EXECUTION COPY
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VIATEL, INC.
and
THE BANK OF NEW YORK,
as Trustee
-----------------
7 3/4% CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
-----------------
INDENTURE
Dated as of April 12, 2000
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VIATEL, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture dated as of April 12, 2000
Trust Indenture
ACT SECTION INDENTURE SECTION
310(a)(1)...................................................6.10
(a)(2).................................................6.10
(a)(3).................................................Not Applicable
(a)(4).................................................Not Applicable
(a)(5).................................................6.10
(b)....................................................6.8, 6.10
311(a)......................................................6.11
(b)....................................................6.11
312(a)......................................................4.1 and 4.2
(b)....................................................4.2
(c)....................................................4.2
313(a)(1)-(5) & (7)(8)......................................6.6
(a)(6).................................................Not Applicable
(b)(1).................................................Not Applicable
(b)(2).................................................6.6
(c)....................................................6.6
(d)....................................................6.6
314(a)(1)-(3)............................................... 4.3
(a)(4).................................................3.4
(b)....................................................Not Applicable
(c)(1).................................................11.5
(c)(2).................................................11.5
(c)(3).................................................Not Applicable
(d)....................................................Not Applicable
(e)....................................................11.5
(f)....................................................Not Applicable
315(a)....................................................Not Applicable
(b)....................................................6.5
(c)....................................................6.1
(d)....................................................6.1
(d)(1).................................................6.1
(d)(2).................................................6.1
(d)(3).................................................6.1
(e)....................................................5.10
316(a)......................................................7.4
(a)(1)(A)............................................5.8
(a)(1)(B)............................................5.1, 5.9
(a)(2)...............................................Not Applicable
(b)..................................................5.6
(c)..................................................7.1
317(a)(1)..............................................5.2
(a)(2)...............................................5.2
(b)..................................................3.3
318(a).................................................11.7
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be part of the Indenture.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1 Certain Terms Defined..........................................1
ARTICLE II
THE CONVERTIBLE DEBENTURES
Section 2.1 Designation and Principal Amount..............................11
Section 2.2 Maturity......................................................11
Section 2.3 Form and Payment..............................................11
Section 2.4 Exchange and Registration of Transfer of Convertible
Debentures; Restrictions on Transfers; Depositary.............12
Section 2.5 Interest......................................................15
Section 2.6 Authentication and Delivery of Convertible Debentures.........16
Section 2.7 Execution of Convertible Debentures...........................18
Section 2.8 Certificate of Authentication.................................18
Section 2.9 Denomination and Date of Convertible Debentures;
Payments of Interest..........................................19
Section 2.10 Registration, Transfer and Exchange..........................20
Section 2.11 Mutilated, Defaced, Destroyed, Lost and Stolen Convertible
Debentures...................................................23
Section 2.12 Cancellation of Convertible Debentures.......................24
Section 2.13 Temporary Convertible Debentures.............................24
Section 2.14 CUSIP Numbers................................................24
ARTICLE III
COVENANTS OF THE COMPANY
Section 3.1 Payment of Principal and Interest.............................25
Section 3.2 Offices for Payment, etc......................................25
Section 3.3 Paying Agents.................................................25
Section 3.4 Written Statement to Trustee..................................26
Section 3.5 Limitation on Dividends; Transactions with Affiliates.........26
Section 3.6 Covenants as to Viatel Trust..................................27
Section 3.7 Existence.....................................................27
ARTICLE IV
HOLDERS OF CONVERTIBLE DEBENTURES LISTS AND REPORTS BY THE COMPANY AND THE
TRUSTEE
Section 4.1 Company to Furnish Trustee Information as to Names and
Addresses of Holders of Convertible Debentures................27
Section 4.2 Preservation and Disclosure of Holders of Convertible
Debentures' Lists.............................................28
Section 4.3 Reports by the Company........................................29
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ARTICLE V
REMEDIES OF THE TRUSTEE AND HOLDERS OF CONVERTIBLE DEBENTURES ON EVENT OF
DEFAULT
Section 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default.............................................30
Section 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt.32
Section 5.3 Application of Proceeds.......................................34
Section 5.4 Restoration of Rights on Abandonment of Proceedings...........34
Section 5.5 Limitations on Suits by Holders of Convertible Debentures.....34
Section 5.6 Unconditional Right of Holders of Convertible Debentures
to Institute Certain Suits....................................35
Section 5.7 Powers and Remedies Cumulative; Delay or Omission Not Waiver
of Default....................................................35
Section 5.8 Control by Holders of Convertible Debentures..................35
Section 5.9 Waiver of Past Defaults.......................................36
Section 5.10 Right of Court to Require Filing of Undertaking to Pay Costs.36
Section 5.11 Suits for Enforcement........................................37
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.1 Duties of the Trustee.........................................37
Section 6.2 Rights of Trustee.............................................38
Section 6.3 Individual Rights of Trustee..................................39
Section 6.4 Trustee's Disclaimer..........................................39
Section 6.5 Notice of Defaults............................................39
Section 6.6 Reports by Trustee to Holders.................................39
Section 6.7 Compensation and Indemnity....................................40
Section 6.8 Replacement of Trustee........................................40
Section 6.9 Successor Trustee by Merger...................................42
Section 6.10 Eligibility; Disqualification................................42
Section 6.11 Preferential Collection of Claims Against Company............42
Section 6.12 Trustee's Application for Instructions from the Company......42
ARTICLE VII
CONCERNING THE HOLDERS OF CONVERTIBLE DEBENTURES
Section 7.1 Evidence of Action Taken by Holders of Convertible Debentures.42
Section 7.2 Proof of Execution of Instruments.............................43
Section 7.3 Holders to be Treated as Owners...............................43
Section 7.4 Convertible Debentures Owned by Company Deemed Not
Outstanding...................................................43
Section 7.5 Right of Revocation of Action Taken...........................43
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of Holders of
Convertible Debentures........................................44
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Section 8.2 Supplemental Indentures With Consent of Holders of
Convertible Debentures........................................45
Section 8.3 Effect of Supplemental Indenture..............................45
Section 8.4 Documents to Be Given to Trustee..............................46
Section 8.5 Notation on Convertible Debentures in Respect of
Supplemental Indentures.......................................46
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Company May Consolidate, etc., on Certain Terms...............46
Section 9.2 Successor Corporation Substituted.............................47
Section 9.3 Opinion of Counsel to Trustee.................................47
ARTICLE X
REDEMPTION OF THE CONVERTIBLE DEBENTURES
Section 10.1 Tax Event Redemption.........................................47
Section 10.2 Optional Redemption by Company...............................48
Section 10.3 No Sinking Fund..............................................49
Section 10.4 Election to Redeem; Notice of Redemption; Partial
Redemptions..................................................49
Section 10.5 Payment of Convertible Debentures Called for Redemption......51
Section 10.6 Exclusion of Certain Convertible Debentures from Eligibility
for Selection for Redemption.................................51
ARTICLE XI
EXTENSION OF INTEREST PAYMENT PERIOD
Section 11.1 Extension of Interest Payment Period.........................51
Section 11.2 Notice of Extension..........................................52
ARTICLE XII
CONVERSION OF CONVERTIBLE DEBENTURES
Section 12.1 Conversion Rights............................................53
Section 12.2 Conversion Procedures........................................53
Section 12.3 Conversion Price Adjustments.................................55
Section 12.4 Merger, Consolidation or Sale of Assets......................60
Section 12.5 Notice of Adjustments of Conversion Price....................61
Section 12.6 Prior Notice of Certain Events...............................62
Section 12.7 Certain Additional Rights....................................64
Section 12.8 Trustee Not Responsible for Determining Conversion Price or
Adjustments..................................................63
Section 12.9 Reservation of Shares of Common Stock........................63
Section 12.10 Payment of Certain Taxes upon Conversion....................65
Section 12.11 Nonassessability............................................64
ARTICLE XIII
SUBORDINATION OF CONVERTIBLE DEBENTURES
Section 13.1 Convertible Debentures Subordinate to Senior Indebtedness.. .64
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Section 13.2 Payment Over of Proceeds upon Dissolution, Etc...............64
Section 13.3 Prior Payment to Senior Indebtedness upon Acceleration
of Convertible Debentures....................................65
Section 13.4 No Payment When Senior Indebtedness in Default...............66
Section 13.5 Payment Permitted in Certain Situations......................66
Section 13.6 Subrogation to Rights of Holders of Senior Indebtedness......66
Section 13.7 Provisions Solely to Define Relative Rights..................67
Section 13.8 Trustee to Effectuate Subordination..........................67
Section 13.9 No Waiver of Subordination Provisions........................67
Section 13.10 Notice to Trustee...........................................68
Section 13.11 Reliance on Judicial Order or Certificate of Liquidating
Agent.......................................................68
Section 13.12 Trustee Not Fiduciary for Holders of Senior Indebtedness....69
Section 13.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights............................69
Section 13.14 Article Applicable to Paying Agents.........................69
Section 13.15 Certain Conversions Deemed Payment..........................69
ARTICLE XIV
EXPENSES
Section 14.1 Payment of Expenses..........................................70
Section 14.2 Payment Upon Resignation or Removal..........................70
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability.....................71
Section 15.2 Provisions of Indenture for the Sole Benefit of Parties and
Holders of Convertible Debentures............................71
Section 15.3 Right to Assign; Successors and Assigns Bound by Indenture...71
Section 15.4 Notices and Demands on Company, Trustee and Holders of
Convertible Debentures.......................................71
Section 15.5 Officers' Certificates and Opinions of Counsel; Statements to
Be Contained Therein.........................................72
Section 15.6 Payments Due on Saturdays, Sundays and Holidays..............73
Section 15.7 Conflict of Any Provision of Indenture with Trust Indenture
Act..........................................................73
Section 15.8 New York Law to Govern.......................................73
Section 15.9 Counterparts.................................................73
Section 15.10 Effect of Headings; Gender...................................74
Exhibit A Form of Convertible Debenture...............................A-1
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THIS INDENTURE, dated as of April 12, 2000 between VIATEL, INC.,
a Delaware corporation (the "Company") and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company desires and has requested the Trustee to
join it in the execution and delivery of this Indenture in order to establish
and provide for the issuance by the Company of Convertible Debentures designated
as its 7 3/4% Convertible Junior Subordinated Debentures (the "Convertible
Debentures"), a specimen copy of which is attached hereto as Exhibit A, on the
terms set forth herein;
WHEREAS, Viatel Financing Trust I, a Delaware statutory business
trust ("Viatel Trust" or the "Trust"), has offered to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. and Banc of America Securities LLC (the
"Initial Purchasers") in a private placement $180,000,000 aggregate liquidation
amount of its 7 3/4% Trust Convertible Preferred Securities (the "Convertible
Preferred Securities"), representing undivided beneficial interests in the
assets of the Trust, and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Company
of 111,340.2 Common Securities, liquidation amount $50 per Common Security, in
$185,567,010 aggregate principal amount of the Convertible Debentures; and
WHEREAS, all things necessary to make this Indenture a valid and
legally binding agreement of the Company and the Trustee, in accordance with its
terms, have been done.
NOW, THEREFORE:
There is hereby established the terms of the Convertible
Debentures to be issued under this Indenture, which shall be as set forth herein
and in the form of Convertible Debentures attached hereto as Exhibit A, and in
consideration of the premises and the purchase and acceptance of the Convertible
Debentures by the holders thereof, the Company mutually covenants and agrees
with the Trustee, for the equal and proportionate benefit of all holders of the
Convertible Debentures, as follows:
ARTICLE I
DEFINITIONS
Section 1.1 CERTAIN TERMS DEFINED. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), or the definitions of which in the
Securities Act of 1933, as amended (the "Securities Act"), are referred to in
the Trust Indenture Act, including terms defined therein by reference to the
Securities Act (except as herein otherwise expressly provided or unless the
context otherwise clearly requires), shall have the meanings assigned to such
terms in the Trust Indenture Act and in the Securities Act as in force at the
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date of this Indenture. All accounting terms used herein and not expressly
defined shall have the meanings assigned to such terms in accordance with
generally accepted accounting principles, and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Indenture as a
whole, as supplemented and amended from time to time, and not to any particular
Article, Section or other subdivision. The terms defined in this Article have
the meanings assigned to them in this Article and include the plural as well as
the singular.
"Additional Sums" shall have the meaning set forth in Section
2.5(c).
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Applicable Price" means (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only cash,
the amount of cash received by a holder of one share of Common Stock and (ii) in
the event of any other Fundamental Change, the average of the daily Closing
Price for one share of Common Stock during the 10 Trading Days immediately prior
to the record date for the determination of the holders of Common Stock entitled
to receive cash, securities, property or other assets in connection with such
Fundamental Change or, if there is no such record date, prior to the date upon
which the holders of the Common Stock shall have the right to receive such cash,
securities, property or other assets.
"Board of Directors" means either the Board of Directors of the
Company or any duly authorized committee of that Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday, Sunday, or
any other day on which banking institutions in New York, New York or Wilmington,
Delaware are permitted or required by any applicable law to close.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, units representing interests, participations, rights in or
other equivalents (however designated) of such Person's capital stock,
including, with respect to partnerships, partnership interests (whether general
or limited) and any other interest or participation that confers upon a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, such partnership, and any rights (other than debt securities
convertible into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Certificated Convertible Preferred Securities" means Convertible
Preferred Securities issued in definitive registered form.
"Clearing Agent" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Convertible Debentures and in whose name or in the name of a
3
nominee of that organization shall be registered one or more Global Debentures
and which shall undertake to effect book entry transfers and pledges of the
Convertible Debentures.
"Closing Price" with respect to any security on any day means the
last reported sale price, regular way on such day, or, if no sale takes place on
such day, the average of the reported closing bid and asked prices on such day,
regular way, in either case as reported on the NYSE Composite Tape, or, if such
security is not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which such security is listed or
admitted to trading, or, if such security is not listed or admitted to trading
on a national securities exchange, on the National Market System of the National
Association of Securities Dealers, Inc., or, if such security is not quoted or
admitted to trading on such quotation system, on the principal quotation system
on which such security is listed or admitted to trading or quoted, or, if not
listed or admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security in the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available in such manner, as furnished by any
New York Stock Exchange member firm selected from time to time by the Board of
Directors (or any committee duly authorized by the Board of Directors) of the
Company for that purpose or, if not so available in such manner, as otherwise
determined in good faith by the Board of Directors (or any committee duly
authorized by the Board of Directors) of the Company.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, as amended, or if
at any time after the execution and delivery of this Indenture such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Common Securities" means undivided beneficial interests in the
assets of the Viatel Trust which rank PARI PASSU with Convertible Preferred
Securities issued by the Viatel Trust; provided, however, that upon the
occurrence of an Event of Default, the rights of holders of Common Securities to
payment in respect to distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights of holders of Convertible Preferred
Securities.
"Common Securities Guarantee" means the Common Securities
Guarantee Agreement dated as of April 12, 2000 by the Guarantor.
"Common Stock" includes any stock of any class of the Company
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which is not subject to redemption by the Company.
"Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Common
Stock consists of common stock that, for the 10 Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
4
quoted on The Nasdaq National Market; provided, however, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) the
Company continues to exist after the occurrence of such Fundamental Change and
the outstanding Convertible Preferred Securities continue to exist as
outstanding Convertible Preferred Securities, or (ii) not later than the
occurrence of such Fundamental Change, the outstanding Convertible Preferred
Securities are converted into or exchanged for convertible preferred stock or
debentures of a corporation succeeding to the business of the Company, which
convertible preferred stock has powers, preferences and relative, participating,
optional or other rights, and qualifications, limitations and restrictions
substantially similar to those of the Convertible Preferred Securities and which
debentures have terms substantially similar to those of the Convertible
Debentures.
"Company" means Viatel, Inc., a Delaware corporation, until a
successor corporation shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall mean such successor
corporation.
"Compound Interest" shall have the meaning specified in Section
11.1.
"Convertible Debenture" or "Convertible Debentures" has the
meaning stated in the first recital of this Indenture and more particularly
means any Convertible Debentures authenticated and delivered under this
Indenture.
"Convertible Preferred Securities" has the meaning specified in
the recitals to this Indenture.
"Conversion Agent" has the meaning assigned thereto in the
Declaration.
"Conversion Price" has the meaning set forth in Section 12.1.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of execution of this
Indenture is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ 21 West, New York, New York
10286, Attention: Corporate Trust Administration.
"Declaration" means the Amended and Restated Declaration of Trust
of Viatel Financing Trust I, a Delaware statutory business trust, dated as of
April 12, 2000.
"Debt" of a Person means, all indebtedness of such Person which
is for money borrowed.
"defaulted interest" has the meaning specified in Section 2.9.
"Deferred Interest" has the meaning specified in Section 11.1.
"Delaware Trustee" has the meaning specified in the Declaration.
"Depositary" means, with respect to the Convertible Debentures
issuable or issued in the form of one or more Global Debentures, the Person
designated as Depositary by the Company until a successor Depositary shall have
5
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such person,
"Depositary" as used with respect to the Convertible Debentures shall mean the
Depositary with respect to the Global Debentures.
"Depositary Convertible Debenture" means a Convertible Debenture
executed by the Company and authenticated and delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction, all in accordance with
this Indenture, which (i) shall be registered as to principal and interest in
the name of the Depositary or its nominee and (ii) shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, all or a
portion of the Outstanding Convertible Debentures.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event (as described in the Declaration), the Trust is
to be dissolved in accordance with the Declaration, and the Convertible
Debentures held by the Institutional Trustee are to be distributed to the
holders of the Trust Securities issued by the Trust pro rata in accordance with
the Declaration.
"Dollar" means the coin or currency of the United States of
America which as of the time of payment is legal tender for the payment of
public and private debts.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Extension Period" has the meaning specified in Section 11.1.
"Fundamental Change" means the occurrence of any transaction or
event or series of transactions or events pursuant to which all or substantially
all of the Common Stock shall be exchanged for, converted into, acquired for or
shall constitute solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of any such series of transactions or
events, for purposes of adjustment of the Conversion Price, such Fundamental
Change shall be deemed to have occurred when substantially all of the Common
Stock shall have been exchanged for, converted into or acquired for, or shall
constitute solely the right to receive, such cash, securities, property or other
assets, but the adjustment shall be based upon the consideration that the
holders of Common Stock received in the transaction or event as a result of
which more than 50% of the Common Stock shall have been exchanged for, converted
into or acquired for, or shall constitute solely the right to receive, such
cash, securities, property or other assets.
"Global Debenture" has the meaning specified in Section 2.4(a).
"Government Obligations" means securities which are (i) direct
obligations of the United States government for which its full faith and credit
is pledged or (ii) obligations of a Person controlled or supervised by, or
acting as an agency or instrumentality of, the United States government, the
payment of which obligations is unconditionally guaranteed by the United States
government, and which, in either case, are full faith and credit obligations of
6
the United States government, and which are not callable or redeemable at the
option of the issuer thereof prior to their stated maturity.
"Guarantor" means the Company in its capacity as guarantor under
any Trust Securities Guarantees.
"Holder" or "Holder of Convertible Debentures" or other similar
terms mean the person in whose name such Convertible Debenture is registered in
the Security Register.
"incur" means to issue, incur, assume, guarantee, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
the payment of, any Debt.
"Indenture" means this instrument as originally executed and
delivered or as it may from time to time be amended or supplemented as herein
provided, as so amended or supplemented or both, and shall include the forms and
terms of the Convertible Debentures appearing as Exhibit A to this instrument.
"Institutional Trustee" has the meaning specified in the
Declaration.
"Interest Payment Date," when used with respect to any
Convertible Debenture, means the Stated Maturity of an installment of interest
on such Convertible Debenture.
"Lien" means any mortgage or deed of trust, pledge, assignment,
security interest, lien, charge, or other encumbrance or preferential
arrangement (including, without limitation, any conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"Maturity" when used with respect to any Convertible Debenture
means the date on which the principal of such Convertible Debenture or an
installment of principal becomes due and payable as therein or herein provided,
whether at Stated Maturity or by declaration of acceleration, call for
redemption or otherwise.
"Maturity Date" means the date on which the Convertible
Debentures mature and on which the principal shall be due and payable together
with all accrued and unpaid interest thereon including Additional Sums, if any,
and (to the extent permitted by applicable law) Compound Interest, if any.
"Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
"Officers' Certificate" means a certificate signed on behalf of
the Company by the Chairman of the Board of Directors or the vice chairman or
the president or any vice president and by the treasurer, the controller, any
assistant treasurer, the secretary or any assistant secretary of the Company and
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 15.5.
