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GLOBALSTAR, L.P.
GLOBALSTAR CAPITAL CORPORATION,
Issuers
%- Subordinated Notes due ________
INDENTURE
Dated as of
THE BANK OF NEW YORK,
Trustee
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TABLE OF CONTENTS
Page
ARTICLE 1. Definitions and Incorporation by Reference
SECTION 1.1. Definitions............................................. 1
SECTION 1.2. Other Definitions....................................... 20
SECTION 1.3. Incorporation by Reference of Trust Indenture Act....... 21
SECTION 1.4. Rules of Construction................................... 21
ARTICLE 2. The Securities
SECTION 2.1. Form and Dating......................................... 22
SECTION 2.2. Execution and Authentication............................ 22
SECTION 2.3. Registrar and Paying Agent.............................. 23
SECTION 2.4. Paying Agent To Hold Money in Trust..................... 23
SECTION 2.5. Securityholder Lists.................................... 24
SECTION 2.6. Transfer and Exchange................................... 24
SECTION 2.7. Replacement Securities.................................. 25
SECTION 2.8. Outstanding Securities.................................. 25
SECTION 2.9. Temporary Securities.................................... 25
SECTION 2.10. Cancellation............................................ 26
SECTION 2.11. Defaulted Interest...................................... 26
SECTION 2.12. CUSIP Numbers........................................... 26
ARTICLE 3. Redemption
SECTION 3.1. Notices to Trustee...................................... 26
SECTION 3.2. Selection of Securities To Be Redeemed.................. 27
SECTION 3.3. Notice of Redemption.................................... 27
SECTION 3.4. Effect of Notice of Redemption.......................... 28
SECTION 3.5. Deposit of Redemption Price............................. 28
SECTION 3.6. Securities Redeemed in Part............................. 28
ARTICLE 4. Covenants
SECTION 4.1. Payment of Securities................................... 28
SECTION 4.2. SEC Reports............................................. 29
SECTION 4.3. Limitation on Consolidated Debt......................... 29
SECTION 4.4. Future Guarantors....................................... 31
SECTION 4.5. Limitation on Restricted Payments....................... 31
SECTION 4.6. Dividend and other Payment Restrictions Affecting
Subsidiaries........................................ 33
SECTION 4.7. Asset Dispositions...................................... 35
SECTION 4.8. Transactions with Affiliates............................ 36
SECTION 4.9. Limitation on Issuances and Sales of Capital, Stock
of Restricted Subsidiaries.......................... 37
SECTION 4.10. Change of Control....................................... 37
SECTION 4.11. Limitation on Liens..................................... 38
(i)
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SECTION 4.12. Business Activities..................................... 40
SECTION 4.13. Maintenance of Insurance................................ 40
SECTION 4.14. Compliance certificate; Statement by officers as to
Default............................................. 42
SECTION 4.15. Further Instruments and Acts............................ 42
SECTION 4.16. Business Activities of Globalstar Capital............... 42
SECTION 4.17. Calculation of Original Issue Discount.................. 43
ARTICLE 5. Successor Issuers
SECTION 5.1. When Issuers May Merge or Transfer Assets............... 43
ARTICLE 6. Defaults and Remedies
SECTION 6.1. Events of Default....................................... 44
SECTION 6.2. Acceleration............................................ 46
SECTION 6.3. Other Remedies.......................................... 47
SECTION 6.4. Waiver of Past Defaults................................. 47
SECTION 6.5. Control by Majority..................................... 47
SECTION 6.6. Limitation on Suits..................................... 48
SECTION 6.7. Rights of Holders to Receive Payment.................... 48
SECTION 6.8. Collection Suit by Trustee.............................. 48
SECTION 6.9. Trustee May File Proofs Claim........................... 48
SECTION 6.10. Priorities.............................................. 49
SECTION 6.11. Undertaking for Costs................................... 49
SECTION 6.12. Waiver of Stay or Extension Laws........................ 49
ARTICLE 7. Trustee
SECTION 7.1. Duties of Trustee....................................... 50
SECTION 7.2. Rights of Trustee....................................... 51
SECTION 7.3. Individual Rights of Trustee............................ 52
SECTION 7.4. Trustee's Disclaimer.................................... 52
SECTION 7.5. Notice of Defaults...................................... 52
SECTION 7.6. Reports by Trustee to Holders........................... 52
SECTION 7.7. Compensation and Indemnity.............................. 53
SECTION 7.8. Replacement of Trustee.................................. 53
SECTION 7.9. Successor Trustee by Merger............................. 54
SECTION 7.10. Eligibility: Disqualification........................... 55
SECTION 7.11. Preferential Collection of Claims Against Issuers....... 55
ARTICLE 8. Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities; Defeasance........ 55
SECTION 8.2. Conditions to Defeasance................................ 56
SECTION 8.3. Application of Trust Money.............................. 57
SECTION 8.4. Repayment to Issuers.................................... 57
SECTION 8.5. Indemnity for Government Obligations.................... 58
SECTION 8.6. Reinstatement........................................... 58
(ii)
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ARTICLE 9. Amendments
SECTION 9.1. Without Consent of Holders.............................. 58
SECTION 9.2. With Consent of Holders................................. 59
SECTION 9.3. Compliance with Trust Indenture Act..................... 60
SECTION 9.4. Revocation and Effect of Consents and Waivers........... 60
SECTION 9.5. Notation on or Exchange of Securities................... 60
SECTION 9.6. Trustee To Such Amendments.............................. 60
SECTION 9.7. Payment for Consent..................................... 61
ARTICLE 10. Subsidiary Guaranties
SECTION 10.1. Guaranties.............................................. 61
SECTION 10.2. Limitation on Liability................................. 63
SECTION 10.3. Successors and Assigns.................................. 63
SECTION 10.4. No Waiver............................................... 63
SECTION 10.5. Modification............................................ 64
SECTION 10.6. Release of Subsidiary Guarantor......................... 64
ARTICLE 11. Subordination of Securities
SECTION 11.1. Securities Subordinated to Senior Indebtedness.......... 64
SECTION 11.2. Subrogation............................................. 66
SECTION 11.3. Obligation of the Issuers Unconditional................. 66
SECTION 11.4. Payments on Securities Permitted........................ 67
SECTION 11.5. Effectuation of Subordination by Trustee................ 67
SECTION 11.6. Knowledge of Trustee.................................... 67
SECTION 11.7. Trustee May Hold Senior Indebtedness.................... 68
SECTION 11.8. Rights of Holders of Senior Indebtedness Not Impaired... 68
ARTICLE 12. Miscellaneous
SECTION 12.1. Trust Indenture Act Controls............................ 68
SECTION 12.2. Notices................................................. 68
SECTION 12.3. Communication by Holders with Other Holders............. 69
SECTION 12.4. Certificate and opinion as to Conditions Precedent...... 69
SECTION 12.5. Statements Required in Certificate or Opinion........... 69
SECTION 12.6. When Securities Disregarded............................. 70
SECTION 12.7. Rules by Trustee, Paying Agent and Registrar............ 70
SECTION 12.8. Legal Holidays.......................................... 70
SECTION 12.9. Governing Law........................................... 70
SECTION 12.10. No Recourse Against Others.............................. 71
SECTION 12.11. Successors.............................................. 71
SECTION 12.12. Multiple Originals...................................... 71
SECTION 12.13. Table of Contents; Headings............................. 71
(iii)
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INDENTURE dated as of , 1999, among Globalstar, L.P.,
a Delaware limited partnership ("Globalstar"), Globalstar Capital
Corporation, a Delaware corporation ("Globalstar Capital" and, together
with Globalstar, the "Issuers") and The Bank of New York, a New York
banking corporation (the "Trustee").
Each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the
Securities.
ARTICLE 1.
Definitions and Incorporation by Reference
SECTION 1.1. Definitions.
"Acquired Debt" means, with respect to any specified Person,
(i) Debt of any other Person existing at the time such Person merges with or
into or consolidates with or becomes a Restricted Subsidiary of such specified
Person and (ii) Debt secured by a Lien encumbering any asset acquired by such
specified Person, which Debt or Lien was not Incurred in anticipation of, and
was outstanding prior to, such merger, consolidation or acquisition.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control. The terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Asset Disposition" means any transfer, conveyance, sale,
lease or other disposition (collectively, any "disposition") by the Issuers or
any Restricted Subsidiary (including any disposition by means of a
consolidation, merger or similar transaction) but excluding a disposition by a
Restricted Subsidiary to the Issuers or a Wholly-Owned Restricted Subsidiary or
by the Issuers to a Wholly-Owned Restricted Subsidiary of shares of Capital
Stock or other ownership interests of a Restricted Subsidiary, (ii) all or
substantially all of the assets of the Issuers or any Restricted Subsidiary
representing a division or line of business or (iii) other assets or rights of
such Person or any of its Restricted Subsidiaries other than a disposition (a)
in the ordinary course of business, (b) that constitutes a Restricted Payment
which is permitted pursuant to Section 4.5 or (c) that is subject to the
provisions set forth in
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Section 5.1(a); provided, however, that a transaction described in clauses (i),
(ii) and (iii) shall constitute an Asset Disposition only to the extent that the
aggregate consideration for all such transfers, conveyances, sales, leases or
other disposition exceeds $5 million in any 12-month period.
"Attributable Debt" in respect of a Sale and Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate borne by the Securities, compounded annually)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale and Leaseback Transaction (including any
period for which such lease has been extended).
"Average Life" means, as of the date of determination, with
respect to any Debt or Preferred Stock, the quotient obtained by dividing (i)
the sum of the products of the numbers of years from the date of determination
to the dates of each successive scheduled principal payment of such Debt or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bank Credit Agreement" means any one or more credit
agreements (which may include or consist of revolving credits) between
Globalstar, Globalstar Capital or any Restricted Subsidiary and one or more
banks or other financial institutions providing financing for the business of
Globalstar and its Restricted Subsidiaries.
"Build-out" means the construction, acquisition, improvement,
operation and development (including all costs related thereto) of the
Globalstar System, until such time as Globalstar shall have constructed at least
for use in the Globalstar System; (ii) launched or attempted to launch (through
"intentional ignition") at least for use in the Globalstar System; and (iii)
commenced commercial service of the Globalstar System with at least in orbit and
Operating.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" of any Person means an obligation
that is required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person in accordance with GAAP
(a "Capital Lease"). The Stated Maturity of such obligation shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without payment
of a penalty. The amount of such Debt represented by such obligation shall be
the capitalized amount thereof that would appear on the face of a balance sheet
of such Person in accordance with GAAP.
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"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock or other equity participations, including partnership interests, whether
general or limited, of such Person and shall (i) include any Special Preferred
obligations and other preferred equivalent obligations and (ii) exclude debt
securities convertible into Capital Stock.
"Change of Control" means:
(i) the sale, lease or transfer, in one transaction or a
series of related transactions, of all or substantially all the assets
of Globalstar and the Restricted Subsidiaries;
(ii) the adoption of a plan relating to the liquidation
or dissolution of Globalstar or Globalstar Capital;
(iii) one or more Dispositions which cause ▇▇▇▇▇'s direct
and indirect equity interest in Globalstar to be reduced by more than
30% as compared to its direct and indirect equity interest in
Globalstar as of December 31, 1996; or
(iv) the first day on which:
(a) Globalstar fails to own, of record and
beneficially, 100% of the equity interests and voting stock of
Globalstar Capital; or
(b) Loral fails to be, or, directly or indirectly,
fails solely to control, the sole managing general partner of
Globalstar.
Notwithstanding clauses (i), (ii) and (iv)(b) above, neither
the acquisition by GTL, Loral or any Wholly Owned Subsidiary of Loral of a
majority of the partnership interests in, or substantially all the assets of,
Globalstar, nor the merger of Globalstar with and into GTL, Loral or any Wholly
Owned Subsidiary of Loral shall constitute a Change of Control; provided,
however, that with respect to clause (iv)(b), Loral continues to control, or is
the corporate successor to, Globalstar.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission and
any survivor agency.
"Consolidated Cash Flow Available for Fixed Charges" for any
period means the Consolidated Net Income of Globalstar
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and its Restricted Subsidiaries for such period plus Consolidated Interest
Expense of Globalstar and its Restricted Subsidiaries for such period, plus the
following to the extent deducted in calculating such Consolidated Net Income:
(i) Consolidated Income Tax Expense of Globalstar and its Restricted
Subsidiaries for such period, (ii) the consolidated depreciation and
amortization expense included in the income statement of Globalstar and its
Restricted Subsidiaries for such period and (iii) any non-cash expense related
to the issuance to employees of Globalstar or any Restricted Subsidiary of
Globalstar of options to purchase Capital Stock of Globalstar or such Restricted
Subsidiary; provided, however, that there shall be excluded therefrom the
Consolidated Cash Flow Available for Fixed Charges (if positive) of any
Restricted Subsidiary (calculated separately, for such Restricted Subsidiary in
the same manner as provided above for Globalstar) that is subject to a
restriction which prevents the payment of dividends or the making of
distributions to Globalstar or another Restricted Subsidiary to the extent of
such restriction; provided, further, however, that if Consolidated Cash Flow
Available For Fixed Charges for any period shall be less than $1, Consolidated
Cash Flow For Fixed Charges for such period shall be deemed to be $1.
