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EXHIBIT 4.1
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GST TELECOMMUNICATIONS, INC.,
as Issuer
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
Indenture
Dated as of November [__], 1997
[__]% Senior Subordinated Accrual Notes due 2007
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CROSS-REFERENCE TABLE
TIA Sections Indenture Sections
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ss. 310(a)(1)........................................... 7.10
(a)(2)............................................. 7.10
(b)................................................ 7.08
ss. 313(c).............................................. 7.06; 12.02
ss. 314(a).............................................. 4.19; 12.02
(a)(4)............................................. 4.18; 12.02
(c)(1)............................................. 12.03
(c)(2)............................................. 12.03
(e)................................................ 12.04
ss. 315(b).............................................. 7.05; 12.02
ss. 316(a)(1)(A)........................................ 6.05
(a)(1)(B).......................................... 6.04
(b)................................................ 6.07
ss. 317(a)(1)........................................... 6.08
(a)(2)............................................. 6.09
ss. 318(a).............................................. 12.01
(c)................................................ 12.01
Note: The Cross-Reference Table shall not for any purpose be deemed to be a part
of the Indenture.
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TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY.............................................. 1
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions........................................... 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act..... 19
SECTION 1.03. Rules of Construction................................. 19
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating....................................... 20
SECTION 2.02. Execution, Authentication and Denominations........... 20
SECTION 2.03. Registrar and Paying Agent............................ 21
SECTION 2.04. Paying Agent to Hold Money in Trust................... 22
SECTION 2.05. Transfer and Exchange................................. 23
SECTION 2.06. Replacement Securities................................ 24
SECTION 2.07. Outstanding Securities................................ 25
SECTION 2.08. Temporary Securities.................................. 25
SECTION 2.09. Cancellation.......................................... 26
SECTION 2.10. CUSIP Numbers......................................... 26
SECTION 2.11. Defaulted Interest.................................... 26
SECTION 2.12. Issuance of Additional Securities..................... 26
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption................................... 27
SECTION 3.02. Notices to Trustee.................................... 27
SECTION 3.03. Selection of Securities to Be Redeemed................ 28
SECTION 3.04. Notice of Redemption.................................. 28
SECTION 3.05. Effect of Notice of Redemption........................ 29
SECTION 3.06. Deposit of Redemption Price........................... 29
SECTION 3.07. Payment of Securities Called for Redemption........... 29
SECTION 3.08. Securities Redeemed in Part........................... 30
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Note: The Table of Contents shall not for any purposes be deemed to be a part of
the Indenture.
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities................................. 30
SECTION 4.02. Maintenance of Office or Agency....................... 30
SECTION 4.03. Limitation on Indebtedness............................ 31
SECTION 4.04. Limitation on Senior Subordinated Indebtedness........ 33
SECTION 4.05. Limitation on Restricted Payments..................... 33
SECTION 4.06. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.................. 35
SECTION 4.07. Limitation on the Issuance and Sale of Capital Stock
of Restricted Subsidiaries......................... 37
SECTION 4.08. Limitation on Issuances of Guarantees by Restricted
Subsidiaries....................................... 37
SECTION 4.09. Limitation on Transactions with Shareholders and
Affiliates ........................................ 38
SECTION 4.10. Limitation on Liens................................... 39
SECTION 4.11. Limitation on Investments............................. 40
SECTION 4.12. Limitation on Asset Sales............................. 40
SECTION 4.13. Repurchase of Securities upon a Change of Control..... 41
SECTION 4.14. Existence............................................. 41
SECTION 4.15. Payment of Taxes and Other Claims..................... 42
SECTION 4.16. Maintenance of Properties and Insurance............... 42
SECTION 4.17. Notice of Defaults.................................... 42
SECTION 4.18. Compliance Certificates............................... 42
SECTION 4.19. Commission Reports and Reports to Holders............. 43
SECTION 4.20. Waiver of Stay, Extension or Usury Laws............... 43
SECTION 4.21. Additional Amounts.................................... 44
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Consolidation, Merger and Sale of Assets.............. 45
SECTION 5.02. Successor Substituted................................. 46
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default..................................... 46
SECTION 6.02. Acceleration.......................................... 47
SECTION 6.03. Other Remedies........................................ 47
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Note: The Table of Contents shall not for any purposes be deemed to be a part of
the Indenture.