7
"Opinion of Counsel" means a written opinion of legal counsel,
who may be an employee of or counsel to the Company. Each Opinion of Counsel
shall include the statements provided for in Section 15.5.
"Optional Redemption Price" has the meaning specified in Section
10.2.
"Outstanding" when used with reference to Convertible Debentures,
subject to the provisions of Section 7.4, means, as of any particular time, all
Convertible Debentures authenticated and delivered under this Indenture, except
(a) Convertible Debentures theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(b) Convertible Debentures, or portions thereof, for the payment
or redemption of which moneys in the necessary amount and in the
required currency shall have been deposited in trust with the Trustee
or with any Paying Agent (other than the Company) or shall have been
set aside, segregated and held in trust by the Company for the Holders
of such Convertible Debentures (if the Company shall act as its own
Paying Agent), provided that if such Convertible Debentures, or
portions thereof, are to be redeemed prior to the Maturity thereof,
notice of such redemption shall have been given as herein provided, or
provision satisfactory to the Trustee shall have been made for giving
such notice; and
(c) Convertible Debentures that have been paid pursuant to
Section 2.11, converted into Common Stock pursuant to Article XII, or
in exchange for or in lieu of which other Convertible Debentures have
been authenticated and delivered pursuant to the Indenture (except
with respect to any such Convertible Debenture as to which proof
satisfactory to the Trustee and the Company is presented that such
Convertible Debenture is held by a person in whose hands such
Convertible Debenture is a legal, valid and binding obligation of the
Company).
"Paying Agent" means any Person (which may include the Company)
authorized by the Company to pay the principal of or interest, if any, on any
Convertible Debenture on behalf of the Company.
"Persons" or "Person" means any individual, corporation,
partnership, joint venture, limited liability company, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment", when used with respect to the Convertible
Debentures, means the place or places where the principal of and interest, if
any, on the Convertible Debentures are payable as specified pursuant to Section
3.2.
"Placement Agreement" means the Placement Agreement dated April
6, 2000 among the Company, the Trust, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc. and Banc of America Securities LLC.
8
"Predecessor Convertible Debenture" of a Convertible Debenture
means every previous Convertible Debenture evidencing all or a portion of the
same debt as that evidenced by such Convertible Debenture; and, for the purposes
of this definition, a Convertible Debenture authenticated and delivered under
Section 2.11 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Convertible Debenture shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Convertible Debenture.
"Preferred Securities Guarantee" means the Preferred Securities
Guarantee Agreement dated as of April 12, 2000 between the Guarantor and The
Bank of New York, as Preferred Guarantee Trustee.
"Preferred Securities Registration Rights Agreement" means the
Registration Rights Agreement dated as of April 6, 2000 among the Company, the
Trust and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. and Banc
of America Securities LLC as the Initial Purchasers, relating to the Convertible
Preferred Securities.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of such Person of any class or classes (however designated)
that ranks prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"principal" whenever used with reference to the Convertible
Debentures or any Convertible Debenture or any portion thereof, shall be deemed
to include "and premium, if any."
"Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the daily Closing Price for one share of the
common stock received by holders of Common Stock (determined as provided herein)
in such Common Stock Fundamental Change during the 10 Trading Days immediately
prior to the date fixed for the determination of the holders of Common Stock
entitled to receive such common stock or, if there is no such date, prior to the
date upon which the holders of Common Stock shall have the right to receive such
common stock.
"QIB" or "Qualified Institutional Buyer" shall mean "Qualified
Institutional Buyer" as such term is defined in Rule 144A under the Securities
Act.
"record date" has the meaning specified in Section 2.9.
"Registrar" has the meaning specified in Section 2.10.
"Representative" means the (a) indenture trustee or other
trustee, agent or representative for any Senior Indebtedness or (b) with respect
to any Senior Indebtedness that does not have any such trustee, agent or other
representative (i) in the case of such Senior Indebtedness issued pursuant to an
agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
9
"Responsible Officer" when used with respect to the Trustee means
any officer within the corporate trust department (or any successor department)
of the Trustee including any vice president, assistant vice president, assistant
treasurer, senior trust officer, trust officer or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred at the Corporate Trust Office
because of his or her knowledge of and familiarity with the particular subject
and who has direct responsibility for the administration of this Indenture.
"Rule 144" means Rule 144 under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning specified in Section 2.10.
"Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (a) indebtedness of the
Company for money borrowed (but excluding trade accounts payable arising in the
ordinary course of business) under any credit agreements, notes, guarantees or
similar documents and (b) indebtedness evidenced by securities, debentures,
bonds or other similar instruments issued by the Company; (ii) all capital lease
obligations of the Company; (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of the Company for the
reimbursement on any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of the Company
(contingent or otherwise) with respect to an interest rate or other swap, cap or
collar agreements or other similar instruments or agreements or foreign currency
hedge, exchange, purchase or similar instruments or agreements; (vi) all
obligations of the types referred to in clauses (i) through (v) of other Persons
for the payment of which the Company is responsible or liable as obligor,
guarantor or otherwise; and (vii) all obligations of the types referred to in
clauses (i) through (vi) above of other Persons secured by any lien on any
property or asset of the Company (whether or not such obligation is assumed by
the Company), whether outstanding on the date of this Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company,
except for any such indebtedness that is by its terms subordinated to or PARI
PASSU with the Convertible Debentures. Such Senior Indebtedness shall continue
to be Senior Indebtedness irrespective of any deferrals, renewals, extensions or
refundings of, or amendments, modifications, supplements or waivers of any term
of such Senior Indebtedness.
"Stated Maturity" when used with respect to any Convertible
Debenture or any installment of principal thereof or interest thereon, means the
date on which the principal of such Convertible Debenture or such installment of
principal or interest is due and payable in accordance with the terms thereof.
10
"Subsidiary" means any corporation, association, partnership or
other business entity of which more than 50% of the total voting power of the
outstanding Capital Stock (or other interests entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, general
partners, managers, managing members, managing partners or trustees thereof or,
if such persons are not elected, to vote on any matter that is submitted to the
vote of all persons holding ownership interests in such entity) is at the time
owned or controlled, directly or indirectly, by (i) the Company, (ii) the
Company and one or more Subsidiaries or (iii) one or more Subsidiaries.
"Trading Day" shall mean a day on which any securities are traded
on the national securities exchange or quotation system used to determine the
Closing Price or any day on which the New York Stock Exchange is open for
trading.
"Transfer Restriction Termination Date" means the earlier of the
first date on which (i) the Convertible Preferred Securities, the Convertible
Debentures and any Common Stock issued or issuable upon the conversion or
exchange thereof (other than (A) such securities acquired by the Company or any
Affiliate thereof since the Issue Date of the Convertible Preferred Securities
and (B) Common Stock issued upon the conversion or exchange of any such security
described in clause (A) above) may be sold pursuant to Rule 144(k) (or any
successor provision) and (ii) all the Offered Securities have been sold pursuant
to an effective registration statement.
"Trust" or "Viatel Trust" means Viatel Financing Trust I, a
Delaware statutory business trust.
"Trust Indenture Act" or "TIA" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended, as in
force at the date as of which this Indenture was originally executed.
"Trust Securities" means the Common Securities and the
Convertible Preferred Securities of Viatel Trust.
"Trust Securities Guarantees" means the Common Securities
Guarantee and the Preferred Securities Guarantee.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof until a successor Trustee shall have become such pursuant to
the provisions hereof, and thereafter, "Trustee" shall mean or include each
Person who is then a Trustee hereunder.
"United States of America" or "United States" means the United
States of America (including the states and the District of Columbia), its
territories, possessions, the Commonwealth of Puerto Rico and other areas
subject to its jurisdiction.
"U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States or any state or political subdivision
thereof, (iii) an estate the income of which is subject to United States federal
income taxation regardless of its sources or (iv) a trust whose administration
is subject to the primary supervision of a United States court and which has one
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or more United States fiduciaries who have the authority to control all
substantial decisions of the Trust.
"vice president" when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title of "vice president."
ARTICLE II
THE CONVERTIBLE DEBENTURES
Section 2.1 DESIGNATION AND PRINCIPAL AMOUNT.
There are hereby authorized Debentures designated the "7 3/4%
Junior Convertible Subordinated Debentures," limited in aggregate principal
amount to $185,567,010 which amount shall be as set forth in any written order
of the Company for the authentication and delivery of Convertible Debentures
pursuant to Section 2.6 of this Indenture.
Section 2.2 MATURITY. The Maturity Date is April 15, 2015.
Section 2.3 FORM AND PAYMENT.(a) Except as provided in Section
2.6, the Convertible Debentures shall be issued in fully registered certificated
form without coupons in denominations of $10 in principal amount and integral
multiples thereof. Principal and interest on the Convertible Debentures issued
in certificated form will be payable, the transfer of such Convertible
Debentures will be registrable and such Convertible Debentures will be
exchangeable for Convertible Debentures bearing identical terms and provisions
at the office or agency of the Trustee; provided, however, that payment of
interest may be made at the option of the Company by check mailed to the Holder
at such address as shall appear in the Security Register. Notwithstanding the
foregoing, so long as the Holder of any Convertible Debentures is the
Institutional Trustee, the payment of the principal of and interest (including
Compound Interest and Additional Sums, if any) on such Convertible Debentures
held by the Institutional Trustee will be made at such place and to such account
as may be designated by the Institutional Trustee.
(b) The Convertible Debentures are subject to the terms set forth
in this Indenture including, without limitation, Exhibit A hereto, the terms of
which are hereby incorporated in their entirety by reference.
(c) The Convertible Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the form of
Exhibit A to this Indenture.
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Section 2.4 EXCHANGE AND REGISTRATION OF TRANSFER OF CONVERTIBLE
DEBENTURES; RESTRICTIONS ON TRANSFERS; DEPOSITARY.If distributed to holders of
Trust Securities, the Convertible Debentures will be issued to such holders in
the same form as the Trust Securities that such Convertible Debentures replace
in accordance with the following procedures:
(a) So long as Convertible Debentures are eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, all
Convertible Debentures that are so eligible may be represented by one or more
Convertible Debentures in global form registered in the name of the Depositary
or the nominee of the Depositary, except as otherwise specified below. The
transfer and exchange of beneficial interests in any such Convertible Debenture
in global form shall be effected through the Depositary in accordance with this
Indenture and the procedures of the Depositary therefor.
Convertible Debentures that are distributed to QIBs in
replacement of Convertible Preferred Securities represented by a global
Convertible Preferred Security will be represented by a global Convertible
Debenture (the "144A Global Debenture"). The 144A Global Debenture shall be
referred to herein as a Global Debenture. Convertible Debentures that are
distributed to QIBs in replacement of Certificated Convertible Preferred
Securities will be represented by definitive Convertible Debentures as set forth
in Section 2.4(b).
Except as provided below, beneficial owners of a Convertible
Debenture in global form shall not be entitled to have certificates registered
in their names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Convertible Debentures in global form.
(b) Convertible Preferred Securities held in certificated form,
except for certificates representing Convertible Preferred Securities held by
the Depositary or its nominee (or any successor Clearing Agency or its nominee),
shall upon presentation to the Trustee by the Institutional Trustee or by the
holder thereof or by the Institutional Trustee on behalf of such holder shall be
exchanged for Convertible Debentures in fully registered certificated form of
like aggregate principal amount and tenor.
(c) So long as the Convertible Debentures are eligible for
book-entry settlement, and to the extent that Convertible Debentures are held by
QIBs in a Global Debenture, or unless otherwise required by law, upon any
transfer of a definitive Convertible Debenture to a QIB in accordance with Rule
144A, unless otherwise requested by the transferor, and upon receipt of the
definitive Convertible Debenture or Convertible Debentures being so transferred,
together with a certification from the transferor that the transfer is being
made in compliance with Rule 144A (or other evidence satisfactory to the
Trustee), the Trustee shall make an endorsement on any ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ to
reflect an increase in the aggregate principal amount of the Convertible
Debentures represented by such Global Debenture, and the Trustee shall cancel
such definitive Convertible Debenture or Convertible Debentures in accordance
with the standing instructions and procedures of the Depositary, the aggregate
principal amount of Convertible Debentures represented by such Global Debenture
to be increased accordingly; provided that no definitive Convertible Debenture,
or portion thereof, in respect of which the Company or an Affiliate of the
Company held any beneficial interest shall be included in such Global Debenture
until such definitive Convertible Debenture is freely tradable in accordance
13
with Rule 144(k); provided further that the Trustee shall, at the written
request of the Company, issue Convertible Debentures in definitive form upon any
transfer of a beneficial interest in the Global Debenture to the Company or any
Affiliate of the Company.
Any Global Debenture may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Depositary, by the New
York Stock Exchange or by the National Association of Securities Dealers, Inc.
in order for the Convertible Debentures to be tradeable on the PORTAL Market or
as may be required for the Convertible Debentures to be tradeable on any other
market developed for trading of securities pursuant to Rule 144A or required to
comply with any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange upon which the Convertible Debentures
may be listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular
Convertible Debentures are subject.
(d) Each Convertible Debenture that bears or is required to bear
the legend set forth in this Section 2.4(d) (a "Restricted Convertible
Debenture") shall be subject to the restrictions on transfer provided in the
legend set forth in this Section 2.4(d), unless such restrictions on transfer
shall be waived by the written consent of the Company, and the Holder of each
Restricted Convertible Debenture, by such Holder's acceptance thereof, agrees to
be bound by such restrictions on transfer. As used in this Section 2.4(d) and in
Section 2.4(e), the term "transfer" encompasses any sale, pledge, transfer or
other disposition of any Restricted Convertible Debenture.
Prior to the Transfer Restriction Termination Date, any
certificate evidencing a Convertible Debenture shall bear a legend in
substantially the following form, unless otherwise agreed by the Company (with
written notice thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION) RESELL OR OTHERWISE TRANSFER THE
SECURITY EVIDENCED HEREBY OR, IF THIS SECURITY IS CONVERTIBLE INTO COMMON STOCK,
THE COMMON STOCK ISSUABLE UPON CONVERSION OR EXCHANGE OF THIS SECURITY EXCEPT
(A) TO VIATEL, INC. (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
14
THE TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE
DEBENTURES, AS THE CASE MAY BE (OR, IF THIS CERTIFICATE EVIDENCES COMMON STOCK,
THE TRANSFER AGENT FOR THE COMMON STOCK), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR TRANSFER AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES,
AS THE CASE MAY BE (OR, IF THIS CERTIFICATE EVIDENCES COMMON STOCK, SUCH HOLDER
MUST FURNISH TO THE TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY OR VIATEL FINANCING TRUST I (THE "TRUST") MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE
COMMON STOCK AND IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES OR THE
CONVERTIBLE DEBENTURES, AS THE CASE MAY BE, SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS THE COMPANY OR THE TRUST MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
Following the Transfer Restriction Termination Date, any
Convertible Debenture or security issued in exchange or substitution therefor
(other than (i) Convertible Debentures acquired by the Company or any Affiliate
thereof since the issue date of the Convertible Preferred Securities and (ii)
Common Stock issued upon the conversion or exchange of any Convertible Debenture
described in clause (i) above) may upon surrender of such Convertible Debenture
for exchange to the Registrar in accordance with the provisions of this Section
2.4, be exchanged for a new Convertible Debenture or Convertible Debentures, of
15
like tenor and aggregate principal amount, which shall not bear the restrictive
legend required by this Section 2.4(d).
Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in this Section 2.4(d)), a Global Debenture may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee to a successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to act
as Depositary with respect to all or a portion of the Convertible Debentures in
global form. Initially, the Global Debentures shall be issued to the Depositary,
registered in the name of Cede & Co., as the nominee of the Depositary, and
deposited with the Trustee as custodian for Cede & Co.
Definitive Convertible Debentures issued in exchange for all or a
part of a Global Debenture pursuant to this Section 2.4(d) shall be registered
in such names and in such authorized denominations as the Depositary, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such definitive Convertible Debentures to the person in whose names such
definitive Convertible Debentures are so registered.
At such time as all interests in a Global Debenture have been
redeemed, converted, exchanged, repurchased or canceled, such Global Debenture
shall be, upon receipt thereof, canceled by the Trustee in accordance with
standing procedures and instructions of the Depositary. At any time prior to
such cancellation, if any interest in a Global Debenture is exchanged for
definitive Convertible Debentures, redeemed, converted, exchanged or repurchased
by the Company pursuant to Article X or canceled, or transferred for part of a
Global Debenture, the principal amount of such Global Debenture shall, in
accordance with the standing procedures and instructions of the Depositary be
reduced or increased, as the case may be, and an endorsement shall be made on
such Global Debenture by, or at the direction of, the Trustee to reflect such
reduction or increase.
(e) Any Convertible Debenture or Common Stock issued upon the
conversion or exchange of a Convertible Debenture that, prior to the Transfer
Restriction Termination Date, is purchased or owned by the Company or any
Affiliate thereof may not be resold by the Company or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Convertible Debentures or Common Stock, as the case may be, no longer
being "restricted securities" (as defined under Rule 144).
Section 2.5 INTEREST.
(a) Each Convertible Debenture will bear interest at the rate of
7:% per annum (the "Coupon Rate") from April 12, 2000 until the principal
thereof becomes due and payable, and on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the Coupon Rate, compounded quarterly,
16
payable (subject to the provisions of Article XI) quarterly in arrears on
January 15, April 15, July 15 and October 15 of each year (each, an "Interest
Payment Date"), commencing on July 15, 2000, to the Person in whose name such
Convertible Debenture or any Predecessor Convertible Debenture is registered, at
the close of business on the record date for such interest installment, which
shall be the close of business on the fifteenth day prior to that Interest
Payment Date.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. The amount of
interest payable for any period shorter than a full quarterly period for which
interest is computed, will be computed on the basis of the actual number of days
elapsed per 30-day month. In the event that any date on which interest is
payable on the Convertible Debentures is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(c) If at any time the Trust is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any such case, the Company will pay as additional sums ("Additional
Sums") such additional amounts as shall be required so that the net amounts
received and retained by the Trust after paying any such taxes, duties,
assessments or other governmental charges will not be less than the amounts the
Trust would have received had no such taxes, duties, assessments or other
government charges been imposed so long as the Trust is the holder of the
Convertible Debentures.
The definitive Convertible Debentures shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Convertible
Debentures, as evidenced by their execution of such Convertible Debentures.
Section 2.6 AUTHENTICATION AND DELIVERY OF CONVERTIBLE
Debentures.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Convertible Debentures in
the aggregate principal amount of up to $185,567,010 executed by the Company to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
make available for delivery such Convertible Debentures to or upon the written
order of the Company, signed by both (i) the chairman of its Board of Directors,
or any vice chairman of its Board of Directors, or its president or any vice
president and (ii) its treasurer or any assistant treasurer or its secretary or
any assistant secretary, without any further action by the Company. In
authenticating such Convertible Debentures and accepting the additional
responsibilities under this Indenture in relation to such Convertible
Debentures, the Trustee shall be provided with and (subject to Section 6.1)
shall be fully protected in relying upon:
17
(a) a copy of any resolution or resolutions of the Board of
Directors relating to the issuance of such Convertible Debentures, in
each case certified by the secretary or an assistant secretary of the
Company;
(b) a supplemental indenture, if any;
(c) an Opinion of Counsel, prepared in accordance with Section
15.5, which shall state that the Convertible Debentures have been duly
authorized, and, when authenticated and delivered by the Trustee and
issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance
with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or other laws relating to or
affecting the enforcement of creditors' rights generally and by
general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
Notwithstanding the provisions of the preceding paragraph, if the
Convertible Debentures are not to be originally issued at one time, it shall not
be necessary to deliver the resolution of the Board of Directors and Opinion of
Counsel otherwise required pursuant to such preceding paragraph at or prior to
the time of authentication of each Convertible Debenture if such documents are
delivered at or prior to the time of authentication upon original issuance of
the first Convertible Debentures to be issued. After the original issuance of
the first Convertible Debenture to be issued, any separate written request by
the Company that the Trustee authenticate Convertible Debentures for original
issuance will be deemed to be a certification by the Company that it is in
compliance with all conditions precedent provided for in this Indenture relating
to the authentication and delivery of such Convertible Debentures.
The Trustee shall have the right to decline to authenticate and
deliver any Convertible Debentures under this Section if the Trustee is advised
by counsel in good faith that the issuance of such Convertible Debentures would
expose the Trustee to personal liability or is unlawful.