"Consolidated Income Tax Expenses" for any period means the
consolidated provision for income taxes of Globalstar and the Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, for any period, the
consolidated interest expense included in a consolidated income statement
(excluding interest income) of Globalstar and the Restricted Subsidiaries for
such period calculated on a consolidated basis in accordance with GAAP, plus, to
the extent not so included, cash dividends paid during such period on Special
Preferred Obligations.
"Consolidated Net Income" means, for any period, the
consolidated net income (or loss) of Globalstar and the Restricted Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP, less
the amount of any cash dividends paid during such period on Special Preferred
Obligations; provided, however, that there shall be excluded therefrom (i) the
net income (or loss) of any Person acquired by Globalstar or a Restricted
Subsidiary in a pooling-of-interests transaction for any period prior to the
date of such transaction, (ii) the net income (and loss) of any Person that is
not a Restricted Subsidiary except to the extent of the amount of dividends or
other distributions actually paid to Globalstar or a Restricted Subsidiary by
such Person during such period, (iii) gains (but not losses) on Asset
Dispositions by Globalstar or any Restricted Subsidiary, (iv) all extraordinary
gains and losses, (v) the cumulative effect of changes in accounting principles,
(vi) non-cash gains or losses resulting from fluctuations in
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currency exchange rates, (vii) any noncash gain or loss realized on the
termination of any employee pension benefit plan and (viii) the tax effect of
any of the items described in clauses (i) through (vii) above; provided further,
however, that for purposes of any determination pursuant to the provisions of
Section 4.5, (a) there shall further be excluded therefrom the net income (but
not net loss) of any Restricted Subsidiary that is subject to a restriction
which prevents the payment of dividends or the making of distributions to
Globalstar or another Restricted Subsidiary of Globalstar to the extent of such
restriction and (b) there shall further be deducted therefrom an amount equal to
the Tax Amount paid by Globalstar during such period.
"Consolidated Net Worth" of any Person means the consolidated
stockholders, equity of such Person, determined on a consolidated basis in
accordance with GAAP, less amounts attributable to Disqualified Stock of such
Person; provided, however, that, with respect to Globalstar, adjustments
following the date of this Indenture to the accounting books and records of
Globalstar in accordance with Accounting Principles Board Opinions Nos. 16 and
17 (or successor opinions thereto) or otherwise resulting from the acquisition
of control of Globalstar by another Person shall not be given effect to.
"Debt" means (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) every obligation of such Person for money
borrowed, (ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including any such obligations Incurred-in
connection with the acquisition of property, assets or businesses, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers, acceptances or similar facilities issued for the account of such
Person, (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business which are not overdue or which are being
contested in good faith), (v) every Capital Lease Obligation of such Person,
(vi) all Receivables Sales of such Person, together with any obligation of such
Person to pay any discount, interest, fees, indemnities, penalties, recourse
expenses or other amounts in connection therewith, (vii) all obligations to
redeem Disqualified Stock issued by such Person, (viii) all Attributable Debt,
(ix) every obligation under Interest Rate and Currency Protection Agreements of
such Person, (x) every obligation of the type referred to in clauses (i) through
(ix) of another Person secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the fair market value of such
property or assets and the amount of
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the obligation so secured and (xi) every obligation of the type referred to in
clauses (i) through (ix) of another Person and all dividends of another Person
the payment of which, in either case, such Person has Guaranteed. The "amount"
or "principal amount", of Debt at any time of determination as used herein
represented by (a) any Debt issued at a price that is less than the principal
amount at maturity thereof, shall be the amount of the liability in respect
thereof determined in accordance with GAAP, (b) any Receivables Sales shall be
the amount of the unrecovered capital or principal investment of the purchaser
(other than Globalstar or a Wholly-Owned Restricted Subsidiary) thereof,
excluding amounts representative of yield or interest earned on such investment,
(c) any Disqualified Stock, shall be the maximum fixed redemption or repurchase
price in respect thereof, (d) any Capital Lease Obligation, shall be determined
in accordance with the definition thereof and (e) any Permitted Interest Rate or
Currency Protection Agreement shall be zero. In no event shall Debt include any
liability for taxes. For purposes of determining any particular amount of Debt,
Guarantees or Liens with respect to letters of credit supporting Debt otherwise
included in the determination of a particular amount shall not be included.
"Default" means an event that is, or after the passing of time
or the giving of notice both would be, an Event of Default.
"Disposition" means (i) the sale, transfer or other conveyance
by Loral or any of its Subsidiaries (other than to a Wholly Owned Subsidiary of
Loral) of (a) Globalstar partnership interests or (b) equity interests in any
entity (an "intermediate entity") which owns, directly or indirectly, Globalstar
partnership interests or (ii) the issue and sale by any such intermediate entity
of its equity securities to one or more third parties if and to the extent the
proceeds of such issue and sale are distributed by such intermediate entity to
Loral or any of its Subsidiaries.
"Disqualified Stock" of any Person means any Capital Stock of
such Person which, by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
first anniversary of the final Stated Maturity of the Securities; provided,
however, that any Preferred Stock which would not constitute Disqualified Stock
but for provisions thereof giving holders thereof the right to require
Globalstar to repurchase or redeem such Preferred Stock upon the occurrence of a
change of control occurring prior to the first anniversary of the final Stated
Maturity of the Securities shall not constitute Disqualified Stock if the change
of control
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provisions applicable to such Preferred Stock are no more favorable to the
holders of such Preferred Stock than the provisions applicable to the Securities
contained in Section 4.10 and such Preferred Stock specifically provides that
Globalstar will not repurchase or redeem any such stock pursuant to such
provisions prior to Globalstar's repurchase of such Securities as are required
to be repurchased pursuant to Section 4.10; provided further, however, that all
Special Preferred obligations shall be deemed to be Disqualified Stock.
"ll 3/8 Indenture" means the indenture dated as of February
15, 1997, among Globalstar, Globalstar Capital and The Bank of New York, as
Trustee, pursuant to which the 11 3/8 Notes were issued.
"ll 1/4 Indenture" means the indenture dated as of June 1,
1997, among Globalstar, Globalstar Capital and The Bank of New York, as Trustee,
pursuant to which the 11 1/4 Notes were issued.
"ll 3/8 Notes" means the $500,000,000 aggregate principal
amount of 11-3/8% Senior Notes due 2004 of the Issuers, together with any
Exchange Securities or Private Exchange Securities (as such terms are defined in
the 11 3/8 Indenture) issued pursuant to the 11 3/8 Indenture.
"ll 1/4 Notes" means the $325,000,000 aggregate principal
amount of the 11-1/4% Senior Notes due 2004 of the Issuers, together with any
Exchange Securities or Private Exchange Securities (as such terms are defined in
the 11 1/4 Indenture) issued pursuant to the 11 1/4 Indenture.
"Eligible Institution" means a commercial banking institution
that has combined capital and surplus of not less than $500 million or its
equivalent in foreign currency, whose debt is rated "A-311 or higher or "A--" or
higher according to ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Ratings
Group (or such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the Securities
Act)) respectively, at the time as of which any investment or rollover therein
is made.
"Equity offering" means (i) any sale or issuance for cash by
Globalstar of Globalstar partnership interests to any Person that, as of the
Business Day immediately before and the Business Day immediately after the day
of such sale, has, or whose Parent has, a total market capitalization of at
least $1. billion on a consolidated basis, after giving effect to such sale
(including any Indebtedness incurred in connection with such sale) and (ii) any
offering of GTL common stock in an underwritten sale to the public pursuant to a
registration statement (other than on Form S-8 or any other form relating to
securities issuable under any benefit plan of Globalstar) that is declared
effective by the Commission, all of the net cash
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proceeds of which sale are applied promptly toward the purchase of Globalstar
partnership interests. For purposes of clause [(i)] of this paragraph, any
issuance or sale of Globalstar partnership interests shall be deemed to be "for
cash" only to the extent that the net cash proceeds of such issuance or sale
exceed the value of any amounts paid (in cash or otherwise) by Globalstar to
redeem Globalstar partnership interests during the past six months.
"Event of Default" has the meaning set forth in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended (or any successor act), and the rules and regulations thereunder.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date, including those set
forth in M the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the Commission
governing the inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to Section 13 of
the Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
Commission.
"General Partners' Committee" means the committee consisting
of representatives of the general partners of Globalstar that governs the
activities of Globalstar.
"Globalstar System" means Globalstar's worldwide, low-earth
orbit, satellite-based digital telecommunications system as described in the
Prospectus, as defined below.
"Globaltel Russia" means Globalstar-Space Telecommunications,
a Russian closed joint stock company.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
obligations or guarantee the full faith and credit of the United States is
pledged and which have a remaining weighted Average Life to maturity of not more
than one year from the date of Investment therein.
"GTL" means Globalstar Telecommunications Limited, a Bermuda
company.
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"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing, or having the economic effect of
guaranteeing, any Debt of any other Person, (the "primary obligor") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person, (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt,
(ii) to purchase property, securities or services for the purposes of assuring
the holder of such Debt of the payment of such Debt, or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Debt (and "Guaranteed", "Guaranteeing" and "Guarantor" shall have meanings
correlative to the foregoing); provided, however, that the Guarantee by any
Person shall not include endorsements by such Person for collection or deposit,
in either case, in the ordinary course of business.
"Holders" means the registered holders from time to time of
the Securities.
"Incur" means, with respect to any Debt or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, Guarantee or otherwise become liable in respect of such Debt or other
obligation including by acquisition of Subsidiaries or the recording, as
required pursuant to GAAP or otherwise, of any such Debt or other obligation on
the balance sheet of such Person (and "Incurrence", "Incurred" and "Incurring"
shall have the meanings correlative to the foregoing); however, that a change in
GAAP that results in an obligation of such Person that exists at such time
becoming Debt shall not be deemed an Incurrence of such Debt and that neither
the accrual of interest nor the accretion of original issue discount shall be
deemed an Incurrence of Debt. Notwithstanding the foregoing, Globalstar may
elect to treat all or any portion of revolving credit debt of Globalstar or a
Subsidiary as being Incurred from and after any date beginning the date the
revolving credit commitment is extended to Globalstar or a Subsidiary, by
furnishing notice thereof to the Trustee, and any borrowings or reborrowings by
Globalstar or a Subsidiary under such commitment up to the amount of such
commitment designated by Globalstar as Incurred shall not be deemed to be new
Incurrence of Debt by Globalstar or such Subsidiary; provided, however, that the
undrawn portion of any such revolving credit debt shall be deemed to be
outstanding Debt until such time as the commitment thereunder is terminated. The
accretion of principal of a non-interest bearing or other discount security
shall not be deemed the Incurrence of Debt.
"Indenture" means this Indenture as amended or supplemented
from time to time.
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"Independent Financial Advisor" means an accounting, appraisal
or investment banking firm of nationally recognized standing that is, in the
judgment of the General Partners' Committee of Globalstar, qualified to perform
the task for which it has been engaged and disinterested and independent with
respect to the Issuers and their Subsidiaries and Affiliates.
"Interest Rate or Currency Protection Agreement" of any Person
means any forward contract, futures contract, swap, option or other financial
agreement or arrangement (including, without limitation, caps, floors, collars
and similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates or indices.
"Investment" by any Person means any direct or indirect loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) to, or purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Debt issued by, any other Person, including any payment on a
Guarantee of any obligation of such other Person, but excluding any loan,
advance or extension of credit to an employee of Globalstar or any Restricted
Subsidiary in the ordinary course of business, accounts receivables and other
commercially reasonable extensions of trade credit.
"Issue Date" means the date on which the Securities are first
issued and delivered.
"Lien" means, with respect to any property or assets, any
mortgage or deed of trust, pledge, hypothecation, assignment, Receivables Sale,
deposit arrangement, security interest, lien, charge, easement (other than any
easement not materially impairing usefulness or marketability), encumbrance,
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such property or assets
(including, without limitation, any conditional sale or other title retention
agreement having substantially the same economic effect as any of the foregoing
or any Sale and Leaseback Transaction).
"Loral" means Loral Space & Communications Ltd., a Bermuda
company.
"Marketable Securities" means: (i) Government Securities; (ii)
any time deposit account, money market deposit and certificate of deposit
maturing not more than 270 days after the date of acquisition issued by, or time
deposit of, an Eligible Institution; (iii) commercial paper maturing not more
than 270 days after the date of acquisition issued by a corporation (other than
an Affiliate of Globalstar) with a rating, at the time as of which any
investment therein is made,
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of "P-111 or higher according to ▇▇▇▇▇'▇ Investors Service, Inc. or "A-111
or higher according to Standard & Poor's Ratings Group (or such similar
equivalent rating by at least one "nationally recognized statistical rating
organization" (as defined in Rule 436 under the Securities Act)); (iv) any
banker's acceptances or money market deposit accounts issued or offered by an
Eligible Institution; (v) repurchase obligations with a term of not more than 7
days for Government Securities entered into with an Eligible Institution; and
(vi) any fund investing exclusively in investments of the types described in
clauses (i) through (v) above.
