a name other than the Holder's name until the
Company receives a sum sufficient to pay any tax which shall be due because the
Common Shares are to be issued in a name other than the Holder's name.
6
(f) The Company may refuse to deliver the certificates
representing the Common Shares being issued in a name other than the Holder's
name unless the Company receives documentation pursuant to Section 2.2(b) hereof
with respect to the transfer of such Note in respect of the transfer of Common
Shares.
Section 4.2. Adjustment of the Conversion Price.
(a) The Conversion Price shall be adjusted from time to
time as follows:
(i) Issuances of Common Shares. In case the
Company shall pay or make a dividend or other distribution on
its Common Shares consisting exclusively of, or shall
otherwise issue, Common Shares or securities convertible into
or exercisable for Common Shares or rights, options or
warrants entitling the holders thereof to subscribe for or
purchase Common Shares (including without limitation the
issuance of options or other equity securities under any
equity compensation plan or agreement of the Company (whether
or not in effect as of the Closing Date)), the Conversion
Price in effect at the close of business on the date fixed for
the determination of shareholders entitled to receive such
securities, rights or warrants or for such issuance shall be
reduced by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of Fully-Diluted
Shares outstanding at the close of business on the date fixed
for such determination (but prior to such issuance) and the
denominator shall be such number of Fully-Diluted Shares plus
the number of Common Shares so issued, offered for
subscription or purchase or issuable upon conversion or
exercise of the securities included in such issuance, dividend
or other distribution, such reduction to become effective
immediately prior to the opening of business on the day
following the date fixed for such determination or for such
issuance; provided, however, that no such adjustment shall be
made upon the issuance of Common Shares or securities
convertible into or exercisable for Common Shares, in
connection with (1) the exercise of options pursuant to the
Equity Incentive Plan, (2) the issuance of any Common Shares
upon conversion of Investor Notes or (3) the conversion or
exercise of any other convertible or derivative security the
grant or issuance of which security previously resulted in a
reduction of the Conversion Price hereunder. For the purposes
of this subparagraph (i), the number of Fully-Diluted Shares
at any time shall not include shares held in the treasury of
the Company. For purposes of this subparagraph (i), the
issuance of rights or warrants to subscribe for or purchase
stock or securities convertible into or exchangeable for
Common Shares shall be deemed to be the issuance of rights,
options or warrants to purchase the Common Shares into which
such stock or securities are convertible or exercisable. In
case any securities or rights, options or warrants referred to
in this subparagraph (i) in respect of which an adjustment
shall have been made shall expire unexercised, the Conversion
Price shall be readjusted at the time of such expiration to
the Conversion Price that would have been in effect if no
adjustment had been made on account of the distribution or
issuance of such expired rights, options or warrants.
7
(ii) Stock Splits, Subdivisions,
Reclassifications or Combinations. In case outstanding Common
Shares shall be subdivided or reclassified into a greater
number of Common Shares, the Conversion Price in effect at the
close of business on the day upon which such subdivision or
reclassification becomes effective shall be proportionately
reduced, and conversely, in case outstanding Common Shares
shall each be combined or reclassified into a smaller number
of Common Shares, the Conversion Price in effect at the close
of business on the day upon which such combination or
reclassification becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to
become effective immediately prior to the opening of business
on the day following the day upon which such subdivision or
combination becomes effective.
(iii) Other Distributions. In case the Company
shall, by dividend or otherwise, distribute to all holders of
record of its Common Shares evidences of its indebtedness,
shares of any class or series of Capital Stock, cash or assets
(including securities, but excluding any securities or rights,
options or warrants referred to in subparagraph (i) of this
Section 4.2(a) and any dividend or distribution paid
exclusively in cash), the Conversion Price shall be reduced so
that such price shall equal the price determined by
multiplying the Conversion Price in effect immediately prior
to the effectiveness of the Conversion Price reduction
contemplated by this subparagraph (iii) by a fraction of which
the numerator shall be the current Market Price per share of
the Common Shares on the Reference Date less the Fair Market
Value, on the Reference Date, of such number or amount of the
evidences of indebtedness, shares of Capital Stock, cash and
assets that is so distributed to a holder of one Common Share
and the denominator shall be such current Market Price per
share of the Common Shares, such reduction to become effective
on the later to occur of (x) immediately prior to the opening
of business on the day following the Reference Date and (y)
the time at which such dividend or other distribution is
unconditionally declared by the Board of the Company. For
purposes of this subparagraph (iii), any dividend or
distribution that includes (but is not limited to) Common
Shares, securities convertible or exchangeable into Common
Shares or rights, options or warrants to subscribe for or
purchase Common Shares shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness,
cash, assets or shares of Capital Stock other than such Common
Shares, such securities convertible or exchangeable into
Common Shares or such rights, options or warrants (so that any
Conversion Price reduction required by this subparagraph (iii)
is made) immediately followed by (2) a dividend or
distribution of such Common Shares, such securities
convertible or exchangeable into Common Shares or such rights,
options or warrants (so that there is made any further
Conversion Price reduction required by subparagraph (i),
except (A) the Reference Date of such dividend or distribution
shall be substituted as "the date fixed for the determination
of shareholders entitled to receive such securities, rights or
warrants or for such issuance" and "the date fixed for such
determination" within the meaning of subparagraph (i) and (B)
any Common Shares included in such dividend or distribution
shall not be included in the "number of Fully-Diluted Shares
8
outstanding at the close of business on the date fixed for
such determination" within the meaning of subparagraph (i). In
case any dividend or other distribution referred to in this
subparagraph (iii) in respect of which an adjustment shall
have been made shall not be paid or otherwise distributed on
the date fixed therefor (as determined in good faith by the
Board of the Company whose good faith determination shall be
conclusive), the Conversion Price shall be readjusted to the
Conversion Price that would have been in effect if no
adjustment had been made on account of such dividend or other
distribution.
(iv) Cash Distributions. In case the Company
shall pay or make a dividend or other distribution to holders
of record of its Common Shares exclusively in cash, the
Conversion Price shall be reduced so that such price shall
equal the price determined by multiplying the Conversion Price
in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this subparagraph
(iv) by a fraction of which the numerator shall be the current
Market Price per Common Share on the Reference Date less the
amount of cash so distributed applicable to one Common Share
and the denominator shall be such current Market Price per
Common Share, such reduction to become effective on the later
to occur of (x) immediately prior to the opening of business
on the day following the Reference Date and (y) the time at
which such dividend or other distribution is unconditionally
declared by the Board of the Company. In case any dividend or
other distribution referred to in this subparagraph (iv) in
respect of which an adjustment shall have been made shall not
be paid or otherwise distributed on the date fixed therefor
(as determined in good faith by the Board of the Company whose
good faith determination shall be conclusive), the Conversion
Price shall be readjusted to the Conversion Price that would
have been in effect if no adjustment had been made on account
of such dividend or other distribution.
(v) Fundamental Changes. If any Fundamental
Change shall occur, then lawful and adequate provisions shall
be made whereby the Holder shall have the right to receive,
upon the basis and upon the terms and conditions specified
herein, in lieu of the Common Shares of the Company
immediately theretofore receivable upon the conversion of this
Note, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for such
number and class of Common Shares issuable upon conversion of
this Note immediately prior to the occurrence of the
Fundamental Change. In the case of any Fundamental Change,
appropriate provision shall be made with respect to the rights
and interests of the Holder to the end that the provisions
hereof (including without limitation provisions for adjustment
of the Conversion Price) shall thereafter be applicable, as
nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise
of any conversion rights hereunder.
(vi) Acquisition of Shares by Company. In case of
an acquisition of Common Shares by the Company or any
Subsidiary of the Company, the Conversion Price shall be
reduced so that such price shall equal the price
9
determined by multiplying the Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this subparagraph (vi) by a fraction
of which the numerator shall be the number of Common Shares
outstanding (including such acquired shares (the "Acquired
Shares")) at the effective time of the acquisition multiplied
by the current Market Price per Common Share on the Trading
Day next succeeding such effective time and the denominator
shall be the sum of (x) the Fair Market Value of the aggregate
consideration payable to shareholders as a result of the
Company's or Subsidiary's acquisition of the Acquired Shares
and (y) the product of the number of Common Shares outstanding
(less any Acquired Shares) at such effective time and the
current Market Price per Common Share on the Trading Day next
succeeding such effective time, such reduction to become
effective immediately prior to the opening of business on the
day following such Effective Time.
(vii) Tender or Exchange Offer. In case a tender
or exchange offer made for all or any portion of the Company's
Common Shares shall expire and result in the acquisition of
Common Shares pursuant thereto and such tender or exchange
offer shall involve the payment of consideration per Common
Share having a Fair Market Value at the last time (the
"Expiration Time") tenders or exchanges may be made pursuant
to such tender or exchange offer (as it shall have been
amended) that exceeds the current Market Price per Common
Share on the Trading Day next succeeding the Expiration Time,
the Conversion Price shall be reduced so that such price shall
equal the price determined by multiplying the Conversion Price
in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this subparagraph
(vii) by a fraction of which the numerator shall be the number
of Common Shares outstanding (including any tendered or
exchanged shares) at the Expiration Time multiplied by the
current Market Price per share of the Common Shares on the
Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the Fair Market Value (at
the Expiration Time) of the aggregate consideration payable to
shareholders as a result of the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of
shares validly tendered or exchanged and not withdrawn as of
the Expiration Time (the shares so accepted, up to any such
maximum, being referred to as the "Purchased Shares") and (y)
the product of the number of Common Shares outstanding (less
any Purchased Shares) at the Expiration Time and the current
Market Price per Common Share on the Trading Day next
succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the
day following the Expiration Time.
(b) Conversion Price Adjustment Deferred. Notwithstanding
the foregoing provisions of this Section 4.2, (i) no adjustment in the number of
Common Shares into which this Note is convertible shall be required unless such
adjustment would require an increase or decrease of at least 1% of the total
number of Common Shares to be issued, and (ii) no adjustment in the Conversion
Price shall be required unless such adjustment would require an increase or
decrease in the Conversion Price of at least $.01 per share; provided, however,
that any adjustments which by reason of this paragraph (b) are not required to
be made shall be
10
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 4.2 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. In addition, in the event that
any event occurs that requires an adjustment pursuant to this Section 4.2, prior
to the occurrence of a Liquidity Event, then each adjustment required by this
Section 4.2 shall be made separately (x) to the Base Conversion Price, as
applicable prior to the occurrence of a Liquidity Event and (y) to the
Conversion Price, with such adjustment to be applicable from and after the time
that this Note becomes convertible pursuant to Section 4.1(a) hereof.
(c) Adjustment Report. Whenever any adjustment is
required in the Conversion Price or the shares into which this Note is
convertible, the Company shall forthwith (i) file with each office or agency
then maintained by the Company for the transfer of this Note a statement
describing in reasonable detail the adjustment and the method of calculation
used and (ii) cause a notice of such adjustment, setting forth the adjusted
Conversion Price and the calculation thereof to be mailed to the Holder at its
address as shown on the books of the Company. The certificate of any independent
firm of public accountants of recognized standing selected by the Board
certifying to the Board the correctness of any computation under this Section
4.2 shall be evidence of the correctness of such computation.
(d) Notice of Certain Events. In the event that:
(i) the Company shall take action to make any
distribution to the holders of its Common Shares;
(ii) the Company shall take action to offer for
subscription pro rata to the holders of its Common Shares any
securities of any kind;
(iii) the Company shall take action to accomplish
any capital reorganization, reclassification of the Capital
Stock of the Company (other than a subdivision, split or
combination of its Common Shares), consolidation or merger to
which the Company is a party and for which approval of any
shareholders of the Company is required, or sale or transfer
of all or substantially all of the assets of the Company; or
(iv) the Company shall take any action to
accomplish a voluntary or involuntary dissolution, liquidation
or winding-up of the Company;
then the Company shall (A) in case of any such distribution or
subscription rights, at least 20 days prior to the date or expected date on
which the stock books of the Company shall close or a record shall be taken for
the determination of holders entitled to such distribution or subscription
rights, and (B) in the case of any such reorganization, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up,
at least 20 days prior to the date or expected date when the same shall be
consummated, cause written notice thereof to be mailed to the Holder at its
address as shown on the books of the Company. Such notice in accordance with the
foregoing clause (A) shall also specify, in the case of any such distribution or
subscription rights, the date or expected date on which the holders of Common
Shares shall be entitled thereto, and such notice in accordance with the
foregoing clause (B) shall also specify the date or
11
expected date on which the holders of Common Shares shall be entitled to
exchange their Common Shares for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up, as the case may be.