If the Convertible Debentures are to be issued in the form of one
or more Global Debentures, then the Company shall execute and the Trustee shall,
in accordance with this Section, authenticate and deliver one or more Global
Debentures that (i) shall represent and shall be denominated in an amount equal
to the aggregate principal amount of all of the Convertible Debentures issued
and not yet cancelled, (ii) shall be registered in the name of the Depositary
for such Global Debenture or Convertible Debentures or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for Convertible Debentures in definitive registered form, this
Convertible Debenture may not be transferred except as a whole by the Depositary
to the nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary."
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Each Depositary must, at the time of its designation and at all
times while it serves as Depositary, be a clearing agency registered under the
Exchange Act and any other applicable statute or regulation to be so registered
to act as such depositary.
Section 2.7 EXECUTION OF CONVERTIBLE DEBENTURES. The Convertible
Debentures shall be signed on behalf of the Company by the chairman of its Board
of Directors, or any vice chairman of its Board of Directors, or its president
or any vice president and attested by its treasurer or any assistant treasurer
or its secretary or any assistant secretary, under its corporate seal. Such
signatures may be the manual or facsimile signatures of such officers. The seal
of the Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Convertible Debentures.
Typographical and other minor errors or defects in any such reproduction of the
seal or any such signature shall not affect the validity or enforceability of
any Convertible Debenture that has been duly authenticated and delivered by the
Trustee.
In case any officer of the Company who shall have signed any of
the Convertible Debentures shall cease to be such officer before the Convertible
Debenture so signed shall be authenticated and delivered by the Trustee or
disposed of by the Company, such Convertible Debenture nevertheless may be
authenticated and delivered or disposed of as though the person who signed such
Convertible Debenture had not ceased to be such officer of the Company; and any
Convertible Debenture may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Convertible Debenture, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Indenture any such person was not such an officer.
Section 2.8 CERTIFICATE OF AUTHENTICATION. Only such Convertible
Debentures as shall bear thereon a certificate of authentication substantially
in the form attached hereto as a part of Exhibit A and executed by the Trustee
by the manual signature of one of its authorized signatories shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose. The
execution of such certificate by the Trustee upon any Convertible Debenture
executed by the Company shall be conclusive evidence that the Convertible
Debenture so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Convertible Debenture shall
have been duly authenticated and delivered hereunder but never issued and sold
by the Company, the Company shall deliver such Convertible Debenture to the
Trustee for cancellation as provided in Section 2.12 together with a written
statement (which need not comply with Section 15.5 and need not be accompanied
by an Opinion of Counsel) stating that such Convertible Debenture has never been
issued and sold by the Company, for all purposes of this Indenture such
Convertible Debenture shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
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Section 2.9 DENOMINATION AND DATE OF CONVERTIBLE DEBENTURES;
PAYMENTS OF INTEREST.
Convertible Debentures shall be issuable in denominations of $10
and any integral multiple thereof. The Convertible Debentures shall be numbered,
lettered, or otherwise distinguished in such manner or in accordance with such
plans as the officers of the Company executing the same may determine with the
approval of the Trustee as evidenced by the execution and authentication
thereof.
Each Convertible Debenture shall be dated the date of its
authentication.
The term "record date" as used with respect to any interest
payment date (except for payment of defaulted interest) shall mean the close of
business on the fifteenth day preceding such interest payment date, whether or
not such record date is a Business Day.
Any interest on any Convertible Debenture which is payable, but
is not punctually paid or duly provided for, on any interest payment date,
subject to the provisions of Article XI (called "defaulted interest" for
purposes of this Section) shall forthwith cease to be payable to the Holder on
the relevant record date by virtue of his having been such Holder; and such
defaulted interest may be paid by the Company, at its election in each case, as
provided in clause (1) or clause (2) below:
(1) The Company may elect to make payment of any defaulted
interest to the persons in whose names any such Convertible Debentures
(or their respective predecessor Convertible Debentures) are
registered at the close of business on a special record date for the
payment of such defaulted interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each
Convertible Debentures and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of
such defaulted interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
persons entitled to such defaulted interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for
the payment of such defaulted interest in respect of Convertible
Debentures which shall not be more than 15 nor less than 10 days prior
to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such special record date
and, in the name and at the expense of the Company shall cause notice
of the proposed payment of such defaulted interest and the special
record date thereof to be mailed, first class postage prepaid, to each
Holder at his address as it appears in the Security Register, not less
than 10 days prior to such special record date. Notice of the proposed
payment of such defaulted interest and the special record date
therefor having been mailed as aforesaid, such defaulted interest in
respect of Convertible Debentures shall be paid to the person in whose
names such Convertible Debentures (or their respective predecessor
Convertible Debentures) are registered on such special record date and
such defaulted interest shall no longer be payable pursuant to the
following clause (2). (2) The Company may make payment of any
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defaulted interest on the Convertible Debentures in any other lawful
manner not inconsistent with the requirements of any securities
exchange on which the Convertible Debentures may be listed, and upon
such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section, each
Convertible Debenture delivered under this Indenture upon transfer of or in
exchange for or in lieu of any other Convertible Debenture shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Convertible Debenture.
In the case of any Convertible Debenture which is converted into
Common Stock of the Company after any record date and on or prior to the next
succeeding Interest Payment Date (other than any Convertible Debenture whose
Maturity is prior to such Interest Payment Date), interest whose Stated Maturity
is on such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Convertible Debenture (or one or more Predecessor Convertible Debentures) is
registered at the close of business on such record date. However, if a
redemption date falls between a record date and the subsequent Interest Payment
Date, the amount of such payment shall include accumulated and unpaid interest
accrued to, but excluding, such redemption date. Except as otherwise expressly
provided in the first two sentences of this paragraph, in the case of any
Convertible Debenture which is converted, interest whose Stated Maturity is
after the date of conversion of such Convertible Debenture shall not be payable.
Section 2.10 REGISTRATION, TRANSFER AND EXCHANGE.The provisions
of this Section 2.10 shall be subject in their entirety to the provisions of
Section 2.4. The Company will cause to be kept at each office or agency to be
maintained for the purpose as provided in Section 3.2 a register or registers
(herein sometimes referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company will provide for
the registration and the registration of the transfer or exchange of the
Convertible Debentures. The Trustee is hereby appointed and accepts the
appointment as Registrar (the "Registrar") for purposes of registering, and
registering transfers of, the Convertible Debentures. Upon surrender for
registration of transfer of any Convertible Debenture at any such office or
agency to be maintained for the purpose as provided in Section 3.2, the Company
shall execute and the Trustee shall authenticate and make available for delivery
in the name of the transferee or transferees a new Convertible Debenture or
Convertible Debentures and of a like tenor and containing the same terms (other
than the principal amount thereof, if more than one Convertible Debenture is
executed, authenticated and delivered in respect to any Convertible Debenture so
presented, in which case the aggregate principal amount of the executed,
authenticated and delivered Convertible Debentures shall equal the principal
amount of the Convertible Debenture presented in respect thereof) and
conditions.
At the option of the Holder thereof, Convertible Debentures
(other than a Global Debenture, except as set forth below) may be exchanged for
a Convertible Debenture or Convertible Debentures having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Convertible Debentures to be exchanged at the agency of the Company that shall
21
be maintained for such purpose in accordance with Section 3.2 and upon payment,
if the Company shall so require, of the charge hereinafter provided. Whenever
any Convertible Debentures are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Convertible
Debentures which the Holder making the exchange is entitled to receive. All
Convertible Debentures surrendered upon any exchange or transfer provided for in
this Indenture shall be promptly cancelled by the Trustee and the Trustee shall
dispose of such cancelled Convertible Debentures in its customary manner and
will deliver a certificate of cancellation thereof to the Company.
All Convertible Debentures issued upon any transfer or exchange
of Convertible Debentures shall be the valid and legally binding obligations of
the Company, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Convertible Debentures surrendered upon such transfer or
exchange.
Every Convertible Debenture presented or surrendered for
registration of transfer or exchange shall (if so required by the Company or the
Trustee) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made to the Holder for any
registration of transfer or exchange of Convertible Debentures, but the company
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Convertible Debentures, other than exchanges pursuant to Sections 2.13, 8.5 or
12.5 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Convertible Debenture during a 15-day period prior
to the day of mailing of the relevant notice of redemption or (ii) to register
the transfer of or exchange any Convertible Debenture so selected for redemption
in whole or in part, except, in the case of any Convertible Debenture to be
redeemed in part, the portion thereof not redeemed.
Notwithstanding any other provisions of this Section 2.10, unless
and until it is exchanged in whole or in part for Convertible Debentures in
definitive registered form, a Global Debenture representing all or a portion of
the Convertible Debentures may not be transferred except as a whole by the
Depositary to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
If at any time the Depositary for any Convertible Debentures
represented by one or more Global Debentures notifies the Company that it is
unwilling or unable to continue as Depositary for such Convertible Debentures or
if at any time the Depositary for such Convertible Debentures shall no longer be
eligible under Section 2.6, the Company shall appoint a successor Depositary
with respect to such Convertible Debentures. If a successor Depositary for such
Convertible Debentures is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility, as the case
may be, the Company's election that such Convertible Debentures be represented
by one or more Global Debentures shall no longer be effective and the Company
will execute, and the Trustee, upon receipt of an Officers' Certificate for the
22
authentication and delivery of definitive Convertible Debentures, will
authenticate and deliver, Convertible Debentures in definitive registered form,
in any authorized denominations, in an aggregate principal amount equal to the
principal amount of the Global Debenture or Convertible Debentures representing
such Convertible Debentures in exchange for such Global Debenture or Convertible
Debentures.
The Company may at any time and in its sole discretion determine
that the Convertible Debentures issued in the form of one or more Global
Debentures shall no longer be represented by a Global Debenture. In such event
the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate for the authentication and delivery of definitive Convertible
Debentures, will authenticate and deliver, Convertible Debentures in definitive
registered form, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Global Debenture, in exchange for
such Global Debenture.
If an Event of Default occurs and is continuing with respect to
Convertible Debentures issued in the form of one or more Global Debentures, upon
written notice from the Depositary, the Company will execute, and the Trustee,
upon receipt of an Officers' Certificate for the authentication and delivery of
definitive Convertible Debentures, will authenticate and deliver, Convertible
Debentures in definitive registered form, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global Debenture
or Convertible Debentures, representing such Convertible Debentures, in exchange
for such Global Debenture or Convertible Debentures.
If specified by the Company, the Depositary for such Global
Debenture may surrender such Global Debenture in exchange in whole or in part
for Convertible Debentures in definitive registered form on such terms as are
acceptable to the Company and such Depositary. Thereupon, the Company shall
execute, and the Trustee shall authenticate and deliver, without service charge
to the Holder:
(i) to the Person specified by such Depositary a new Convertible
Debenture or Convertible Debentures, of any authorized denominations
as requested by such Person, in an aggregate principal amount equal to
and in exchange for such Person's beneficial interest in the Global
Debenture; and
(ii) to such Depositary a new Global Debenture in a denomination
equal to the difference, if any, between the principal amount of the
surrendered Global Debenture and the aggregate principal amount of
Convertible Debentures authenticated and delivered pursuant to clause
(i) above.
Upon the exchange of a Global Debenture for Convertible
Debentures in definitive registered form, in authorized denominations, such
Global Debenture shall be cancelled by the Trustee or an agent of the Company or
the Trustee. Convertible Debentures in definitive registered form issued in
exchange for a Global Debenture pursuant to this Section 2.10 shall be
registered in such names and in such authorized denominations as the Depositary
for such Global Debenture, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or agent of the Company or
the Trustee. The Trustee or such agent shall deliver such Convertible Debentures
23
to or as directed by the Persons in whose names such Convertible Debentures are
so registered.
Section 2.11 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN
CONVERTIBLE DEBENTURES. In case any temporary or definitive Convertible
Debenture shall become mutilated or defaced or be destroyed, lost or stolen,
then, in the absence of notice to the Company or the Trustee that the
Convertible Debenture has been acquired by a bona fide purchaser, the Company
shall execute, and upon the written request of any officer of the Company, the
Trustee shall authenticate and make available for delivery a new Convertible
Debenture and of like tenor and principal amount and with the same terms and
conditions, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Convertible Debenture or in lieu of
and substitution for the Convertible Debenture so destroyed, lost or stolen. In
every case the applicant for a substitute Convertible Debenture shall furnish to
the Company and to the Trustee and to any agent of the Company or the Trustee
such security or indemnity as may be required by them to indemnify and defend
and to save each of them harmless and, in every case of destruction, loss or
theft, evidence to their satisfaction of the destruction, loss or theft of such
Convertible Debenture and of the ownership thereof and in the case of mutilation
or defacement shall surrender the Convertible Debenture to the Trustee or such
agent.
Upon the issuance of any substitute Convertible Debenture, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or its agent) connected
therewith. In case any Convertible Debenture which has matured or is about to
mature or has been called for redemption in full shall become mutilated or
defaced or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Convertible Debenture, pay or authorize, the payment of the same
(without surrender thereof except in the case of a mutilated or defaced
Convertible Debenture); provided, however, that the applicant for such payment
shall furnish to the Company and to the Trustee and any agent of the Company or
the Trustee such security or indemnity as any of them may require to save each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and the Trustee and any agent of the
Company or the Trustee evidence to their satisfaction of the destruction, loss
or theft of such Convertible Debenture and of the ownership thereof.
Every substitute Convertible Debenture issued pursuant to the
provisions of this Section by virtue of the fact that any Convertible Debenture
is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Convertible Debenture shall be at any time enforceable by anyone and shall be
entitled to all the benefits of (but shall be subject to all the limitations of
rights set forth in) this Indenture equally and proportionately with any and all
other Convertible Debentures duly authenticated and delivered hereunder. All
Convertible Debentures shall be held upon the express condition that, to the
extent permitted by law, the foregoing provisions are exclusive with respect to
the replacement or payment of mutilated, defaced, destroyed, lost or stolen
Convertible Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
24
Section 2.12 CANCELLATION OF CONVERTIBLE DEBENTURES. All
Convertible Debentures surrendered for payment, redemption, conversion,
registration of transfer or exchange, or for credit against any payment in
respect of a sinking or analogous fund, shall, if surrendered to the Company or
any agent of the Company or the Trustee, be delivered to the Trustee for
cancellation or, if surrendered to the Trustee, shall be cancelled by it; and no
Convertible Debentures shall be issued in lieu thereof, except as expressly
permitted by any of the provisions of this Indenture. The Company may at any
time deliver to the Trustee for cancellation any Convertible Debentures
previously authenticated hereunder which the Company has not issued and sold and
all Convertible Debentures so delivered shall be promptly cancelled by the
Trustee. If the Company shall acquire any of the Convertible Debentures, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Convertible Debentures unless and until the
same are delivered to the Trustee for cancellation. All cancelled Convertible
Debentures shall be disposed of in accordance with the Trustee's customary
practices.
Section 2.13 TEMPORARY CONVERTIBLE DEBENTURES. Pending the
preparation of definitive Convertible Debentures, the Company may execute and
the Trustee shall authenticate and make available for delivery temporary
Convertible Debentures (printed, lithographed, typewritten or otherwise
reproduced, in each case in form reasonably acceptable to the Trustee).
Temporary Convertible Debentures shall be issuable in any authorized
denomination, and substantially in the form of the definitive Convertible
Debentures but with such omissions, insertions and variations as may be
appropriate for temporary Convertible Debentures, all as may be determined by
the Company with the reasonable concurrence of the Trustee. Temporary
Convertible Debentures may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Convertible Debenture shall be
executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the
definitive Convertible Debentures. Without unreasonable delay the Company shall
execute and shall furnish definitive Convertible Debentures and thereupon
temporary Convertible Debentures may be surrendered in exchange therefor without
charge to the Holder at each office or agency to be maintained by the Company
for that purpose pursuant to Section 3.2, and the Trustee shall authenticate and
make available for delivery in exchange for such temporary Convertible
Debentures an equal aggregate principal amount of definitive Convertible
Debentures of authorized denominations. Until so exchanged, the temporary
Convertible Debentures shall be entitled to the same benefits under this
Indenture as definitive Convertible Debentures.
Section 2.14 CUSIP NUMBERS.
The Company in issuing the Convertible Debentures may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; PROVIDED that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Convertible Debentures or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Convertible Debentures, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the "CUSIP"
numbers.
25
ARTICLE III
COVENANTS OF THE COMPANY
Section 3.1 PAYMENT OF PRINCIPAL AND INTEREST.
The Company covenants and agrees for the benefit of the
Convertible Debentures that it will duly and punctually pay or cause to be paid
the principal of, and interest on, each of the Convertible Debentures in
accordance with the terms of such Convertible Debentures and of this Indenture.
The interest on Convertible Debentures (together with any additional amounts
payable pursuant to the terms of such Convertible Debentures) shall be payable
only to or upon the written order of the Holders thereof and at the option of
the Company may be paid by wire transfer or by mailing checks for such interest
payable to or upon the written order of such Holders at their last addresses as
they appear on the Security Register.
Payment of principal of and any interest on any Convertible
Debenture in definitive global form shall be made to the Person or Persons
specified therein. Except as provided in the preceding paragraph, the Company,
the Trustee and any agent of the Company and the Trustee shall treat a Person as
the Holder of such principal amount of Outstanding Convertible Debentures
represented by a Global Debenture as shall be specified in a written statement
of the Holder of such Global Debenture.
Section 3.2 OFFICES FOR PAYMENT, ETC. So long as any of the
Convertible Debentures remain outstanding, the Company will maintain the
following: an office or agency in the Borough of Manhattan, City of New York (a)
where the Convertible Debentures may be presented for payment, (b) where the
Convertible Debentures may be presented for registration of transfer and for
exchange as provided in this Indenture, and (c) where notices and demands may be
served upon the Company in respect of the Convertible Debentures, or this
Indenture.
The Company will give to the Trustee written notice of the
location of any such office or agency and of any change of location thereof. In
case the Company shall fail to so designate or maintain any such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made and notices may be
served at the Corporate Trust Office. The Trustee is hereby appointed, and
accepts its appointment as, Paying Agent.
Section 3.3 PAYING AGENTS. Whenever the Company shall appoint a
Paying Agent other than the Trustee with respect to the Convertible Debentures,
it will cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section:
(a) that it will hold all sums received by it as such Paying
Agent for the payment of the principal of or interest on the
Convertible Debentures (whether such sums have been paid to it by the
Company or by any other obligor on the Convertible Debentures) in
trust for the benefit of the Holders of the Convertible Debentures or
26
of the Trustee, and upon the occurrence of an Event of Default and
upon the written request of the Trustee, pay over all such sums
received by it to the Trustee; and
(b) that it will give the Trustee written notice of any failure
by the Company (or by any other obligor on the Convertible Debentures)
to make any payment of the principal of or interest on the Convertible
Debentures when the same shall be due and payable. The Company will,
on or prior to each due date of the principal of or interest on the
Convertible Debentures, deposit in a timely manner with the Paying
Agent a sum sufficient to pay such principal or interest so becoming
due, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of any failure to take such action.
If the Company shall act as its own Paying Agent with respect to
the Convertible Debentures, it will, on or before each due date of the principal
of or interest on the Convertible Debentures, set aside, segregate and hold in
trust for the benefit of the holders of the Convertible Debentures a sum
sufficient to pay such principal or interest so becoming due. The Company will
promptly notify the Trustee of any failure to take such action.
Section 3.4 WRITTEN STATEMENT TO TRUSTEE. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, a brief certificate (which need not comply
with Section 15.5) from the principal executive, financial or accounting officer
of the Company as to his or her knowledge, after due inquiry, of the Company's
compliance with all conditions and covenants under this Indenture (such
compliance to be determined without regard to any period of grace or requirement
of notice provided under this Indenture), and if the Company shall not be in
compliance, specifying all such defaults or non-compliance and the nature and
status thereof. The Company shall deliver to the Trustee promptly after the
Company becomes aware of the occurrence of any Event of Default or an event
which, with notice or the lapse of time or both, would constitute an Event of
Default, an Officers' Certificate setting forth the details of such Event of
Default or default and the action which the Company proposes to take with
respect thereto.