"Net Available Proceeds" from any Asset Disposition by any
Person means cash or Marketable Securities received (including by way of sale or
discounting of a note, installment receivable or other receivable, but excluding
any other consideration received in the form of assumption by the acquiror of
Debt or other obligations relating to such properties or assets) therefrom by
such Person, net of (i) all legal, title and recording tax expenses, commissions
and other fees and expenses Incurred and all federal, state, provincial, foreign
and local taxes (including taxes payable upon payment or other distribution of
funds from a foreign subsidiary to Globalstar or another Subsidiary of
Globalstar) required to be accrued as a liability as a consequence of such Asset
Disposition, (ii) all payments made by such Person or its Restricted
Subsidiaries on any Debt which is secured by such assets in accordance with the
terms of any Lien upon or with respect to such assets or which must by the terms
of such Lien, or in order to obtain a necessary consent to such Asset
Disposition or by applicable law, be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments made to minority
interest holders in Restricted Subsidiaries of such Person or joint ventures as
a result of such Asset Disposition, (iv) appropriate amounts to be provided by
such Person or any Restricted Subsidiary thereof, as the case may be, as a
reserve in accordance with GAAP against any liabilities associated with such
assets and retained by such Person or any Restricted Subsidiary thereof, as the
case may be, after such Asset Disposition, including, without limitation,
liabilities under any indemnification obligations and severance and other
employee termination costs associated with such Asset Disposition, in each case
as determined by the General Partners' Committee of Globalstar, in its
reasonable good faith judgment evidenced by a board resolution filed with the
Trustee; provided, however, that any reduction in such reserve within twelve
months following the consummation of such Asset Disposition will be treated for
all purposes of this Indenture and the Securities as a new Asset Disposition at
the time of such reduction with Net Available Proceeds equal to the amount of
such reduction, and (v) any consideration for an Asset Disposition (which would
otherwise constitute Net Available Proceeds) that is required to be held in
escrow pending determination of whether a purchase price adjustment will be
made, but amounts under this clause (v) shall
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become Net Available Proceeds at such time and to the extent such amounts are
released to such Person.
"Net Cash Proceeds", with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Non-Recourse Debt" means Debt:
(i) as to which neither the Issuers nor any Restricted
Subsidiary:
(a) provides credit support of any kind (including
any undertaking, agreement or instrument that would constitute
Debt);
(b) is directly or indirectly liable (as a guarantor
or otherwise); or
(c) constitutes the lender;
(ii) no default with respect to which (including any
rights that the holders thereof may have to take enforcement action
against an Issuer or any Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Debt of the
Issuers or any Restricted Subsidiary to declare a default on such other
Debt or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and
(iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of
the Issuers or any of their Restricted Subsidiaries.
["Offer to Purchase" means a written offer (the "Offer") sent
by Globalstar by first class mail, postage prepaid, to each holder at his
address appearing in the Securities register on the date of the Offer offering
to purchase up to the principal amount of Securities specified in such offer at
the purchase price specified in such offer (as determined pursuant to this
Indenture). Unless otherwise required by applicable law, the Offer shall specify
an expiration date (the "Expiration Date") of the offer to Purchase which shall
be, subject to any contrary requirements of applicable law, not less than 30
days or more than 60 days after the date of such offer and a settlement date for
purchase of Securities within five Business Days after the Expiration Date. The
Issuers shall notify the Trustee at least 15 Business Days (or such shorter
period as is acceptable
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to the Trustee) prior to the mailing of the Offer of Globalstar's obligation to
make an Offer to Purchase, and the offer shall be mailed by Globalstar or, at
Globalstar's request, by the Trustee in the name and at the expense of
Globalstar. The Offer shall contain information concerning the business of
Globalstar and its Subsidiaries which Globalstar in good faith believes will
enable such holders to make an informed decision with respect to the Offer to
Purchase (which at a minimum will include (i) the most recent annual and
quarterly financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained in the documents
required to be filed with the Trustee pursuant to this Indenture (which
requirements may be satisfied by delivery of such documents together with the
offer), (ii) a description of material developments in Globalstar's business
subsequent to the date of the latest of such financial statements referred to in
clause (i) (including a description of the events requiring Globalstar to make
the Offer to Purchase), (iii) if applicable, appropriate pro forma financial
information concerning the Offer to Purchase and the events requiring Globalstar
to make the Offer to Purchase and (iv) any other information required by
applicable law to be included therein). The Offer shall contain all instructions
and materials necessary to enable such holders to tender Securities pursuant to
the Offer to Purchase.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary of the Issuers.
"Officers' Certificate" means a certificate signed by two
Officers.
"Operating" means, with respect to any satellite, that at
least 50% of the call circuits of such satellite are operating at design
performance specifications.
"Opinion of Counsel" means an opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of, or counsel to,
the Issuers or the Trustee.
"Parent" means, with regard to any Person, any other entity of
which such Person is a Subsidiary.
"Permitted Interest Rate or Currency Protection Agreement" of
any Person means any Interest Rate or Currency Protection Agreement entered into
with one or more financial institutions in the ordinary course of business that
is designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with respect to the Debt being
hedged thereby and not for purposes of speculation.
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"Permitted Investment" means an Investment by an Issuer or any
Restricted Subsidiary (i) in any Person as a result of which such Person becomes
a Restricted Subsidiary, (ii) in Marketable Securities, (iii) in Permitted
Interest Rate or Currency Protection Agreements, (iv) made as a result of the
receipt of noncash consideration from an Asset Disposition that was made
pursuant to and in compliance with Section 4.7 and (v) consisting of loans or
advances to employees made in the ordinary course of business not to exceed $
million in the aggregate outstanding at any one time.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization, government or agency or political
subdivision thereof or any other entity.
"Preferred 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" of a Security means the principal of the Security
plus the premium, if any, payable on the Security which is due or overdue or is
to become due at the relevant time.
"Receivables" means receivables, chattel paper, instruments,
documents or intangibles evidencing or relating to the right to payment of money
in respect of the sale of goods or services.
"Receivables Sale" of any Person means any sale of Receivables
of such Person (pursuant to a purchase facility or otherwise), other than in
connection with a disposition of the business operations of such Person relating
thereto or a disposition of defaulted Receivables for purpose of collection and
not as a financing arrangement.
"Refinance" means in respect of any Debt, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Debt in exchange or replacement for, such Debt. "Refinanced" and
"Refinance" shall have correlative meanings.
"Refinancing Debt" means Debt that Refinances any Debt of the
Issuers or any Restricted Subsidiary existing on the Issue Date or Incurred in
compliance with this Indenture, including Debt that Refinances Refinancing Debt;
provided, however, that (i) such Refinancing Debt has a Stated Maturity no
earlier than the Stated Maturity of the Debt being Refinanced, (ii) such
Refinancing Debt has an Average Life at the time such Refinancing Debt is
Incurred that is equal to or greater than the Average Life of the Debt being
Refinanced, (iii) such Refinancing Debt
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has an aggregate principal amount (or if Incurred with original issue discount,
an aggregate issue price) that is equal to or less than the aggregate principal
amount (or if Incurred with original issue discount, the aggregate accreted
value) then outstanding or committed (plus fees and expenses, including any
premium and defeasance costs) under the Debt being Refinanced, (iv) in the event
the Debt being Refinanced constitutes a Subordinated Obligation, the Refinancing
Debt is subordinated to the Securities to at least the same extent as the Debt
being Refinanced and (v) Special Preferred Obligations may only be Refinanced
with Preferred Stock (other than Preferred Stock that is Disqualified Stock),
other Special Preferred Obligations or Subordinated obligations; provided,
further, however, that Refinancing Debt shall not include (x) Debt of a
Subsidiary that Refinances Debt of the Issuers or (y) Debt of the Issuers or a
Restricted Subsidiary that Refinances Debt of an Unrestricted Subsidiary.
"Related Person" of any Person means any other Person directly
or indirectly owning (a) 10% or more of the outstanding common equity of such
Person (or, in the case of a Person that is not a corporation, 10% or more of
the equity interest in such Person) or (b) 10% or more of the combined voting
power of the Voting Stock of such Person.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the direct
or indirect holders of its Capital Stock (other than dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and
dividends or distributions payable solely to the Issuers or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly-Owned Restricted Subsidiary to minority
stockholders (or owners of an equivalent interest in the case of a Subsidiary
that is an entity other than a corporation)), (ii) the purchase, redemption or
other acquisition or retirement for value of any Capital Stock of an Issuer held
by any Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Issuers (other than a Restricted Subsidiary), including the
exercise of any option to exchange any Capital Stock (other than into Capital
Stock of the Issuers that is not Disqualified Stock), (iii) the purchase,
repurchase, redemption, defeasance or other acquisition or retirement for value,
prior to scheduled maturity, scheduled repayment or scheduled sinking fund
payment of any Subordinated obligations (other than the purchase, repurchase or
other acquisition of Subordinated obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of
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acquisition) or (iv) the making of any Investment in any Person (other than a
Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of Globalstar,
whether existing on or after the Issue Date, unless such Subsidiary is an
Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means an arrangement relating
to property now owned or hereafter acquired whereby an Issuer or a Restricted
Subsidiary transfers such property to a Person and an Issuer or a Restricted
Subsidiary leases it from such Person.
"Securities" means the Securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended
(or any successor act) and the rules and regulations thereunder.
"Senior Indebtedness" means (i) the principal of and premium,
if any, and unpaid interest on indebtedness for money borrowed, (ii) purchase
money and similar obligations, (iii) Capital Lease Obligations, (iv) guarantees,
assumptions or purchase commitments relating to, or other transactions as a
result of which the Issuers are responsible for the payment of, such
indebtedness of others, (v) renewals, extensions and refunding of any such
indebtedness, (vi) interest or obligations in respect of any such indebtedness
accruing after the commencement of any insolvency or bankruptcy proceedings; and
(vii) obligations associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity contracts,
and similar arrangements, unless, in each case, the instrument by which the
Issuers incurred, assumed or guaranteed the indebtedness or obligations
described in clauses (i) through (vii) hereof expressly provides that such
indebtedness or obligation is subordinate or junior in right of payment to any
other indebtedness or obligations of the Issuers.
"Significant Subsidiary" means a Restricted Subsidiary that is
a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under
the Securities Act and the Exchange Act.
"Special Preferred Obligations" means (i) preferred
partnership interests of Globalstar existing as of the Issue Date and (ii) any
preferred partnership interests, convertible preferred equivalent obligations or
similar preferred obligations of Globalstar issued after the Issue Date to
finance the Build-out; provided, however, that any such preferred partnership
interests, convertible preferred equivalent obligations or similar preferred
obligations of Globalstar issued after the Issue Date shall not constitute
Special Preferred Obligations if such interest or obligation, by its terms (or
by the terms of any
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security into which it is convertible or for which it is exchangeable at the
option of the Holders), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the final Stated Maturity of the Securities; provided further, however,
that any such interest or obligation which would constitute Special Preferred
Obligations but for provisions thereof giving holders thereof the right to
require Globalstar to repurchase or redeem such interest or obligation upon the
occurrence of a change of control occurring prior to the final Stated Maturity
of the Securities shall constitute Special Preferred Obligations if the change
of control provisions applicable to such interest or obligation are no more
favorable to the holders of such interest or obligation than the provisions
applicable to the Securities contained in Section 4.10 and such interest or
obligation specifically provides that Globalstar will not repurchase or redeem
any such interest or obligation pursuant to such provisions prior to
Globalstar's repurchase of such Securities as are required to be repurchased
pursuant to Section 4.10. Notwithstanding the foregoing, preferred partnership
interests, convertible preferred equivalent obligations or similar preferred
obligations of Globalstar issued after the Issue Date shall not be Special
Preferred Obligations unless, at the time of their issuance, Globalstar shall
certify to the Trustee that such interests or obligations shall be designated
Special Preferred obligations.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Debt of the Issuers
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement to that effect.
"Subsidiary" of any Person means (i) a corporation more than
50% of the combined voting power of the outstanding Voting Stock of which is
owned, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person or (ii) any other Person (other than a corporation) in which such
Person, or one or more other Subsidiaries of such Person or such Person and one
or more other Subsidiaries of such Person, directly or indirectly, has at least
a majority ownership and power to direct the policies, management and affairs
thereof.
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"Subsidiary Guaranty" means the Guarantee by a Subsidiary
Guarantor of the Issuers' obligations with respect to the Securities contained
in Article 10 hereof.
"Subsidiary Guarantor" means any Subsidiary which, pursuant to
the terms hereof, has executed a supplemental indenture in a form reasonably
satisfactory to the Trustee and become bound by the terms hereof, including
Article 10 hereof.
"Tax Amount" means, with respect to any year, an amount not to
exceed the sum of the ordinary income from trade or business activities and
other items of income, loss and deduction reported by Globalstar for that year
for United States federal income tax purposes multiplied by a percentage equal
to the sum of (a) the highest applicable federal corporation income tax rate for
that year (expressed as a percentage) plus (b) % multiplied by the excess of
100% over the highest applicable federal corporate income tax for that year
(expressed as a percentage).
"10 3/4 Indenture" means the indenture dated as of October 15,
1997, among Globalstar, Globalstar Capital and The Bank of New York, as trustee,
pursuant to which the 10 3/4 Notes were issued.
"10 3/4 Notes" means the $325,000,000 aggregate principal
amount of 10 3/4% Senior Notes due 2004 of the Issuers, together with any
Exchange Securities or Private Exchange Securities (as such terms are defined in
the 10 3/4 Indenture) issued pursuant to the 10 3/4 Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. H
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided by
Section 9.3.
