EXHIBIT 10.32
[FORM OF NOTE]
THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED UNDER
ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED
OF EXCEPT WHILE A REGISTRATION STATEMENT IS IN EFFECT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY IS SUBJECT TO THE TERMS OF
THE PURCHASE AGREEMENT, DATED AS OF DECEMBER 31, 2004 (THE "PURCHASE
AGREEMENT"), AMONG TERREMARK WORLDWIDE, INC. (THE "COMPANY"), THE GUARANTORS
NAMED THEREIN, THE AGENT NAMED THEREIN AND THE PURCHASERS NAMED THEREIN. A COPY
OF SUCH PURCHASE AGREEMENT IS AVAILABLE AT THE OFFICES OF THE COMPANY.
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS NOTE IS BEING
ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS
NOTE, (1) THE ISSUE PRICE IS $939.36; (2) THE AMOUNT OF THE ORIGINAL ISSUE
DISCOUNT IS $224.07; (3) THE ISSUE DATE IS DECEMBER 31, 2004; AND (4) THE YIELD
TO MATURITY IS 14.42% (COMPOUNDED QUARTERLY).
SENIOR SECURED NOTES DUE 2009
$__________
No. __________
Terremark Worldwide, Inc., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company," which term
includes any successor Person under the Purchase Agreement), for value received,
hereby promises to pay to [ ], or registered assigns, the principal sum of $[ ]
Dollars (as such amount may be increased from time to time in accordance with
Paragraph 2 on the reverse of this Note) on March 10, 2009 (the "STATED
MATURITY").
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated: December , 2004
TERREMARK WORLDWIDE, INC.
By:
-------------------------------------
Name:
Title:
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[Form of Reverse of Note]
1. GENERAL. This Note is one of a duly authorized issue of
Notes of the Company designated as its Senior Secured Notes due 2009 (herein
called the "NOTES"), limited in aggregate principal amount to the sum of (a)
$30,000,000 and (b) the amount of interest which, in accordance with the terms
of Paragraph 2 below, may be capitalized and added to the principal amount of
the Notes, in each case, issued pursuant to the Purchase Agreement, dated as of
December 31, 2004 (herein called the "PURCHASE AGREEMENT"), among the Company,
the Guarantors named therein, the Agent named therein and the Purchasers named
therein, to which Purchase Agreement and all amendments thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company and the Noteholders and of the
terms upon which the Notes are, and are to be, issued and delivered.
Principal on this Note shall be payable only against surrender
therefor, while payments of interest on this Note shall be made, in accordance
with the Purchase Agreement and subject to applicable laws and regulations, by
check mailed on or before the due date for such payment to the person entitled
thereto at such person's address appearing on the Security Register or, by wire
transfer to such account as any Noteholder shall designate by written
instructions received by the Company no less than 15 days prior to any
applicable Interest Payment Date, which wire instruction shall continue in
effect until such time as the Noteholder otherwise notifies the Company or such
Noteholder no longer is the registered owner of this Note.
2. INTEREST. The Company promises to pay interest on the
principal amount of this Note from the date of issuance of this Note (or any
Predecessor Note) or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, quarterly in arrears on March 30,
June 30, September 30 and December 30 in each year commencing March 30, 2005
(each, an "INTEREST PAYMENT DATE") and at Stated Maturity at the Applicable
Rate, until the principal hereof is paid; PROVIDED, HOWEVER, that if any
Interest Payment Date falls on a date which is not a Business Day, interest due
on such Interest Payment Date shall be paid on the Business Day immediately
following such Interest Payment Date, PROVIDED, FURTHER, that such interest
payment shall not include any interest accruing after such Interest Payment
Date. On each such Interest Payment Date occurring during the period during
which the Applicable Rate shall equal the Standard Rate the Company may, at its
option and in its sole discretion, in lieu of the payment in whole or in part of
interest due on this Note which is in excess of 9 7/8% (other than default
interest as described below), pay such amount in excess of 9 7/8% (and only such
excess amount) on this Note by adding such amount to the principal amount of
this Note on such Interest Payment Date. If the Company elects to pay a portion
of the interest due on this Note through an increase in the principal amount of
this Note as provided in the immediately preceding sentence, the Company shall,
within five (5) Business Days of each relevant Interest Payment Date, deliver to
the Noteholder of this Note written notice of such election, which notice shall
also state the amount of interest so added to the principal of this Note and the
new principal amount of this Note. Notwithstanding the foregoing, if at any time
the Applicable Rate shall have converted from the Standard Rate to the Reduced
Rate in accordance with the terms of this Note then (i) interest on this Note
shall accrue and be paid entirely in cash (and no interest shall thereafter be
added to the principal amount of this Notes) and (ii) all interest which shall
have been added to the principal amount of this Note on or prior to such time
shall be paid to the
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holder hereof in cash in equal consecutive quarterly installments, payable over
that number of successive Interest Payment Dates which equals the number of
Interest Payment Dates which shall have occurred since the Closing Time and
prior to the date of conversion of the Applicable Rate. If as a result of any
Intervening Noncompliance Event (as defined below), the Applicable Rate shall
revert to the Standard Rate, then the Standard Rate shall once again be applied
retroactively to the Closing Time; PROVIDED that no Noteholder shall be required
to return any interest payments made in cash as a result of the Applicable Rate
converting from the Standard Rate to the Reduced Rate, but the Company shall be
deemed to have paid such interest in cash as so paid.