Section 3.5 LIMITATION ON DIVIDENDS; TRANSACTIONS WITH
AFFILIATES. If any Convertible Debentures are outstanding and (i) there shall
have occurred any Event of Default or any event that, with the giving of notice
or lapse of time or both, would constitute an Event of Default, (ii) the
Guarantor shall be in default with respect to its payment or other obligations
under the Preferred Securities Guarantee or the Common Securities Guarantee, or
(iii) the Company shall have given notice of its election to defer payments of
interest on Convertible Debentures by extending the interest payment period as
provided in Article XI and such period, or any extension thereof, shall be
continuing, then the Company shall not (a) declare or pay any dividend on, make
any distribution with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its Capital Stock or (b) make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank pari passu with or junior in
interest to the Convertible Debentures or make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any subsidiary
of the Company if such guarantee ranks pari passu with or junior in interest to
the Convertible Debentures (other than (i) as a result of a reclassification of
the Capital Stock of the Company or the exchange or conversion of one class or
series of the Capital Stock of the Company for another class or series of the
27
Capital Stock of the Company, (ii) the purchase of fractional interests in
shares of the Capital Stock of the Company pursuant to the conversion or
exchange provisions of such Capital Stock or the security being converted into
or exchanged for such Capital Stock, (iii) dividends or distributions in Common
Stock of the Company, (iv) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (v) payments under the Trust Securities Guarantees, (vi)
purchases of Common Stock of the Company related to the issuance of Common Stock
of the Company or rights under any of the Company's benefit plans for its
directors, officers or employees and (vii) obligations under any dividend
reinvestment and stock purchase plans).
Section 3.6 COVENANTS AS TO VIATEL TRUST. For so long as the
Trust Securities remain outstanding, the Company will (a) maintain 100% direct
or indirect ownership of the Common Securities of Viatel Trust; provided,
however, that any permitted successor of the Company under this Indenture may
succeed to the Company's ownership of the Common Securities, (b) use its
reasonable efforts to cause Viatel Trust (i) to remain a statutory business
trust, except in connection with the distribution of Convertible Debentures to
the holders of Trust Securities in liquidation of Viatel Trust, the redemption
of all of the Trust Securities of Viatel Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, and (ii)
to continue to be classified as a grantor trust for United States federal income
tax purposes and (c) to use its reasonable efforts to cause each holder of Trust
Securities to be treated as owning an undivided beneficial interest in the
Convertible Debentures.
Section 3.7 EXISTENCE.Subject to Article IX, the Company will do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
ARTICLE IV
HOLDERS OF CONVERTIBLE DEBENTURES LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 4.1 COMPANY TO FURNISH TRUSTEE INFORMATION AS TO NAMES
AND ADDRESSES OF HOLDERS OF CONVERTIBLE DEBENTURES. The Company covenants and
agrees that it will furnish or cause to be furnished to the Trustee a list in
such form as the Trustee may reasonably require of the names and addresses of
the Holders of the Convertible Debentures:
(a) semiannually and not more than 15 days after each record date
for the payment of interest on such Convertible Debentures, as
hereinabove specified, as of such record date, and
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(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such
request, such list to be as of a date not more than 15 days prior to
the time such information is furnished, provided that if and so long
as the Trustee shall be the Registrar, such list shall not be required
to be furnished.
Section 4.2 PRESERVATION AND DISCLOSURE OF HOLDERS OF CONVERTIBLE
DEBENTURES' LISTS. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Holders of Convertible Debentures contained in the most recent list furnished to
it as provided in Section 4.1 or maintained by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more Holders of Convertible Debentures
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has owned a
Convertible Debenture for a period of at least six months preceding the date of
such application, and such application states that the applicants desire to
communicate with other Holders of Convertible Debentures (in which case the
applicants must all hold Convertible Debentures) or with Holders of all
Convertible Debentures with respect to their rights under this Indenture or
under such Convertible Debentures and such application is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five business days after the receipt of
such application, at is election, either
(i) afford to such applicants access to the information preserved
at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section, or
(ii) inform such applicants as to the approximate number of
Holders of Convertible Debentures or of all Convertible Debentures, as
the case may be, whose names and addresses appear in the information
preserved at the time by the Trustee, in accordance with the
provisions of subsection (a) of this Section, as to the approximate
cost of mailing to such Holders of Convertible Debentures the form of
proxy or other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of Convertible Debentures or all
Holders of Convertible Debentures, as the case may be, whose name and
address appears in the information preserved at the time by the
Trustee in accordance with the provisions of subsection (a) of this
Section, a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender
to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Commission together with a copy of
the material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of Convertible Debentures or could be in
violation of applicable law. Such written statement shall specify the
basis of such opinion. If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so
filed, shall enter an order refusing to sustain any of such objections
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or if, after the entry of such order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity
for hearing, that all the objections so sustained have been met, and
shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders of Convertible Debentures with
reasonable promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any obligation
or duty to such applicants respecting their application.
(c) Each and every Holder of Convertible Debentures, by receiving
and holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of the Company or the Trustee shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Convertible Debentures in accordance with
the provisions of subsection (b) of this Section, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
such subsection (b).
Section 4.3 REPORTS BY THE COMPANY. The Company covenants: (a) to
file with the Trustee, within 15 days after the Company is required to file the
same with the Commission, copies of the annual reports and of the information,
documents, and other reports (or copies of such portions and any of the
foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act, or if the Company
is not required to file information, documents, or reports pursuant to either of
such Sections, then to file with the Trustee and the Commission to the extent
permitted, in accordance with rules and regulations prescribed from time to time
by the Commission, such of the supplementary and periodic information,
documents, and reports which may be required pursuant to Section 13 of the
Exchange Act, in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations;
(b) to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
additional information, documents, and reports with respect to compliance by the
Company with the conditions and covenants provided for in this Indenture as may
be required from time to time by such rules and regulations; and
(c) to transmit by mail to the Holders of Convertible Debentures
in the manner and to the extent required by Sections 6.6 and 15.4, within 30
days after the filing thereof with the Trustee, such summaries of any
information, documents, and reports required to be filed by the Company pursuant
to subsections (a) and (b) of this Section as may be required to be transmitted
to such Holders by rules and regulations prescribed from time to time by the
Commission.
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ARTICLE V
REMEDIES OF THE TRUSTEE AND HOLDERS OF CONVERTIBLE DEBENTURES ON EVENT OF
DEFAULT
Section 5.1 EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY;
WAIVER OF DEFAULT. "Event of Default" with respect to the Convertible Debentures
wherever used herein, means any one or more of the following events which shall
have occurred and be continuing (whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(a) default in the payment of any interest (including any
Additional Sums and Compound Interest) upon or any additional amounts,
including any Liquidated Damages Amount (as defined in the Preferred
Securities Registration Rights Agreement), payable in respect of any
Convertible Debentures when it becomes due and payable, and
continuance of such default for a period of 30 days; provided,
however, that a valid extension of an interest payment period by the
Company in accordance with the terms of this Indenture shall not
constitute a default in the payment of interest for this purpose; or
(b) default in the payment of the principal of, or premium, if
any, on, any Convertible Debentures as and when the same shall become
due and payable whether at maturity, upon redemption, by declaration
or otherwise; or
(c) default in the performance, or breach of any covenant or
warranty of the Company contained in the Convertible Debentures or in
this Indenture (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of
30 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the
Outstanding Convertible Debentures a written notice specifying such
default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(d) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of all or any substantial part of its
property, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 90
consecutive days; or
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(e) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under
any applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or of all or any substantial part
of its property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action; or
(f) failure by the Company to convert Convertible Debentures into
shares of Common Stock of the Company upon an appropriate election by
a holder of Trust Securities or Convertible Debentures to convert such
Trust Securities or Convertible Debentures, as the case may be, into
such Common Stock (whether or not conversion or exchange is prohibited
by the subordination provisions set forth herein); or
(g) the Viatel Trust shall have voluntarily or involuntarily
dissolved, wound up its business or otherwise terminated its existence
except in connection with (i) the distribution of Convertible
Debentures to holders of Trust Securities in liquidation of their
interest in the Viatel Trust upon the occurrence of a Special Event or
upon the occurrence of events as described in Section 3 of Annex I to
the Declaration, (ii) the redemption of all of the outstanding Trust
Securities of the Viatel Trust, (iii) the conversion of all
outstanding Convertible Preferred Securities into Common Stock of the
Company or (iv) certain mergers, consolidations or amalgamations, each
as permitted by the Declaration.
If an Event of Default occurs and is continuing, then and in each
and every such case, unless the principal of all Convertible Debentures shall
have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Convertible Debentures then
Outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by such Holders), may declare the entire principal of, plus accrued and
unpaid interest on, all the Convertible Debentures (including Additional Sums,
if any, and, to the extent permitted by applicable law, Compound Interest, if
any) and any other amounts payable under this Indenture to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. These provisions, however, are subject to the
condition that if at any time after the principal and other amounts due on the
Convertible Debentures shall have been so declared due and payable, and before
any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest, if any, upon all the Convertible Debentures and the principal of any
and all Convertible Debentures which shall have become due otherwise than by
such acceleration (with interest upon such principal and, to the extent that
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payment of such interest is enforceable under applicable law, Compound Interest
to the date of such payment) or deposit in Dollars such amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel and all other expenses and liabilities incurred, and all
advances with interest made, by the Trustee, its agents, attorneys and counsel,
and if any and all defaults under this Indenture, other than the nonpayment of
the principal and interest of Convertible Debentures which shall have become due
by such acceleration, shall have been cured or waived as provided herein, then
and in every such case the Holders of a majority in aggregate principal amount
of the Convertible Debentures then Outstanding, by written notice to the Company
and to the Trustee for the Convertible Debentures, may waive all defaults and
rescind and annul such declaration and its consequences; but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or shall impair any right consequent thereon.
Section 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY
PROVE DEBT.The Company covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Convertible Debentures when
such interest shall have become due and payable, and such default shall have
continued for a period of 30 days, or (b) in case default shall be made in the
payment of all or any part of the principal of any of the Convertible Debentures
when the same shall have become due and payable, whether upon Maturity or upon
any redemption or by declaration or otherwise, then upon demand of the Trustee
for the Convertible Debentures, the Company will pay to the Trustee for the
benefit of the Holders of the Convertible Debentures the whole amount that then
shall have become due and payable on all Convertible Debentures for principal of
or interest, as the case may be (with interest to the date of such payment upon
the overdue principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest at the
same rate as the rate of interest specified in the Convertible Debentures); and
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable compensation to, and all
expenses and liabilities incurred and all advances with interest made by, the
Trustee and each predecessor Trustee except as a result of its negligence or bad
faith.
Until such demand is made by the Trustee, the Company may pay the
principal of and interest on the Convertible Debentures to the persons entitled
thereto, whether or not the principal of and interest on the Convertible
Debentures are overdue.
In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee for the Convertible Debentures, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against the
Company or other obligor upon such Convertible Debentures and collect in the
manner provided by law out of the property of the Company or other obligor upon
such Convertible Debentures, wherever situated, the moneys adjudged or decreed
to be payable.
In case there shall be pending proceedings relative to the
Company or any other obligor upon the securities under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Company or its property or such other
33
obligor, or in case of any other comparable judicial proceedings relative to the
Company or other obligor under the Convertible Debentures, or to the property of
the Company or such other obligor, the Trustee, irrespective of whether the
principal of any Convertible Debentures shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Convertible
Debentures, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to, and all expenses
and liabilities incurred and all advances with interest made by, the
Trustee and each predecessor Trustee, and their respective agents,
attorneys and counsel, except as a result of negligence or bad faith)
and of the Holders of Convertible Debentures allowed in any judicial
proceedings relative to the Company or other obligor upon all
Convertible Debentures, or to the property of the Company or such
obligor, and
(b) to collect and receive any moneys or other property payable
or deliver able on any such claims, and to distribute all amounts
received with respect to the claims of the Holders of Convertible
Debentures and of the Trustee on their behalf; and any trustee,
receiver, liquidator, custodian or other similar official is hereby
authorized by each of the Holders of Convertible Debentures to make
payments to the Trustee for the Convertible Debentures, and, in the
event that such Trustee shall consent to the making of payments
directly to the Holders of Convertible Debentures, to pay to such
Trustee such amounts as shall be sufficient to cover reasonable
compensation to, and all expenses and liabilities incurred and all
advances with interest made by, such Trustee, each predecessor Trustee
and their respective agents, attorneys and counsel and all other
amounts due to such Trustee or any predecessor Trustee pursuant to
Section 6.7, except as a result of Trustee's negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder of
Convertible Debentures any plan of reorganization, arrangement, adjustment or
composition affecting the Convertible Debentures or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of Convertible Debentures in any such proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Convertible Debentures, may be enforced by the
34
Trustee for the Convertible Debentures without the possession of any of the
Convertible Debentures or the production thereof at any trial or other
proceedings relative thereto, any such action or proceedings instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Convertible Debentures in respect of which such action was taken.
In any proceedings brought by the Trustee for the Convertible
Debentures (and also any proceedings involving the interpretation of any
provision of this Indenture to which the Trustee shall be a party), the Trustee
shall be held to represent all the Holders of the Convertible Debentures in
respect to which such action was taken, and it shall not be necessary to make
any Holders of such Convertible Debentures parties to any such proceedings.
Section 5.3 APPLICATION OF PROCEEDS. Any moneys collected by the
Trustee for the Convertible Debentures pursuant to this Article in respect of
the Convertible Debentures shall be applied in the following order at the date
or dates fixed by such Trustee and, in case of the distribution of such moneys
on account of principal or interest, upon presentation of the several
Convertible Debentures in respect of which moneys have been collected and
stamping (or otherwise noting) thereon the payment, or issuing Convertible
Debentures in reduced principal amounts in exchange for the presented
Convertible Debentures if only partially paid, or upon surrender thereof if
fully paid:
FIRST: To the payment of costs and expenses applicable in respect
of which moneys have been collected, including reasonable compensation
to, and all expenses and liabilities incurred and all advances with
interest made by, the Trustee and each predecessor Trustee and their
respective agents and attorneys and all other amounts due to the
Trustee or any predecessor Trustee pursuant to Section 6.7, except as
a result of Trustee's negligence or bad faith;
SECOND: To the payment of the amounts then due and unpaid for
interest on the Convertible Debentures for which principal is not yet
due and payable in respect of which moneys have been collected, such
payments to be made ratably to the persons entitled thereto, without
discrimination or preference, according to the amounts then due and
payable on such Convertible Debentures for interest;
THIRD: To the payment of the amounts then due and unpaid for
principal of and interest on the Convertible Debentures for which
principal is due and payable in respect of which moneys have been
collected, such payments to be made ratably to the persons entitled
thereto, without discrimination or preference, according to the
amounts then due and payable on such Convertible Debentures of
principal and interest, respectively; and
FOURTH: To the payment of the remainder, if any, to the Company.
Section 5.4 RESTORATION OF RIGHTS ON ABANDONMENT OF
PROCEEDINGS. In case the Trustee for the Convertible Debentures or any Holder
shall have proceeded to enforce any right under this Indenture and such
proceedings shall have been discontinued or abandoned for any reason, or shall
have been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to the determination in any such proceeding, the
Company, the Trustee and the Holders shall be restored respectively to their
former positions and rights hereunder, and all rights, remedies and powers of
the Company, the Trustee and the Holders of Convertible Debentures shall
continue as though no such proceedings had been taken.
Section 5.5 LIMITATIONS ON SUITS BY HOLDERS OF CONVERTIBLE
DEBENTURES.
No Holder of any Convertible Debenture shall have any right by
virtue or by availing of any provision of this Indenture to institute any action
or proceeding at law or in equity or in bankruptcy or otherwise upon or under
35
with respect to this Indenture, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for any other remedy
hereunder, unless such Holder previously shall have given to the Trustee written
notice of any Event of Default and of the continuance thereof, as hereinbefore
provided, and, if the Viatel Trust is not the sole Holder of the Convertible
Debentures, unless also the Holders of not less than 25% in aggregate principal
amount of the Convertible Debentures then Outstanding shall have made written
request upon the Trustee to institute such action or proceedings in its own name
as trustee hereunder and shall have offered to the Trustee such reasonable
indemnity, as it may require, against the costs, expenses and liabilities to be
incurred therein or thereby and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity shall have failed to institute any
such action or proceeding and no direction inconsistent with such written
request shall have been given to the Trustee during such 60 day period by
Holders of a majority in principal amount of the Convertible Debentures then
Outstanding; it being understood and intended, and being expressly covenanted by
the taker and Holder of every Convertible Debenture with every other taker and
Holder of a Convertible Debenture and the Trustee, that no one or more Holders
of Convertible Debentures shall have any right in any manner whatever, by virtue
or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any other such Holder of Convertible Debentures, or to
obtain or seek to obtain priority over or preference to any other such Holder or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders of Convertible
Debentures.
Section 5.6 UNCONDITIONAL RIGHT OF HOLDERS OF CONVERTIBLE
DEBENTURES TO INSTITUTE CERTAIN SUITS. Notwithstanding any provision in this
Indenture and any provision of any Convertible Debenture, the right of any
Holder of any Convertible Debenture to receive payment of the principal of and
(subject to Section 2.9 and Article XI) interest on such Convertible Debenture
at the respective rates, in the respective amount on or after the respective due
dates expressed in such Convertible Debenture, and to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 5.7 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER OF DEFAULT. Except as provided in Section 2.11 and Section 5.5, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders of
Convertible Debentures is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of
Convertible Debentures to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right or
power or shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 5.5, every power and remedy given
by this Indenture or by law to the Trustee or to the Holders of Convertible
Debentures may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or the Holders of Convertible Debentures.
36
Section 5.8 CONTROL BY HOLDERS OF CONVERTIBLE DEBENTURES. The
Holders of a majority in aggregate principal amount of the Convertible
Debentures at the time Outstanding shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee with respect
to the Convertible Debentures by this Indenture; provided that such direction
shall not be in conflict with any rule of law or the provisions of this
Indenture; and provided further that the Trustee, being advised by counsel,
shall have the right to decline to follow any such direction if the Trustee
shall determine that the action or proceedings so directed would involve the
Trustee in personal liability or if the Trustee in good faith shall so determine
that the actions or forbearance specified in or pursuant to such direction would
be unduly prejudicial to the interest of Holders of the Convertible Debentures
not joining in the giving of said direction.
Section 5.9 WAIVER OF PAST DEFAULTS. The Holders of not less than
a majority in aggregate principal amount of the Convertible Debentures at the
time Outstanding may on behalf of the Holders of all the Convertible Debentures
waive any past default hereunder or its consequences, except a default:
(a) in the payment of the principal of (or premium, if any) or
any interest on any Convertible Debenture as and when the same shall
become due by the terms of Convertible Debentures otherwise than by
acceleration (unless such default has been cured and sums sufficient
to pay all matured installments of interest and principal and any
premium has been deposited with the Trustee (in accordance with
Section 5.1)), or
(b) in respect of a covenant or provision hereof which under
Article VIII cannot be modified or amended without the consent of the
Holder of each Outstanding Convertible Debenture affected;
provided, however, that if the Convertible Debentures are held by the Viatel
Trust or the Institutional Trustee of such Trust, such waiver or modification to
such waiver shall not be effective until the holders of a majority in aggregate
liquidation amount of Trust Securities of the Viatel Trust shall have consented
to such waiver or modification to such waiver; provided further, that if the
consent of the Holder of each Outstanding Convertible Debenture is required,
such waiver shall not be effective until each holder of the Trust Securities of
the Viatel Trust shall have consented to such waiver.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
Section 5.10 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO
PAY COSTS. All parties to this Indenture agree, and each Holder of any
Convertible Debenture, by his acceptance thereof, shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
37
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Trustee, to any suit instituted by any
Holder of Convertible Debentures or group of Holders of Convertible Debentures
holding in the aggregate more than 10% in principal amount of the Outstanding
Convertible Debentures, or to any suit instituted by a Holder of Convertible
Debentures for the enforcement of the payment of the principal of or interest on
any Convertible Debenture on or after the due date expressed in such Convertible
Debenture or any date fixed for redemption.
Section 5.11 SUITS FOR ENFORCEMENT.