"Transitory Equipment Subsidiary" means a Subsidiary of
Globalstar whose only business activity is acquiring equipment from Globalstar
for the sole purpose of selling such equipment to a service provider to
Globalstar; provided, however, that Globalstar retains a security interest in
such equipment so long as it is owned by such Subsidiary; provided further,
however, that such Subsidiary has no Debt outstanding at any time other than
Debt represented by such security interest.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
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"Unrestricted Subsidiary" means (i) any Subsidiary of
Globalstar designated as such by the General Partner's Committee as set forth
below where (a) neither Globalstar nor any of its other Subsidiaries (other than
another Unrestricted Subsidiary) (1) provides credit support for, or Guarantee
of, any Debt of such Subsidiary or any Subsidiary of such Subsidiary (including
any undertaking, agreement or instrument evidencing such Debt), (2) is directly
or indirectly liable for any Debt of such Subsidiary or any Subsidiary of such
Subsidiary, or (3) has any obligation to make additional Investments in such
Subsidiary or any Subsidiary of such Subsidiary, (b) such Subsidiary has no Debt
other than Non-Recourse Debt; provided, however, that if any Unrestricted
Subsidiary Incurs any Debt other than Non-Recourse Debt or any Non-Recourse Debt
Incurred by such Unrestricted Subsidiary shall thereafter cease for any reason
to be Non-Recourse Debt, such event shall be deemed to constitute an Incurrence
of such Debt by Globalstar and such Unrestricted Subsidiary shall be deemed to
be a Restricted Subsidiary for purposes of Section 4.4 and (c) such Subsidiary
and each Subsidiary of such Subsidiary has at least one director on its board of
directors that is not a director or executive officer of Globalstar or any
Restricted Subsidiary and (ii) any Subsidiary of an Unrestricted Subsidiary. The
General Partner's Committee may designate any Subsidiary to be an Unrestricted
Subsidiary unless such Subsidiary or any Subsidiary of such Subsidiary owns any
Capital Stock or Debt of, or owns or holds any Lien on any property of,
Globalstar or any other Subsidiary of Globalstar which is not a Subsidiary of
the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary;
provided, however, that either (A) the Subsidiary to be so designated has total
assets of $1,000 or less or (B) immediately after giving effect to such
designation, Globalstar could incur an additional $1. of Debt pursuant to
Section 4.3(a) and provided further, however, that Globalstar could make a
Restricted Payment in an amount equal to the greater of the fair market value
and the book value of such Subsidiary pursuant to Section 4.5 and such amount is
thereafter treated as a Restricted Payment for the purpose of calculating the
aggregate amount available for Restricted Payments thereunder. The General
Partners' Committee may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary, provided that, immediately after giving effect to such designation,
Globalstar could incur an additional $1. of Debt pursuant to Section 4.3(a).
Notwithstanding the foregoing Globalstar Capital [nor any of its Subsidiaries]
shall be Unrestricted Subsidiaries.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations of the
United States of America (including any agency or instrumentality thereof) (for
the payment of which the full faith and credit of the United States of America
is Pledged and which are not callable or redeemable at the Issuers' option.
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"Vendor Financing Facility" means any agreements between
Globalstar, Globalstar Capital and/or any Restricted Subsidiary and one or more
vendors or lessors of equipment to Globalstar, Globalstar Capital and/or any
Restricted Subsidiary (or any affiliate of any such vendor or lessor) providing
financing for the acquisition by Globalstar or any such Restricted Subsidiary of
equipment from any such vendor or lessor.
"Voting Stock" of any Person means Capital Stock of such
Person which ordinarily has voting power for the election of directors (or
persons performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by reason of
any contingency.
"Wholly-Owned Restricted Subsidiary" means a Restricted
Subsidiary 99% or more of the outstanding Capital Stock or other ownership
interests of which (other than directors' qualifying shares) shall at the time
be owned by Globalstar or by one or more Wholly-Owned Restricted Subsidiaries of
Globalstar or by Globalstar and one or more Wholly-Owned Restricted Subsidiaries
of Globalstar.
SECTION 1.2. Other Definitions.
Defined in
Term Section
"Affiliate Transaction"....................................... 4.8
"Appendix".................................................... 2.1
"Bankruptcy Law".............................................. 6.1
"Cash Insurance".............................................. 4.13
"Covenant Defeasance Option".................................. 8.1(b)
"Custodian"................................................... 6.1
"Debt Coverage Ratio"......................................... 4.3
"Event of Default"............................................ 6.1
"Exchange Securities"......................................... Recital
"Globalstar".................................................. Preamble
"Globalstar Capital".......................................... Preamble
"Initial Securities".......................................... Recital
"In-orbit Insurance Event".................................... 4.13
"Insurance Account"........................................... 4.13
"Insurance Proceeds".......................................... 4.13
"Issuers"..................................................... Preamble
"Legal Defeasance Option"..................................... 8.1(b)
"Legal Holiday"............................................... 12.8
"Notice of Default"........................................... 6.1
"Obligations"................................................. 10.1
"Paying Agent"................................................ 2.3
"Permitted Lien".............................................. 4.11
"Private Exchange Securities"................................. Recital
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"Registrar"................................................... 2.3
"Securities".................................................. Recital
"Successor Issuers"........................................... 5.1
"Trustee"..................................................... Preamble
SECTION 1.3. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the Commission;
"Indenture Securities" means the Securities;
"Indenture Security Holder" means a Securityholder;
"indenture to be Qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Issuers and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or
junior to secured Debt merely by virtue of its nature as unsecured
Debt;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal
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amount thereof that would be shown on a balance sheet of the issuer
dated such date prepared in accordance with GAAP but accretion of
principal on such security shall not be deemed to be the Incurrence of
Indebtedness;
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater;
(9) all references to the date the Securities were originally
issued shall refer to the date the Initial Securities were originally
issued; and
(10) the terms "redemption" and "redeemable" shall not be
deemed to refer to Offers to Purchase or to repurchases pursuant to
Section 4.10 or similar offers or repurchases.
ARTICLE 2.
The Securities
SECTION 2.1. Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Issuers are subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Issuers). Each Security shall be dated the date of its authentication.
The terms of the Securities set forth in the Exhibit A are part of the terms of
this Indenture.
SECTION 2.2. Execution and Authentication. Two officers shall
sign the Securities for the Issuers by manual or facsimile signature.
If an officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate and deliver Securities for
original issue upon a written order of the Issuers signed by two Officers or by
an Officer and either an Assistant Treasurer or an Assistant Secretary of the
Issuers. Such order shall
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specify the amount of the Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated. The aggregate principal
amount of Securities outstanding at any time may not exceed that amount except
as provided in Section 2.7.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Issuers to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.3. Registrar and Paying Agent. The Issuers shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Issuers may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Issuers shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Issuers shall notify
the Trustee of the name and address of any such agent. If the Issuers fail to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Issuers or any of their domestically incorporated Wholly owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Issuers initially appoint the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.4. Paying Agent To Hold Money in Trust. Prior to
each due date of the principal and interest on any Security, the Issuers shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Issuers shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Issuers in making any such
payment. If either Issuer or a Subsidiary acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate
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trust fund. The Issuers at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by the Paying
Agent. Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.5. Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Issuers shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.6. Transfer and Exchange. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of Section 8-401(l)
(or any successor provision thereto) of the Uniform Commercial Code are met.
When Securities are presented to the Registrar or a co-registrar with a request
to exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met. To permit registration of transfers and exchanges, the
Issuers shall execute and the Trustee shall authenticate Securities at the
Registrar's or co- registrar's request. The Issuers may require payment of a sum
sufficient to pay all taxes, assessments or other governmental charges in
connection with any transfer or exchange pursuant to this Section. The Issuers
shall not be required to make and the Registrar need not register transfers or
exchanges of Securities selected for redemption (except, in the case of
Securities to be redeemed in part, the portion thereof not to be redeemed) or
any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
Prior to the due presentation for registration of transfer of
any Security, the Issuers, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Issuers,
the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
All Securities issued upon any transfer or exchange pursuant
to the terms of this Indenture will evidence the same
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debt and will be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
SECTION 2.7. Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Issuers shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 (or any successor provision thereto) of the Uniform Commercial
Code are met and the Holder satisfies any other reasonable requirements of the
Trustee. Such Holder shall furnish an indemnity bond sufficient in the judgment
of the Issuers and the Trustee to protect the Issuers, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss which any of them may
suffer if a Security is replaced. The Issuers and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Issuers.
SECTION 2.8. Outstanding Securities. Securities outstanding at
any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Issuers or an Affiliate of the Issuers holds the Security.
If a Security is replaced pursuant to Section 2.7, it ceases
to be outstanding unless the Trustee and the Issuers receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, then on and after that date such Securities (or portions thereof) cease
to be outstanding and interest on them ceases to accrue.
SECTION 2.9. Temporary Securities. Until definitive Securities
are ready for delivery, the Issuers may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Issuers
consider appropriate for temporary Securities. Without unreasonable delay, the
Issuers shall prepare and the Trustee shall authenticate definitive Securities
and deliver them in exchange for Temporary Securities.
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SECTION 2.10. Cancellation. The Issuers at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else shall
cancel and may, but shall not be required to, destroy (subject to the record
retention requirements of the Exchange Act) all Securities surrendered for
registration of transfer, exchange, payment or cancellation unless the Issuers
direct the Trustee to deliver canceled Securities to the Issuers. The Issuers
may not issue new Securities to replace securities they have redeemed, paid or
delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Issuers default in a
payment of interest on the Securities, the Issuers shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Issuers may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Issuers shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Issuers in issuing the
Securities 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, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Issuers shall promptly notify the Trustee of any
change in the CUSIP numbers.
ARTICLE 3.
Redemption
SECTION 3.1. Notices to Trustee. If the Issuers elect to
redeem Securities pursuant to paragraph 5 of the Securities, they shall notify
the Trustee in writing of the redemption date, the principal amount of
Securities to be redeemed and the paragraph of the Securities pursuant to which
the redemption will occur.
The Issuers shall give each notice to the Trustee provided for
in this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and
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an Opinion of Counsel from the Issuers to the effect that such redemption will
comply with the conditions herein.
SECTION 3.2. Selection of Securities To Be Redeemed. If less
than all the Securities are to be redeemed at any time, the Trustee shall select
the Securities to be redeemed by a method that complies with the requirements of
the principal national securities exchange, if any, on which the Securities are
listed, or if the Securities are not listed, on a pro rata basis, by lot or by
such method as the Trustee in its sole discretion shall deem to be fair and
appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Issuers promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.3. Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Issuers shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed at such ▇▇▇▇▇▇'s registered address.
The notice shall identify the Securities (including CUSIP
number(s), if any) to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Issuers default in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Securities (or
portion thereof) called for redemption ceases to accrue on and after
the redemption date;
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(7) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
At the Issuers' request, the Trustee shall give the notice of
redemption in the Issuers' name and at the Issuers' expense. In such event, the
Issuers shall provide the Trustee with the information required by this Section.
SECTION 3.4. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date.
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.5. Deposit of Redemption Price. On or prior to the
redemption date, the Issuers shall deposit with the Paying Agent (or, if an
Issuer or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Issuers to the
Trustee for cancellation.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Issuers shall execute and the Trustee
shall authenticate for the Holder (at the Issuers' expense) a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4.
Covenants
SECTION 4.1. Payment of Securities. The Issuers shall promptly
pay the principal of and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture. Principal, interest
shall be considered paid on the date due if on such date the Trustee or the
Paying Agent holds in accordance with this Indenture money sufficient to pay all
principal, interest then due.
The Issuers shall pay interest on overdue principal at the
rate specified therefor in the Securities, and shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
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SECTION 4.2. SEC Reports. Notwithstanding that the Issuers may
not be, or may not be required to remain, subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, the Issuers shall file with the
Commission (unless the Commission will not accept such filing) and provide the
Trustee and Holders of the Securities with such annual reports and such
information, documents and other reports as are specified in Sections 13 and
15(d) of the Exchange Act and applicable to a U.S. corporation subject to such
Sections, such information, documents and other reports to be so filed and
provided at the times specified for the filing of such information, documents
and reports under such Sections.
In addition, for so long as any Securities remain outstanding,
the Issuers shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuers,
compliance with any of their covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.3. Limitation on Consolidated Debt. (a) The Issuers
may not, and may not permit any Restricted Subsidiary to, Incur any Debt;
provided, however, that the Issuers or any Restricted Subsidiary may Incur Debt
so long as the ratio of (i) the aggregate consolidated principal amount of Debt
of the Issuers and the Restricted Subsidiaries outstanding as of the most recent
available quarterly or annual balance sheet, after giving pro forma effect to
the Incurrence of such Debt and any other Debt Incurred since such balance sheet
date and the receipt and application of the proceeds thereof to (ii)
Consolidated Cash Flow Available for Fixed Charges for the four full fiscal
quarters ending on the date of such balance sheet determined on a pro forma
basis as if any such Debt had been Incurred and the proceeds thereof had been
applied at the beginning of such four fiscal quarters, would be less than [ ]
(the "Debt Coverage Ratio").