(e) Common Shares. For the purposes of this Section 4.2,
the term "Common Shares" shall mean (x) (i) the Common Shares or (ii) any other
class of stock resulting from successive changes or reclassifications of such
Common Shares consisting solely of changes in par value or from no par value to
par value, or from par value to no par value and (y) any securities having
economic terms similar to the Common Shares. In the event that at any time as a
result of an adjustment made pursuant to the provisions of Section 4.2(a), the
Holder shall become entitled to receive any shares of the Company other than
Common Shares, thereafter the number of such other shares so receivable upon
conversion of this Note shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Shares contained in Section 4.2(a), and the other
provisions of this Section 4.2 with respect to the Common Shares shall apply on
like terms to any such other shares.
(f) Fractional Shares. The Company shall not be required
to issue fractional Common Shares upon the conversion of the Note. If more than
one Investor Note shall be surrendered for conversion at one time by the same
Noteholder, the number of full Common Shares issuable upon conversion thereof
shall be computed on the basis of the aggregate principal amount so surrendered.
If any fractional interest in a Common Share would be deliverable upon the
conversion of this Note, the Company may pay, in lieu thereof, in cash the
Closing Price thereof as of the Business Day immediately preceding the date of
such conversion.
(g) Reservation of Shares. The Company shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
but unissued stock, for the purpose of effecting the conversion or redemption of
the Investor Notes, such number of its duly authorized Common Shares as shall
from time to time be sufficient for the conversion of all outstanding Investor
Notes (and all Additional Notes that may be issued if the Company were to pay
interest on the Investor Notes throughout the term thereof in Additional Notes
pursuant to Section 1.1 hereof) into Common Shares at any time. The Company
shall, from time to time and in accordance with the Bermuda law, cause the
authorized number of Common Shares to be increased if the aggregate of the
number of authorized Common Shares remaining unissued and the issued Common
Shares reserved for issuance in any other connection shall not be sufficient for
the conversion of all outstanding (and issuable as set forth above) Notes into
Common Shares at any time.
(h) Additional Conversion Price Adjustments. The Company
may make such reductions in the Conversion Price, in addition to those required
by Section 4.2, as it considers to be advisable to avoid or diminish any income
tax to holders of Common Shares or rights to purchase Common Shares resulting
from any dividend or distribution of stock (or rights to acquire stock) or from
any event treated as such for income tax purposes. The Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days, the reduction is irrevocable during the period and
the Board of Directors of the Company shall have made a determination that such
reduction would be in the best interest of
12
the Company, which determination shall be conclusive. Whenever the Conversion
Price is reduced pursuant to the preceding sentence, the Company shall mail to
the Holder a notice of the reduction at least 15 days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period it will be in effect.
Section 4.3. Total Equity Value. (a) The Conversion Price for
purposes of Section 4.1(c)(ii) shall be the result of a fraction, (x) the
numerator of which is the sum of the amounts determined by multiplying the
portion of the Total Equity Value allocated to each Tranche by the Tranche C.P.
of such Tranche, up to and including the Tranche that includes the Total Equity
Value, divided by (y) the Total Equity Value. All calculations of the Conversion
Price under this Section 4.3 shall be made to the nearest cent. For greater
certainty, the formula is set forth below, and Schedule A to this Note shows the
Tranche, Tranche CP and Conversion Price at Total Equity Value ranging from
$100,000,000 to $800,000,000.
SumProduct (1) (Tranches; Conversion Price)
__________________________________________
Total Equity Value
(1) Sum Product = Multiply each Tranche by its respective
Tranche C.P. and add the totals.
(b) At any time that a Conversion Price must be
determined, the "Total Equity Value" shall be determined as follows:
(i) The Board of Directors shall make a
reasonable, good-faith determination of the Total Equity Value
in accordance with paragraph (vi) below and shall submit such
determination (the "Board Determination") for the approval of
the Noteholders. The Total Equity Value shall be deemed to be
the amount so determined by the Board if such amount is
approved by the Majority Noteholders.
(ii) If the Majority Noteholders do not approve
the Board Determination, then the Board of Directors, on the
one hand, and the Noteholders, on the other hand, shall
promptly commence good-faith negotiations to arrive at a joint
determination of the Total Equity Value. If the Board and the
Majority Noteholders agree to a determination of the Total
Equity Value, then the Total Equity Value shall be deemed to
be the amount so agreed.
(iii) If the Board of Directors and the Majority
Noteholders do not arrive at a joint determination of the
Total Equity Value within ten days of delivery by the Board of
Directors to the Noteholders or by any Noteholder to the Board
of Directors, as applicable, of written notice of the
occurrence of an event giving rise to conversion or exchange,
then no later than the 15th day after delivery of the written
notice referenced in this clause (iii), the Board of Directors
and the Majority Noteholders shall refer the matter to an
independent valuation expert to be selected by mutual consent
of the Board of Directors and the Majority Noteholders. If the
independent valuation expert shall not have been agreed upon
by such 15th day, then each of the Board of Directors and the
Majority
13
Noteholders shall, by the twentieth day after delivery of the
written notice referenced in this clause (iii) select an
independent valuation expert and instruct such expert to
agree, no later than the twenty-fifth day following delivery
of such notice, with the expert selected by the other party on
a third independent valuation expert which shall perform the
valuation hereunder. If any party shall fail to select an
independent valuation expert and to instruct such expert as
required by the immediately preceding sentence, then the
independent valuation expert shall be the independent
valuation expert selected by the other party. The
determination of the independent valuation expert as provided
in this clause (iii) shall be final and binding on the Company
and the Holder and all fees and expenses of such expert shall
be borne by the Company.
(iv) If the circumstance giving rise to a right
of conversion by Noteholders or exchange by the Company is a
Liquidity Event of the nature set forth in clause (5) of the
definition of "Liquidity Events," the Total Equity Value shall
be determined (by agreement of the Board of Directors and the
Majority Noteholders or by the independent valuation expert,
as applicable) with reference to the public offer price for
the Common Shares, unless the public offer price does not
reasonably reflect the equity value of the Company.
(v) If a Trading Market exists, the Total Equity
Value shall be determined with reference to the market value
of the Common Shares on the Trading Market, unless such market
value does not reasonably reflect the equity value of the
Company due to the lack of a sufficient volume of trading
activity on such Trading Market or otherwise.
(vi) Negotiations and determination (in each case
on behalf of the Company) of Total Equity Value shall be
undertaken by the Independent Directors.
14
Section 4.4. Delay in Calculation of Conversion Price. Subject
to Section 4.1(c)(ii), Section 5.4 and Section 6.1(f), in the event that the
Holder desires to convert this Note at a time when the Conversion Price, as
opposed to the Base Conversion Price, is in effect, and at that time the
Conversion Price has not been finally determined pursuant to this Article 4 (the
"time of price uncertainty"), then the Holder may at its option convert this
Note at the Company's proposed Conversion Price and continue to participate with
the Noteholders (as if this Note had not been converted) in any negotiation with
the Company concerning the final Conversion Price and in any determination of
the Majority Noteholders with respect thereto. In such event, the Holder will be
entitled to receive from the Company, as soon as practicable following final
determination of the Conversion Price, such number of additional Common Shares
(and cash in lieu of fractional shares), if any, as such Holder would have been
issued had such Holder converted this Note immediately after such determination.
The Company shall provide the Holder with its proposed Conversion Price at any
time of price uncertainty promptly upon request of the Holder.
ARTICLE 5
REDEMPTION OF SECURITIES
Section 5.1. Redemption. This Note shall not be redeemable at
the option of the Company prior to April 21, 2013. On or after such date, this
Note along with all other Investor Notes shall be redeemable at the option of
the Company, in whole and not in part, on not less than 20 nor more than 40 days
prior notice, in cash by wire transfer to a U.S. dollar account maintained by
the Holder with a bank in the United States designated in writing by the Holder
at 100% of the principal amount, plus accrued and unpaid interest to the
Redemption Date (the "Redemption Price"); provided, that in the event of a
Change of Control prior to or in connection with any such optional redemption,
the Redemption Price will be the greater of the price set forth above and the
Change of Control Put Price. The giving of a notice of optional redemption will
not terminate the right of the Holder to convert this Note into Common Shares at
any time prior to the effectiveness of such optional redemption.
Section 5.2. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 20 nor more than 40 days prior to the
Redemption Date, to the Holder at the Holder's address appearing in the
Register.
All notices of redemption shall state:
(i) the date on which the Note will be redeemed
(the "Redemption Date");
(ii) that on the Redemption Date the Redemption
Price will become due and payable in respect of this Note and
all other Investor Notes, the amount of the Redemption Price,
and that interest thereon will cease to accrue on and after
said date;
15
(iii) the place or places (which shall in no event
be outside the continental United States) where the Note is to
be surrendered for payment of the Redemption Price; and
(iv) that from and after the date on which such
notice is first mailed or delivered, and until the Redemption
Date, the Holder shall be entitled to convert this Note, the
then-applicable Conversion Price, and a description of the
procedures required pursuant to Article 4 hereof to convert
this Note.
Section 5.3. Notes Payable on Redemption Date. A notice of
redemption having been given as aforesaid, unless converted, this Note shall on
the Redemption Date become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price) shall cease to bear interest. Upon surrender of
this Note for redemption in accordance with said notice, this Note shall be paid
by the Company at the Redemption Price.
If this Note is called for redemption and the Redemption Price
for the Note is not paid in full on the Redemption Date upon surrender thereof
for redemption, then the Redemption Date shall be deemed not to have occurred
and in that case (x) the Company will be required to comply with all provisions
of this Article 5 in order to redeem this Note as if the notice required by this
Section 5.3 had not been delivered, (y) all payments of the Redemption Price
shall be allocated first to any accrued and unpaid interest to the Redemption
Date and then to the unpaid principal amount of this Note and (z) the unpaid
principal amount of this Note shall, until paid, continue to bear interest at
the rate prescribed herein, and all other terms and conditions of this Note
shall continue to apply.
Section 5.4. Determination of Conversion Price. If a notice of
redemption has been given prior to final determination of the Conversion Price
pursuant to Section 4.3 hereof, the Conversion Price shall be deemed to be the
Base Conversion Price, as adjusted pursuant to Section 4.2 hereof.
ARTICLE 6
CHANGE OF CONTROL OFFER
Section 6.1. Change of Control Offer. (a) Upon a Change of
Control, the Holder shall have the right to require that the Company repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of the Note at
a purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest thereon, if any, to the date of repurchase (the
"Change of Control Put Price") (subject to the right of the Holder to receive
interest due on the relevant interest payment date) in accordance with the terms
contemplated in Section 6.1(b).