In case an Event of Default has occurred, has not been waived and
is continuing, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either at law or in equity or in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.1 DUTIES OF THE TRUSTEE. (a) If an Event of Default has
occurred and is continuing with respect to the Convertible Debentures, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default with
respect to the Convertible Debentures:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no other duties shall be
inferred or implied against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming on their face to the
requirements of this Indenture. However, in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether or
not they conform on their face to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent failure to act or its own willful misconduct, except that:
38
(i) this paragraph (c) does not limit the effect of paragraph (b)
of this Section 6.1;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.8.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 6.1.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers hereunder, if it shall have reasonable grounds for believing
that the repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
Section 6.2 RIGHTS OF TRUSTEE. Subject to Section 6.1 and the
provisions of the Trust Indenture Act:
(a) The Trustee may conclusively rely on any document (whether in
its original or facsimile form) believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the sole cost of the
Company.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) Subject to the provisions of Section 6.1(c), the Trustee
shall not be liable for any action it takes or omits to take in good faith which
it believes to be authorized or within its rights or powers.
(d) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon in accordance with such
advice or Opinion of Counsel.
39
(e) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(f) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(g) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed by the Trustee with due care to act hereunder.
Section 6.3 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Convertible
Debentures and may otherwise deal with the Company or its affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar or
co- Registrar may do the same with like rights. However, the Trustee must comply
with Sections 6.10 and 6.11.
Section 6.4 TRUSTEE'S DISCLAIMER. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Convertible Debentures, it shall not be accountable for the Company's use of the
proceeds from the Convertible Debentures, it shall not be responsible for any
statement in the registration statement for the Convertible Debentures under the
Securities Act or in the Indenture or the Convertible Debentures (other than its
certificate of authentication).
Section 6.5 NOTICE OF DEFAULTS. If a default occurs and is
continuing with respect to any Convertible Debentures and if it is known to the
Trustee through oral or written notice to a Responsible Officer, the Trustee
shall give to each Holder of Convertible Debentures notice of the default within
90 days after such default occurs. Except in the case of a default described in
Section 5.1(a) or (b), the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interest of Holders of Convertible Debentures.
Section 6.6 REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after
each May 15, beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Holder of Convertible Debentures and each other
person specified in TIA Section 313(c) a brief report dated as of such May 15
that complies with TIA Section 313(a) to the extent required thereby. The
Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders of
Convertible Debentures shall be filed with the Commission and each securities
exchange on which the Convertible Debentures are listed. The Company agrees
40
promptly to notify the Trustee whenever the Convertible Debentures become listed
on any securities exchange and of any delisting thereof.
Section 6.7 COMPENSATION AND INDEMNITY. The Company agrees:
(a) to pay to the Trustee from time to time in Dollars such
compensation as shall be agreed to in writing between the Company and the
Trustee for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances with interest thereon incurred or made by
the Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses, advances with interest thereon and
disbursements of its agents and counsel), except to the extent any such expense,
disbursement or advance may be attributable to its negligence or bad faith; and
(c) to fully indemnify the Trustee and any predecessor Trustee in
Dollars for, and to hold it harmless against, any loss, liability, claim, damage
or expense arising out of or in connection with the acceptance or administration
of this trust or the performance of its duties hereunder, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder
(including the reasonable compensation and the expenses, advances with interest
thereon and disbursements of its agents and counsel), except to the extent that
any such loss, liability, claim, damage or expense may be attributable to its
negligence or bad faith.
As security for the performance of the obligations of the Company
in this Section 6.7, the Trustee shall have a lien prior to the Convertible
Debentures on all money or property held or collected by the Trustee, except
that held in trust to pay the principal of or interest, if any, on particular
Convertible Debentures.
"Trustee" for purposes of this Section 6.7 includes any
predecessor Trustee, provided that the negligence or bad faith of any Trustee
shall not be attributable to any other Trustee.
The Company's payment obligations pursuant to this Section 6.7
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a default specified in Sections 5.1(d) and 5.1(e), such
expenses are intended to constitute expenses of administration under bankruptcy
law.
Section 6.8 REPLACEMENT OF TRUSTEE. The Trustee may resign at any
time with respect to Convertible Debentures by so notifying the Company;
provided, however, no such resignation shall be effective until a successor
Trustee has accepted its appointment pursuant to this Section 6.8. The Holders
of a majority in aggregate principal amount of the Outstanding Convertible
Debentures may remove the Trustee at the time outstanding by so notifying the
Trustee and the Company. The Company shall remove the Trustee if:
41
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, with respect to the Convertible
Debentures, the Company shall promptly appoint, by resolution of its Board of
Directors, a successor Trustee with respect to the Convertible Debentures.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture with respect to the Convertible Debentures. The successor
Trustee shall mail a notice of its succession to Holders of Convertible
Debentures so affected. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 6.7.
If a successor Trustee does not take office within 30 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in aggregate principal amount of the Convertible
Debentures at the time Outstanding may petition at the expense of the Company
any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10, any Holder of
Convertible Debentures may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
42
Section 6.9 SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee.
Section 6.10 ELIGIBILITY; DISQUALIFICATION. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a)(1) and Section
310(a)(5). The Trustee shall have combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b).
Section 6.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
Section 6.12 TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE
COMPANY.
Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
five Business Days after the date any officer of the Company actually receives
such application, unless an such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
ARTICLE VII
CONCERNING THE HOLDERS OF CONVERTIBLE DEBENTURES
Section 7.1 EVIDENCE OF ACTION TAKEN BY HOLDERS OF CONVERTIBLE
DEBENTURES.(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided in this Indenture to be given or taken by a
specified percentage in principal amount of the Holders of Convertible
Debentures may be embodied in and evidenced by one or more instruments or
substantially similar tenor signed by such specified percentage of Holders of
Convertible Debentures in person or by agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee.
Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Sections
6.1 and 6.2) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Article.
(b) The ownership of such Convertible Debentures shall be
provided by the Security Register.
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Section 7.2 PROOF OF EXECUTION OF INSTRUMENTS. Subject to
Sections 6.1 and 6.2, the execution of any instrument by a Holder of Convertible
Debentures or his agent or proxy may be proved in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee.
Section 7.3 HOLDERS TO BE TREATED AS OWNERS. The Company, the
Trustee and any agent of the Company or the Trustee may deem and treat the
person in whose name any Convertible Debenture shall be registered upon the
Security Register as the absolute owner of such Convertible Debenture (whether
or not such Convertible Debenture shall be overdue and notwithstanding any
notification of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and (subject to Section 2.9)
interest on such Convertible Debenture and for all other purposes; and neither
the Company nor the Trustee nor any agent of the Company or the Trustee shall be
affected by any notice to the contrary.
Section 7.4 CONVERTIBLE DEBENTURES OWNED BY COMPANY DEEMED NOT
OUTSTANDING. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Convertible Debentures have concurred in any
direction, consent or waiver under this Indenture, Convertible Debentures which
are owned by the Company or any other obligor on the Convertible Debentures with
respect to which such determination is being made or by any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any other obligor on the Convertible Debentures with
respect to which such determination is being made shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination, except
that for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver only Convertible Debentures
which a Responsible Officer of the Trustee actually knows are so owned shall be
so disregarded. Convertible Debentures so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Convertible Debentures and that the pledgee is not the Company or any other
obligor upon the Convertible Debentures or any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Convertible Debentures.
Section 7.5 RIGHT OF REVOCATION OF ACTION TAKEN.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.1, of the taking of any action by the Holders
of the percentage in aggregate principal amount of the Convertible Debentures,
as the case may be, specified in this Indenture in connection with such action,
any Holder of a Convertible Debenture the serial number of which is shown by the
evidence to be included among the serial numbers of the Convertible Debentures
the Holders of which have consented to such action may, by filing written notice
at the Corporate Trust Office and upon proof of holding as provided in this
Article, revoke such action so far as concerns such Convertible Debenture.
Except as aforesaid any such action taken by the Holder of any Convertible
Debentures shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Convertible Debenture and of any Convertible
Debentures issued in exchange or substitution therefor, irrespective of whether
or not any notation in regard thereto is made upon any such Convertible
Debenture. Any action taken by the Holders of the percentage in aggregate
44
principal amount of the Convertible Debentures, as the case may be, specified in
this Indenture in connection with such action shall be conclusively binding upon
the Company, the Trustee and the Holders of all the Convertible Debentures
affected by such action.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS OF
CONVERTIBLE DEBENTURES. The Company, when authorized by a resolution of its
Board of Directors, and the Trustee for the Convertible Debentures may from time
to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in
force at the date of the execution thereof), in form satisfactory to such
Trustee, for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Convertible Debentures any property or
assets;
(b) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Company pursuant to Article IX;
(c) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the protection
of the Holders of Convertible Debentures;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture; or to make such other provisions in
regard to matters or questions arising under this Indenture or under
any supplemental indenture as the Board of Directors may deem
necessary or desirable and which shall not materially and adversely
affect the interests of the Holders of the Convertible Debentures; or
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Convertible
Debentures.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Convertible Debentures at the time Outstanding, notwithstanding any of the
provisions of Section 8.2.
45
Section 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS OF
CONVERTIBLE DEBENTURES. With the consent (evidenced as provided in Article VII)
of the Holders of not less than a majority in aggregate principal amount of the
Convertible Debentures at the time Outstanding (voting as one class), the
Company, when authorized by a resolution of its Board of Directors, and the
Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Convertible Debentures;
provided, however, that no such supplemental indenture shall (a) except to the
extent permitted by Article XI, extend the Stated Maturity of any Convertible
Debenture, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable on redemption thereof, or make the principal thereof or interest
thereon payable in any coin or currency other than that provided in the
Convertible Debentures or in accordance with the terms thereof, or impair or
affect the right of any Holder of Convertible Debentures to institute suit for
payment thereof, or adversely affect the right to convert Convertible
Debentures, or modify the subordination provisions of this Indenture in any
manner adverse to the Holders of Convertible Debentures without the consent of
the Holders of each Convertible Debenture so affected, or (b) reduce the
aforesaid percentage of Convertible Debentures, the consent of the Holders of
which is required for any such supplemental indenture, without the consent of
the Holders of each Convertible Debenture so affected.
Upon the request of the Company, accompanied by a copy of a
resolution of the Board of Directors certified by the secretary or assistant
secretary of the Company authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
Holders of Convertible Debentures as aforesaid and other documents, if any,
required by Section 7.1, the Trustee shall join with the Company in the
execution of such supplemental indenture or otherwise, in which case such
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
It shall not be necessary for the consent of the Holders of
Convertible Debentures under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Company shall give notice thereof to the Holders of then Outstanding Convertible
Debentures, by mailing a notice thereof by first-class mail to such Holders at
their addresses as they shall appear on the Security Register, and in each case
such notice shall set forth in general terms the substance of such supplemental
indenture. Any failure of the Company to give such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
Section 8.3 EFFECT OF SUPPLEMENTAL INDENTURE. Every supplemental
indenture executed pursuant to this Article VIII shall conform to the
requirements of the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and be
46
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the Holders of Convertible Debentures
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be a part of the
terms and conditions of this Indenture for any and all purposes.
Section 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. The Trustee,
subject to the provisions of Section 6.1 and 6.2, shall receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article VIII complies with the
applicable provisions of this Indenture.
Section 8.5 NOTATION ON CONVERTIBLE DEBENTURES IN RESPECT OF
SUPPLEMENTAL INDENTURES. Convertible Debentures authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article VIII may bear, upon the direction of the Company, a notation in
form satisfactory to the Trustee for the Convertible Debentures as to any matter
provided for by such supplemental indenture. If the Company or the Trustee shall
so determine, new Convertible Debentures so modified as to conform, in the
opinion of the Trustee and the Company, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Convertible
Debentures then Outstanding.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. The
Company may sell, transfer, lease or otherwise convey all or substantially all
of its assets on a consolidated basis to any Person, or consolidate or merge
with or into, any other Person, provided that in any such case, (a) either (i)
the Company shall be the continuing corporation, or (ii) if the Company is not
the continuing corporation, the successor corporation or Person which acquires
by sale, transfer, lease or other conveyance all or substantially all of the
assets of the Company, shall be a corporation organized and validly existing
under the laws of the United States of America or any state thereof or the
District of Columbia and shall expressly assume the due and punctual payment of
the principal of, premium, if any, and interest (including Additional Sums and
Compound Interest) on all of the Convertible Debentures according to their
tenor, and the due and punctual performance and observance of all of the
covenants, agreements and conditions (A) of this Indenture to be performed or
observed by the Company by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation or entity, and (B) of
the Preferred Securities Registration Rights Agreement, by amendment thereto,
(b) immediately after such merger or consolidation, or such sale, transfer,
lease or other conveyance, no Event of Default, and no event which, after notice
or lapse of time or both, would become an Event of Default, shall have occurred
and be continuing, and (c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that the requirements of
this Section have been complied with.
47
Section 9.2 SUCCESSOR CORPORATION SUBSTITUTED. In case of any
such consolidation, merger, sale, transfer, lease or conveyance, and following
such an assumption by the successor corporation, such successor corporation
shall succeed to and be substituted for the Company, with the same effect as if
it had been named herein, and (except in the case of a lease) the Company shall
be discharged from all obligations and covenants under this Indenture, the
Convertible Debentures and the Preferred Securities Registration Rights
Agreement and may be liquidated and dissolved. Such successor corporation may
cause to be signed, and may issue either in its own name or in the name of the
Company any or all of the Convertible Debentures issuable hereunder which
theretofore shall not have been signed by the Company and be delivered to the
Trustee; and, upon the order of such successor corporation instead of the
Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall make available
for delivery any Convertible Debentures which previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Convertible Debentures, which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All of
the Convertible Debentures so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Convertible Debentures theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Convertible Debentures had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, transfer, lease
or conveyance such changes in phraseology and form (but not in substance) may be
made in the Convertible Debentures thereafter to be issued as may be
appropriate.
Section 9.3 OPINION OF COUNSEL TO TRUSTEE. The Trustee, subject
to the provisions of Section 6.1 and 6.2, may receive an Opinion of Counsel,
prepared in accordance with Section 15.5, as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption, and
any such liquidation or dissolution, complies with the applicable provisions of
this Indenture.
ARTICLE X
REDEMPTION OF THE CONVERTIBLE DEBENTURES
Section 10.1 TAX EVENT REDEMPTION.
If a Tax Event (as defined in the Declaration) has occurred and
is continuing and:
(a) the Company has received a Redemption Tax Opinion (as defined
in the Declaration); or
(b) after receiving a Dissolution Tax Opinion (as defined in the
Declaration), the Regular Trustees shall have been informed by tax
counsel rendering the Dissolution Tax Opinion that a No-Recognition
Opinion (as defined in the Declaration) cannot be delivered to the
Trust, then, notwithstanding Section 10.2(a) but subject to Section
10.2(b), the Company shall have the right upon not less than 30 days
nor more than 60 days notice to the Holders of the Convertible
Debentures to redeem the Convertible Debentures, in whole or in part,
48
for cash within 90 days following the occurrence of such Tax Event
(the "90-Day Period") at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest
thereon (including Additional Sums, if any, and, to the extent
permitted by applicable law, Compound Interest, if any) to the date of
such redemption (the "Redemption Price"), provided that if at the time
there is available to the Company or the Trust the opportunity to
eliminate, within the 90-Day Period, the Tax Event by taking some
ministerial action ("Ministerial Action"), such as filing a form or
making an election, or pursuing some other similar reasonable measure
which has no adverse effect on the Company, the Trust or the Holders
of the Trust Securities issued by the Trust, the Company shall pursue
such Ministerial Action in lieu of redemption. The Redemption Price
shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or such earlier time as the Company determines, provided
that the Company shall deposit with the Trustee an amount sufficient
to pay the Redemption Price prior to the redemption date.
Section 10.2 OPTIONAL REDEMPTION BY COMPANY.(a) Subject to the
provisions of Section 10.2(b) and to the provisions of this Article X generally,
except as otherwise may be specified in Section 10.1 or elsewhere in this
Indenture, the Company shall have the right to redeem the Convertible
Debentures, in whole or in part, from time to time, on or after April 18, 2003.
Any redemption pursuant to this paragraph will be made upon not less than 30
days nor more than 60 days notice to the Holders of the Convertible Debentures,
at the following prices (expressed as percentages of the principal amount of the
Convertible Debentures) (the "Optional Redemption Price") together with accrued
and unpaid interest (including Additional Sums, if any, and, to the extent
permitted by applicable law, Compound Interest, if any) to, but excluding, the
redemption date, if redeemed during the 12-month period beginning April 18, of
the applicable year set forth below:
--------------------------------------
YEAR REDEMPTION PRICE
--------------------------------------
2003 105.43%
--------------------------------------
2004 104.65%
--------------------------------------
2005 103.88%
--------------------------------------
2006 103.10%
--------------------------------------
2007 102.33%
--------------------------------------
2008 101.55%
--------------------------------------
2009 100.78%
--------------------------------------
and 100% if redeemed on or after April `8, 2010.
If Convertible Debentures are redeemed on any January 15, April
15, July 15 and October 15, accrued and unpaid interest shall be payable to
holders of record on the relevant record date.
The Company may not redeem fewer than all of the outstanding
Convertible Debentures unless all accrued and unpaid interest has been paid on
all Convertible Debentures for all quarterly interest payment periods
terminating on or prior to the date of redemption.
49
So long as the corresponding Trust Securities are outstanding,
the proceeds from the redemption of the Convertible Debentures will be used to
redeem the Trust Securities. If the Convertible Debentures are only partially
redeemed pursuant to this Section 10.2, the Convertible Debentures will be
redeemed pro rata. The Optional Redemption Price, together with any required
interest payment, shall be paid prior to 12:00 noon, New York time, on the
redemption date or at such earlier time as the Company determines provided that
the Company shall deposit with the Trustee an amount sufficient to pay the
Optional Redemption Price, together with any required interest payment, by 10:00
a.m., New York time, on the date such amounts are to be paid. Partial
redemptions must be in an amount not less than $1,000 principal amount of
Convertible Debentures.
If Convertible Debentures selected for partial redemption are
converted in part before termination of the conversion right with respect to the
portion of the Convertible Debentures so selected, the converted portion of the
Convertible Debentures shall be deemed (so far as may be) to be the portion
selected for redemption. Convertible Debentures (or portions thereof) which have
been converted during a selection of Convertible Debentures to be redeemed shall
be treated by the Trustee as Outstanding for the purpose of such selection. In
any case where more than one Convertible Debenture is registered in the same
name, the Trustee in its discretion may treat the aggregate principal amount so
registered as if it were represented by one Convertible Debenture.
If any Convertible Debenture called for redemption is converted
into Common Stock of the Company, any money deposited with the Trustee or with
any Paying Agent or so segregated and held in trust for the redemption of such
Convertible Debenture shall (subject to any right of the Holder of such
Convertible Debenture or any Predecessor Convertible Debenture to receive
interest as provided in the last paragraph of Section 2.9) be paid to the
Company upon the Company's request or, if then held by the Company, shall be
discharged from such trust.
(b) If a partial redemption of the Convertible Debentures would
result in the delisting of the Convertible Preferred Securities issued by the
Trust from any national securities exchange or other organization on which the
Convertible Preferred Securities are then listed, the Company shall not be
permitted to effect such partial redemption and may only redeem the Convertible
Debentures in whole.
Section 10.3 NO SINKING FUND. The Convertible Debentures are not
entitled to the benefit of any sinking fund or subject to any sinking fund.
Section 10.4 ELECTION TO REDEEM; NOTICE OF REDEMPTION; PARTIAL
REDEMPTIONS.
The election of the Company to redeem any Convertible Debentures
shall be evidenced by, or pursuant to, a resolution of the Board of Directors.
Notice of redemption to the Holders of Convertible Debentures required to be
redeemed or to be redeemed as a whole or in part at the option of the Company
shall be given by giving notice of such redemption as provided in Section 15.4,
at least 30 days and not more than 60 days prior to the date fixed for
redemption to such Holders of Convertible Debentures. Any notice which is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice. Neither the failure to
50
give notice by mail, nor any defect in the notice so mailed to the Holder of any
Convertible Debenture designated for redemption as a whole or in part shall
affect the validity of the proceedings for such redemption.