(b) Notwithstanding the foregoing limitation, the Issuers and
any Restricted Subsidiary may Incur the following:
(i) Debt Incurred under any one or more Bank Credit
Agreements, Vendor Financing Facilities or other agreements or
arrangements to finance the Build-out; provided, however, that Debt
Incurred pursuant to this clause (i), other than Debt Incurred pursuant
to a Bank Credit Agreement or a Vendor Financing Facility, shall not
have a Stated Maturity
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on or earlier than the Stated Maturity of the Securities, and shall not
be mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or be redeemable at the option of the holder thereof, in
whole or in part, on or prior to the Stated Maturity of the Securities;
(ii) Debt under any one or more Bank Credit Agreements or
other agreements or arrangements to finance working capital
requirements of Globalstar and any Refinancing Debt in respect of such
Debt; provided, however, at the time of the Incurrence of such Debt and
after giving effect thereto, the aggregate principal amount of all Debt
Incurred pursuant to this clause (ii) [and then outstanding shall not
exceed $ ;
(iii) Debt owed by the Issuers to any Wholly-Owned
Restricted Subsidiary or Debt owed by any Wholly-Owned Restricted
Subsidiary to the Issuers or to another Wholly-Owned Restricted
Subsidiary; provided, however, that upon either (x) the transfer or
other disposition by such Wholly-Owned Restricted Subsidiary or the
Issuers of any Debt so permitted to a Person other than the Issuers or
another Wholly-Owned Restricted Subsidiary or (y) the issuance (other
than directors, qualifying shares), sale, lease, transfer or other
disposition of shares of Capital Stock (including by consolidation or
merger) of such Wholly-Owned Restricted Subsidiary to a Person other
than the Issuers or another such Wholly-Owned Restricted Subsidiary,
the provisions of this clause (iii) shall no longer be applicable to
such Debt and such Debt shall be deemed to have been Incurred by the
Issuers thereof at the time of such issuance, sale, lease, transfer or
other disposition;
(iv) Refinancing Debt Incurred to Refinance Debt Incurred
pursuant to the first paragraph of this covenant or pursuant to clause
(i), (vi) or (vii) or this clause (iv) of this paragraph;
(v) Debt consisting of Permitted Interest Rate and
Currency Protection Agreements;
(vi) Debt represented by the Securities;
(vii) Debt outstanding on the Issue Date (other than Debt
described in clause (i), (ii), (iii), (vi) or (viii) of this
paragraph);
(viii) Debt (including Capital Lease Obligations) of
Globalstar or any Restricted Subsidiary financing the purchase, lease
or improvement of property (real or personal) or equipment (whether
through the direct purchase of assets or the Capital Stock of any
Person owning such assets), in each case Incurred no more than 180 days
after
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such purchase, lease or improvement of such property and any
Refinancing Debt in respect of such Debt, provided, however, that (x)
the amount of such Debt (net of original issue discount) does not
exceed, at the time initially Incurred, 90% of the fair market value of
such acquired property or equipment and (y) at the time of the
Incurrence of such Debt and after giving effect thereto, the aggregate
amount of all Debt Incurred pursuant to this clause (viii) and then
outstanding shall not exceed [$ ;]
(ix) Debt consisting of performance and other similar
bonds and reimbursement obligations Incurred in the ordinary course of
business securing the performance of contractual, franchise or license
obligations of the Issuers or a Restricted Subsidiary, or in respect of
a letter of credit obtained to secure such performance; and
(x) Debt in an aggregate principal amount which,
together with all other Debt of the Issuers and the Restricted
Subsidiaries outstanding on the date of such Incurrence (other than
Debt permitted by clauses (i) through (ix) above or Section 4.3(a))
does not exceed [$ .]
(c) For purposes of determining compliance with this Section
4.3, in the event that an item of Debt meets the criteria of more than one of
the types of Debt the Issuers and the Restricted Subsidiaries are permitted to
Incur, the Issuers or such Restricted Subsidiary, as the case may be, shall have
the right, in their sole discretion, to classify such item of Debt at the time
of its Incurrence and shall only be required to include the amount and type of
such Debt under the clause permitting the Debt as so classified.
SECTION 4.4. Future Guarantors. In the event that, after the
Issue Date, Globalstar shall acquire or create a Subsidiary, Globalstar shall
cause such Subsidiary (unless such Subsidiary is a Transitory Equipment
Subsidiary or is an Unrestricted Subsidiary) to become a Subsidiary Guarantor
and to Guarantee the Securities pursuant to a Subsidiary Guaranty.
SECTION 4.5. Limitation on Restricted Payments. (a) The
Issuers may not, and may not permit any Restricted Subsidiary, directly or
indirectly, to make a Restricted Payment if at the time such Issuers or such
Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) Globalstar is not able to Incur an additional $1. of Debt
pursuant to Section 4.3(a); or
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(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum of:
(A) [ ]%- of the Consolidated Net Income of
Globalstar accrued during the period (treated as one
accounting period) from the beginning of the fiscal quarter
immediately following the fiscal quarter during which the
Issue Date occurs to the end of the most recent fiscal quarter
for which internal financial statements are available at the
time of such Restricted Payment (or, in case such Consolidated
Net Income shall be a deficit, minus [ %] of such deficit);
(B) the aggregate Net Cash Proceeds received by
Globalstar from the issuance or sale of its Capital Stock
(other than Disqualified Stock) subsequent to the Issue Date
(other than an issuance or sale to a Subsidiary of Globalstar
and other than an issuance or sale to an employee stock
ownership plan or to a trust established by Globalstar or any
of its Subsidiaries for the benefit of their employees);
(C) the amount by which Debt of Globalstar is reduced
on the balance sheet of Globalstar upon the conversion or
exchange (other than by a Subsidiary of Globalstar) subsequent
to the Issue Date of any Debt of Globalstar convertible or
exchangeable for Capital Stock (other than Disqualified Stock)
of Globalstar (less the amount of any cash, or the fair value
of any other property, distributed by Globalstar upon such
conversion or exchange); and
(D) an amount equal to the sum of (i) the net
reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, repayments of loans or advances or
other transfers of assets, in each case to Globalstar or any
Restricted Subsidiary from Unrestricted Subsidiaries, and (ii)
the portion (proportionate to Globalstar's equity interest in
such Subsidiary) of the fair market value of the net assets of
an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; provided,
however, that the foregoing sum shall not exceed, in the case
of any Unrestricted Subsidiary, the amount of Investments
previously made (and treated as a Restricted Payment) by
Globalstar or any Restricted Subsidiary in such Unrestricted
Subsidiary.
(b) Notwithstanding the foregoing, Globalstar may subject to
clause (vi) below, pay any dividend on Capital Stock
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of any class within 60 days after the declaration thereof if, on the date when
the dividend was declared, Globalstar could have paid such dividend in
accordance with the foregoing provisions; (ii) repurchase any shares of its
Capital Stock or options to acquire its Capital Stock from Persons who were
formerly officers or employees of Globalstar; provided, however, that the
aggregate amount of all such repurchases made pursuant to this clause (ii) shall
not exceed [$2 million,] plus the aggregate cash proceeds received by Globalstar
since the Issue Date on sale of its Capital Stock or options to acquire its
Capital Stock to members, officers, managers and employees of Globalstar or any
of its Subsidiaries; (iii) Refinance, and permit its Restricted Subsidiaries to
Refinance, any Debt otherwise permitted to be Refinanced by clause (iv) of
Section 4.3(b); (iv) so long as Globalstar is treated as a partnership for U.S.
federal income tax purposes, make distributions in respect of members, or
partners' income tax liability with respect to Globalstar in an amount not to
exceed the Tax Amount; (v) make distributions to GTL to pay GTL's ordinary and
reasonable operating expenses related to Globalstar, as set forth in an
Officers' Certificate delivered to the Trustee; (vi) pay any scheduled dividend
on Special Preferred Obligations; provided, however, that at the time of payment
of any such dividend (other than a dividend paid only by distributions of
additional Special Preferred Obligations), no Default shall have occurred and be
continuing (or result therefrom); (vii) make any Restricted Payment by exchange
for, or out of the proceeds of the substantially concurrent sale of, or capital
contribution in respect of, Capital Stock of Globalstar (other than Disqualified
Stock and other than Capital Stock issued or sold to a Subsidiary of Globalstar
or an employee stock ownership plan or to a trust established by Globalstar or
any of its Subsidiaries for the benefit of their employees); (viii) contribute
its Investment in Globaltel Russia to an Unrestricted Subsidiary; and (ix) make
other Restricted Payments in an aggregate amount not to exceed $ .
(c) Any Restricted Payment made pursuant to clauses (ii),
(iii), (iv), (vi), (vii), (viii) and (ix) of Section 4.5(b) shall be excluded
from the calculation of the aggregate amount of Restricted Payments made since
the Issue Date; provided, however, that the Net Cash Proceeds from the issuance
of Capital Stock pursuant to clauses (ii) and (vii) of Section 4.5(b) shall be
excluded from the calculation of amounts under clause (B) of Section 4.5(a)(3).
SECTION 4.6. Dividend and other Payment Restrictions Affecting
Subsidiaries. (a) The Issuers may not, and may not permit any Restricted
Subsidiary, directly or indirectly, to create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to:
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(i) pay dividends or make any other distributions to the
Issuers or any of their Restricted Subsidiaries on its Capital Stock or
with respect to any other interest or participation in, or measured by,
its profits;
(ii) pay any indebtedness owed to the Issuers or any
Restricted Subsidiary;
(iii) make loans or advances to the Issuers or any
Restricted Subsidiary; or
(iv) transfer any of its properties or assets to the
Issuers or any Restricted Subsidiary.
(b) Notwithstanding the foregoing, the Issuers may, and may
permit any Restricted Subsidiary to, suffer to exist any such encumbrance or
restriction (i) pursuant to any agreement in effect on the Issue Date; (ii)
pursuant to an agreement relating to any Acquired Debt, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person so acquired and its Subsidiaries; (iii) pursuant
to an agreement effecting a Refinancing of Debt Incurred pursuant to an
agreement referred to in clause (i) or (ii) above or clause (iv) below,
provided, however, that the provisions contained in such Refinancing agreement
relating to such encumbrance or restriction are no more restrictive taken as a
whole (as determined in good faith by the Chief Financial Officer of Globalstar)
than the provisions contained in the predecessor agreement the subject thereof;
(iv) in the case of clause (iii) of Section 4.6(a), consisting of restrictions
contained in any security agreement (including a Capital Lease Obligation)
securing Debt of the Issuers or a Restricted Subsidiary otherwise permitted
under this Indenture, but only to the extent such encumbrances or restrictions
restrict the transfer of the property subject to such security agreement; (v) in
the case of clause (iv) of Section 4.6(a), consisting of customary nonassignment
provisions entered into in the ordinary course of business in leases governing
leasehold interests, but only to the extent such provisions restrict the
transfer of the lease or the property thereunder; (vi) with respect to a
Restricted Subsidiary, imposed pursuant to an agreement which has been entered
into for the sale or disposition of all or substantially all of the Capital
Stock or assets of such Restricted Subsidiary; provided, however, that after
giving effect to such transaction no Default shall have occurred or be
continuing, that such restriction terminates if such transaction is not
consummated and that such consummation or abandonment of such transaction occurs
within one year of the date such agreement was entered into; (vii) imposed
pursuant to applicable law or regulations; (viii) imposed pursuant to this
Indenture and the Securities; or (ix) consisting of any restriction on the sale
or other disposition of assets or property securing Debt as a result of a
Permitted Lien on such assets or property.
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SECTION 4.7. Asset Dispositions. (a) The Issuers may not, and
may not permit any Restricted Subsidiary to, directly or indirectly, make any
Asset Disposition unless: (i) Globalstar, Globalstar Capital or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Disposition at least equal to the fair market value (including as to the value
of all non-cash consideration) of the shares and assets subject to such Asset
Disposition, as determined by the General Partners' Committee of Globalstar in
good faith and evidenced by a resolution filed with the Trustee; (ii) at least
80% of the consideration thereof received by Globalstar, Globalstar Capital or
such Restricted Subsidiary, as the case may be, consists of (a) cash or
Marketable Securities or (b) the assumption of Debt (other than Subordinated
Obligations) of Globalstar, Globalstar Capital or such Restricted Subsidiary and
the release of the Issuers and the Restricted Subsidiaries, as applicable, from
all liability on the Debt assumed; and (iii) all Net Available Proceeds, less
any amounts invested within 180 days of such disposition in assets that comply
with Section 4.12, are applied within 180 days of such disposition (A) first, to
the permanent repayment or reduction of Debt then outstanding under any Bank
Credit Agreement or Vendor Financing Facility, to the extent such agreement or
facility would require such application or prohibit payments pursuant to the
following clause (B), (B) second, to the extent of remaining Net Available
Proceeds, to make an Offer to Purchase outstanding Securities at 100% of their
principal amount plus accrued and unpaid interest to the date of purchase
thereon and, to the extent required by the terms thereof, any other Debt of
Globalstar, Globalstar Capital or a Restricted Subsidiary that ranks pari passu
with the Securities at a price no greater than 100% of the principal amount
thereof plus accrued and unpaid interest to the date of purchase and (C) third,
to the extent of any remaining Net Available Proceeds following the completion
of the offer to Purchase, to the repayment of other Debt of Globalstar or Debt
of a Restricted Subsidiary, to the extent permitted under the terms thereof. To
the extent any Net Available Proceeds remain after such uses, Globalstar and the
Restricted Subsidiaries may use such amounts for any purposes not prohibited by
this Indenture. Notwithstanding the foregoing, these provisions shall not apply
to any Asset Disposition which constitutes a transfer, conveyance, sale, lease
or other disposition of all or substantially all of Globalstar's properties or
assets pursuant to Section 5.1(a).