"APPLICABLE RATE" means initially 13.5% per annum (the
"STANDARD RATE"); PROVIDED, HOWEVER, that if (and only if) the Company's Total
Leverage Ratio as of the last day of any fiscal quarter of the Company ending
after the Closing Time and on or prior to December 31, 2005 (the "FINAL TEST
QUARTER") shall be equal to or less than 1.75 to 1.0, then the Applicable Rate
shall equal 12.5% per annum (the "REDUCED RATE") and such Reduced Rate shall
apply retroactively to all interest accruing from the Closing Time; PROVIDED,
HOWEVER, if following conversion to the Reduced Rate, the Total Leverage Ratio
as of the last day of any subsequent fiscal quarter through and including the
Final Test Quarter shall be greater than 1.75 to 1.0 (an "INTERVENING
NONCOMPLIANCE EVENT") then the Reduced Rate shall be retroactively converted
back to the Standard Rate.
To the extent that the payment of such interest shall be
legally enforceable, any principal of, or premium or installment of interest on,
this Note which is overdue shall bear interest at the rate of 2% per annum in
excess of the rate of interest then borne by the Notes ("DEFAULT INTEREST") from
the date such amounts are due until they are paid, and the entire amount of such
default interest shall be payable in cash.
Interest on this Note shall be computed on the basis of a
360-day year of twelve 30-day months.
All interest payable, on any Interest Payment Date will, as
provided in the Purchase Agreement, be paid to the Person in whose name this
Note (or one or more Predecessor Notes) is registered at the close of business
on the "REGULAR RECORD DATE" for such interest, which shall be the fifteenth
calendar day (whether or not a Business Day) immediately preceding such Interest
Payment Date. Notwithstanding the foregoing, if this Note is issued after a
Regular Record Date and prior to an Interest Payment Date, the record date for
such Interest Payment Date shall be the original issue date.
3. REDEMPTION. The Company may, at its option, redeem the
Notes, in whole or in part at any time commencing December 31, 2005 through and
including Stated Maturity at a Redemption Price as set forth below plus accrued
and unpaid interest, if any, to the Redemption Date:
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Period Commencing: Redemption Price
----------------- ----------------
December 31, 2005 115.0%
December 31, 2006 107.5%
June 30, 2007 105.0%
December 31, 2007 102.25%
June 30, 2008 and thereafter 100.0%
4. PROCEDURES FOR REDEMPTION. If less than all the Notes are
to be redeemed, the Notes shall be redeemed PRO RATA from each Noteholder.
In the event of redemption or purchase pursuant to an offer to
purchase this Note in part only, a new Note or Notes for the unredeemed or
unpurchased portion hereof will be issued in the name of the Noteholder hereof
upon the cancellation hereof.
5. EVENTS OF DEFAULT. If an Event of Default shall occur and
be continuing, the principal of all the Notes may be declared due and payable in
the manner and with the effect provided in the Purchase Agreement.
6. OFFERS TO PURCHASE NOTES. The Purchase Agreement provides
that, subject to certain conditions, if (i) certain Excess Proceeds are
available to the Company as a result of Asset Sales or (ii) a Change of Control
occurs, the Company shall be required to make an offer to purchase all or a
specified portion of the Notes as provided for in the Purchase Agreement.
7. AMENDMENTS, MODIFICATIONS AND WAIVERS. The Purchase
Agreement permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
certain rights of the Noteholders under the Purchase Agreement at any time by
the Company with the consent of the holders of a majority in aggregate principal
amount of the Notes at the time outstanding. The Purchase Agreement also
contains provisions permitting the Noteholders of specified percentages in the
aggregate principal amount of the Notes at the time outstanding, on behalf of
the Noteholders of all the Notes, to waive compliance by the Company with
certain provisions of the Agreement and certain past defaults under the
Agreement and their consequences. Any such consent or waiver by the holder of
this Note shall be conclusive and binding upon such Noteholder and upon all
future Noteholders and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
8. REGISTRATION OF TRANSFER. As provided in the Purchase
Agreement and subject to certain limitations therein set forth, the transfer of
this Note is registrable in the Security Register, upon surrender of this Note
for registration of transfer at the principal offices of the Company, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company duly executed by, the holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
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The Notes are issuable only in registered form without coupons
in denominations authorized under the Purchase Agreement. As provided in the
Purchase Agreement and subject to certain limitations therein set forth, Notes
are exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Noteholder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any Tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Company and any agent of the Company may treat the Person in whose
name this Note is registered as the owner hereof for all purposes, whether or
not this Note be overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.
9. MISCELLANEOUS. All terms used in this Note which are
defined in the Agreement shall have the meanings assigned to them in the
Purchase Agreement. The Company and the Noteholder agree that, unless otherwise
required by law or the good faith resolution of an examination or audit by the
Internal Revenue Service, they shall treat the Notes as not subject to the
provisions of Treasury Regulation 1.1275-4.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW
YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased in its
entirety by the Company pursuant to Section 7.08 or 7.09 of the Purchase
Agreement, check the box:
If you want to elect to have only a part of the principal
amount of this Note purchased by the Company pursuant to Section 7.08 or 7.09 of
the Purchase Agreement, state the portion of such amount:
$__________.
Dated: Your Signature: _____________________________________
(Sign exactly as name appears on the other side of
this Note)
Signature Guarantee:
_____________________________________________________
(Signature must be guaranteed by a financial
institution that is a member of the Securities
Transfer Agent Medallion Program ("STAMP"), the
Stock Exchange Medallion Program ("SEMP"), the New
York Stock Exchange, Inc. Medallion Signature
Program ("MSP") or such other signature guarantee
program as may be determined by the Security
Registrar in addition to, or in substitution for,
STAMP, SEMP or MSP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
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