The notice of redemption to each such Holder shall specify the
date fixed for redemption, the "CUSIP" number or numbers, if any, for such
Convertible Debentures, the redemption price, the Place or Places of Payment,
that payment will be made upon presentation and surrender of such Convertible
Debentures, that interest accrued to the date fixed for redemption will be paid
as specified in such notice and that on and after said date interest thereon or
on the portions thereof to be redeemed will cease to accrue, the conversion rate
or price, the date on which the right to convert the Convertible Debentures to
be redeemed will terminate and the place or places where such Convertible
Debentures may be surrendered for conversion. If less than all of the
Convertible Debentures are to be redeemed, the notice of redemption shall
specify the number of the Convertible Debentures to be redeemed. In case any
Convertible Debenture is to be redeemed in part, the notice of redemption shall
state the portion of the principal amount thereof to be redeemed and shall state
that on and after the date fixed for redemption, upon surrender of such
Convertible Debenture, a new Convertible Debenture or Convertible Debentures in
principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Convertible Debentures to be redeemed
at the option of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. If such
notice is to be given by the Trustee, the Company shall provide notice of such
redemption to the Trustee at least 60 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee). If
such notice is given by the Company, the Company shall provide a copy of such
notice given to the Holders of such redemption to the Trustee at least 2 days
prior to the date such notice is given to such Holders, but in any event at
least 30 days and not more than 60 days prior to the date fixed for redemption.
The Company or the Trust shall give public notice of any such
redemption by the issuance of a press release through the services of the Dow
▇▇▇▇▇ Broad Tape, Reuters News Service and Bloomberg News Service.
Not later than the redemption date specified in the notice of
redemption given as provided in this Section, the Company will have on deposit
with the Trustee or with one or more Paying Agents (or, if the Company is acting
as its own Paying Agent, set aside, segregate and hold in trust as provided in
Section 3.3) in funds available on such date an amount of money sufficient to
redeem on the redemption date all the Convertible Debentures so called for
redemption at the appropriate redemption price, together with accrued interest
to the date fixed for redemption. If less than all of the Outstanding
Convertible Debentures are to be redeemed at the election of the Company, the
Company will deliver to the Trustee at least 60 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee) an
Officers' Certificate stating the aggregate principal amount of Convertible
Debentures to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Convertible Debentures
51
shall relate, in the case of any Convertible Debenture redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Convertible Debenture which has been or is to be redeemed.
Section 10.5 PAYMENT OF CONVERTIBLE DEBENTURES CALLED FOR
REDEMPTION. If notice of redemption has been given as above provided, the
Convertible Debentures or portions of Convertible Debentures specified in such
notice shall become due and payable on the date and at the place stated in such
notice at the applicable redemption price, together with interest accrued to the
date fixed for redemption, and on and after said date (unless the Company shall
default in the payment of such Convertible Debentures at the redemption price,
together with interest accrued to said date) interest on the Convertible
Debentures or portions of Convertible Debentures so called for redemption shall
cease to accrue, and, except as provided in Section 6.1, such Convertible
Debentures shall cease from and after the date fixed for redemption to be
entitled to any benefit or security under this Indenture, and the Holders
thereof shall have no right in respect of such Convertible Debentures except the
right to receive the redemption price thereof and unpaid interest to the date
fixed for redemption. On presentation and surrender of such Convertible
Debentures at a Place of Payment specified in said notice, said Convertible
Debentures or the specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that, payment of interest
becoming due on or prior to the date fixed for redemption shall be payable to
the Holders of such Convertible Debentures registered as such on the relevant
record date subject to the terms and provisions of Section 2.9 hereof.
If any Convertible Debenture called for redemption shall not be
so paid upon surrender thereof for redemption, the principal shall, until paid
or duly provided for, bear interest from the date fixed for redemption at the
Coupon Rate.
Upon presentation of any Convertible Debenture redeemed in part
only, the Company shall execute and the Trustee shall authenticate and make
available for delivery to or on the order of the Holder thereof, at the expense
of the Company, a new Convertible Debenture or Convertible Debentures, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Convertible Debenture so presented.
Section 10.6 EXCLUSION OF CERTAIN CONVERTIBLE DEBENTURES FROM
ELIGIBILITY FOR SELECTION FOR REDEMPTION. Convertible Debentures shall be
excluded from eligibility for selection for redemption if they are identified by
registration and certificate number in a written statement signed by an
authorized officer of the Company and delivered to the Trustee at least 30 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by, either (a)
the Company or (b) an entity specifically identified in such written statement
as directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company.
ARTICLE XI
EXTENSION OF INTEREST PAYMENT PERIOD
52
Section 11.1 EXTENSION OF INTEREST PAYMENT PERIOD.
As long as an Event of Default under Section 5.1(a) of this
Indenture shall not have occurred and be continuing, the Company shall have the
right, at any time and from time to time during the term of the Convertible
Debentures, to defer payments of interest by extending the interest payment
period of such Convertible Debentures for a period not exceeding 20 consecutive
quarters (the "Extension Period"), during which Extension Period no interest
shall be due and payable; provided that no Extension Period may extend beyond
the Maturity Date or any earlier redemption date. To the extent permitted by
applicable law, interest, the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 11.1, will
bear interest thereon at the Coupon Rate compounded quarterly for each quarter
of the Extension Period ("Compound Interest"). Each Extension Period, if any,
will end on an Interest Payment Date. At the end of the Extension Period, the
Company shall pay all interest accrued and unpaid on the Convertible Debentures,
including any Additional Sums and, to the extent permitted by law, Compound
Interest (together, "Deferred Interest") that shall be payable to the Holders of
the Convertible Debentures in whose names the Convertible Debentures are
registered in the Security Register at the close of business on the record date
next preceding such Interest Payment Date. Before the termination of any
Extension Period, the Company may further extend such period, provided that such
period together with all previous and further extensions thereof shall not
exceed 20 consecutive quarters, or extend beyond the Maturity Date or any
earlier redemption date. Upon the termination of any Extension Period and upon
the payment of all Deferred Interest then due, the Company may commence a new
Extension Period, subject to the foregoing requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof, but the
Company may prepay at any time all or any portion of the interest accrued during
an Extension Period.
Section 11.2 NOTICE OF EXTENSION.(a) If the Institutional Trustee
is the only registered Holder of the Convertible Debentures at the time the
Company selects an Extension Period, the Company shall give written notice to
the Regular Trustees, the Institutional Trustee and the Trustee of its selection
of such Extension Period at least one Business Day before the earlier of (i) the
next succeeding date on which Distributions on the Trust Securities issued by
the Trust are payable, or (ii) the date the Regular Trustees are required to
give notice of the record date, or the date such Distributions are payable, to
the New York Stock Exchange or other applicable self-regulatory organization or
to holders of the Convertible Preferred Securities issued by the Trust, but in
any event at least ten Business Days before such record date. The Company shall
cause the Trust to give notice of the Company's selection of such Extension
Period to holders of the Convertible Preferred Securities.
(b) If the Institutional Trustee is not the only Holder of the
Convertible Debentures at the time the Company selects an Extension Period, the
Company shall give the Holders of the Convertible Debentures, the Institutional
Trustee and the Trustee written notice of its selection of such Extension Period
at least 10 Business Days before the earlier of (i) the next succeeding Interest
Payment Date or (ii) the date the Company is required to give notice of the
record or payment date of such interest payment to the New York Stock Exchange
or other applicable self- regulatory organization or to Holders of the
Convertible Debentures, but in any event not less than two Business Days prior
to such record date.
53
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 11.2 shall be counted as one of the 20
consecutive quarters permitted in the maximum Extension Period permitted under
Section 11.1.
ARTICLE XII
CONVERSION OF CONVERTIBLE DEBENTURES
Section 12.1 CONVERSION RIGHTS. Subject to and upon compliance
with the provisions of this Article XII, the Convertible Debentures are
convertible, at the option of the Holders, at any time beginning July 11, 2000
through the close of business on April 14, 2015 (or, in the case of Convertible
Debentures called for redemption, prior to the close of business on the Business
Day prior to the corresponding redemption date) into fully paid and
nonassessable shares of Common Stock of the Company at an initial conversion
rate of 1.048 shares of Common Stock for each $50 in principal amount of
Convertible Debentures (equivalent to a conversion price of $47.71 per share of
Common Stock (the "Conversion Price")), subject to adjustment and reset as
described in this Article XII. A Holder of Convertible Debentures may convert
any portion of the principal amount of the Convertible Debentures into that
number of fully paid and nonassessable shares of Common Stock obtained by
dividing the principal amount of the Convertible Debentures to be converted by
such Conversion Price. All calculations under this Article XII shall be made to
the nearest cent or to the nearest 1/100th of a share, as the case may be.
Section 12.2 CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Convertible
Debentures, the Holder thereof shall deliver to the Conversion Agent an
irrevocable notice of conversion (the "Notice of Conversion") setting forth the
principal amount of Convertible Debentures to be converted, together with the
name or names, if other than the Holder, in which the shares of Common Stock
should be issued upon conversion and, if such Convertible Debentures are
definitive Convertible Debentures, surrender to the Conversion Agent the
Convertible Debentures to be converted, duly endorsed or assigned to the Company
or in blank. In addition, a holder of Convertible Preferred Securities may
exercise its right under the Declaration to convert such Convertible Preferred
Securities into Common Stock by delivering to the Conversion Agent an
irrevocable Notice of Conversion setting forth the information called for by the
preceding sentence and directing the Conversion Agent (i) to exchange such
Convertible Preferred Security for a portion of the Convertible Debentures held
by the Trust (at an exchange rate of $50 principal amount of Convertible
Debentures for each Convertible Preferred Security) and (ii) to immediately
convert such Convertible Debentures, on behalf of such holder, into Common Stock
of the Company pursuant to this Article XII and, if such Convertible Preferred
Securities are in definitive form, surrendering such Convertible Preferred
Securities, duly endorsed or assigned to the Company or in blank. So long as any
Convertible Preferred Securities are outstanding, the Trust shall not convert
any Convertible Debentures except pursuant to a Notice of Conversion delivered
to the Conversion Agent by a holder of Convertible Preferred Securities.
54
If a Notice of Conversion is delivered on or after the record
date and prior to the subsequent Interest Payment Date, the Holder will be
entitled to receive the interest payable on the subsequent Interest Payment Date
on the portion of Convertible Debentures to be converted notwithstanding the
conversion thereof prior to such Interest Payment Date. However, if a redemption
date falls between a record date and the subsequent Interest Payment Date, the
Holder will be entitled to receive, on such Interest Payment Date, the interest
accrued to, but excluding, the redemption date. Except as otherwise provided in
the first and second sentences of this paragraph, in the case of any Convertible
Debenture which is converted, interest whose Stated Maturity is after the date
of conversion of such Convertible Debenture shall not be payable, and the
Company shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest on the Convertible
Debentures being converted, which shall be deemed to be paid in full. Each
conversion shall be deemed to have been effected immediately prior to the close
of business on the day on which the Notice of Conversion was received (the
"Conversion Date") by the Conversion Agent from the Holder or from a holder of
the Convertible Preferred Securities effecting a conversion thereof pursuant to
its conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
as of the Conversion Date. As promptly as practicable on or after the Conversion
Date, the Company shall issue and deliver at the office of the Conversion Agent,
unless otherwise directed by the Holder in the Notice of Conversion, a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to receive the
same. The Conversion Agent shall deliver such certificate or certificates to
such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of
shares of Common Stock into which the Convertible Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) shall be
deemed to satisfy the Company's obligation to pay the principal amount at
Maturity of the portion of Convertible Debentures so converted and any unpaid
interest (including Compound Interest) accrued on such Convertible Debentures at
the time of such conversion.
(c) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, the Company shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the Closing Price of such fractional interest on the date on which the
Convertible Debentures were duly surrendered to the Conversion Agent for
conversion, or, if such day is not a Trading Day, on the next Trading Day, and
the Conversion Agent in turn will make such payment, if any, to the Holder of
the Convertible Debentures or the holder of the Convertible Preferred Securities
so converted.
(d) In the event of the conversion of any Convertible Debenture
in part only, the Company shall execute and the Trustee shall authenticate and
make available for delivery to or on the order of the Holder thereof, at the
expense of the Company, a new Convertible Debenture or Convertible Debentures in
the aggregate principal amount equal to the unconverted portion thereof.
55
(e) In effecting the conversion transactions described in this
Section 12.2, the Conversion Agent is acting as agent of the holders of
Convertible Preferred Securities (in the exchange of Convertible Preferred
Securities for Convertible Debentures) and as agent of the Holders of
Convertible Debentures (in the conversion of Convertible Debentures into Common
Stock), as the case may be. The Conversion Agent is hereby authorized (i) to
exchange Convertible Debentures held by the Trust from time to time for
Convertible Preferred Securities in connection with the conversion of such
Convertible Preferred Securities in accordance with this Article XII and (ii) to
convert all or a portion of the Convertible Debentures into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Article XII and to deliver to the Trust a new Convertible
Debenture or Convertible Debentures for any resulting unconverted principal
amount.
Section 12.3 CONVERSION PRICE ADJUSTMENTS. The Conversion Price
shall be adjusted from time to time as follows:
(a) In case the Company shall, while any of the Convertible
Debentures are outstanding, (i) pay a dividend or make a distribution
with respect to Common Stock in shares of Common Stock, (ii) subdivide
outstanding shares of Common Stock, (iii) combine outstanding shares
of Common Stock into a smaller number of shares or (iv) issue by
reclassification of its shares of Common Stock any shares of capital
stock of the Company, the conversion privilege and the Conversion
Price for the Convertible Debentures shall be adjusted so that the
Holder of any Convertible Debenture thereafter surrendered for
conversion shall be entitled to receive the number of shares of
capital stock of the Company which such Holder would have owned
immediately following such action had such Convertible Debenture been
converted immediately prior thereto. An adjustment made pursuant to
this subsection (a) shall become effective immediately after the
record date in the case of a dividend or other distribution and shall
become effective immediately after the effective date in case of a
subdivision, combination or reclassification (or immediately after the
record date if a record date shall have been established for such
event). If, as a result of an adjustment made pursuant to this
subsection (a), the Holder of any Convertible Debenture thereafter
surrendered for conversion shall become entitled to receive shares of
two or more classes or series of capital stock of the Company, the
Board of Directors (whose determination shall be conclusive and shall
be evidenced by a Board Resolution filed with the Trustee) shall
determine the allocation of the adjusted Conversion Price for the
Convertible Debentures between or among shares of such classes or
series of capital stock.
(b) In case the Company shall, while any of the Convertible
Debentures are outstanding, issue rights or warrants to all holders of
its Common Stock entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or purchase
shares of Common Stock at a price per share less than the current
market price per share of Common Stock (as determined pursuant to
subsection (g) below) on the record date mentioned below, the
Conversion Price for the Convertible Debentures shall be adjusted so
that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of issuance
of such rights or warrants by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of shares which
56
the aggregate offering price of the total number of shares so offered
for subscription or purchase would purchase at such current market
price, and of which the denominator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of additional shares of Common Stock offered
for subscription or purchase. Such adjustment shall become effective
immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants. To the
extent that no shares of Common Stock are so delivered after the
expiration of such rights or warrants, the Conversion Price shall be
readjusted to the Conversion Price which would then be in effect if
such date fixed for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. For the purposes
of this subsection, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Company. In case any rights or warrants referred to in this subsection
in respect of which an adjustment shall have been made shall expire
unexercised within 45 days after the same shall have been distributed
or issued by the Company, 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 or warrants.
(c) Subject to the last sentence of this subsection (c), in case
the Company shall, by dividend or otherwise, distribute to all holders
of its Common Stock evidences of its indebtedness, shares of any class
or series of capital stock, cash or assets or rights or warrants to
subscribe for or purchase any of its securities (excluding any rights
or warrants referred to in subsection (b), any dividend or
distribution paid exclusively in cash and any dividend or distribution
referred to in subsection (a) of this Section 12.3), the Conversion
Price shall be reduced so that the same 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 subsection (c) by a fraction of which the
numerator shall be the current market price per share (determined as
provided in subsection (g)) of the Common Stock on the date fixed for
the payment of such distribution (the "Reference Date") less the fair
market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and evidenced by a resolution
of the Board of Directors), on the Reference Date, of the portion of
the evidences of indebtedness, shares of capital stock, cash and
assets so distributed or of such subscription rights or warrants
applicable to one share of Common Stock and the denominator shall be
such current market price per share of the Common Stock, such
reduction to become effective immediately prior to the opening of
business on the day following the Reference Date; provided, however,
that in the event the numerator shall be less than one, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Holder of Convertible Debentures shall have the right to receive upon
conversion the amount of such distribution such Holder would have
received had such Holder converted each Convertible Debenture
immediately prior to the Reference Date. In the event that no such
dividend or distribution is so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be
in effect if such dividend or distribution had not occurred. If the
Board of Directors determines the fair market value of any
distribution for purposes of this subsection (c) by reference to the
actual or when issued trading market for any securities comprising
57
such distribution, it must in doing so consider the prices in such
market over the same period used in computing the current market price
per share of Common Stock (determined as provided in subsection (g)).
For purposes of this subsection (c), any dividend or distribution that
includes shares of Common Stock, or rights or warrants of the type
described in subsection (b), shall be deemed instead to be a dividend
or distribution of the evidences of indebtedness, shares of capital
stock, cash or assets or rights or warrants other than such shares of
Common Stock, or such rights or warrants of the type described in
subsection (b) (making any Conversion Price reduction required by this
subsection (c)), immediately followed by a dividend or distribution of
such shares of Common Stock or such rights or warrants of the type
described in subsection (b) (making any further Conversion Price
adjustment required by subsection (a) or (b)), except (A) the
Reference Date of such dividend or distribution as defined in this
subsection (c) shall be substituted as (1) "the record date in the
case of a dividend or other distribution," and (2) "the record date
for the determination of stockholders entitled to receive such rights
or warrants" and (3) "the date fixed for such determination" within
the meaning of subsections (a) and (b) and (B) any shares of Common
Stock included in such dividend or distribution shall not be deemed
outstanding for purposes of computing any adjustment of the Conversion
Price in subsection (b).
(d) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding any
quarterly cash dividend on Common Stock to the extent that the
aggregate cash dividend per share of Common Stock in any quarter does
not exceed the greater of (i) the amount per share of Common Stock of
the next preceding quarterly dividend on Common Stock to the extent
such preceding quarterly dividend did not require an adjustment of the
Conversion Price pursuant to this subsection (d) (as adjusted to
reflect subdivisions or combinations of Common Stock), and (ii) 3.75%
of the daily Closing Price per share determined as provided in
subsection (g), and excluding any dividend or distribution in
connection with the liquidation, dissolution or winding-up of the
Company), the Conversion Price shall be reduced so that the same 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 subsection (d) by a fraction of which
the numerator shall be the current market price per share (determined
as provided in subsection (g)) of the Common Stock on the date fixed
for the payment of such distribution less the amount of cash so
distributed (and not excluded as provided above) applicable to one
share of Common Stock and the denominator shall be such current market
price per share of the Common Stock (determined as provided in
subsection (g)), such reduction to become effective immediately prior
to the opening of business on the day following the date fixed for the
payment of such distribution; provided, however, that in the event the
portion of the cash so distributed applicable to one share of Common
Stock is equal to or greater than the current market price per share
(as defined in subsection (g)) of the Common Stock on the record date
mentioned above, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder of shares of Convertible
Debentures shall have the right to receive upon conversion the amount
of cash such Holder would have received had such Holder converted each
Convertible Debenture immediately prior to the record date for the
distribution of the cash. If an adjustment is required to be made
pursuant to this subsection (d) as a result of a distribution that is
58
a quarterly dividend, such adjustment shall be based upon the amount
by which such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded as provided above. If an adjustment
is required to be made pursuant to this subsection (d) as a result of
a distribution that is not a quarterly dividend, such adjustment shall
be based upon the full amount of the distribution. In the event that
no such dividend or distribution is so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price which would
then be in effect if such Record Date had not been fixed.
(e) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary of the Company for all or
any portion of the Company's Common Stock shall expire and such tender
or exchange offer shall involve the payment by the Company or such
subsidiary of consideration per share of Common Stock having a fair
market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and evidenced by a resolution
of the Board of Directors) 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 Closing Price
of the Common Stock on the Trading Day next succeeding the Expiration
Time, the Conversion Price shall be reduced so that the same 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 subsection (e) by a fraction (which
shall not be greater than one) of which the numerator shall be the
number of shares of Common Stock outstanding (including any tendered
or exchanged shares) at the Expiration Time multiplied by the Closing
Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (i) the fair
market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (ii) the product of the
number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Closing Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, such
reduction to become retroactively effective immediately prior to the
opening of business on the day following the Expiration Time.