(b) The Issuers shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section 4.7. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.7, the Issuers shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached their obligations under this Section 4.7 by virtue
thereof.
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SECTION 4.8. Transactions with Affiliates. (a) The Issuers may
not, and may not permit any Restricted Subsidiary, directly or indirectly, to
enter into any transactions (or series of related transactions) with an
Affiliate or Related Person of the Issuers (other than the Issuers or a
Wholly-Owned Restricted Subsidiary) (an "Affiliate Transaction") unless:
(i) such Affiliate Transaction is on terms that are no
less favorable to Globalstar, Globalstar Capital or the relevant
Restricted Subsidiary than those that would have been obtained in a
comparable transaction by Globalstar, Globalstar Capital or such
Restricted Subsidiary, as the case may be, with an unrelated Person;
and
(ii) Globalstar delivers to the Trustee:
(A) with respect to any Affiliate Transaction
involving aggregate consideration in excess of $1 million
(other than financing transactions that are not vendor
financing transactions pursuant to a Vendor Financing
Facility) and entered into in connection with the Build-out, a
certificate of the Chief Executive Officer of Globalstar to
the effect that a majority of the disinterested limited
partners of Globalstar have approved such Affiliate
Transaction; provided, however, that there is at least one
disinterested limited partner at the time of such Affiliate
Transaction; provided further, however, that any limited
partner receiving any compensation in respect of its approval
shall be deemed not to be a disinterested limited partner; or
(B) (1) with respect to any Affiliate Transaction
involving aggregate consideration in excess of $ , a
certificate of the Chief Executive officer of Globalstar to
the effect that such Affiliate Transaction complies with
clause (i) above; and (2) with respect to any Affiliate
Transaction involving aggregate consideration in excess of
[$10 million], an opinion as to the fairness to Globalstar,
Globalstar Capital or such Restricted Subsidiary, as the case
may be, of such Affiliate Transaction from a financial point
of view issued by an Independent Financial Advisor or, with
respect to telecommunications-related matters, a recognized
expert in the satellite telecommunications industry.
(b) Notwithstanding the foregoing Section 4.8(a), the
following shall be deemed not to be Affiliate Transactions:
(i) employee compensation arrangements entered into in
the ordinary course of business and approved by the General Partners'
Committee of Globalstar;
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(ii) transactions solely between or among the Issuers and
the Restricted Subsidiaries;
(iii) Restricted Payments permitted by Section 4.5;
(iv) Investments by an Affiliate or Related person of
Globalstar or Globalstar Capital in the Capital Stock (other than
Disqualified Stock) of Globalstar or any Restricted Subsidiary; and
(v) an Affiliate or Related Person of the Issuers acting
as agent for the placement or acquisition of launch services or
insurance on behalf of the Issuers or any Restricted Subsidiary.
SECTION 4.9. Limitation on Issuances and Sales of Capital,
Stock of Restricted Subsidiaries. The Issuers may not, and may not permit any
Restricted Subsidiary to, issue, transfer, convey, sell or otherwise dispose of
any shares of Capital Stock of a Restricted Subsidiary or securities convertible
or exchangeable into, or options, warrants, rights or any other interest with
respect to, Capital Stock of a Restricted Subsidiary to any person other than
Globalstar, Globalstar Capital or a Wholly-Owned Restricted Subsidiary except
(i) in a transaction consisting of a sale of all the Capital Stock of such
Restricted Subsidiary and that complies with the provisions of Section 4.7 to
the extent such provisions apply; (ii) if required, the issuance, transfer,
conveyance, sale or other disposition of directors, qualifying shares; (iii) in
a transaction in which, or in connection with which, an Issuer or a Restricted
Subsidiary acquires at the same time sufficient Capital Stock of such Restricted
Subsidiary to at least maintain the same percentage ownership interest it had
prior to such transaction; and (iv) Disqualified Stock of a Restricted
Subsidiary Incurred to Refinance Disqualified Stock of such Restricted
Subsidiary; provided, however, that the amounts of the redemption obligations of
such Disqualified Stock shall not exceed the amounts of the redemption
obligations of, and such Disqualified Stock shall have redemption obligations no
earlier than those required by, the Disqualified Stock being Refinanced.
SECTION 4.10. Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder of Securities shall have the right to require
that the Issuers repurchase such Holder's Securities at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid interest
to the date of purchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date).
(b) Within 30 days following any Change of Control, the
Issuers shall mail a notice to each Holder with a copy to the Trustee stating:
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(1) that a Change of Control has occurred and that such Holder
has the right to require the Issuers to purchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal
amount thereof plus accrued and unpaid interest to the date of purchase
(subject to the right of Holders of record on the relevant record date
to receive interest on the relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change
of Control (including information with respect to pro forma historical
income, cash flow and capitalization, each after giving effect to such
Change of Control);
(3) the repurchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Issuers, consistent
with this Section 4.10, that a Holder must follow in order to have its
Securities purchased.
(c) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Issuers at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Issuers receive not later than one Business Day prior to
the purchase date, a facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such ▇▇▇▇▇▇ is withdrawing his
election to have such Security purchased.
(d) on the purchase date, all Securities purchased by the
Issuers under this Section shall be delivered by the Trustee for cancellation,
and the Issuers shall pay the purchase price plus accrued and unpaid interest
and Liquidated Damages, if any, to the Holders entitled thereto.
(e) The Issuers shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Issuers shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached their obligations under this Section by virtue thereof.
SECTION 4.11. Limitation on Liens. The Issuers may not, and
may not permit any Restricted Subsidiary, directly or indirectly, to Incur or
permit to exist any Lien on any asset now
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owned or hereafter acquired, or any income or profits therefrom or assign or
convey any right to receive income therefrom, except for the following Liens
(each, a "Permitted Lien"):
(i) Liens to secure up to $ million, minus the aggregate
principal amount of Notes issued pursuant to the Initial Purchasers,
over-allotment option, of Debt permitted to be Incurred under this
Indenture (including the Debt outstanding at any time under the 11 3/8
Indenture, the 11 1/4 Indenture and the 10 3/4 Indenture) so long as
effective provision is made to secure the Securities equally and
ratably with (or prior to) the obligations so secured;
(ii) Liens in favor of Holders of the Securities;
(iii) Liens in favor of the Issuers;
(iv) Liens on property or shares of Capital Stock of another
Person at the time such other Person becomes a Subsidiary of such
Person; provided, however, that such Liens are not created, incurred or
assumed in connection with, or in contemplation of, such other Person
becoming such a Subsidiary; provided further, however, that such Lien
may not extend to any other property owned by such Person or any of its
Subsidiaries (other than inventory and receivables generated in the
ordinary course of business and substitute property);
(v) Liens on property at the time such Person or any of its
Subsidiaries acquires such property, including any acquisition by means
of a merger or consolidation with or into such Person or a Subsidiary
of such Person; provided, however, that such Liens are not created,
incurred or assumed in connection with, or in contemplation of, such
acquisition; provided further, however, that the Liens may not extend
to any other property owned by such Person or any of its Subsidiaries;
(vi) Liens securing Debt Incurred pursuant to clause (viii) of
Section 4.3(b); provided, however, that the Lien may not extend to any
assets owned by an Issuer or any Restricted Subsidiary other than (a)
the assets being financed or refinanced and income and proceeds
therefrom and (b) any other assets of such obligor securing other Debt
of such obligor to the same secured party;
(vii) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of
business;
(viii) Liens existing on the Issue Date;
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(ix) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded; provided, however, that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been
made therefor;
(x) Liens incurred in the ordinary course of business of the
Issuers and the Restricted Subsidiaries with respect to obligations
that do not exceed $ million at any one time outstanding and that:
(A) are not incurred in connection with the borrowing
of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business); and
(B) do not in the aggregate materially detract from
the value of the property or materially impair the use thereof
in the operation of business by the Issuers and the Restricted
Subsidiaries.
SECTION 4.12. Business Activities. The Issuers may not, and
may not permit any Restricted Subsidiary to, engage in any business other than
that which is related to the design, development, procurement, installation,
operation and ownership of telecommunications systems and businesses.
SECTION 4.13. Maintenance of Insurance.
(a) The Issuers shall:
(i) maintain, with respect to each satellite in the
Globalstar System, for the period beginning at least 45 days prior to,
and at all times up to and including, the launch of such satellite,
launch insurance with respect to such satellite in an amount sufficient
to provide for the construction, launch and insurance of a replacement
satellite to be payable in the event of a launch failure; and
(ii) in the event that more than of Globalstar's
satellites have ceased Operating for 90 consecutive days and fewer than
satellites are Operating as part of the Globalstar System (such an
event, an "In-orbit Insurance Event"), obtain (within 60 days of such
In-orbit Insurance Event), and thereafter maintain, in-orbit insurance
in an amount sufficient to provide for the construction, launch and
insurance of replacement satellites for at least of Globalstar's
satellites still operating or, if such in-orbit insurance in such
amount is not then commercially available
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from traditional insurance providers, such lesser amount as is so
available.
(b) The obligation of the Issuers to maintain insurance
pursuant to this covenant may be satisfied by any combination of:
(i) insurance commitments obtained from any recognized
insurance provider;
(ii) insurance commitments obtained from any other entity
if the General Partners' Committee of Globalstar determines in good
faith that such entity is creditworthy and otherwise capable of bearing
the financial risk of providing such insurance;
(iii) unrestricted cash segregated and maintained by
Globalstar in a segregated account (the "Insurance Account") solely for
disbursement in accordance with Section 4.13(d) ("Cash Insurance"); and
(iv) in respect of the insurance described in clause M of
Section 4.13(a), self-insurance for the launch of up to 12 satellites;
provided, however, that no earlier than 60 days prior to the scheduled
launch of any such satellites:
(a) the Issuers deliver an officers, Certificate to
the Trustee certifying that they have sufficient committed
capital to construct, launch and insure at least
[44] satellites, in addition to the satellites with respect to
which the Issuers are self-insuring; and
(b) the Issuers obtain an opinion from an investment
banking firm that is an Independent Financial Advisor to the
effect that the Issuers would be able to raise sufficient
capital in the capital markets to replace, relaunch and insure
such satellites in the event of a failure to successfully
launch such satellites.
(c) Within 30 days following any date on which the Issuers are
required to obtain insurance pursuant to this Indenture, the Issuers will
deliver to the Trustee an insurance certificate certifying the amount of
insurance then carried and an Officers, Certificate stating that such insurance,
together with any other insurance or Cash Insurance maintained by the Issuers,
complies with this Indenture. In addition, the Issuers will cause to be
delivered to the Trustee no less than once each year an insurance certificate
setting forth the amount of insurance then carried, which insurance certificate
shall entitle the Trustee to:
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(i) notice of any claim under any such insurance policy;
and
(ii) at least 30 days, notice from the provider of such
insurance prior to the cancellation of any such insurance.
In the event that the Issuers maintain any Cash Insurance in satisfaction of any
part of their obligation to maintain insurance pursuant to this Section 4.13,
the Issuers shall deliver an Officers' Certificate to the Trustee in lieu of any
insurance certificate otherwise required by this Section 4.13.
(d) In the event that the Issuers receive any proceeds of any
launch or in-orbit insurance that they are required to maintain pursuant to this
Section 4.13, such proceeds shall constitute "Insurance Proceeds". In addition,
if the Issuers maintain any Cash Insurance in satisfaction of any part of their
obligations to maintain in-orbit insurance pursuant to this Section 4.13, then
upon the occurrence of the event (i.e., the in-orbit failure) that would have
entitled the Issuers to the payment of insurance had the Issuers purchased
insurance from an insurance provider, the cash maintained in the Insurance
Account shall constitute "Insurance Proceeds". Promptly following the receipt of
any Insurance Proceeds, the Issuers shall apply such Insurance Proceeds in
accordance with the provisions of Section 4.7; provided, however, that Insurance
Proceeds shall only be required to be so applied to the extent that the
aggregate amount of all Insurance Proceeds received by the Issuers exceeds $5
million in any 12-month period.
SECTION 4.14. Compliance Certificate; Statement by Officers as
to Default. The Issuers shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Issuers an Officers, Certificate, one of the
signers of which shall be the principal executive, principal financial or
principal accounting officer of the Issuers, stating that in the course of the
performance by the signers of their duties as officers of the Issuers they would
normally have knowledge of any Default and whether or not the signers know of
any Default that occurred during such period. If they do, the certificate shall
describe the Default, its status and what action the Issuers are taking or
propose to take with respect thereto. The Issuers also shall comply with TIA
Section 314(a)(4).
SECTION 4.15. Further Instruments and Acts. Upon request of
the Trustee, the Issuers will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.16. Business Activities of Globalstar Capital.
Globalstar Capital shall not engage in any trade or
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business, and shall conduct no business activity, other than the Incurrence of
Debt permitted by Section 4.3 and the issuance of Capital Stock to Globalstar or
any Wholly Owned Restricted Subsidiary and activities incidental thereto.