(b) Within five Business Days following any Change of
Control, and if the Conversion Price has not yet been determined pursuant to
Section 4.3 hereof again within five Business Days following such final
determination (including such determination pursuant to Section 6.1(f)), the
Company shall mail a notice to the Holder (the "Change of Control Offer")
stating:
16
(i) that a Change of Control has occurred and
that the Holder has the right to require the Company to
purchase all or a portion (equal to $1,000 or an integral
multiple thereof) of the Note at a purchase price in cash
equal to 101% of the principal amount thereof, plus accrued
and unpaid interest to the date of repurchase (subject to the
right of the Holder to receive interest due on the relevant
interest payment date if prior to the date of repurchase);
(ii) the circumstances and relevant facts and
financial information regarding such Change of Control;
(iii) the repurchase date (which shall be no
earlier than 30 days (or such shorter time period as may be
permitted under applicable laws, rules and regulations) nor
later than 60 days from the date such notice is mailed);
(iv) the instructions reasonably determined by
the Company, consistent with this Section 6.01, that the
Holder must follow in order to have this Note purchased;
(v) that the Holder has the right to convert
this Note, at the then-applicable Conversion Price and
including a statement of such price and a description of the
procedures required pursuant to Article 4 hereof to convert
this Note; and
(vi) if applicable, that the final Conversion
Price has not yet been determined, and that upon such
determination the Company will make another Change of Control
Offer pursuant to this Article 6.
(c) If the Holder elects to have the Note purchased, the
Holder shall be required to (1) complete and manually sign the notice on the
back of this Note (or complete and manually sign a facsimile of such notice) and
deliver such notice to the Company and (2) surrender the Note to the Company at
the address specified in the notice at least three Business Days prior to the
purchase date. The Holder shall be entitled to withdraw its election if the
Company receives not later than one Business Day prior to the purchase date a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note which was delivered for purchase by the
Holder and a statement that the Holder is withdrawing his election to have the
Note purchased. The Company will issue to the Holder a new Note equal in
principal amount to such unpurchased portion.
(d) On the purchase date, the Note, or any portion
thereof, purchased by the Company under this Section 6.1 shall be cancelled, and
the Company shall pay the purchase price determined pursuant to Section
6.1(b)(i) to the Holder.
(e) The Company shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of the Note
pursuant to this Section 6.1. To the extent that the provisions of any
applicable securities laws or regulations require the Company to act in a manner
that conflicts with provisions of this Note relating to Change of Control
Offers, the
17
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 6.1 by
virtue thereof.
Notwithstanding the foregoing, if the final
Conversion Price shall not have been determined within 60 days of the Change of
Control, the Conversion Price shall be the Base Conversion Price.
ARTICLE 7
EVENTS OF DEFAULT
Section 7.1. Events of Default. The following shall be Events
of Default:
(a) the Company or any Guarantor defaults in any payment
of interest on any Investor Note, and such default continues for a period of 3
days;
(b) the Company or any Guarantor (i) defaults in the
payment of the principal of any Investor Note when the same becomes due and
payable at its Maturity Date, upon required redemption or repurchase, upon
declaration or otherwise, or (ii) fails to redeem or purchase Notes when
required pursuant to the terms hereof;
(c) the Company or any Guarantor fails to comply with
Article 4, Article 6 or Section 8.3 hereof;
(d) the Company or any Guarantor fails to comply with any
of its covenants in this Note or any Transaction Document (other than those
referred to in paragraphs (a), (b) or (c) above) and such failure continues for
60 days after written notice of such failure shall have been delivered to the
Company by a Noteholder or the Security Trustee;
(e) the Company or any Subsidiary pursuant to or within
the meaning of any Bankruptcy Law or otherwise shall be liquidated, dissolved,
adjudicated insolvent, or shall fail to pay, or shall admit in writing its
inability to pay its debts as they mature, or shall make a general assignment
for the benefit of creditors; or the Company or any Subsidiary shall apply for
or consent to the appointment of any receiver, custodian, trustee or similar
officer for it or for all or any substantial part of its property, or such
receiver, custodian, trustee or similar officer shall be appointed without the
application or consent of the Company or any Subsidiary; or the Company or any
Subsidiary shall institute (by petition, application, answer, consent or
otherwise), or take any action to authorize the institution of, any bankruptcy,
insolvency, reorganization, dissolution, liquidation or similar proceeding
relating to the Company or any Subsidiary under the laws of any jurisdiction or
takes any comparable action under any foreign laws relating to insolvency; or
any such proceeding shall be instituted (by petition, application or otherwise)
against the Company or any Subsidiary and such proceeding shall not be dismissed
within 60 days after being instituted;
(f) (i) any Security Document or any security interest
granted thereby shall be held in any judicial proceeding to be unenforceable or
invalid, or not perfected, or shall cease or fail for any reason to be in full
force and effect or to create or constitute a security interest with the
priority and effect required under the Security Trust Deed and such default or
failure
18
continues for 10 days after written notice, or (ii) the Company or any
Guarantor, or any Person acting on behalf of such Guarantor, shall deny or
disaffirm its obligations under this Note or any Security Document;
(g) A representation or warranty made or repeated by the
Company or any Guarantor in or in connection with this Note or any Security
Document or in any certificate or statement delivered by or on behalf of the
Company or any Guarantor under or in connection with this Note or any Security
Document is incorrect in any material respect when made or deemed to have been
made or repeated;
(h) The Company and its Subsidiaries (taken as a whole)
cease to carry on all or a substantial part of its business;
(i) The Company or any Subsidiary (x) sells or otherwise
transfers or disposes of, or abandons, the Network or any material part of it,
or (y) ceases to have good and marketable title in fee simple to, or have valid
rights to lease or otherwise use, all items of real and personal property that
are material to the Network, in each case free and clear of all Security
Interests (other than Security Interests in favor of the Security Trustee as
provided under the Security Documents), claims and defects and imperfections of
title except such as do not materially interfere with the use made and proposed
to be made of such Network under the Viatel Business Plan;
(j) Any litigation, arbitration or administrative
proceedings of or before any court, arbitral body or agency have been started
against the Company or any Subsidiary where there is a reasonable likelihood of
an adverse outcome to the Company or any Subsidiary where that outcome is of a
nature which would have a Material Adverse Effect;
(k) All or a material part of the undertakings, assets,
rights or revenues of, or shares or other ownership interests in, the Company or
any material Subsidiary are seized, expropriated, nationalised or otherwise
compulsory acquired by or under the authority of any government or government
entity; or
(l) Prior to the Majority Conversion Date, the Company
shall take or permit any of its Subsidiaries to take any action that would
require adjustment pursuant to Section 4.2 unless (x) no agreement is necessary
pursuant to the definition of Fair Market Value to effect such adjustment or (y)
prior to the effective time of such action an agreement has been reached in good
faith pursuant to that definition.
Section 7.2. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default (other than an Event of Default specified in
Section 7.1(e) with respect to the Company) occurs and is continuing, then and
in every such case the Majority Noteholders may declare the principal of, and
all accrued and unpaid interest under, all Investor Notes, including this Note,
to be due and payable immediately, by a notice in writing to the Company, and
upon any such declaration such principal and interest shall become due and
payable immediately. If an Event of Default specified in Section 7.1(e) with
respect to the Company occurs, the principal of and interest on this Note shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of any Holders.
19
Notwithstanding any of the foregoing, at any time after such a
declaration of acceleration has been made and before a judgment or decree for
payment of the money due has been obtained, the Majority Noteholders may rescind
and annul such declaration and its consequences if it so notifies the Company in
writing of its desire to do so. No such rescission and annulment shall affect
any subsequent default or impair any right consequent thereon.
ARTICLE 8
COVENANTS
Section 8.1. Payment of Notes. The Company shall promptly pay
the principal of and interest on this Note on the dates and in the manner
provided herein. The Company shall, to the extent lawful, pay interest on
overdue principal and overdue installments of interest to the extent and in the
manner set forth in Section 1.1(g) of this Note.
Section 8.2. Information requirements. The Company shall
comply with Sections 4.2 and 4.3 of the Shareholders Agreement.
Section 8.3. Compliance with Bye-Laws. Prior to the Majority
Conversion Date, the Company shall, and shall cause all of its Subsidiaries to,
comply with all of the terms and conditions of Section 76A and Schedule 2 of the
Amended Bye-Laws.
Section 8.4. Compliance Certificate. The Company shall deliver
to the Holder within 120 days after the end of each fiscal year of the Company
an Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto.
ARTICLE 9
DEFINITIONS
Section 9.1. Definitions. The following terms shall have the
meanings set forth below:
"Additional Notes" means additional 8% Convertible Senior
Secured Notes due 2014, having terms and conditions identical to those of this
Note, and which are issued in face amount equal to interest that would otherwise
be payable in cash on this Note or on such Notes or any other Investor Note.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly,
20
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Amended Bye-Laws" means the Bye-Laws of the Company, as
amended and restated in the form attached as EXHIBIT A to the Purchase
Agreement.
"Bankruptcy Law" means Title 11, United States Code, or any
similar Federal, state or foreign law for the relief of debtors.
"Base Conversion Price" has the meaning set forth in Section
4.1(c)(i).
"Board of Directors" means the Board of Directors or any
committee thereof duly authorized to act on behalf of the Board of Directors.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares,
partnership, membership or other interests, participations or other equivalents
of or interests in (however designated) equity of such Person, including any
Preferred Stock (but excluding any debt securities convertible into such equity)
and any rights to purchase, warrants, options or similar interests with respect
to the foregoing.
"Change of Control" means the occurrence (x) of a Liquidity
Event, (y) of the adoption of a plan relating to the liquidation or dissolution
of the Company, or (z) at any time following the occurrence of a Liquidity
Event, of any of the following events:
(a) (i) any "person" (as such term is used in Section
13(d)(3) of the Exchange Act), other than one or more Permitted Holders, becomes
the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 40% of the total voting power of the Voting Stock of
the Company, whether as a result of issuance of securities of the Company, any
merger, consolidation, liquidation or dissolution of the Company, any direct or
indirect transfer of securities by any Permitted Holder or otherwise, and (ii)
the Permitted Holders "beneficially own" (as defined in clause (i) above),
directly or indirectly, in the aggregate a lesser percentage of the total voting
power of the Voting Stock of the Company, than such other person and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors; or
(b) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors (together with any new directors or members of such governing body, as
the case may be, whose designation or election to such Board of Directors, or
whose nomination for election by the shareholders of the Company, (x) was
approved by a vote of a majority of the directors of the Company then still in
office who were either directors or members of such governing body, as the case
may be, at the beginning of such period or whose election or nomination for
election was previously so approved or (y) was effected in accordance with
Sections 83A, 83B and 83C of the Amended Bye-Laws), cease for any reason to
constitute a majority of the Board of Directors, then in office; or
21
(c) the merger or consolidation of the Company with or
into another Person or the merger of another Person with or into the Company, or
the sale of all or substantially all the assets of the Company to another Person
(other than a Person that is controlled by the Permitted Holders), and, in the
case of any such merger or consolidation, the securities of the Company that are
outstanding immediately prior to such transaction and which represent 100% of
the aggregate voting power of the Voting Stock of the Company are changed into
or exchanged for cash, securities or property, unless pursuant to such
transaction such securities are changed into or exchanged for, in addition to
any other consideration, securities of the surviving Person or transferee that
represent immediately after such transaction, at least a majority of the
aggregate voting power of the Voting Stock of the surviving Person or transferee
or a Person controlling such surviving Person or transferee.
"Change of Control Offer" has the meaning set forth in Section
6.1(b).
"Change of Control Put Price" has the meaning set forth in
Section 6.1(a).
"Closing Date" means April 21, 2004.
"Common Shares" means the Common Shares of the Company, par
value $0.01 per share.
"Company" has the meaning set forth in the preamble.
"Conversion Date" has the meaning provided in Section 4.1(d).
"Conversion Price" has the meaning set forth in Section
4.1(c).
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Equity Incentive Plan" has the meaning set forth in the
Purchase Agreement.
"Event of Default" has the meaning set forth in Section 7.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Time" has the meaning set forth in Section
4.2(a)(vii).
"Executive Agreement" means that employment agreement dated as
of April 21, 2004, between ▇▇▇▇ ▇▇▇▇▇ and the Company in the form attached as
EXHIBIT B to the Purchase Agreement.
"Fair Market Value" of any asset or property mean the fair
market value of the same (a) at any time prior to the Majority Conversion Date,
as agreed to in good faith by the Independent Directors and the Majority
Noteholders and (b) at any time on or after the Majority Conversion Date, as
determined in good faith by the Board, whose good faith determination shall be
conclusive and described in a resolution of the Board.