(f) In case a tender or exchange offer made by a Person other
than the Company or any Subsidiary of the Company for all or any
portion of the Common Stock shall expire and such tender or exchange
offer shall involve the payment by a Person other than the Company or
any Subsidiary of the Company of consideration per share of Common
Stock having a fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and
evidenced by a resolution of the Board of Directors) at the applicable
Expiration Time that exceeds the Closing Price of the Common Stock on
the Trading Day next succeeding the applicable Expiration Time in
which as of the closing date of the offer the Board of Directors of
the Company is not recommending rejection of the offer, the Conversion
Price shall be reduced so that the same 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 subsection (f) by a fraction (which shall not be
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greater than one) of which the numerator shall be the number of shares
of Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time multiplied by the Closing Price of the
Common Stock on the Trading Day next succeeding the Expiration Time
and the denominator shall be the sum of (i) the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of the Purchased Shares
and, (ii) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) at the Expiration Time and the
Closing Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become retroactively effective
immediately prior to the opening of business on the day following the
Expiration Time; provided, however, that the reduction of the
Conversion Price contemplated by this subsection (f) will only be made
if the tender offer or exchange offer is made for an amount which
increases that Person's ownership of Common Stock to more than 25% of
the total shares of Common Stock outstanding and provided, further,
that the reduction of the Conversion Price contemplated by this
subsection (f) will not be made if as of the close of the offer, the
offering documents with respect to such offer disclose a plan or an
intention to cause the Company to engage in a consolidation or merger
of the Company or a sale of all or substantially all of the assets of
the Company.
(g) For the purpose of any computation under subsection (b), (c)
or (d), the current market price per share of Common Stock on any date
in question shall be deemed to be the average of the daily Closing
Prices for the ten Trading Day period ending on the earlier of the day
in question and, if applicable, the day before the "ex" date with
respect to the issuance or distribution requiring such computation;
provided, however, that if more than one event occurs that would
require an adjustment pursuant to subsections (a) through (f),
inclusive, the Board of Directors may make such adjustments to the
Closing Prices during such ten Trading Day period as it deems
appropriate to effectuate the intent of the adjustments in this
Section 12.3, in which case any such determination by the Board of
Directors shall be set forth in a Board Resolution and shall be
conclusive. For purposes of this paragraph, the term "ex" date, (1)
when used with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way on the New
York Stock Exchange or on such successor securities exchange as the
Common Stock may be listed or in the relevant market from which the
Closing Prices were obtained without the right to receive such
issuance or distribution, and (2) when used with respect to any tender
or exchange offer means the first date on which the Common Stock
trades regular way on such securities exchange or in such market after
the Expiration Time of such offer.
(h) The Company may make such reductions in the Conversion Price,
in addition to those required by subsections (a) through (f), as the
Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common
Stock 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
twenty (20) days. Whenever the Conversion Price is reduced pursuant to
the preceding sentence, the Company shall mail to Holders of record of
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the Convertible Debentures 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.
(i) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in the Conversion Price; provided, however, that any
adjustments which by reason of this subsection (i) are not required to
be made shall be carried forward and taken into account in determining
whether any subsequent adjustment shall be required.
(j) If any action would require adjustment of the Conversion
Price pursuant to more than one of the provisions described above,
only one adjustment shall be made and such adjustment shall be the
amount of adjustment that has the highest absolute value to the Holder
of Convertible Debentures.
(k) Except as stated above, the Conversion Rate will not be
adjusted for the issuance of Common Stock or any securities
convertible into, or exchangeable for, Common Stock, or carrying the
right to purchase any of the foregoing.
Section 12.4 MERGER, CONSOLIDATION OR SALE OF ASSETS. (a) In the
event that the Company shall be a party to any transaction (including without
limitation (i) any recapitalization or reclassification of the Common Stock
(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
Common Stock), (ii) 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 shares of Common Stock of the Company),
(iii) any sale or transfer of all or substantially all of the assets of the
Company or (iv) any compulsory share exchange) pursuant to which either shares
of Common Stock shall be converted into the right to receive other securities,
cash or other property, or, in the case of a sale or transfer of all or
substantially all of the assets of the Company, the holders of Common Stock
shall be entitled to receive other securities, cash or other property, then
lawful provision shall be made as part of the terms of such transaction whereby
the Holder of each Convertible Debenture then outstanding shall have the right
thereafter to convert such Convertible Debenture only into:
(i) in the case of any such transaction that does not constitute
a Common Stock Fundamental Change and subject to funds being legally
available for such purpose under applicable law at the time of such
conversion, the kind and amount of the securities, cash or other
property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share
exchange by a holder of the number of shares of Common Stock issuable
upon conversion of such Convertible Debenture immediately prior to
such recapitalization, reclassification, consolidation, merger, sale,
transfer or share exchange, after giving effect, in the case of any
Non-Stock Fundamental Change, to any adjustment in the Conversion
Price in accordance with clause (i) of subsection (c) of this Section
12.4; and
(ii) in the case of any such transaction that constitutes a
Common Stock Fundamental Change, common stock of the kind received by
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holders of Common Stock as a result of such Common Stock Fundamental
Change in an amount determined in accordance with clause (ii) of
subsection (c) of this Section 12.4.
(b) The Company or the Person formed by such consolidation or
resulting from such merger or which acquired such assets or which acquires the
Company's shares, as the case may be, shall make provision in its certificate or
articles of incorporation or other constituent document to establish such right.
Such certificate or articles of incorporation or other constituent document
shall provide for adjustments which, for events subsequent to the effective date
of such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article XII. The above provisions shall similarly apply to
successive transactions of the foregoing type.
(c) Notwithstanding any other provision of this Section 12.4 to
the contrary, if any Fundamental Change occurs, then the Conversion Price in
effect will be adjusted immediately after such Fundamental Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the Conversion
Price of the Convertible Debentures immediately following such
Non-Stock Fundamental Change shall be the lower of (A) the Conversion
Price in effect immediately prior to such Non-Stock Fundamental
Change, but after giving effect to any other prior adjustments
effected pursuant to Section 12.3, and (B) the Applicable Price; and
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price of the Convertible Debentures immediately following
such Common Stock Fundamental Change shall be the Conversion Price in
effect immediately prior to such Common Stock Fundamental Change, but
after giving effect to any other prior adjustments effected pursuant
to Section 12.3, multiplied by a fraction, the numerator of which is
the Purchaser Stock Price and the denominator of which is the
Applicable Price; provided, however, that in the event of a Common
Stock Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of Common Stock is common stock of
the successor, acquiror or other third party (and cash, if any, paid
with respect to any fractional interests in such common stock
resulting from such Common Stock Fundamental Change) and (B) all of
the Common Stock shall have been exchanged for, converted into or
acquired for, common stock of the successor, acquiror or other third
party (and any cash with respect to fractional interests), the
Conversion Price of the Convertible Debentures immediately following
such Common Stock Fundamental Change shall be the Conversion Price in
effect immediately prior to such Common Stock Fundamental Change
multiplied by a fraction, the numerator of which is one (1) and the
denominator of which is the number of shares of common stock of the
successor, acquiror or other third party received by a holder of one
share of Common Stock as a result of such Common Stock Fundamental
Change.
Section 12.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE. Whenever
the Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price and
shall prepare a certificate signed by the Chief Financial Officer or
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the Treasurer of the Company setting forth the adjusted Conversion
Price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed
with the Trustee and the transfer agent for the Convertible Preferred
Securities and the Convertible Debentures; and
(b) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as
practicable be mailed by the Company to all record holders of
Convertible Preferred Securities and the Convertible Debentures at
their last addresses as they appear upon the transfer books of the
Company and the Trust.
Section 12.6 PRIOR NOTICE OF CERTAIN EVENTS. In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable
in shares of Common Stock or (B) a dividend payable in cash that would
not require an adjustment pursuant to Section 12.3(c) or (d) or (ii)
authorize a tender or exchange offer that would require an adjustment
pursuant to Section 12.3(e);
(b) the Company shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any
shares of stock of any class or series or of any other rights or
warrants;
(c) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the
Company shall be required, or of the sale or transfer of all or
substantially all of the assets of the Company or of any compulsory
share exchange whereby the Common Stock is converted into other
securities, cash or other property; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall (i) if any Convertible Preferred Securities are
outstanding, cause to be filed with the transfer agent for the Convertible
Preferred Securities, and shall cause to be mailed to the holders of record of
the Convertible Preferred Securities, at their last addresses as they shall
appear upon the stock transfer books of the Trust or (ii) shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least 15 days prior to the applicable record or effective
date hereinafter specified, a notice stating (A) the date on which a record (if
any) is to be taken for the purpose of such dividend, distribution, rights or
warrants or, if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distribution, rights or
warrants are to be determined or (B) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effec tive, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer, share
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exchange, dissolution, liquidation or winding up (but no failure to mail such
notice or any defect therein or in the mailing thereof shall affect the validity
of the corporate action required to be specified in such notice). If at any time
the Trustee shall not be the Conversion Agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee.
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Section 12.7 CERTAIN ADDITIONAL RIGHTS. In case the Company
shall, by dividend or otherwise, declare or make a distribution on the Common
Stock referred to in Section 12.3(c) or 12.3(d), the Holder of the Convertible
Debentures, upon the conversion thereof subsequent to the close of business on
the date fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the Conversion Price adjustment
in respect of such distribution, shall also be entitled to receive for each
share of Common Stock into which the Convertible Debentures are converted, the
portion of the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash and assets so distributed applicable
to one share of Common Stock; provided, however, that, at the election of the
Company (whose election shall be evidenced by a resolution of the Board of
Directors) with respect to all Holders so converting, the Company may, in lieu
of distributing to such Holder any portion of such distribution not consisting
of cash or securities of the Company, pay such Holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a resolution
of the Board of Directors). If any conversion of Convertible Debentures
described in the immediately preceding sentence occurs prior to the payment date
for a distribution to holders of Common Stock which the Holder of Convertible
Debentures so converted is entitled to receive in accordance with the
immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
Holder a due ▇▇▇▇ for the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets to which such Holder is so
entitled, provided, that such due ▇▇▇▇ (a) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded and (b) requires payment or delivery of such shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets no later than the date of payment or delivery thereof to
holders of shares of Common Stock receiving such distribution.
Section 12.8 TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION
PRICE OR ADJUSTMENTS.Neither the Trustee nor any Conversion Agent shall at any
time be under any duty or responsibility to any Holder of any Convertible
Debenture to determine whether any facts exist which may require any adjustment
of the Conversion Price, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed. Neither the
Trustee nor any Conversion Agent shall be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Convertible Debenture; and neither the Trustee nor any
Conversion Agent makes any representation with respect thereto. Neither the
Trustee nor any Conversion Agent shall be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or stock certificates or other securities or property upon the
surrender of any Convertible Debenture for the purpose of conversion. All
Convertible Debentures delivered for conversion shall be delivered to the
Trustee to be cancelled by or at the discretion of the Trustee, which shall
dispose of the same as provided in Section 2.12 of this Indenture.
Section 12.9 RESERVATION OF SHARES OF COMMON STOCK.The Company
shall at all times reserve and keep available, free from preemptive rights, out
of its authorized but unissued Common Stock or treasury shares, for the purpose
65
of effecting the conversion of Convertible Debentures, the full number of shares
of Common Stock of the Company then issuable upon the conversion of all
outstanding Convertible Debentures.
Section 12.10 PAYMENT OF CERTAIN TAXES UPON CONVERSION. The
Company will pay any and all taxes that may be payable in respect of the issue
or delivery of shares of its Common Stock on conversion of Convertible
Debentures pursuant hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of its Common Stock in a name other than that of the
Holder of the Convertible Debenture or Convertible Debentures to be converted,
and no such issue or delivery shall be made unless and until the person
requesting such issue has paid to the Company the amount of any such tax, or has
established, to the satisfaction of the Company, that such tax has been paid.
Section 12.11 NONASSESSABILITY. The Company covenants that all
shares of Common Stock which may be issued upon conversion of Convertible
Debentures will upon issue in accordance with the terms hereof be duly and
validly issued and fully paid and nonassessable.
ARTICLE XIII
SUBORDINATION OF CONVERTIBLE DEBENTURES
Section 13.1 CONVERTIBLE DEBENTURES SUBORDINATE TO SENIOR
INDEBTEDNESS. The Company covenants and agrees, and each Holder of a Convertible
Debenture, by the Holder's acceptance thereof, likewise covenants and agrees,
that, to the extent and in the manner hereinafter set forth in this Article, the
indebtedness represented by the Convertible Debentures and the payment of the
principal of (and premium, if any) and interest on each and all of the
Convertible Debentures are hereby expressly made subordinate and junior in right
of payment to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of this Indenture or thereafter
incurred. No provision of this Article shall prevent the occurrence of any
default or Event of Default hereunder.
Section 13.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In
the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Company, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Company voluntarily or
involuntarily, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Company for the benefit of creditors or (iv) any
other marshalling of assets of the Company, all amounts due upon all Senior
Indebtedness of the Company (including any interest thereon accruing after the
commencement of such proceedings) shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made by the Company on account of the principal (and premium, if any) or
interest on the Convertible Debentures; and any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Convertible Debentures or
the Trustee would be entitled to receive from the Company, except for the
provisions of this Article, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
66
payment or distribution, or by the Holders of the Convertible Debentures or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness
(including any interest thereon accruing after the commencement of such
proceedings) in full, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of the Convertible Debentures or
to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment, such payment or distribution shall be held
in trust for the benefit of and shall be paid over or delivered to the holders
of such Senior Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, and their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness of the Company, as the case may be, remaining
unpaid to the extent necessary to pay such Senior Indebtedness in full, after
giving effect to any concurrent payment or distribution to or for the benefit of
the holders of such Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment which are subordinated
in right of payment to all Senior Indebtedness which may at the time be
outstanding to substantially the same extent as, or to a greater extent than,
the Convertible Debentures are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the conveyance
or transfer of its properties and assets substantially as an entirety to another
Person upon the terms and conditions set forth in Article IX of this Indenture
shall not be deemed a dissolution, winding up, liquidation, reorganization,
readjustment, composition, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company for the purposes of this
Section if the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer such properties
and assets substantially as an entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
set forth in Article IX of this Indenture.
Section 13.3 PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON
ACCELERATION OF CONVERTIBLE DEBENTURES. In the event that any Convertible
Debentures are declared due and payable before their Stated Maturity, then and
in such event the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness or provision shall be made for such payment in cash, before
the Holders of the Convertible Debentures are entitled to receive any payment
67
(including any payment which may be payable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of the
Convertible Debentures) by the Company on account of the principal of (or
premium, if any) or interest on the Convertible Debentures or on account of the
purchase or other acquisition of Convertible Debentures.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Convertible Debenture
prohibited by the foregoing provisions of this Section, and if such fact shall,
at or prior to the time of such payment, have been made known to the Trustee or,
as the case may be, such Holder, then and in such event such payment shall be
paid over and delivered forthwith to the Company. The provisions of this Section
shall not apply to any payment with respect to which Section 13.2 would be
applicable.
Section 13.4 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT. In
the event and during the continuation of any default by the Company in the
payment of principal, premium, if any, interest or any other payment due on any
Senior Indebtedness of the Company, as the case may be, beyond any applicable
grace period with respect thereto, or in the event that the maturity of any
Senior Indebtedness of the Company has been accelerated because of a default,
then, in any such case, no payment shall be made by the Company with respect to
the principal (including redemption payments, if any) of, premium, if any, or
interest on the Convertible Debentures until such default is cured or waived or
ceases to exist or any such acceleration or demand for payment has been
rescinded.
Section 13.5 PAYMENT PERMITTED IN CERTAIN SITUATIONS. Nothing
contained in this Article or elsewhere in this Indenture or in the Convertible
Debentures shall prevent (a) the Company, at any time except during the pendency
of any dissolution, winding-up, liquidation or reorganization of the Company,
whether voluntary or involuntary or any bankruptcy, insolvency, receivership or
other proceedings of the Company referred to in Section 13.2 or under the
conditions described in Section 13.3 or 13.4, from making payments at any time
of principal of or premium, if any, or interest on the Convertible Debentures,
or (b) the application by the Trustee of any money deposited with it hereunder
to the payment of or on account of the principal of, or premium, if any, or
interest on the Convertible Debentures or the retention of such payment by the
Holders, if, at the time of such application by the Trustee, it did not have
knowledge that such payment would have been prohibited by the provisions of this
Article.
Section 13.6 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR
INDEBTEDNESS. Subject to the payment in full of all Senior Indebtedness or the
provision for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Indebtedness, the rights of the Holders of
Convertible Debentures shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article (equally and ratably with the holders of indebtedness
of the Company which by its express terms is subordinated to indebtedness of the
Company to substantially the same extent as the Convertible Debentures are
subordinated to the Senior Indebtedness and is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Convertible Debentures shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of
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Convertible Debentures or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to the provisions of
this Article to or for the benefit of the holders of Senior Indebtedness by
Holders of Convertible Debentures or the Trustee, shall, as among the Company,
its creditors other than holders of Senior Indebtedness and the Holders of
Convertible Debentures, be deemed to be a payment or distribution by the Company
to or on account of the Senior Indebtedness.
Section 13.7 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of Convertible Debentures on the one
hand and the holders of Senior Indebtedness on the other hand. Nothing contained
in this Article or elsewhere in this Indenture or in the Convertible Debentures
is intended to or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of Convertible Debentures,
the obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the holders of Senior Indebtedness,
is intended to rank equally with all other general obligations of the Company),
to pay to the Holders of Convertible Debentures the principal of (and premium,
if any) and interest on the Convertible Debentures as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders of Convertible Debentures and
creditors of the Company, as the case may be, other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Convertible
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Senior Indebtedness to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
Section 13.8 TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of
a Convertible Debenture by such Holder's acceptance thereof authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee such Holder's attorney-in-fact for any and all
such purposes.
Section 13.9 NO WAIVER OF SUBORDINATION PROVISIONS. No right of
any present or future holder of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Convertible Debentures, without incurring responsibility to the Holders of
Convertible Debentures and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders of
Convertible Debentures to the holders of Senior Indebtedness do any one or more
of the following (a) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument evidencing the
69
same or any agreement under which Senior Indebtedness is outstanding; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Company and any other Person.
Section 13.10 NOTICE TO TRUSTEE. The Company shall give prompt
written notice to a Responsible Officer of the Trustee of any fact known to the
Company which would prohibit the making of any payment to or by the Trustee in
respect of the Convertible Debentures pursuant to the provisions of this
Article. Notwithstanding the provisions of this Article or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee in respect of the Convertible Debentures pursuant to the provisions
of this Article, unless and until a Responsible Officer of the Trustee shall
have received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section 6.2
of this Indenture, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall have not received the
notice provided for in this Section at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Convertible Debentures, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
Subject to the provisions of Section 6.2 of this Indenture, the
Trustee shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
Section 13.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATING AGENT. Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Section
6.2 of this Indenture, and the Holders of Convertible Debentures shall be
entitled to conclusively rely upon any order or decree entered by any court of
competent jurisdiction in which such insolvency, bankruptcy, receivership,
liquidation, reorganization, dissolution, winding up or similar case or
proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Convertible Debentures, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
70
Senior Indebtedness and other indebtedness of the Company, as the case may be,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
Section 13.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS. With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into this Indenture against the Trustee. Except with respect to Section
13.4, the Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness and shall not be liable to any such holders or creditors
if it shall in good faith pay over or distribute to Holders of Convertible
Debentures or to the Company or to any other Person cash, property or securities
to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
Section 13.13 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
PRESERVATION OF TRUSTEE'S RIGHTS. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article XIII shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.7 of this Indenture.
Section 13.14 ARTICLE APPLICABLE TO PAYING AGENTS. In case at any
time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however, that Section 13.13
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as Paying Agent.
Section 13.15 CERTAIN CONVERSIONS DEEMED PAYMENT. For purposes of
this Article only, (a) the issuance and delivery of junior securities (or cash
paid in lieu of fractional shares) upon conversion of Convertible Debentures in
accordance with Article XII shall not be deemed to constitute a payment or
distribution on account of the principal of or premium or interest on
Convertible Debentures or on account of the purchase or other acquisition of
Convertible Debentures, and (b) the payment, issuance or delivery of cash,
property or securities (other than junior securities and cash paid in lieu of
fractional shares) upon conversion of a Convertible Debenture shall be deemed to
constitute payment on account of the principal of such Convertible Debenture.
For the purposes of this Section, the term "junior securities" means (i) shares
of any stock of any class of the Company and (ii) securities of the Company
which are subordinated in right of payment to all Senior Indebtedness which may
be outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Convertible
Debentures are so subordinated as provided in this Article. Nothing contained in
this Article or elsewhere in this Indenture or in the Convertible Debentures is
intended to or shall impair, as among the Company, its creditors other than
71
holders of Senior Indebtedness and the Holders of Convertible Debentures, the
right, which is absolute and unconditional, of the Holder of any Convertible
Debenture to convert such Convertible Debenture in accordance with Article XII.