SECTION 4.17. Calculation of Original Issue Discount. The
Issuers shall file with the Trustee promptly at the end of each calendar year
(i) a written notice specifying the amount of original issue discount (including
daily rates and accrual periods) accrued on outstanding Securities as of the end
of such year and (ii) such other specific information relating to such original
issue discount as may then be relevant under the Code, as amended from time to
time.
ARTICLE 5.
Successor Issuers
SECTION 5.1. When Issuers May Merge or Transfer Assets. (a)
Neither Globalstar nor Globalstar Capital may consolidate with or merge with or
into, or convey, transfer or lease, in one transaction or a series of
transactions, all or substantially all its assets to any Person; provided,
however, that Globalstar may consolidate with or merge with or into, or convey,
transfer or lease, in one transaction or a series of transactions, all or
substantially all its assets to any Person, if:
(i) the resulting , surviving or transferee Person (the
"Successor Issuer") shall be a Person organized and existing under the
laws of Bermuda the United States of America, any State thereof or the
District of Columbia and the Successor Issuer (if not Globalstar) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of Globalstar under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction
(and treating any Debt which becomes an obligation of the Successor
Issuer or any Subsidiary as a result of such transaction as having been
Incurred by the Successor Issuer or such Subsidiary at the time of such
transaction), no Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction,
the Successor Issuer would be able to Incur an additional $1. of Debt
pursuant to Section 4.3(a);
(iv) immediately after giving effect to such transaction,
the Successor Issuer shall have Consolidated Net Worth in an amount
that is not less than the
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Consolidated Net Worth of Globalstar immediately prior to such
transaction; and
(v) Globalstar shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
transaction and such supplemental indenture (if any) comply with this
Indenture.
The Successor Issuer shall be the successor to Globalstar and
shall succeed to, and be substituted for, and may exercise every right and power
of, Globalstar under this Indenture, and Globalstar (other than in the case of a
lease) shall be released from the obligation to pay the principal of and
interest on the Securities.
(b) Globalstar shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless: (i) the resulting, surviving or transferee Person (if not
such Subsidiary) shall be a Person organized and existing under the laws of the
jurisdiction under which such Subsidiary was organized or under the laws of the
United States of America, or any State thereof or the District of Columbia, and
such Person shall expressly assume, by a guaranty agreement in a form acceptable
to the Trustee, all the obligations of such Subsidiary, if any, under its
Subsidiary Guaranty; (ii) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Debt which becomes an
obligation of the resulting, surviving or transferee Person as a result of such
transaction as having been issued by such Person at the time of such
transaction), no Default shall have occurred and be continuing; and (iii)
Globalstar delivers to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
guaranty agreement, if any, complies with this Indenture.
ARTICLE 6.
Defaults and Remedies
SECTION 6.1. Events of Default. An "Event of Default" occurs
if:
(1) the Issuers default in any payment of interest on any
Security when the same becomes due and payable, and such default
continues for a period of 30 days;
(2) the Issuers (i) default in the payment of the principal of
any Security when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise, or
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(ii) fail to redeem or purchase Securities when required pursuant to
this Indenture or the Securities;
(3) the Issuers fail to comply with Section 5.1;
(4) the Issuers fail to comply with Section 4.2, 4.3, 4.4,
4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13 or 4.16 (other than a
failure to purchase Securities when required under Section 4.7 or 4.10)
and such failure continues for 30 days after the notice specified
below;
(5) the Issuers fail to comply with any of their agreements in
the Securities or this Indenture (other than those referred to in
clause (1), (2), (3) or (4) above) and such failure continues for 60
days after the notice specified below;
(6) Debt of the Issuers or any Significant Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Debt unpaid or accelerated exceeds $ million, or its
foreign currency equivalent at the time and such failure continues for
10 days after the notice specified below;
(7) any Issuer or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Issuers or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Issuers or any
Significant Subsidiary or for any substantial part of its
property; or
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(C) orders the winding up or liquidation of the
Issuers or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess
of $ million or its foreign currency equivalent at the time is
entered against the Issuers or any Significant Subsidiary, remains
outstanding for a period of 60 days following the entry of such
judgment or decree and is not discharged, waived or the execution
thereof stayed within 10 days after the notice specified below; or
(10) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of such Subsidiary
Guaranty) or a Subsidiary Guarantor denies or disaffirms its
obligations under its Subsidiary Guaranty.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is 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.
The term "Bankruptcy Law" means Title 11, United States Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clauses (4), (5), or (9) is not an Event of
Default until the Trustee or the holders of at least 25% in principal amount of
the outstanding Securities notify the Issuers of the Default and the Issuers do
not cure such Default within the time specified after receipt 6f such notice.
Such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default".
The Issuers shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Issuers are taking or
propose to take with respect thereto.
SECTION 6.2. Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.1(7) or (8) with respect to the
Issuers) occurs and is continuing, the Trustee by notice to the Issuers, or the
Holders of at least 25%
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in principal amount of the Securities by notice to the Issuers and the Trustee,
may declare the principal of and accrued but unpaid interest on all the
Securities to be due and payable. Upon such a declaration, such principal,
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.1(7) or (8) with respect to the Issuers occurs, the principal of
and interest on all the Securities shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Securityholders. The Holders of a majority in principal amount of the
Securities by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security or (ii) a Default in
respect of a provision that under Section 9.2 cannot be amended without the
consent of each Securityholder affected. When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.
SECTION 6.5. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.1, that the Trustee determines is unduly prejudicial to the
rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the
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Trustee that is not inconsistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to reasonable indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
SECTION 6.6. Limitation on Suits. Except to enforce the right
to receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
the Holders of a majority in principal amount of the Securities do not give the
Trustee a direction inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.7. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring 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 6.8. Collection Suit by Trustee. If an Event of
Default specified in Section 6.1(i) or (2) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Issuers for the whole amount then due and owing (together with interest on
any unpaid interest to the extent lawful) and the amounts provided for in
Section 7.7.
SECTION 6.9. Trustee May File Proofs Claim. The Trustee may
file such proofs of claim and other papers or
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documents as may be necessary or advisable in order to have the claims of the
Trustee and the Securityholders allowed in any judicial proceedings relative to
the Issuers, its creditors or its property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal, interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Securities for
principal, interest and Liquidated Damages (if any), respectively; and
THIRD: to the Issuers.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Issuers shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. 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 or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys, fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7
or a suit by Holders of more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Issuers
(to the extent they may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law
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wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Issuers (to the extent
that they may lawfully do so) hereby expressly waive all benefit or advantage of
any such law, and shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 7.
Trustee
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such ▇▇▇▇▇▇'s own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) 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 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 be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
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(3) 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 6.5.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee. (a) The Trustee may rely on
any document 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.
(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
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) 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; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and
the advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall
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be full and complete authorization and protection from liability in respect to
any action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Trust officer has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the principal corporate trust office of the Trustee,
and such notice references the Securities and this Indenture.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Issuers or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Issuers'
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Issuers in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. If required by TIA
Section 313(a), as promptly as practicable after each beginning with the
, 1999, and in any event prior to in each year, the Trustee shall mail
to each Securityholder a brief report dated as of that complies with
such TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the Commission and each stock exchange (if
any) on which the Securities are listed. The Issuers agree to notify promptly
the Trustee whenever the Securities become listed on any stock exchange and of
any delisting thereof.
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SECTION 7.7. Compensation and Indemnity. Issuers shall pay to
the Trustee from time to time such compensation as shall be agreed in writing
between the Issuers and the Trustee for its services. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuers shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Issuers shall indemnify
the Trustee against any and all loss, damage, claim, liability or reasonable
expense (including reasonable attorneys, fees and expenses) incurred by it in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder. The Trustee shall notify the Issuers
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Issuers shall not relieve the Issuers of their obligations
hereunder. The Issuers shall defend the claim and the Trustee may have separate
counsel and the Issuers shall pay the reasonable fees and expenses of such
counsel. The Issuers need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith.
To secure the Issuers' payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
The Issuers' payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.1(7) or (8) with
respect to the Issuers, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at
any time by so notifying the Issuers. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee. The Issuers shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
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If the Trustee resigns, is removed by the Issuers or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Issuers shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. 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. The successor Trustee shall mail a notice of its
succession to Securityholders. 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 7.7.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition, at the
expense of the Issuers, any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Issuers, obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by ▇▇▇▇▇▇. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have
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the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility: Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a 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); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Issuers are outstanding if the requirements for such exclusion set forth in
TIA Section 310 (b) (1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Issuers. 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.
ARTICLE 8.
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities; Defeasance.
(a) When (i) the Issuers deliver to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.7) for cancellation or
(ii) all outstanding Securities have become due and payable, whether at maturity
or as a result of the mailing of a notice of redemption pursuant to Article 3
hereof and the Issuers irrevocably deposit with the Trustee funds sufficient to
pay at maturity or upon redemption all outstanding Securities, including
interest thereon to maturity or such redemption date (other than Securities
replaced pursuant to Section 2.7), and if in either case the Issuers pay all
other sums payable hereunder by the Issuers, then this Indenture shall, subject
to Sections 8.1(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Issuers
accompanied by an Officers, Certificate and an opinion of Counsel and at the
cost and expense of the Issuers.
(b) Subject to Sections 8.1(c) and 8.2, the Issuers at any
time may terminate (i) all their obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) their obligations under Sections
4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13 and 4.16 and the
operation of Sections 6.1(4), 6.1(6), 6.1(7), 6.1(8), 6.1(9) and 6.1(10) (but,
in the case of Sections 6.1(7) and (8), with respect only to Significant
Subsidiaries) and the limitations contained in Sections 5.1(a)(iii) and (iv)
("covenant defeasance option").
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The Issuers may exercise their legal defeasance option notwithstanding their
prior exercise of their covenant defeasance option.
If the Issuers exercise their legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default with
respect thereto. If the Issuers exercise their covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of Default
specified in Sections 6.1(4), 6.1(6), 6.1(7), 6.1(8), 6.1(9) and 6.1(10) (but,
in the case of Sections 6.1M and (8), with respect only to Significant
Subsidiaries) or because of the failure of the Issuers to comply with Section
5.1(a)(iii) or (iv). If the Issuers exercise their legal defeasance option or
their covenant defeasance option, each Subsidiary Guarantor, if any, shall be
released from all its obligations with respect to its Subsidiary Guaranty.
Upon satisfaction of the conditions set forth herein and upon
request of the Issuers, the Trustee shall acknowledge in writing the discharge
of those obligations that the Issuers terminate.
(c) Notwithstanding clauses (a) and (b) above, the Issuers'
obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 7.7 and 7.8 and in this
Article 8 shall survive until the Securities have been paid in full. Thereafter,
the Issuers, obligations in Sections 7.7, 8.4 and 8.5 shall survive.
SECTION 8.2. Conditions to Defeasance. The Issuers may
exercise their legal defeasance option or their covenant defeasance option only
if:
(1) the Issuers irrevocably deposit in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of
and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Issuers deliver to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity or redemption, as the case
may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.1[M] or (8) with
respect to the Issuers occurs which is continuing at the end of the
period;
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(4) the deposit does not constitute a default under any other
agreement binding on the Issuers;
(5) the Issuers deliver to the Trustee an opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Issuers Act of 1940;
(6) in the case of the legal defeasance option, the Issuers
shall have delivered to the Trustee an opinion of Counsel stating that
(i) the Issuers have received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the Issue Date there
has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such opinion of Counsel
shall confirm that, the Securityholders will not recognize income, gain
or loss for Federal income tax purposes as a result of such defeasance
and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Issuers
shall have delivered to the Trustee an opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Issuers deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as
contemplated by this Article 8 have been complied with.
Before or after a deposit, the Issuers may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.3. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.4. Repayment to Issuers. The Trustee and the Paying
Agent shall promptly turn over to the Issuers upon written request any excess
money or securities held by them at any time.
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Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Issuers upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Issuers for payment as general creditors.
SECTION 8.5. Indemnity for Government Obligations. The Issuers
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government obligations.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Issuers, obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
obligations in accordance with this Article 8; provided, however, that, if the
Issuers have made any payment of interest on or principal of any Securities
because of the reinstatement of their obligations, the Issuers shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9.
Amendments
SECTION 9.1. Without Consent of Holders. The Issuers and the
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities,
including any Subsidiary Guaranties, or to secure the
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Securities or to release such guaranties in accordance with the terms
of Section 4.4;
(5) to add to the covenants of the Issuers for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Issuers;
(6) to comply with any requirements of the Commission in
connection with qualifying, or maintaining the qualification of, this
Indenture under the TIA; or
(7) to make any change that does not adversely affect the
rights of any Securityholder.
After an amendment under this Section becomes effective, the
Issuers shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.2. With Consent of Holders. The Issuers and the
Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities then outstanding (including
consents obtained in connection with a tender offer or exchange for the
Securities). However, without the consent of each Securityholder affected
thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent
to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal of or extend the Stated Maturity of
any Security;
(4) reduce the premium payable upon the redemption of any
Security or change the time at which any Security may be redeemed in
accordance with Article 3;
(5) make any Security payable in money other than that stated
in the Security;
(6) make any change in Section 6.4 or 6.7 or the second
sentence of this Section; or
(7) make any change in any Subsidiary Guaranty that would
adversely affect the Securityholders.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any
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proposed amendment, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment under this Section becomes effective, the
Issuers shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.3. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Issuers may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Issuers or the Trustee so determines, the Issuers
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new security shall not affect the validity of such
amendment.