22
"Fully-Diluted Shares" means the number of Common Shares
issued and outstanding assuming the exercise of all outstanding options,
warrants and rights to acquire, and the conversion of any securities convertible
or exercisable into, Common Shares (including all Investor Notes), whether or
not then vested, convertible or exercisable.
"Fundamental Change" means, with respect to the Company, the
occurrence of any transaction to which the Company is a party (including without
limitation any recapitalization or reclassification of the Common Shares (other
than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination of the
Ordinary), any consolidation of the Company with, or merger of the Company into,
any other person, any merger of another person into the Company (other than a
merger which does not result in a reclassification, conversion, exchange or
cancellation of outstanding Common Shares of the Company) or any sale or
transfer of all or substantially all of the assets of the Company or any
compulsory share exchange) pursuant to which all Common Shares are converted
into or exchangeable for the right to receive other securities, cash or other
property.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any indebtedness of any other
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for purposes of assuring
in any other manner the obligee of such indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor" means any Subsidiary that has issued a Guarantee
of this Note under the Security Trust Agreement.
"Holder" has the meaning set forth in the preamble, as further
described in Section 2.1.
"Independent Directors" means a committee of the Board
consisting solely of "independent directors" as defined in Section 10A(m) of the
Exchange Act.
"Interest Payment Date" has the meaning set forth in Section
1.1(b).
"Investor Group" means each Purchaser (as defined in the
Purchase Agreement) and each of their respective Affiliates.
"Investor Notes" means this Note and each other 8% Convertible
Senior Secured Note due 2014 of the Company on the date of issuance set forth
above pursuant to the Purchase Agreement, as well as the Additional Notes and
the 8% Convertible Senior Secured Notes due 2014 of the Company issued pursuant
to the Executive Agreement.
23
"Legal Holiday" is a Saturday, a Sunday or other day on which
banking institutions are not open for general business in London or New York.
"Liquidity Event" means the occurrence of any of the following
events:
(1) (A) if any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders
or members of the Investor Group, is or becomes the beneficial owner (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person shall
be deemed to have "beneficial ownership" of all shares that any such person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time or upon the occurrence of an event, including all
Common Shares issuable upon conversion of the Investor Notes), directly or
indirectly, of more than 50% of the total voting power of the Company (or its
successor by merger, consolidation or purchase of all or substantially all of
its assets) (for the purpose of this clause, such person shall be deemed to
beneficially own any voting stock of the Company held by an entity, if such
person "beneficially owns" (as defined above), directly or indirectly, more than
50% of the voting power of such entity) and (B) the members of the Investor
Group beneficially own (as defined above), directly or indirectly, in the
aggregate a lesser percentage of the total voting power of the Company (or such
successor) than such person.
(2) if:
(A) any "person" (as defined above)
(x) other than any member of the Investor Group,
or
(y) if, no later than 60 Business Days following
the Event Date (as defined below), the Board of
Directors (with the Directors that are affiliated
with Noteholders abstaining) notifies the
Noteholders that it desires such event to be a
Liquidity Event, including any member of the
Investor Group,
is or becomes the beneficial owner (as defined
above, except that solely for purposes of this
clause (2) such person shall be deemed not to
have "beneficial ownership" of any shares that
any such person has the right to acquire, whether
such right is exercisable immediately or only
after the passage of time or upon the occurrence
of an event, through conversion of the Investor
Notes), directly or indirectly, of more than 35%
of the outstanding Common Shares of the Company
(or its successor by merger, consolidation or
purchase of all or substantially all of its
assets) (for the purpose of this clause, such
person shall be deemed to beneficially own any
voting stock of the Company held by an entity, if
such person "beneficially owns" (as defined
above), directly or indirectly, more than 35% of
the voting power of such entity) (the date of
such event or occurrence being referred to herein
as the "Event Date"); and
24
(B) in either such case, the Majority Noteholders
agree in writing (within 60 Business Days
following receipt of written notice of the Event
Date, together with notice of the proposed
Conversion Price) that such event shall be deemed
a Liquidity Event.
(3) the adoption by the shareholders of the Company of a plan
or proposal for the liquidation or dissolution of the Company, provided that the
Majority Noteholders agree in writing (no later than 20 Business Days following
receipt of written notice of adoption of such plan or proposal) that such event
shall be deemed a Liquidity Event;
(4) consummation of a scheme of arrangement, reorganization,
merger, statutory share exchange or consolidation or similar corporate
transaction involving the Company or any of its Subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Company and each of
its Subsidiaries, taken as a whole, or the acquisition of the assets or stock of
another entity by the Company or any of its Subsidiaries (each, a "Business
Combination"), in each case unless, following such Business Combination, (A) all
or substantially all of the individuals and entities that were the beneficial
owners (as defined in clause (1) above) of the Common Shares (or of options,
warrants, rights or other securities convertible into or exercisable for Common
Shares) of the Company immediately prior to such Business Combination
beneficially own (as defined in clause (1) above), directly or indirectly, more
than 67% of the then-outstanding voting power of the corporation resulting from
such Business Combination in substantially the same proportion as their
ownership immediately prior to such Business Combination of the outstanding
Common Shares (or options, warrants, rights or other securities convertible into
or exercisable for Common Shares) of the Company and (B) no person (excluding
any corporation resulting from such Business Combination or any employee benefit
plan or related trust of the Company or such corporation resulting from such
Business Combination) beneficially owns (as defined in clause (1) above),
directly or indirectly, 20% or more (on a fully-diluted basis) of the voting
power of the corporation resulting from such Business Combination, except if
such Person owned 20% or more (on a fully diluted basis) of such voting power
prior to the Business Combination.
(5) if the Company effects a public offering for cash of an
amount of its Common Shares equal to at least 20% of the Common Shares of the
Company and, following such offering, the Common Shares of the Company are
registered with the U.S. Securities and Exchange Commission pursuant to the
Exchange Act or traded either on a U.S. or foreign securities exchange or in the
National Association of Securities Dealers Automated Quotation System.
(6) there occurs an Event of Default or an Event of Default is
threatened by the Company, provided that the Majority Noteholders agree in
writing (within 20 Business Days following receipt of written notice thereof)
that such event shall be deemed a Liquidity Event.
"Majority Conversion Date" means the date that a majority in
principal amount of the Investor Notes issued on the Closing Date has been
converted into Common Shares.
"Majority Noteholders" means, at any time, the Noteholders
holding a majority of the principal amount of the Investor Notes outstanding at
such time.
25
"Market Price" means, with respect to a particular security,
on any given day, the average of the highest and lowest reported sale prices
regular way or, in case no such reported sales take place on such day, the
average of the highest asked and lowest bid prices regular way, in either case
on the principal national securities exchange on which the applicable security
is listed or admitted to trading, or if not listed or admitted to trading on any
national securities exchange, (i) the average of the highest and lowest sale
prices for such day reported by the Nasdaq Stock Market if such security is
traded over-the-counter and quoted in the Nasdaq Stock Market and a Trading
Market exists, or (ii) if such security is so traded, but not so quoted, and a
Trading Market exists, the average of the highest reported asked and lowest
reported bid prices of such security as reported by the Nasdaq Stock Market or
any comparable system, or (iii) if such security is not listed on the Nasdaq
Stock Market or any comparable system, and a Trading Market exists, the average
of the highest asked and lowest bid prices as furnished by two members of the
National Association of Securities Dealers, Inc. selected from time to time by
the Company for that purpose. If such security is not listed and traded in a
manner that the quotations referred to above are available for the period
required hereunder, or a Trading Market otherwise does not exist, the Market
Price per share of Common Shares shall be derived by dividing the Total Equity
Value (as determined as set forth in Section 4.3) at such time by the total
number of Fully-Diluted Shares outstanding at such time.
"Material Adverse Effect" means a material adverse effect on
the assets, liabilities, business, condition (financial or otherwise), results
of operations or prospects of the Company and its Subsidiaries taken as a whole,
or any other circumstance that in any manner would be expected to materially
adversely affect the interests of the Holder in the Note.
"Maturity Date" has the meaning set forth in the preamble.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.
"Network" means the telecommunications network in Belgium,
France, Germany, the Netherlands, Switzerland, United Kingdom and the United
States operated or to be operated by the Company and its Subsidiaries (including
all apparatus, equipment and telecommunications systems of every description
which is installed and operated in connection therewith).
"Note Documents" means this Note, the Security Trust
Agreement, and the Security Documents.
"Noteholders" means all registered owners of the Investor
Notes.
"Note" means this Note, as amended, supplemented, extended,
restated, renewed, replaced, refinanced or otherwise modified, in each case from
time to time and whether in whole or in part..
"Obligations" means all obligations of the Company and the
Guarantors under this Note and the other Note Documents, including obligations
to the Security Trustee, whether for payment of principal of or interest on this
Note and all other monetary obligations of the Company and the Guarantors under
this Note and the other Note Documents, whether for fees, expenses,
indemnification or otherwise.
26
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company. "Officer" of a Guarantor has a correlative meaning.
"Officers' Certificate" means a certificate signed by two
Officers of each Person issuing such certificate. For the avoidance of doubt,
any Officers' Certificate to be delivered by the Company pursuant to this Note
shall be signed by two Officers of the Company.
"Permitted Holders" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and its Affiliates
and any Person acting in the capacity of an underwriter in connection with a
public or private offering of the Company's Capital Stock.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
"Purchase Agreement" means the Investment and Note Purchase
Agreement, dated as of April 21, 2004, by and among the Company, the Purchasers
and the Special Share Purchaser (as such terms are defined therein).
"Purchased Shares" has the meaning set forth in Section
4.2(a)(vii).
"Qualified Shareholder" means each Person that holds Common
Shares acquired upon conversion of an Investor Note.
"Redemption Date" has the meaning set forth in Section 5.2(i).
"Redemption Price" has the meaning set forth in Section 5.1.
"Reference Date" means, with respect to any dividend or other
distribution, the Trading Day prior to the date on which the Common Shares first
trades in its principal market with a Market Price that reflects the absence of
a right to receive such dividend or other distribution or, if a Trading Market
does not exist, means the date set in good faith by two-thirds vote of the Board
of Directors.
"Register" has the meaning set forth in Section 2.1.
"Registration Rights Agreement" means the Registration Rights
Agreement dated April 21, 2004 by and among the Company and the other parties
thereto.
"Securities Act" means the Securities Act of 1933, as amended.
27
"Security Documents" means the Security Trust Agreement and
any mortgages, charges, assignments or other Security Interests from time to
time granted by the Company or the Guarantors to the Security Trustee pursuant
to the Security Trust Agreement or any other such security document.
"Security Interest" means any mortgage, sub-mortgage, security
assignment, standard security, charge, sub-charge, pledge, lien, right of
set-off or other encumbrance or security interest of any kind, however created
or arising.
"Security Trust Agreement" means the Security Trust and
Intercreditor Deed, dated as of April 21, 2004, by and among the Company, the
Guarantors, the Security Trustee and the Noteholders.
"Security Trustee" means The Law Debenture Trust Corporation
p.l.c. and its successors and assigns under the Security Trust Agreement.
"Shareholders Agreement" means the Shareholders Agreement
dated as of April 21, 2004 among the Company and the other parties thereto.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total Voting
Stock is at the time owned or controlled, directly or indirectly, by (a) such
Person, (b) such Person and one or more Subsidiaries of such Person or (c) one
or more Subsidiaries of such Person.
"Time of Price Uncertainty" has the meaning set forth in
Section 4.4.
"Total Equity Value" means, as of any date of determination,
the total equity value of the Company on such date determined in accordance with
the procedure set forth in Section 4.3 (it being understood and agreed that the
equity value of the Company includes the value of all outstanding equity and all
equity issuable upon conversion, exercise or exchange of outstanding
convertible, exercisable or exchangeable securities that are in-the-money, net
of all debt and convertible debt securities that are at or not in-the-money).