ARTICLE XIV
EXPENSES
Section 14.1 PAYMENT OF EXPENSES. In connection with the
offering, sale and issuance of the Convertible Debentures to the Institutional
Trustee and in connection with the sale of the Trust Securities by the Trust,
the Company, in its capacity as borrower with respect to the Convertible
Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale,
issuance and registration under the Securities Act of the Convertible
Debentures and the Trust Securities, including commissions to the
purchasers payable pursuant to the Placement Agreement and
compensation of the Trustee under this Indenture in accordance with
the provisions of Section 6.7 of this Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the
Trust, the fees and expenses of the Institutional Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of
the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses
for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel
and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets);
(c) pay all costs and expenses related to the enforcement by the
Institutional Trustee of the rights of the holders of the Trust
Securities;
(d) be primarily liable for any indemnification obligations
arising with respect to the Declaration; and
(e) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
Section 14.2 PAYMENT UPON RESIGNATION OR REMOVAL. Upon
termination of this Indenture or the removal or resignation of the Trustee
pursuant to Section 6.8 of this Indenture, the Company shall pay to the Trustee
all amounts accrued to the date of such termination, removal or resignation.
Upon termination of the Declaration or the removal or resignation of the
Delaware Trustee or the Institutional Trustee, as the case may be, pursuant to
Section 5.6 of the Declaration, the Company shall pay to the Delaware Trustee or
72
the Institutional Trustee, and their respective counsel, as the case may be, all
amounts accrued to the date of such termination, removal or resignation.
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
OF COMPANY EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligations, covenant or agreement contained in this Indenture, in any
Convertible Debenture, or because of any indebtedness evidenced thereby, shall
be had against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Company or of any successor,
either directly or through the Company or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Convertible Debentures by
the Holders thereof and as part of the consideration of the issue of the
Convertible Debentures.
Section 15.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF
PARTIES AND HOLDERS OF CONVERTIBLE DEBENTURES. Nothing in this Indenture or in
the Convertible Debentures, expressed or implied, shall give or be construed to
give to any Person, firm or corporation, other than the parties hereto, any
Paying Agent and their successors hereunder, the holders of Senior Indebtedness,
the holders of Convertible Preferred Securities (to the extent provided herein)
and the Holders of the Convertible Debentures any legal or equitable right,
remedy or claim under this Indenture or under any covenant or provision herein
contained, all such covenants and provisions being for the sole benefit of the
parties hereto and their successors and of the Holders of the Convertible
Debentures.
Section 15.3 RIGHT TO ASSIGN; SUCCESSORS AND ASSIGNS BOUND BY
INDENTURE. The Company shall have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly-owned Subsidiary of the Company; provided that, in the event of any such
assignment, the Company shall remain liable for all of its obligations under
this Indenture. Subject to the foregoing, this Indenture will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. The rights and obligations of the parties under this Indenture may
not otherwise be assigned by such parties.
All the covenants, stipulations, promises and agreements in this
Indenture by the parties hereto shall bind their respective successors and
assigns, whether so expressed or not.
Section 15.4 NOTICES AND DEMANDS ON COMPANY, TRUSTEE AND HOLDERS
OF CONVERTIBLE DEBENTURES. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Convertible Debentures to or on the Company may be given or
served by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein); via overnight courier; or through personal
delivery, with such notice or demand addressed (until another address of the
73
Company is filed by the Company with the Trustee) to Viatel, Inc., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel. Any
notice, direction, request or demand by the Company or any Holder of Convertible
Debentures to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders of
Convertible Debentures of any event such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed by
first-class mail, postage prepaid to such Holders as their names and addresses
appear in the Convertible Debenture register within the time prescribed. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, shall
affect the sufficiency of such notice, and any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to the Company
and Holders of Convertible Debentures when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be reasonably acceptable to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 15.5 OFFICERS' CERTIFICATES AND OPINIONS OF COUNSEL;
STATEMENTS TO BE CONTAINED THEREIN. Upon any application or demand by the
Company to the Trustee to take action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition and the
definitions herein relating thereto, (b) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based, (c) a statement that, in the
opinion of such person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with and (d) a statement as to whether
or not, in the opinion of such person, such condition or covenant has been
complied with. Any certificate, statement or opinion of any officer of the
Company may be based, insofar as it relates to legal matters, upon a certificate
or opinion of or representations by counsel, unless such officer knows that the
74
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters or information with respect to which is in the
possession of the Company, upon the certificate, statement or opinion of or
representations by an officer or officers of the Company, unless such counsel
knows that the certificate, statement or opinion or representations with respect
to the matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous.
Any certificate, statement or opinion of an officer of the
Company or of counsel may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous. Any certificate or
opinion of any independent firm of public accountants filed with and directed to
the Trustee shall contain a statement that such firm is independent.
Section 15.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS.
Except as otherwise provided in Section 2.5, if the date of Maturity of interest
on or principal of the Convertible Debentures or the date fixed for redemption
or repayment of any such Convertible Debenture shall not be a Business Day, then
payment of interest or principal need not be made on such date, but may be made
on the next succeeding Business Day; provided that if such next succeeding
Business Day falls in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on the date of Maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.
Section 15.7 CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST
INDENTURE ACT. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required by the Trust Indenture Act, such required provision shall control.
Section 15.8 NEW YORK LAW TO GOVERN. THIS INDENTURE AND THE
CONVERTIBLE DEBENTURES SHALL BE DEEMED TO BE CONTRACTS MADE AND TO BE PERFORMED
ENTIRELY IN THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO THE
CONFLICTS OF LAW RULES OF SAID STATE.
Section 15.9 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
75
Section 15.10 EFFECT OF HEADINGS; GENDER. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof. The use of the masculine, feminine or neuter
gender herein shall not limit in any way the applicability of any term or
provision hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed all as of the day and year first above written.
VIATEL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_____________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
General Counsel
THE BANK OF NEW YORK,
as Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
[(FORM OF FACE OF CONVERTIBLE DEBENTURE)]
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE
FOLLOWING - - THIS DEBENTURE IS A BOOK-ENTRY DEBENTURE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS DEBENTURE IS EXCHANGEABLE FOR CONVERTIBLE
DEBENTURES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY DEBENTURE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. __________ [CUSIP NO. __________]
VIATEL, INC.
[ % CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE]
[PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, ANY
CERTIFICATE EVIDENCING A CONVERTIBLE DEBENTURE SHALL BEAR A LEGEND IN
SUBSTANTIALLY THE FOLLOWING FORM, UNLESS OTHERWISE AGREED BY THE COMPANY (WITH
WRITTEN NOTICE THEREOF TO THE TRUSTEE): THE SECURITY EVIDENCED HEREBY HAS NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
A-1
144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR, IF THIS SECURITY
IS CONVERTIBLE INTO COMMON STOCK, THE COMMON STOCK ISSUABLE UPON CONVERSION OR
EXCHANGE OF THIS SECURITY EXCEPT (A) TO VIATEL, INC. (THE "COMPANY") OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (D) TO AN "INSTITUTIONAL ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON STOCK, THE TRANSFER AGENT FOR THE COMMON
STOCK), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT), (E)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT
OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY OR VIATEL FINANCING TRUST I (THE "TRUST") MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON STOCK AND IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR
THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE
MAY BE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY
OR THE TRUST MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
A-2
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.]
Viatel, Inc., a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, The Bank of New York, as
Institutional Trustee (the "Institutional Trustee") for Viatel Financing Trust I
or registered assigns, the principal sum of One Hundred Eighty-Five Million Five
Hundred Sixty-Seven Thousand Ten Dollars ($185,567,010)]1 on April 15, 2015 and
to pay interest on said principal sum from April 12, 2000, or from the most
recent interest payment date to which interest has been paid or duly provided
for, quarterly (subject to deferral as set forth herein) in arrears on January
15, April 15, July 15 and October 15 (each such date, an "Interest Payment
Date") of each year commencing July 15, 2000, at the rate of 7 3/4% per annum
until the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded quarterly. The
amount of interest payable on any Interest Payment Date shall be computed on the
basis of a 360-day year of twelve 30-day months. The amount of interest payable
for any period shorter than a full quarterly period for which interest is
computed, will be computed on the basis of the actual number of days elapsed per
30-day month. In the event that any date on which interest is payable on this
Convertible Debenture is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture (referred to on the reverse hereof) be paid
to the person in whose name this Convertible Debenture (or one or more
Predecessor Convertible Debentures, as defined in said Indenture) is registered
on the record date for such interest installment, which shall be the close of
business on the fifteenth day prior to such Interest Payment Date. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holders on such record date and may be
paid to the Person in whose name this Convertible Debenture (or one or more
Predecessor Convertible Debentures) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered Holders of the
Convertible Debentures not less than 10 days prior to such special record date,
or may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Convertible Debentures may
be listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. The principal of (and premium, if any) and the
interest on this Convertible Debenture shall be payable at the office or agency
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of the Trustee maintained for that purpose in any coin or currency of the United
States of America that at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered Holder at
such address as shall appear in the Security Register. Notwithstanding the
foregoing, so long as the Holder of this Convertible Debenture is the
Institutional Trustee, the payment of the principal of (and premium, if any) and
interest on this Convertible Debenture will be made at such place and to such
account as may be designated by the Institutional Trustee.
The indebtedness evidenced by this Convertible Debenture is, to
the extent provided in the Indenture, subordinate and junior in right of payment
to the prior payment in full of all Senior Indebtedness, and this Convertible
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Convertible Debenture, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on his or her behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so provided and (c)
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
Each Holder hereof, by his or her acceptance hereof, hereby waives all notice of
the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Convertible Debenture shall not be entitled to any benefit
under the Indenture hereinafter referred to, be valid or become obligatory for
any purpose until the Certificate of Authentication hereon shall have been
signed by or on behalf of the Trustee.
The provisions of this Convertible Debenture are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
Capitalized terms used but not defined herein shall have the
meaning given them in the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
VIATEL, INC.
By:_____________________________
Name:
Title:
Attest:
By:________________________________
Name:
Title:
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[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures described in the
within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK
as Trustee
By:________________________________
Authorized Signatory
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[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of the 7 3/4% Convertible
Junior Subordinated Debentures (herein referred to as the "Convertible
Debentures"), all issued or to be issued under and pursuant to an Indenture
dated as of April 12, 2000, duly executed and delivered between the Company and
The Bank of New York, as Trustee (the "Trustee") (the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Convertible Debentures. The Convertible Debentures are limited in aggregate
principal amount as specified in the Indenture.
Because of the occurrence and continuation of a Tax Event, in
certain circumstances, this Convertible Debenture may become due and payable at
the principal amount specified on the face hereof together with any interest
accrued thereon (the "Redemption Price"). The Redemption Price shall be paid
prior to 12:00 noon, New York City time, on the date of such redemption or at
such earlier time as the Company determines. The Company shall have the right to
redeem this Convertible Debenture at the option of the Company, upon not less
than 30 nor more than 60 days notice, without premium or penalty, in whole or in
part at any time on or after April 18, 2003 (an "Optional Redemption") at the
following prices (expressed as percentages of the principal amount of the
Convertible Debentures) (the "Optional Redemption Price") together with accrued
and unpaid interest (including Additional Sums, if any, and, to the extent
permitted by applicable law, Compound Interest, if any) to, but excluding, the
redemption date, if redeemed during the 12-month period beginning April 18 of
the applicable year set forth below:
YEAR REDEMPTION PRICE
------- ----------------
2003 105.43%
2004 104.65%
2005 103.88%
2006 103.10%
2007 102.33%
2008 101.55%
2009 100.78%
and 100% if redeemed on or after April 18, 2010.
If Convertible Debentures are redeemed on any January 15, April
15, July 15 or October 15, accrued and unpaid interest shall be payable to
holders of record on the relevant record date.
So long as the corresponding Trust Securities are outstanding,
the proceeds from the redemption of any of the Convertible Debentures will be
used to redeem Trust Securities.
If the Convertible Debentures are only partially redeemed by the
Company pursuant to an Optional Redemption, the Convertible Debentures will be
redeemed pro rata.
A-6
In the event of redemption of this Convertible Debenture in part
only, a new Convertible Debenture or Convertible Debentures for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the principal of all of the Convertible
Debentures and the interest accrued thereon may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of a majority of the aggregate
principal amount of the Convertible Debentures at the time Outstanding,
evidenced as provided in the Indenture, to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in any
manner the rights of the Holders of the Convertible Debentures; provided,
however, that no such supplemental indenture shall (i) extend the Stated
Maturity of any Convertible Debenture, or reduce the principal amount thereof or
any premium thereon, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable upon redemption thereof, or
impair or affect the right of any Holder to institute suit for the payment
thereof, without the consent of the Holder of each Convertible Debenture so
affected, or (ii) reduce the aforesaid percentage of Convertible Debentures, the
Holders of which are required to consent to any such supplemental indenture,
without the consent of the Holder of each Convertible Debenture. It is also
provided in the Indenture that, with respect to certain defaults or Events of
Default regarding the Convertible Debentures, prior to any declaration
accelerating the maturity of such Convertible Debentures, or after such
declaration and before any judgment or decree for the payment of the moneys due
is obtained or entered, and provided the Company has paid or made provision for
payment of any unaccelerated amounts then due, the Holders of a majority in
aggregate principal amount Outstanding of the Convertible Debentures (or, in the
case of certain defaults or Events of Default, all of the Convertible
Debentures), may on behalf of the Holders of all the Convertible Debentures
waive any such past default or Event of Default and its consequences. The
preceding sentence shall not, however, apply to a default in the payment of the
principal of or premium, if any, or interest on any of the Convertible
Debentures. Any such consent or waiver by the Holder of this Convertible
Debenture (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this
Convertible Debenture and any Convertible Debenture which may be issued in
exchange or substitution therefor, irrespective of whether or not any notation
thereof is made upon this Convertible Debenture or such other Convertible
Debenture.
No reference herein to the Indenture and no provision of this
Convertible Debenture or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Convertible Debenture at the time and
place and at the rate and in the money herein prescribed.
As long as an Event of Default under Section 5.1(a) of the
Indenture shall not have occurred and be continuing, the Company shall have the
right at any time during the term of the Convertible Debentures and from time to
time to extend the interest payment period of such Convertible Debentures for up
to 20 consecutive quarters (an "Extension Period"), at the end of which period
A-7
the Company shall pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Convertible Debentures to the
extent that payment of such interest is enforceable under applicable law).
Before the termination of any such Extension Period, the Company may further
extend such Extension Period, provided that such Extension Period together with
all such further extensions thereof shall not exceed 20 consecutive quarters. At
the termination of any such Extension Period and upon the payment of all accrued
and unpaid interest and any additional amounts then due, the Company may
commence a new Extension Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Convertible Debenture is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Convertible Debenture for registration of transfer at the office or agency of
the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Convertible Debentures of
authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Convertible Debenture, the Company, the Trustee, any paying agent and the
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Convertible Debenture shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Holder of any Convertible Debenture has the right,
exercisable at any time beginning July 11, 2000 through the close of business
(New York time) on April 14, 2015 (or, in the case of a Convertible Debenture
called for redemption, prior to the close of business on the Business Day prior
to the corresponding redemption date), to convert the principal amount thereof
(or any portion thereof that is an integral multiple of $50) into shares of
Common Stock at the initial conversion rate of 1.048 shares of Common Stock for
each Convertible Debenture (equivalent to a Conversion Price of $47.71 per share
of Common Stock), subject to adjustment under certain circumstances.
A-8
To convert a Convertible Debenture, a Holder must (a) complete
and sign a conversion notice substantially in the form attached hereto, (b)
surrender the Convertible Debenture to a Conversion Agent, (c) furnish
appropriate endorsements or transfer documents if required by the Conversion
Agent and (d) pay any transfer or similar tax, if required. Upon conversion, no
adjustment or payment will be made for interest or dividends, but if any Holder
surrenders a Convertible Debenture for conversion on or after the record date
for the payment of an installment of interest and prior to the opening of
business on the next Interest Payment Date, then, notwithstanding such
conversion, the interest payable on such Interest Payment Date will be paid to
the registered Holder of such Convertible Debenture on such record date. In such
event, such Convertible Debenture, when surrendered for conversion, need not be
accompanied by payment of an amount equal to the interest payable on such
Interest Payment Date on the portion so converted. However, if a redemption date
falls between a record date and the subsequent Interest Payment Date, the Holder
will be entitled to receive, on such redemption date, the interest accrued to,
but excluding, the redemption date. The number of shares issuable upon
conversion of a Convertible Debenture is determined by dividing the principal
amount of the Convertible Debenture converted by the Conversion Price in effect
on the Conversion Date. No fractional shares will be issued upon conversion but
a cash adjustment will be made for any fractional interest. The outstanding
principal amount of any Convertible Debenture shall be reduced by the portion of
the principal amount thereof converted into shares of Common Stock.
The Convertible Debentures are issuable only in registered form
without coupons in denominations of $10 and any integral multiple thereof.2 This
Global Debenture is exchangeable for Convertible Debentures in definitive form
only under certain limited circumstances set forth in the Indenture. Convertible
Debentures so issued are issuable only in registered form without coupons in
denominations of $10 and any integral multiple thereof.3 As provided in the
Indenture and subject to certain limitations therein set forth, Convertible
Debentures are exchangeable for a like aggregate principal amount of Convertible
Debentures of a different authorized denomination, as requested by the Holder
surrendering the same.
THE INDENTURE AND THE CONVERTIBLE DEBENTURES SHALL BE DEEMED TO
BE CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN THE STATE OF NEW YORK, AND FOR
ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SAID STATE WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SAID STATE.
A-9
FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: Viatel, Inc.
The undersigned owner of this Convertible Debenture hereby irrevocably exercises
the option to convert this Convertible Debenture, or the portion below
designated, into Common Stock of VIATEL, INC. in accordance with the terms of
the Indenture referred to in this Convertible Debenture, and directs that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: _______________, ____
in whole _____ Portions of Convertible Debenture to be converted ($50 or
integral multiples-thereof): $________________
_____________________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including
Zip Code, and Social Security or Other Identifying
Number
_____________________________________________________
_____________________________________________________
_____________________________________________________
Signature Guarantee:4 _______________________________
____________________
A-10
ASSIGNMENT
[FORM OF ASSIGNMENT FOR CONVERTIBLE DEBENTURES
THAT ARE NOT GLOBAL DEBENTURES]
For value received __________________________ hereby sell(s),
assign(s) and transfer(s) unto
________________________________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.) the within Convertible Debenture and hereby irrevocably constitutes
and appoints _______ attorney to transfer the said Convertible Debenture on the
books of the Company, with full power of substitution in the premises.
In connection with any transfer of the within Convertible
Debenture occurring prior to the Transfer Restriction Termination Date, the
undersigned confirms that such Convertible Debenture is being transferred:
[_] To Viatel, Inc. or a subsidiary thereof; or
[_] Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
[_] To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
[_] Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
[_] Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
[_] Pursuant to an effective registration statement.
and unless the box below is checked, the undersigned confirms that such
Convertible Debenture is not being transferred to an "affiliate" of the Company
as defined in Rule 144 under the Securities Act of 1933, as amended (an
"Affiliate"):
[_] The transferee is an Affiliate of the Company.
Dated: _____________________________
________________________________
A-11
________________________________
Signature(s)
________________________________
Signature Guarantee5
NOTICE: The above signatures of the holder(s) hereof must
correspond with the name as written upon the face of this Convertible Debenture
in every particular without alteration or enlargement or any change whatever.
A-12
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL DEBENTURES TO REFLECT CHANGES IN
PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Debentures
Principal Amount of
Convertible Debentures
by which this Global
Debenture is to be
Reduced or Increased, Remaining Principal
and Reason for Amount of this
DATE REDUCTION OR INCREASE Global DEBENTURE NOTATION MADE BY
A-13
---------------------
1 In the case of a Global Debenture the bracketed text will be replaced with the
following: "principal amount set forth on Schedule A hereto".
2 This text will appear in the case of registered definitive certificates issued
to Institutional Accredited Investors.
3 This text will appear in the case of a Global Debenture.
4 Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
5 (Signature must be guaranteed by an "eligible guarantor institution," that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)