SECTION 9.6. Trustee To Such Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if
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the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign it. In
signing such amendment the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.1) shall
be fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that such amendment is authorized or permitted by this
Indenture.
SECTION 9.7. Payment for Consent. Neither the Issuers nor any
Affiliate of the Issuers shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend (and,
if appropriate, tender their Securities) in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE 10.
Subsidiary Guaranties
SECTION 10.1. Guaranties. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Issuers under this Indenture and the securities and
(b) the full and punctual performance within applicable grace periods of all
other obligations of the Issuers under this Indenture and the Securities (all
the foregoing being hereinafter collectively called the "Obligations"). Each
Subsidiary Guarantor further agrees that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from such
Subsidiary Guarantor and that such Subsidiary Guarantor will remain bound under
this Article 10 notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Issuers of any of the obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice
of any default under the Securities or the Obligations. The Obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Issuers or any other Person under this Indenture, the
Securities or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities
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or any other agreement; (d) the release of any security held by any Holder or
the Trustee for the Obligations or any of them; (e) the failure of any Holder or
the Trustee to exercise any right or remedy against any other guarantor of the
Obligations; or (f) any change in the ownership of such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Obligations.
Except as expressly set forth in Sections 8.1(b), 10.2 and
10.6, the obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the Obligations of each Subsidiary Guarantor herein
shall not be discharged or impaired or otherwise affected by the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any remedy
under this Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any
obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Issuers or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Issuers to pay
the principal of or interest on any obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other obligation, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid amount of such obligations, (ii) accrued and unpaid
interest on such Obligations (but only to the extent not
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prohibited by law) and (iii) all other monetary Obligations of the Issuers to
the Holders and the Trustee.
Each Subsidiary Guarantor agrees that, as between it, on the
one hand, and the Holders and the Trustee, on the other hand, (x) the maturity
of the Obligations Guaranteed hereby may be accelerated as provided in Article 6
for the purposes of such Subsidiary Guarantor's Subsidiary Guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such Obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purposes of this
Section.
Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys, fees and expenses) incurred by the
Trustee or any Holder in enforcing any rights under this Section.
SECTION 10.2. Limitation on Liability. Any term or provision
of this Indenture to the contrary notwithstanding, the maximum, aggregate amount
of the obligations guaranteed hereunder by any Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 10.3. Successors and Assigns. This Article 10 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
ensure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 10.4. No Waiver. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 10 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Trustee and
the Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Article 10
at law, in equity, by statute or otherwise.
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SECTION 10.5. Modification. No modification, amendment or
waiver of any provision of this Article 10, nor the consent to any departure by
any Subsidiary Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on any Subsidiary Guarantor in any case
shall entitle such Subsidiary Guarantor to any other or further notice or demand
in the same, similar or other circumstances.
SECTION 10.6. Release of Subsidiary Guarantor. Upon the sale
or other disposition (including by way of consolidation or merger) of a
Subsidiary Guarantor or the sale or disposition of all or substantially all the
assets of such Subsidiary Guarantor (in each case other than to the Issuers or
an Affiliate of the Issuers), such Subsidiary Guarantor shall be deemed released
from all Obligations under this Article 10 without any further action required
on the part of the Trustee or any Holder. At the request of the Issuers, the
Trustee shall execute and deliver an appropriate instrument evidencing such
release.
ARTICLE 11.
Subordination of Securities
SECTION 11.1. Securities Subordinated to Senior Indebtedness.
The Issuers covenant and agree, and each Holder of Securities, by his acceptance
thereof, likewise covenants and agrees, that the indebtedness represented by the
Securities and the payment of the principal of (and premium, if any) and
interest and any Additional Amounts payable in respect of each and all of the
Securities is hereby expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment in full of
Senior Indebtedness.
In the event (a) of any distribution of assets of the Issuers
upon any dissolution, winding up, liquidation or reorganization of the Issuers
whether in bankruptcy, insolvency, reorganization or receivership proceeding or
upon an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Issuers or otherwise, except a distribution in
connection with a merger or consolidation or a conveyance or transfer of all or
substantially all of the properties of the Issuers which complies with the
requirements of Article 4, or (b) that a default shall have occurred and be
continuing with respect to the payment of principal of (or premium, if any) or
interest on or any Additional Amounts payable in respect of any Senior
Indebtedness, or (c) that the principal of the Securities of any series (or in
the case of Original Issue Discount Securities, the portion of the principal
amount thereof referred to in Section 502) shall have been declared due and
payable pursuant to Section 502 and such declaration shall not
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have been rescinded and annulled as provided in Section 502, then:
(1) in a circumstance described in the foregoing clause (a) or
(b) the holders of all Senior Indebtedness, and in the circumstance
described in the foregoing clause (c) the holders of all Senior
Indebtedness outstanding at the time the principal of such Securities
(or in the case of Original Issue Discount Securities, such portion of
the principal amount) shall have been so declared due and payable,
shall first be entitled to receive payment of the full amount due
thereon in respect of principal, premium (if any), Interest and
Additional Amounts, or provision shall be made for such payment in
money or money's worth, before the Holders of any of the Securities are
entitled to receive any payment on account of the principal of (or
premium, if any) or interest on or any Additional Amounts in respect of
the indebtedness evidenced by the Securities;
(2) any payment by, or distribution of assets of, the Issuers
of any kind or character, whether in cash, property or securities
(other than securities of the Issuers as reorganized or readjusted or
securities of the Issuers or any other corporation provided for by a
plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Article with
respect to the securities, to the payment of all Senior Indebtedness,
provided that the rights of the holders of the Senior Indebtedness are
not altered by such reorganization or readjustment), to which the
Holders of any of the Securities would be entitled except for the
provisions of this Article shall be paid or delivered by the person
making such payment or distribution, whether a trustee in bankruptcy, a
receiver or liquidating trustee or otherwise, directly to the holders
of such Senior Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under which any
instrument evidencing any of such Senior Indebtedness may have been
issued, ratably according to the aggregate amounts remaining unpaid on
account of such Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid after giving effect to any concurrent payment or
distribution (or provision therefor) to the holders of such Senior
Indebtedness, before any payment or distribution is made to the Holders
of the indebtedness evidenced by the Securities under this Indenture;
and
(3) in the event that, notwithstanding the foregoing, any
payment by, or distribution of assets of, the Issuers of any kind or
character, whether in cash, property or securities (other than
securities of the Issuers as reorganized or readjusted or securities of
the Issuers or
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any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the
extent provided in this Article with respect to the Securities, to the
payment of all Senior Indebtedness, provided that the rights of the
holders of Senior Indebtedness are not altered by such reorganization
or readjustment), shall be received by the Holders of any of the
Securities before all Senior Indebtedness is paid in full, such payment
or distribution shall be paid over to the holders of such Senior
Indebtedness or their representative or representatives or to the
trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued,
ratably as aforesaid, for application to the payment of all Senior
Indebtedness remaining unpaid until all such Senior Indebtedness shall
have been paid in full, after giving effect to any concurrent payment
or distribution (or provision therefor) to the holders of such Senior
Indebtedness.
SECTION 11.2. Subrogation. Subject to the payment in full of
all Senior Indebtedness to which the indebtedness evidenced by the Securities is
in the circumstances subordinated, as provided in Section 11.1, the Holders of
the Securities shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Issuers applicable to such Senior Indebtedness until all
amounts owing on the Securities shall be paid in full, and, as between the
Issuers, their creditors other than holders of such Senior Indebtedness, and the
Holders of the Securities, no such payment or distribution made to the holders
of such Senior Indebtedness by virtue of this Article which otherwise would have
been made to the Holders of the Securities shall be deemed to be a payment by
the Issuers on account of such Senior Indebtedness, it being understood that the
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of Senior Indebtedness.
SECTION 11.3. Obligation of the Issuers Unconditional. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as between the Issuers, their creditors other than
the holders of Senior Indebtedness, and the Holders of the Securities, the
obligation of the Issuers, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of (and premium, if any) and interest on
and any Additional Amounts in respect of the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders of the Securities and
creditors of the Issuers other than the holders of Senior Indebtedness nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all
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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 in respect of cash, property or securities of the Issuers
received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Issuers
referred to in this Article, the Trustee and the Holders of the Securities shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of the Issuers is pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, liquidating trustee or agent or other person making any
payment or distribution, delivered to the Trustee or to the Holders of the
Securities, for the purpose of ascertaining the persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other indebtedness of the Issuers, the amount thereof or payable thereon, the
amount paid or distributed thereon and all other facts pertinent thereto or to
this Article.
SECTION 11.4. Payments on Securities Permitted. Nothing
contained in this Article or elsewhere in this Indenture, or in any of the
Securities, shall affect the obligation of the Issuers to make, or prevent the
Issuers from making, payment of the principal of (or premium, if any) or
interest on or any Additional Amounts in respect of the Securities in accordance
with the provisions hereof and thereof, except as otherwise provided in this
Article.
SECTION 11.5. Effectuation of Subordination by Trustee. Each
Holder of the Securities, by his acceptance thereof, authorizes and directs the
Trustee in his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article and appoints the Trustee
his attorney-in-fact for any and all such purposes.
SECTION 11.6. Knowledge of Trustee. Notwithstanding the
provisions of this Article or any other provisions of this Indenture, the
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be charged with knowledge of the existence of any
facts which would prohibit the making of any payment or moneys to or by the
Trustee, or the taking of any other action by the Trustee, unless and until the
Trustee shall have received written notice thereof from the Issuers, any Holder
of Securities, any paying or conversion agent of the Issuers or the holder or
representative of any class of Senior Indebtedness; provided, however, that if
the Trustee shall not have received the notice provided for in this Section at
least 3 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
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principal of (or premium, if any) or interest on, or Additional Amounts in
respect of, any Security) then, anything herein contained to the contrary
notwithstanding, the Trustee shall have all power and authority to receive such
money and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by it
during or after such 3 Business Day period.
SECTION 11.7. Trustee May Hold Senior Indebtedness. The
Trustee in its individual capacity shall be entitled to all the rights set forth
in this Article with respect to any Senior Indebtedness at the time held by it,
to the same extent as any other holder of Senior Indebtedness, and nothing in
Section 313 of the Trust Indenture Act or elsewhere in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall subordinate any claims of, or
payments to, the Trustee (under or pursuant to Section 7.7) to Senior
Indebtedness.
SECTION 11.8. Rights of Holders of Senior Indebtedness Not
Impaired. No right of any present or future holder of any Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Issuers or by any
non-compliance by the Issuers with the terms, provisions and covenants of this
Indenture, regardless or any knowledge thereof any such holder may have or be
otherwise charged with.
ARTICLE 12.
Miscellaneous
SECTION 12.1. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 12.2. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Issuers:
Globalstar, L.P.
Globalstar Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
▇▇▇▇▇▇▇▇▇: (▇▇▇) ▇▇▇-▇▇▇▇
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if to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Issuers or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 12.3. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Issuers, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 12.4. Certificate and opinion as to Conditions
Precedent. Upon any request or application by the Issuers to the Trustee to take
or refrain from taking any action under this Indenture, the Issuers shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 12.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
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(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) 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;
(3) a statement that, in the opinion of such individual, 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
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 12.6. When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Issuers
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuers shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which a Trust Officer of the Trustee actually knows
are so owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
SECTION 12.7. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 12.8. Legal Holidays. A "Legal Holiday" is a Saturday,
a Sunday or a day on which banking institutions are not required to be open in
the State of New York. If a payment date is a Legal Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period. If a regular record date is a Legal
Holiday, the record date shall not be affected.
SECTION 12.9. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles of conflicts of law
to the extent that the application of the laws of another jurisdiction would be
required thereby.
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SECTION 12.10. No Recourse Against Others. Any past, present
or future director, officer, partner (including any general partner) employee,
incorporator or stockholder, as such, of the Issuers shall not have any
liability for any obligations of the Issuers under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such liability. The waiver and release shall be part
of the consideration for the issue of the Securities.
SECTION 12.11. Successors. All agreements of the Issuers in
this Indenture and the Securities shall bind their successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 12.12. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 12.13. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
GLOBALSTAR, L.P.,
by
LORAL/QUALCOMM SATELLITE
SERVICES, L.P., its managing
general partner,
by
LORAL/QUALCOMM PARTNERSHIP,
L.P. its general partner
by
LORAL GENERAL PARTNER, INC.,
its general partner
by
----------------------------------
Name:
Title:
GLOBALSTAR CAPITAL CORPORATION,
by
----------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
by
----------------------------------
Name:
Title:
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Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK as Trustee, certifies that this is one of the Securities
referred to in the Indenture.
by
----------------------------------
Authorized Signatory
-------------------
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to the Rule 144A Appendix and the attachment from such
Exhibit 1 captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY".
**/ If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to the Rule 144A Appendix and
replace the Assignment Form included in this Exhibit A with the Assignment Form
included in such Exhibit 1.
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