"Trading Day" means a day on which securities are traded or
quoted on the national securities exchange or quotation system or in the
over-the-counter market used to determine the Market Price.
"Trading Market" shall be deemed to exist at such time as the
Common Shares are (i) registered under the Exchange Act and (ii) listed on the
New York Stock Exchange or traded on the NASDAQ Standard 3 Marketplace or
admitted to the list maintained by the relevant Governmental Authority or to any
other approved exchange or recognized overseas investment exchange (within the
meanings thereof given in Part VI and Part XV(III of the Financial Services and
Markets Act 2000 respectively), or are otherwise traded in a manner that has
been determined to be a Trading Market by the Board of Directors of the Company
with the consent of either (x) prior to the Majority Conversion Date, holders of
a majority of the principal amount of the Notes issued on the Closing Date, or
(y) following the Majority Conversion Date, holders of a majority of the Common
Shares of the Company held by Qualified Shareholders.
28
"Tranche" means a level of Total Equity Value set forth on
Schedule A.
"Tranche C.P." means, for any level of Total Equity Value set
forth on Schedule A, the number specified in the column labeled "Tranche C.P."
for such level.
"Transaction Document" means the Investor Notes, the
Registration Rights Agreement, the Purchase Agreement, the Shareholders
Agreement and the Security Documents.
"transfer" has the meaning set forth in Section 2.2.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Viatel Business Plan" means the business plan of Company and
its Subsidiaries presented to the Investors (as defined in the Purchase
Agreement) on January 27, 2004, including any revised business plan approved by
the holder of the Special Share (as defined in the purchase Agreement).
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled at the time to vote in the election of
directors, managers or trustees thereof.
Section 9.2. Interpretation. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has
the meaning assigned to it in accordance with generally
accepted accounting principles;
(iii) references to "generally accepted accounting
principles" shall mean generally accepted accounting
principles in effect as of the time when and for the period as
to which such accounting principles are to be applied;
(iv) "or" is not exclusive;
(v) words in the singular include the plural,
and in the plural include the singular;
(vi) provisions apply to successive events and
transactions;
(vii) "including" means including without
limitation; and
(viii) any definition of or reference to any
agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or
otherwise modified.
29
ARTICLE 10
MISCELLANEOUS
Section 10.1. Notices. Any notice or communication to be given
according to the terms of this Note shall be governed by the terms and
conditions for the giving of notices under Section 9.04 of the Purchase
Agreement. Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
Section 10.2. No Recourse Against Others. A director, officer,
employee or shareholder, as such, of the Company shall not have any liability
for any obligations of the Company under this Note or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Noteholder
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of this Note.
Section 10.3. Amendment. The provisions of this Note may be
amended, modified or waived if the Majority Noteholders shall, by written
consent delivered to the Company, consent to such amendment, modification or
waiver; provided, however, that no such waiver shall extend to or affect any
covenant set forth herein except to the extent so expressly waived and, until
such waiver shall become effective, the obligations of the Company in respect of
any such covenant shall remain in full force and effect; and provided further
that no such amendment, modification or waiver (i) which would modify any
requirement hereunder that any particular action be taken by all of the
Noteholders, or by Noteholders of a specified percentage of the aggregate
principal amount of the outstanding Investor Notes, shall be effective unless
consented to by all of the Noteholders or by Noteholders of such specified
percentage, respectively, or (ii) which would extend the due date for, or reduce
the amount of, or form of, any payment of principal of or interest on any
Investor Note shall be made without the consent of the Noteholder of such
Investor Note. Any such amendment, modification or waiver consented to by the
Majority Noteholders shall be binding on all Noteholders.
Section 10.4. Governing Law; Jurisdiction; Waiver of Trial by
Jury. (a) This Note shall be construed in accordance with the internal laws of
the State of New York without regard to the conflicts of laws provisions
thereof. The Company hereby irrevocably submits to the jurisdiction of any court
of the State of New York located in the County of New York or the United States
District Court for the Southern District of the State of New York, any appellate
courts from any thereof (any such court, a "New York Court") or any court of the
United Kingdom located in London, or any appellate courts from any thereof (any
such court, a "U.K. Court"), for the purpose of any suit, action or other
proceeding arising out of or relating to this Note or under any applicable
securities laws and arising out of the foregoing, which is brought by or against
the Company, and the Company hereby irrevocably agrees that all claims in
respect of any such suit, action or proceeding will be heard and determined in
any New York Court or U.K. Court. The Company hereby agrees not to commence any
action, suit or proceeding relating to this Note other than in a New York Court
except to the extent mandated by applicable law. The Company hereby waives any
objection that it may now or hereafter have to the venue of any such suit,
action or proceeding in any such court or that such suit, action or proceeding
was brought in an inconvenient court and agree not to plead or claim the same.
EACH PARTY TO THIS NOTE HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS NOTE
30
OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT THIS NOTE, OR THE TRANSACTIONS
RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS NOTE MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
(b) The submission to the jurisdiction referred to in the
preceding paragraph shall not limit the right of the Holder to take proceedings
against the Company in courts of any other competent jurisdiction nor shall the
taking of proceedings against the Company in any one or more jurisdictions
preclude the taking of proceedings against the Company in any other jurisdiction
(whether concurrently or not) if and to the extent permitted by applicable law.
(c) The Company agrees that the process by which any
suit, action or proceeding is begun in connection with this Note may be served
on it at its principal place of business in the United Kingdom for the time
being. If the Company ceases to have a principal place of business in the United
Kingdom, it shall immediately appoint a further person in the United Kingdom to
accept service of process on its behalf in such jurisdiction. Nothing contained
herein shall affect the right of the Company or the Holder to serve process in
any other manner permitted by law. In addition, the Company acknowledges and
agrees that (a) it has, by separate letter, irrevocably appointed CT Corporation
System, as its authorized agent upon which process may be served in any suit or
proceeding against the Company arising out of or relating to this Note or under
any securities laws of the United States or any state thereof and arising out of
the foregoing, (b) it has, prior to the date hereof, paid such agent an amount
in cash sufficient to procure such agent's services for eleven years from the
date hereof and (c) service of process upon such agent, and written notice of
said service to the Company by the person serving the same to the address
provided above, shall be deemed in every respect effective service of process
upon the Company in any such suit or proceeding. The Company agrees to take any
and all action as may be necessary to maintain such designation and appointment
of such agent in full force and effect for a period of at least eleven years
from the date of this Note.
Section 10.5. Successors. All agreements of the Company in
this Note shall bind its successor.
Section 10.6. Severability. If any one or more of the
provisions contained in this Note shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Note and such
provision shall be interpreted to the fullest extent permitted by the law;
provided that the Company and the Holder shall use their reasonable best efforts
to find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such provision.
31
Section 10.7. Headings, etc. The headings of the Articles and
Sections of this Note have been inserted for convenience of reference only, are
not to be considered a part hereof, and shall in no way modify or restrict any
of the terms or provisions hereof.
Section 10.8. Enforcement. The Company agrees to pay all fees
(including legal fees) and expenses which the Holder may reasonably incur as a
result of any contest by the Holder of the liability of the Company under any
provision of this Note in which a final and non-appealable decision or
settlement is made that the Company is liable to the Holder in substantially
such a manner as is claimed by the Holder.
Section 10.9. Specific Performance. The Company acknowledges
that the Holder would not have an adequate remedy at law for money damages in
the event that the terms of this Note were not performed in accordance with its
terms, and therefore agrees that the Holder shall be entitled to (in addition to
any other remedy to which the Holder may be entitled, at law or in equity)
injunctive relief, including specific performance, to enforce such obligations,
without the posting of any bond and if any action should be brought in equity to
enforce any of the provisions of this Note, the Company shall not raise the
defense that there is an adequate remedy at law.
Section 10.10. Non-Waiver; Remedies Cumulative. Holder shall
not, by any act of omission or commission, be deemed to waive any of its rights
or remedies hereunder unless such waiver be in writing and signed by ▇▇▇▇▇▇ and
then only to the extent specifically set forth therein; a waiver on one occasion
shall not, except as specifically set forth therein, be construed as continuing
or as a bar to or waiver of a right or remedy on any other occasion. All
remedies conferred upon Holder by this Note shall be cumulative and none is
exclusive, and such remedies may be exercised concurrently or consecutively at
Holder's option.
Section 10.11. Waiver. The Company hereby waives presentment
for payment, protest and demand, and, except as specifically set forth or
required herein or hereunder, notice of protest, intent, demand, dishonor and
nonpayment of this Note and all other notices of any kind.
Section 10.12. Assignment. This Note and the rights, duties
and obligations hereunder may not be assigned or delegated by the Company
without the prior written consent of the Holder.
Section 10.13. Entire Agreement. This Note and the agreements,
documents and instruments executed in connection herewith, constitutes the
entire agreement of the Company and the Holder with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements,
representations, understandings, negotiations and discussions between the
Company and the Holder, whether oral or written, with respect to the subject
matter hereof.
32
Section 10.14. Time of the Essence. Time is of the essence
with respect to all of the obligations and agreements specified in this Note.
VIATEL HOLDING (BERMUDA) LIMITED
By: __________________________
Name:
Title:
33
[FORM OF ASSIGNMENT]
The undersigned Holder, hereby * to_____________________ (herein called the
"Assignee"), ** interest of the undersigned in this Note, with the effect and
subject to the provisions set forth in this Note, such assignment to be effected
by delivery of this Note to the Company with this assignment properly completed
in accordance with the terms and conditions of this Note, such transfer or
assignment to become effective on, and not to be effective for any purpose
until, the Company has acknowledged such transfer or assignment and executed and
delivered a new Note to the (partial) Assignee registered in the name of the
(partial) Assignee (and, in the case of a partial assignment, a new Note to the
undersigned Holder).
Dated: ___________ _______________________________________________
Signature
(Use exact name of ▇▇▇▇▇▇ as shown on this Note)
Fill in for registration of new Note:
_____________________________________
_____________________________________
_____________________________________
Please print address of Assignee (including zip code)
The undersigned, [insert name of assignee], ▇▇▇▇▇▇ agrees to all of the terms
and provision of the Shareholders Agreement, and agrees to be bound thereby, and
agrees to execute any documents reasonably requested by the Company or the
Majority Noteholders to effect the foregoing.
_______________________________
Signature of Assignee
___________
* Insert, as appropriate, the words "transfers", "assigns", or followed
by a description of the obligation, "pledges as security for".
** Insert, as appropriate, the words "(100%) the entire" or, preceded by a
percentage less than 100% in parentheses, "a partial".
Notice of the foregoing assignment is hereby acknowledged and approved.
VIATEL HOLDING (BERMUDA) LIMITED
By _____________________________
Dated:_______________
[FORM OF CONVERSION NOTICE PURSUANT TO SECTION 4.1]
TO VIATEL HOLDING (BERMUDA) LIMITED:
The undersigned Holder of this Note hereby irrevocably exercises the
option to convert this Note into Common Shares of VIATEL HOLDING (BERMUDA)
LIMITED in accordance with the terms of this Note, and directs that the shares
and the Common Shares issuable and deliverable upon the conversion be issued and
delivered to the Holder hereof unless a different name has been indicated below.
If shares are to be issued in the name of a person other than the Holder, the
Holder will pay all transfer taxes payable with respect thereto.
[If conditional: This exercise is conditioned upon
______________________________________________________, and shall become
effective [immediately prior to] [at the same time as] [immediately following]
satisfaction of such condition.]
________________________________________________
Signature
(Use exact name of ▇▇▇▇▇▇ as shown on this Note)
Dated:_______________________
Fill in for registration
of shares and the Conversion Security:
_____________________________________
_____________________________________
_____________________________________
(Please print name and address,
including zip code)
_____________________________________
Social Security or other Taxpayer
Identification Number
[FORM OF OPTION OF HOLDER TO ELECT
PURCHASE PURSUANT TO SECTION 6.1 - CHANGE
OF CONTROL]
TO VIATEL HOLDING (BERMUDA) LIMITED:
The undersigned Holder hereby elects to have the Company repurchase [all] [ *
principal amount] of this Note pursuant to Section 6.1 of this Note.
Dated: ____________ _______________________________________________
Signature
(Use exact name of ▇▇▇▇▇▇ as shown on this Note)
* If Note to be repurchased in part, state the amount ($1,000 or integral
multiple thereof).
SCHEDULE A
CONVERSION PRICE CALCULATION CHART
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
100,000,000 100,000,000 0.75 0.75
101,000,000 1,000,000 0.76 0.75
102,000,000 1,000,000 0.78 0.75
103,000,000 1,000,000 0.79 0.75
104,000,000 1,000,000 0.81 0.75
105,000,000 1,000,000 0.82 0.75
106,000,000 1,000,000 0.83 0.75
107,000,000 1,000,000 0.85 0.75
108,000,000 1,000,000 0.86 0.75
109,000,000 1,000,000 0.88 0.76
110,000,000 1,000,000 0.89 0.76
111,000,000 1,000,000 0.90 0.76
112,000,000 1,000,000 0.92 0.76
113,000,000 1,000,000 0.93 0.76
114,000,000 1,000,000 0.95 0.76
115,000,000 1,000,000 0.96 0.76
116,000,000 1,000,000 0.97 0.77
117,000,000 1,000,000 0.99 0.77
118,000,000 1,000,000 1.00 0.77
119,000,000 1,000,000 1.01 0.77
120,000,000 1,000,000 1.03 0.77
121,000,000 1,000,000 1.04 0.78
122,000,000 1,000,000 1.06 0.78
123,000,000 1,000,000 1.07 0.78
124,000,000 1,000,000 1.08 0.78
125,000,000 1,000,000 1.10 0.79
126,000,000 1,000,000 1.11 0.79
127,000,000 1,000,000 1.13 0.79
128,000,000 1,000,000 1.14 0.79
129,000,000 1,000,000 1.15 0.80
130,000,000 1,000,000 1.17 0.80
131,000,000 1,000,000 1.18 0.80
132,000,000 1,000,000 1.20 0.81
133,000,000 1,000,000 1.21 0.81
134,000,000 1,000,000 1.22 0.81
135,000,000 1,000,000 1.24 0.82
136,000,000 1,000,000 1.25 0.82
137,000,000 1,000,000 1.27 0.82
138,000,000 1,000,000 1.28 0.82
139,000,000 1,000,000 1.29 0.83
140,000,000 1,000,000 1.31 0.83
141,000,000 1,000,000 1.32 0.84
142,000,000 1,000,000 1.34 0.84
143,000,000 1,000,000 1.35 0.84
144,000,000 1,000,000 1.36 0.85
145,000,000 1,000,000 1.38 0.85
146,000,000 1,000,000 1.39 0.85
147,000,000 1,000,000 1.41 0.86
A-1
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
148,000,000 1,000,000 1.42 0.86
149,000,000 1,000,000 1.43 0.86
150,000,000 1,000,000 1.45 0.87
151,000,000 1,000,000 1.46 0.87
152,000,000 1,000,000 1.48 0.88
153,000,000 1,000,000 1.49 0.88
154,000,000 1,000,000 1.50 0.88
155,000,000 1,000,000 1.52 0.89
156,000,000 1,000,000 1.53 0.89
157,000,000 1,000,000 1.54 0.90
158,000,000 1,000,000 1.56 0.90
159,000,000 1,000,000 1.57 0.91
160,000,000 1,000,000 1.59 0.91
161,000,000 1,000,000 1.60 0.91
162,000,000 1,000,000 1.61 0.92
163,000,000 1,000,000 1.63 0.92
164,000,000 1,000,000 1.64 0.93
165,000,000 1,000,000 1.66 0.93
166,000,000 1,000,000 1.67 0.94
167,000,000 1,000,000 1.68 0.94
168,000,000 1,000,000 1.70 0.94
169,000,000 1,000,000 1.71 0.95
170,000,000 1,000,000 1.73 0.95
171,000,000 1,000,000 1.74 0.96
172,000,000 1,000,000 1.75 0.96
173,000,000 1,000,000 1.77 0.97
174,000,000 1,000,000 1.78 0.97
175,000,000 1,000,000 1.80 0.98
176,000,000 1,000,000 1.81 0.98
177,000,000 1,000,000 1.82 0.99
178,000,000 1,000,000 1.84 0.99
179,000,000 1,000,000 1.85 1.00
180,000,000 1,000,000 1.87 1.00
181,000,000 1,000,000 1.88 1.01
182,000,000 1,000,000 1.89 1.01
183,000,000 1,000,000 1.91 1.02
184,000,000 1,000,000 1.92 1.02
185,000,000 1,000,000 1.94 1.03
186,000,000 1,000,000 1.95 1.03
187,000,000 1,000,000 1.96 1.04
188,000,000 1,000,000 1.98 1.04
189,000,000 1,000,000 1.99 1.05
190,000,000 1,000,000 2.00 1.05
191,000,000 1,000,000 2.02 1.06
192,000,000 1,000,000 2.03 1.06
193,000,000 1,000,000 2.05 1.07
194,000,000 1,000,000 2.06 1.07
195,000,000 1,000,000 2.07 1.08
196,000,000 1,000,000 2.09 1.08
197,000,000 1,000,000 2.10 1.09
198,000,000 1,000,000 2.12 1.09
A-2
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
199,000,000 1,000,000 2.13 1.10
200,000,000 1,000,000 2.14 1.10
201,000,000 1,000,000 2.16 1.11
202,000,000 1,000,000 2.17 1.11
203,000,000 1,000,000 2.19 1.12
204,000,000 1,000,000 2.20 1.12
205,000,000 1,000,000 2.21 1.13
206,000,000 1,000,000 2.23 1.13
207,000,000 1,000,000 2.24 1.14
208,000,000 1,000,000 2.26 1.14
209,000,000 1,000,000 2.27 1.15
210,000,000 1,000,000 2.28 1.16
211,000,000 1,000,000 2.30 1.16
212,000,000 1,000,000 2.31 1.17
213,000,000 1,000,000 2.33 1.17
214,000,000 1,000,000 2.34 1.18
215,000,000 1,000,000 2.35 1.18
216,000,000 1,000,000 2.37 1.19
217,000,000 1,000,000 2.38 1.19
218,000,000 1,000,000 2.40 1.20
219,000,000 1,000,000 2.41 1.20
220,000,000 1,000,000 2.42 1.21
221,000,000 1,000,000 2.44 1.22
222,000,000 1,000,000 2.45 1.22
223,000,000 1,000,000 2.47 1.23
224,000,000 1,000,000 2.48 1.23
225,000,000 1,000,000 2.49 1.24
226,000,000 1,000,000 2.51 1.24
227,000,000 1,000,000 2.52 1.25
228,000,000 1,000,000 2.53 1.25
229,000,000 1,000,000 2.55 1.26
230,000,000 1,000,000 2.56 1.27
231,000,000 1,000,000 2.58 1.27
232,000,000 1,000,000 2.59 1.28
233,000,000 1,000,000 2.60 1.28
234,000,000 1,000,000 2.62 1.29
235,000,000 1,000,000 2.63 1.29
236,000,000 1,000,000 2.65 1.30
237,000,000 1,000,000 2.66 1.31
238,000,000 1,000,000 2.67 1.31
239,000,000 1,000,000 2.69 1.32
240,000,000 1,000,000 2.70 1.32
241,000,000 1,000,000 2.72 1.33
242,000,000 1,000,000 2.73 1.34
243,000,000 1,000,000 2.74 1.34
244,000,000 1,000,000 2.76 1.35
245,000,000 1,000,000 2.77 1.35
246,000,000 1,000,000 2.79 1.36
247,000,000 1,000,000 2.80 1.36
248,000,000 1,000,000 2.81 1.37
249,000,000 1,000,000 2.83 1.38
A-3
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
250,000,000 1,000,000 2.84 1.38
251,000,000 1,000,000 2.86 1.39
252,000,000 1,000,000 2.87 1.39
253,000,000 1,000,000 2.88 1.40
254,000,000 1,000,000 2.90 1.41
255,000,000 1,000,000 2.91 1.41
256,000,000 1,000,000 2.93 1.42
257,000,000 1,000,000 2.94 1.42
258,000,000 1,000,000 2.95 1.43
259,000,000 1,000,000 2.97 1.43
260,000,000 1,000,000 2.98 1.44
261,000,000 1,000,000 3.00 1.45
262,000,000 1,000,000 3.01 1.45
263,000,000 1,000,000 3.02 1.46
264,000,000 1,000,000 3.04 1.46
265,000,000 1,000,000 3.05 1.47
266,000,000 1,000,000 3.06 1.48
267,000,000 1,000,000 3.08 1.48
268,000,000 1,000,000 3.09 1.49
269,000,000 1,000,000 3.11 1.49
270,000,000 1,000,000 3.12 1.50
271,000,000 1,000,000 3.13 1.51
272,000,000 1,000,000 3.15 1.51
273,000,000 1,000,000 3.16 1.52
274,000,000 1,000,000 3.18 1.52
275,000,000 1,000,000 3.19 1.53
276,000,000 1,000,000 3.20 1.54
277,000,000 1,000,000 3.22 1.54
278,000,000 1,000,000 3.23 1.55
279,000,000 1,000,000 3.25 1.56
280,000,000 1,000,000 3.26 1.56
281,000,000 1,000,000 3.27 1.57
282,000,000 1,000,000 3.29 1.57
283,000,000 1,000,000 3.30 1.58
284,000,000 1,000,000 3.32 1.59
285,000,000 1,000,000 3.33 1.59
286,000,000 1,000,000 3.34 1.60
287,000,000 1,000,000 3.36 1.60
288,000,000 1,000,000 3.37 1.61
289,000,000 1,000,000 3.39 1.62
290,000,000 1,000,000 3.40 1.62
291,000,000 1,000,000 3.41 1.63
292,000,000 1,000,000 3.43 1.63
293,000,000 1,000,000 3.44 1.64
294,000,000 1,000,000 3.46 1.65
295,000,000 1,000,000 3.47 1.65
296,000,000 1,000,000 3.48 1.66
297,000,000 1,000,000 3.50 1.67
298,000,000 1,000,000 3.51 1.67
299,000,000 1,000,000 3.52 1.68
300,000,000 1,000,000 3.54 1.68
A-4
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
301,000,000 1,000,000 3.55 1.69
302,000,000 1,000,000 3.57 1.70
303,000,000 1,000,000 3.58 1.70
304,000,000 1,000,000 3.59 1.71
305,000,000 1,000,000 3.61 1.72
306,000,000 1,000,000 3.62 1.72
307,000,000 1,000,000 3.64 1.73
308,000,000 1,000,000 3.65 1.73
309,000,000 1,000,000 3.66 1.74
310,000,000 1,000,000 3.68 1.75
311,000,000 1,000,000 3.69 1.75
312,000,000 1,000,000 3.71 1.76
313,000,000 1,000,000 3.72 1.77
314,000,000 1,000,000 3.73 1.77
315,000,000 1,000,000 3.75 1.78
316,000,000 1,000,000 3.76 1.78
317,000,000 1,000,000 3.78 1.79
318,000,000 1,000,000 3.79 1.80
319,000,000 1,000,000 3.80 1.80
320,000,000 1,000,000 3.82 1.81
321,000,000 1,000,000 3.83 1.82
322,000,000 1,000,000 3.85 1.82
323,000,000 1,000,000 3.86 1.83
324,000,000 1,000,000 3.87 1.83
325,000,000 1,000,000 3.89 1.84
326,000,000 1,000,000 3.90 1.85
327,000,000 1,000,000 3.92 1.85
328,000,000 1,000,000 3.93 1.86
329,000,000 1,000,000 3.94 1.87
330,000,000 1,000,000 3.96 1.87
331,000,000 1,000,000 3.97 1.88
332,000,000 1,000,000 3.99 1.89
333,000,000 1,000,000 4.00 1.89
334,000,000 1,000,000 4.01 1.90
335,000,000 1,000,000 4.03 1.90
336,000,000 1,000,000 4.04 1.91
337,000,000 1,000,000 4.05 1.92
338,000,000 1,000,000 4.07 1.92
339,000,000 1,000,000 4.08 1.93
340,000,000 1,000,000 4.10 1.94
341,000,000 1,000,000 4.11 1.94
342,000,000 1,000,000 4.12 1.95
343,000,000 1,000,000 4.14 1.96
344,000,000 1,000,000 4.15 1.96
345,000,000 1,000,000 4.17 1.97
346,000,000 1,000,000 4.18 1.97
347,000,000 1,000,000 4.19 1.98
348,000,000 1,000,000 4.21 1.99
349,000,000 1,000,000 4.22 1.99
350,000,000 1,000,000 4.24 2.00
351,000,000 1,000,000 4.24 2.01
A-5
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
352,000,000 1,000,000 4.24 2.01
353,000,000 1,000,000 4.25 2.02
354,000,000 1,000,000 4.25 2.03
355,000,000 1,000,000 4.26 2.03
356,000,000 1,000,000 4.26 2.04
357,000,000 1,000,000 4.26 2.04
358,000,000 1,000,000 4.27 2.05
359,000,000 1,000,000 4.27 2.06
360,000,000 1,000,000 4.28 2.06
361,000,000 1,000,000 4.28 2.07
362,000,000 1,000,000 4.28 2.07
363,000,000 1,000,000 4.29 2.08
364,000,000 1,000,000 4.29 2.09
365,000,000 1,000,000 4.29 2.09
366,000,000 1,000,000 4.30 2.10
367,000,000 1,000,000 4.30 2.11
368,000,000 1,000,000 4.31 2.11
369,000,000 1,000,000 4.31 2.12
370,000,000 1,000,000 4.31 2.12
371,000,000 1,000,000 4.32 2.13
372,000,000 1,000,000 4.32 2.13
373,000,000 1,000,000 4.33 2.14
374,000,000 1,000,000 4.33 2.15
375,000,000 1,000,000 4.33 2.15
376,000,000 1,000,000 4.34 2.16
377,000,000 1,000,000 4.34 2.16
378,000,000 1,000,000 4.35 2.17
379,000,000 1,000,000 4.35 2.18
380,000,000 1,000,000 4.35 2.18
381,000,000 1,000,000 4.36 2.19
382,000,000 1,000,000 4.36 2.19
383,000,000 1,000,000 4.37 2.20
384,000,000 1,000,000 4.37 2.20
385,000,000 1,000,000 4.37 2.21
386,000,000 1,000,000 4.38 2.22
387,000,000 1,000,000 4.38 2.22
388,000,000 1,000,000 4.39 2.23
389,000,000 1,000,000 4.39 2.23
390,000,000 1,000,000 4.39 2.24
391,000,000 1,000,000 4.40 2.24
392,000,000 1,000,000 4.40 2.25
393,000,000 1,000,000 4.40 2.25
394,000,000 1,000,000 4.41 2.26
395,000,000 1,000,000 4.41 2.27
396,000,000 1,000,000 4.42 2.27
397,000,000 1,000,000 4.42 2.28
398,000,000 1,000,000 4.42 2.28
399,000,000 1,000,000 4.43 2.29
400,000,000 1,000,000 4.43 2.29
401,000,000 1,000,000 4.44 2.30
402,000,000 1,000,000 4.44 2.30
A-6
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
403,000,000 1,000,000 4.44 2.31
404,000,000 1,000,000 4.45 2.31
405,000,000 1,000,000 4.45 2.32
406,000,000 1,000,000 4.46 2.32
407,000,000 1,000,000 4.46 2.33
408,000,000 1,000,000 4.46 2.33
409,000,000 1,000,000 4.47 2.34
410,000,000 1,000,000 4.47 2.34
411,000,000 1,000,000 4.48 2.35
412,000,000 1,000,000 4.48 2.36
413,000,000 1,000,000 4.48 2.36
414,000,000 1,000,000 4.49 2.37
415,000,000 1,000,000 4.49 2.37
416,000,000 1,000,000 4.49 2.38
417,000,000 1,000,000 4.50 2.38
418,000,000 1,000,000 4.50 2.39
419,000,000 1,000,000 4.51 2.39
420,000,000 1,000,000 4.51 2.40
421,000,000 1,000,000 4.51 2.40
422,000,000 1,000,000 4.52 2.41
423,000,000 1,000,000 4.52 2.41
424,000,000 1,000,000 4.53 2.42
425,000,000 1,000,000 4.53 2.42
426,000,000 1,000,000 4.53 2.43
427,000,000 1,000,000 4.54 2.43
428,000,000 1,000,000 4.54 2.44
429,000,000 1,000,000 4.55 2.44
430,000,000 1,000,000 4.55 2.45
431,000,000 1,000,000 4.55 2.45
432,000,000 1,000,000 4.56 2.46
433,000,000 1,000,000 4.56 2.46
434,000,000 1,000,000 4.57 2.47
435,000,000 1,000,000 4.57 2.47
436,000,000 1,000,000 4.57 2.47
437,000,000 1,000,000 4.58 2.48
438,000,000 1,000,000 4.58 2.48
439,000,000 1,000,000 4.58 2.49
440,000,000 1,000,000 4.59 2.49
441,000,000 1,000,000 4.59 2.50
442,000,000 1,000,000 4.60 2.50
443,000,000 1,000,000 4.60 2.51
444,000,000 1,000,000 4.60 2.51
445,000,000 1,000,000 4.61 2.52
446,000,000 1,000,000 4.61 2.52
447,000,000 1,000,000 4.62 2.53
448,000,000 1,000,000 4.62 2.53
449,000,000 1,000,000 4.62 2.54
450,000,000 1,000,000 4.63 2.54
451,000,000 1,000,000 4.63 2.55
452,000,000 1,000,000 4.64 2.55
453,000,000 1,000,000 4.64 2.55
A-7
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
454,000,000 1,000,000 4.64 2.56
455,000,000 1,000,000 4.65 2.56
456,000,000 1,000,000 4.65 2.57
457,000,000 1,000,000 4.66 2.57
458,000,000 1,000,000 4.66 2.58
459,000,000 1,000,000 4.66 2.58
460,000,000 1,000,000 4.67 2.59
461,000,000 1,000,000 4.67 2.59
462,000,000 1,000,000 4.68 2.60
463,000,000 1,000,000 4.68 2.60
464,000,000 1,000,000 4.68 2.60
465,000,000 1,000,000 4.69 2.61
466,000,000 1,000,000 4.69 2.61
467,000,000 1,000,000 4.69 2.62
468,000,000 1,000,000 4.70 2.62
469,000,000 1,000,000 4.70 2.63
470,000,000 1,000,000 4.71 2.63
471,000,000 1,000,000 4.71 2.64
472,000,000 1,000,000 4.71 2.64
473,000,000 1,000,000 4.72 2.64
474,000,000 1,000,000 4.72 2.65
475,000,000 1,000,000 4.73 2.65
476,000,000 1,000,000 4.73 2.66
477,000,000 1,000,000 4.73 2.66
478,000,000 1,000,000 4.74 2.67
479,000,000 1,000,000 4.74 2.67
480,000,000 1,000,000 4.75 2.68
481,000,000 1,000,000 4.75 2.68
482,000,000 1,000,000 4.75 2.68
483,000,000 1,000,000 4.76 2.69
484,000,000 1,000,000 4.76 2.69
485,000,000 1,000,000 4.77 2.70
486,000,000 1,000,000 4.77 2.70
487,000,000 1,000,000 4.77 2.71
488,000,000 1,000,000 4.78 2.71
489,000,000 1,000,000 4.78 2.71
490,000,000 1,000,000 4.78 2.72
491,000,000 1,000,000 4.79 2.72
492,000,000 1,000,000 4.79 2.73
493,000,000 1,000,000 4.80 2.73
494,000,000 1,000,000 4.80 2.73
495,000,000 1,000,000 4.80 2.74
496,000,000 1,000,000 4.81 2.74
497,000,000 1,000,000 4.81 2.75
498,000,000 1,000,000 4.82 2.75
499,000,000 1,000,000 4.82 2.76
500,000,000 1,000,000 4.82 2.76
501,000,000 1,000,000 4.83 2.76
502,000,000 1,000,000 4.83 2.77
503,000,000 1,000,000 4.84 2.77
504,000,000 1,000,000 4.84 2.78
A-8
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
505,000,000 1,000,000 4.84 2.78
506,000,000 1,000,000 4.85 2.78
507,000,000 1,000,000 4.85 2.79
508,000,000 1,000,000 4.86 2.79
509,000,000 1,000,000 4.86 2.80
510,000,000 1,000,000 4.86 2.80
511,000,000 1,000,000 4.87 2.80
512,000,000 1,000,000 4.87 2.81
513,000,000 1,000,000 4.87 2.81
514,000,000 1,000,000 4.88 2.82
515,000,000 1,000,000 4.88 2.82
516,000,000 1,000,000 4.89 2.82
517,000,000 1,000,000 4.89 2.83
518,000,000 1,000,000 4.89 2.83
519,000,000 1,000,000 4.90 2.84
520,000,000 1,000,000 4.90 2.84
521,000,000 1,000,000 4.91 2.84
522,000,000 1,000,000 4.91 2.85
523,000,000 1,000,000 4.91 2.85
524,000,000 1,000,000 4.92 2.86
525,000,000 1,000,000 4.92 2.86
526,000,000 1,000,000 4.93 2.86
527,000,000 1,000,000 4.93 2.87
528,000,000 1,000,000 4.93 2.87
529,000,000 1,000,000 4.94 2.88
530,000,000 1,000,000 4.94 2.88
531,000,000 1,000,000 4.95 2.88
532,000,000 1,000,000 4.95 2.89
533,000,000 1,000,000 4.95 2.89
534,000,000 1,000,000 4.96 2.90
535,000,000 1,000,000 4.96 2.90
536,000,000 1,000,000 4.97 2.90
537,000,000 1,000,000 4.97 2.91
538,000,000 1,000,000 4.97 2.91
539,000,000 1,000,000 4.98 2.91
540,000,000 1,000,000 4.98 2.92
541,000,000 1,000,000 4.98 2.92
542,000,000 1,000,000 4.99 2.93
543,000,000 1,000,000 4.99 2.93
544,000,000 1,000,000 5.00 2.93
545,000,000 1,000,000 5.00 2.94
546,000,000 1,000,000 5.00 2.94
547,000,000 1,000,000 5.01 2.95
548,000,000 1,000,000 5.01 2.95
549,000,000 1,000,000 5.02 2.95
550,000,000 1,000,000 5.02 2.96
551,000,000 1,000,000 5.02 2.96
552,000,000 1,000,000 5.03 2.96
553,000,000 1,000,000 5.03 2.97
554,000,000 1,000,000 5.04 2.97
555,000,000 1,000,000 5.04 2.98
A-9
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
556,000,000 1,000,000 5.04 2.98
557,000,000 1,000,000 5.05 2.98
558,000,000 1,000,000 5.05 2.99
559,000,000 1,000,000 5.06 2.99
560,000,000 1,000,000 5.06 2.99
561,000,000 1,000,000 5.06 3.00
562,000,000 1,000,000 5.07 3.00
563,000,000 1,000,000 5.07 3.00
564,000,000 1,000,000 5.07 3.01
565,000,000 1,000,000 5.08 3.01
566,000,000 1,000,000 5.08 3.02
567,000,000 1,000,000 5.09 3.02
568,000,000 1,000,000 5.09 3.02
569,000,000 1,000,000 5.09 3.03
570,000,000 1,000,000 5.10 3.03
571,000,000 1,000,000 5.10 3.03
572,000,000 1,000,000 5.11 3.04
573,000,000 1,000,000 5.11 3.04
574,000,000 1,000,000 5.11 3.04
575,000,000 1,000,000 5.12 3.05
576,000,000 1,000,000 5.12 3.05
577,000,000 1,000,000 5.13 3.06
578,000,000 1,000,000 5.13 3.06
579,000,000 1,000,000 5.13 3.06
580,000,000 1,000,000 5.14 3.07
581,000,000 1,000,000 5.14 3.07
582,000,000 1,000,000 5.15 3.07
583,000,000 1,000,000 5.15 3.08
584,000,000 1,000,000 5.15 3.08
585,000,000 1,000,000 5.16 3.08
586,000,000 1,000,000 5.16 3.09
587,000,000 1,000,000 5.17 3.09
588,000,000 1,000,000 5.17 3.09
589,000,000 1,000,000 5.17 3.10
590,000,000 1,000,000 5.18 3.10
591,000,000 1,000,000 5.18 3.11
592,000,000 1,000,000 5.18 3.11
593,000,000 1,000,000 5.19 3.11
594,000,000 1,000,000 5.19 3.12
595,000,000 1,000,000 5.20 3.12
596,000,000 1,000,000 5.20 3.12
597,000,000 1,000,000 5.20 3.13
598,000,000 1,000,000 5.21 3.13
599,000,000 1,000,000 5.21 3.13
600,000,000 1,000,000 5.22 3.14
601,000,000 1,000,000 5.22 3.14
602,000,000 1,000,000 5.22 3.14
603,000,000 1,000,000 5.23 3.15
604,000,000 1,000,000 5.23 3.15
605,000,000 1,000,000 5.24 3.15
606,000,000 1,000,000 5.24 3.16
A-10
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
607,000,000 1,000,000 5.24 3.16
608,000,000 1,000,000 5.25 3.16
609,000,000 1,000,000 5.25 3.17
610,000,000 1,000,000 5.26 3.17
611,000,000 1,000,000 5.26 3.17
612,000,000 1,000,000 5.26 3.18
613,000,000 1,000,000 5.27 3.18
614,000,000 1,000,000 5.27 3.18
615,000,000 1,000,000 5.27 3.19
616,000,000 1,000,000 5.28 3.19
617,000,000 1,000,000 5.28 3.19
618,000,000 1,000,000 5.29 3.20
619,000,000 1,000,000 5.29 3.20
620,000,000 1,000,000 5.29 3.21
621,000,000 1,000,000 5.30 3.21
622,000,000 1,000,000 5.30 3.21
623,000,000 1,000,000 5.31 3.22
624,000,000 1,000,000 5.31 3.22
625,000,000 1,000,000 5.31 3.22
626,000,000 1,000,000 5.32 3.23
627,000,000 1,000,000 5.32 3.23
628,000,000 1,000,000 5.33 3.23
629,000,000 1,000,000 5.33 3.24
630,000,000 1,000,000 5.33 3.24
631,000,000 1,000,000 5.34 3.24
632,000,000 1,000,000 5.34 3.25
633,000,000 1,000,000 5.35 3.25
634,000,000 1,000,000 5.35 3.25
635,000,000 1,000,000 5.35 3.26
636,000,000 1,000,000 5.36 3.26
637,000,000 1,000,000 5.36 3.26
638,000,000 1,000,000 5.36 3.27
639,000,000 1,000,000 5.37 3.27
640,000,000 1,000,000 5.37 3.27
641,000,000 1,000,000 5.38 3.27
642,000,000 1,000,000 5.38 3.28
643,000,000 1,000,000 5.38 3.28
644,000,000 1,000,000 5.39 3.28
645,000,000 1,000,000 5.39 3.29
646,000,000 1,000,000 5.40 3.29
647,000,000 1,000,000 5.40 3.29
648,000,000 1,000,000 5.40 3.30
649,000,000 1,000,000 5.41 3.30
650,000,000 1,000,000 5.41 3.30
651,000,000 1,000,000 5.42 3.31
652,000,000 1,000,000 5.42 3.31
653,000,000 1,000,000 5.42 3.31
654,000,000 1,000,000 5.43 3.32
655,000,000 1,000,000 5.43 3.32
656,000,000 1,000,000 5.44 3.32
657,000,000 1,000,000 5.44 3.33
A-11
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
658,000,000 1,000,000 5.44 3.33
659,000,000 1,000,000 5.45 3.33
660,000,000 1,000,000 5.45 3.34
661,000,000 1,000,000 5.46 3.34
662,000,000 1,000,000 5.46 3.34
663,000,000 1,000,000 5.46 3.35
664,000,000 1,000,000 5.47 3.35
665,000,000 1,000,000 5.47 3.35
666,000,000 1,000,000 5.47 3.36
667,000,000 1,000,000 5.48 3.36
668,000,000 1,000,000 5.48 3.36
669,000,000 1,000,000 5.49 3.37
670,000,000 1,000,000 5.49 3.37
671,000,000 1,000,000 5.49 3.37
672,000,000 1,000,000 5.50 3.37
673,000,000 1,000,000 5.50 3.38
674,000,000 1,000,000 5.51 3.38
675,000,000 1,000,000 5.51 3.38
676,000,000 1,000,000 5.51 3.39
677,000,000 1,000,000 5.52 3.39
678,000,000 1,000,000 5.52 3.39
679,000,000 1,000,000 5.53 3.40
680,000,000 1,000,000 5.53 3.40
681,000,000 1,000,000 5.53 3.40
682,000,000 1,000,000 5.54 3.41
683,000,000 1,000,000 5.54 3.41
684,000,000 1,000,000 5.55 3.41
685,000,000 1,000,000 5.55 3.42
686,000,000 1,000,000 5.55 3.42
687,000,000 1,000,000 5.56 3.42
688,000,000 1,000,000 5.56 3.42
689,000,000 1,000,000 5.56 3.43
690,000,000 1,000,000 5.57 3.43
691,000,000 1,000,000 5.57 3.43
692,000,000 1,000,000 5.58 3.44
693,000,000 1,000,000 5.58 3.44
694,000,000 1,000,000 5.58 3.44
695,000,000 1,000,000 5.59 3.45
696,000,000 1,000,000 5.59 3.45
697,000,000 1,000,000 5.60 3.45
698,000,000 1,000,000 5.60 3.46
699,000,000 1,000,000 5.60 3.46
700,000,000 1,000,000 5.61 3.46
701,000,000 1,000,000 5.61 3.47
702,000,000 1,000,000 5.62 3.47
703,000,000 1,000,000 5.62 3.47
704,000,000 1,000,000 5.62 3.47
705,000,000 1,000,000 5.63 3.48
706,000,000 1,000,000 5.63 3.48
707,000,000 1,000,000 5.64 3.48
708,000,000 1,000,000 5.64 3.49
A-12
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
709,000,000 1,000,000 5.64 3.49
710,000,000 1,000,000 5.65 3.49
711,000,000 1,000,000 5.65 3.50
712,000,000 1,000,000 5.66 3.50
713,000,000 1,000,000 5.66 3.50
714,000,000 1,000,000 5.66 3.50
715,000,000 1,000,000 5.67 3.51
716,000,000 1,000,000 5.67 3.51
717,000,000 1,000,000 5.67 3.51
718,000,000 1,000,000 5.68 3.52
719,000,000 1,000,000 5.68 3.52
720,000,000 1,000,000 5.69 3.52
721,000,000 1,000,000 5.69 3.53
722,000,000 1,000,000 5.69 3.53
723,000,000 1,000,000 5.70 3.53
724,000,000 1,000,000 5.70 3.53
725,000,000 1,000,000 5.71 3.54
726,000,000 1,000,000 5.71 3.54
727,000,000 1,000,000 5.71 3.54
728,000,000 1,000,000 5.72 3.55
729,000,000 1,000,000 5.72 3.55
730,000,000 1,000,000 5.73 3.55
731,000,000 1,000,000 5.73 3.56
732,000,000 1,000,000 5.73 3.56
733,000,000 1,000,000 5.74 3.56
734,000,000 1,000,000 5.74 3.56
735,000,000 1,000,000 5.75 3.57
736,000,000 1,000,000 5.75 3.57
737,000,000 1,000,000 5.75 3.57
738,000,000 1,000,000 5.76 3.58
739,000,000 1,000,000 5.76 3.58
740,000,000 1,000,000 5.76 3.58
741,000,000 1,000,000 5.77 3.59
742,000,000 1,000,000 5.77 3.59
743,000,000 1,000,000 5.78 3.59
744,000,000 1,000,000 5.78 3.59
745,000,000 1,000,000 5.78 3.60
746,000,000 1,000,000 5.79 3.60
747,000,000 1,000,000 5.79 3.60
748,000,000 1,000,000 5.80 3.61
749,000,000 1,000,000 5.80 3.61
750,000,000 1,000,000 5.80 3.61
751,000,000 1,000,000 5.81 3.61
752,000,000 1,000,000 5.81 3.62
753,000,000 1,000,000 5.82 3.62
754,000,000 1,000,000 5.82 3.62
755,000,000 1,000,000 5.82 3.63
756,000,000 1,000,000 5.83 3.63
757,000,000 1,000,000 5.83 3.63
758,000,000 1,000,000 5.84 3.64
759,000,000 1,000,000 5.84 3.64
A-13
TOTAL EQUITY VALUE (US$) TRANCHE TRANCHE C.P. CONVERSION PRICE
------------------------ ----------- ------------ ----------------
760,000,000 1,000,000 5.84 3.64
761,000,000 1,000,000 5.85 3.64
762,000,000 1,000,000 5.85 3.65
763,000,000 1,000,000 5.85 3.65
764,000,000 1,000,000 5.86 3.65
765,000,000 1,000,000 5.86 3.66
766,000,000 1,000,000 5.87 3.66
767,000,000 1,000,000 5.87 3.66
768,000,000 1,000,000 5.87 3.66
769,000,000 1,000,000 5.88 3.67
770,000,000 1,000,000 5.88 3.67
771,000,000 1,000,000 5.89 3.67
772,000,000 1,000,000 5.89 3.68
773,000,000 1,000,000 5.89 3.68
774,000,000 1,000,000 5.90 3.68
775,000,000 1,000,000 5.90 3.68
776,000,000 1,000,000 5.91 3.69
777,000,000 1,000,000 5.91 3.69
778,000,000 1,000,000 5.91 3.69
779,000,000 1,000,000 5.92 3.70
780,000,000 1,000,000 5.92 3.70
781,000,000 1,000,000 5.93 3.70
782,000,000 1,000,000 5.93 3.70
783,000,000 1,000,000 5.93 3.71
784,000,000 1,000,000 5.94 3.71
785,000,000 1,000,000 5.94 3.71
786,000,000 1,000,000 5.95 3.72
787,000,000 1,000,000 5.95 3.72
788,000,000 1,000,000 5.95 3.72
789,000,000 1,000,000 5.96 3.72
790,000,000 1,000,000 5.96 3.73
791,000,000 1,000,000 5.96 3.73
792,000,000 1,000,000 5.97 3.73
793,000,000 1,000,000 5.97 3.74
794,000,000 1,000,000 5.98 3.74
795,000,000 1,000,000 5.98 3.74
796,000,000 1,000,000 5.98 3.74
797,000,000 1,000,000 5.99 3.75
798,000,000 1,000,000 5.99 3.75
799,000,000 1,000,000 6.00 3.75
800,000,000 1,000,000 6.00 3.75
Each level in Schedule A represents the Tranche C.P. for the portion of Total
Equity Value that is greater than the prior level, up to and including the Total
Equity Value specified for such level; provided, that the Conversion Price for
any Total Equity Value less than or equal to $100,000,000 shall be 0.75 and the
Conversion Price for any Total Equity Value greater than or equal to
$800,000,000 shall be 3.75.
A-14