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SECTION 6.04. Waiver of Past Defaults............................... 48
SECTION 6.05. Control by Majority................................... 48
SECTION 6.06. Limitation on Suits................................... 48
SECTION 6.07. Rights of Holders to Receive Payment.................. 49
SECTION 6.08. Collection Suit by Trustee............................ 49
SECTION 6.09. Trustee May File Proofs of Claim...................... 49
SECTION 6.10. Priorities............................................ 50
SECTION 6.11. Undertaking for Costs................................. 50
SECTION 6.12. Restoration of Rights and Remedies.................... 50
SECTION 6.13. Rights and Remedies Cumulative........................ 50
SECTION 6.14. Delay or Omission Not Waiver.......................... 51
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General............................................... 51
SECTION 7.02. Certain Rights of Trustee............................. 51
SECTION 7.03. Individual Rights of Trustee.......................... 52
SECTION 7.04. Trustee's Disclaimer.................................. 52
SECTION 7.05. Notice of Default..................................... 53
SECTION 7.06. Reports by Trustee to Holders......................... 53
SECTION 7.07. Compensation and Indemnity............................ 53
SECTION 7.08. Replacement of Trustee................................ 54
SECTION 7.09. Successor Trustee by Merger, Etc...................... 54
SECTION 7.10. Eligibility........................................... 55
SECTION 7.11. Money Held in Trust................................... 55
SECTION 7.12. Withholding Taxes..................................... 55
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations.................. 55
SECTION 8.02. Defeasance and Discharge of Indenture................. 56
SECTION 8.03. Defeasance of Certain Obligations..................... 58
SECTION 8.04. Application of Trust Money............................ 60
SECTION 8.05. Repayment to the Company.............................. 60
SECTION 8.06. Reinstatement......................................... 61
SECTION 8.07. Insiders.............................................. 61
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Note: The Table of Contents shall not for any purposes be deemed to be a part of
the Indenture.
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ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders............................ 61
SECTION 9.02. With Consent of Holders............................... 62
SECTION 9.03. Revocation and Effect of Consent...................... 63
SECTION 9.04. Notation on or Exchange of Securities................. 63
SECTION 9.05. Trustee to Sign Amendments, Etc....................... 63
SECTION 9.06. Conformity with Trust Indenture Act................... 64
ARTICLE TEN
MEETINGS OF HOLDERS
SECTION 10.01. Purposes for Which Meetings May Be Called............ 64
SECTION 10.02. Manner of Calling Meetings........................... 64
SECTION 10.03. Call of Meetings by Company or Holders............... 65
SECTION 10.04. Who May Attend and Vote at Meetings.................. 65
SECTION 10.05. Quorum; Action....................................... 65
SECTION 10.06. Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment................ 66
SECTION 10.07. Voting at the Meeting and Record to Be Kept.......... 67
SECTION 10.08. Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting............. 67
SECTION 10.09. Procedures Not Exclusive............................. 67
ARTICLE ELEVEN
SUBORDINATION
SECTION 11.01. Securities Subordinated to Senior Indebtedness....... 68
SECTION 11.02. No Payment on Securities in Certain Circumstances.... 68
SECTION 11.03. Payment over Proceeds upon Dissolution, Etc.......... 69
SECTION 11.04. Subrogation.......................................... 71
SECTION 11.05. Obligations of Company Unconditional................. 71
SECTION 11.06. Notice to Trustee.................................... 72
SECTION 11.07. Reliance on Judicial Order or Certificate of Liquidating
Agent.............................................. 73
SECTION 11.08. Trustee's Relation to Senior Indebtedness............ 73
SECTION 11.09. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Indebtedness...... 73
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Note: The Table of Contents shall not for any purposes be deemed to be a part of
the Indenture.
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SECTION 11.10. Holders Authorize Trustee to Effectuate Subordination
of Securities...................................... 73
SECTION 11.11. Not to Prevent Events of Default..................... 74
SECTION 11.12. Trustee's Compensation Not Prejudiced................ 74
SECTION 11.13. No Waiver of Subordination Provisions................ 74
SECTION 11.14. Payments May Be Paid Prior to Dissolution............ 74
SECTION 11.15. Trust Moneys Not Subordinated........................ 75
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act of 1939.......................... 75
SECTION 12.02. Notices.............................................. 75
SECTION 12.03. Certificate and Opinion as to Conditions Precedent... 76
SECTION 12.04. Statements Required in Certificate or Opinion........ 76
SECTION 12.05. Rules by Trustee, Paying Agent or Registrar.......... 77
SECTION 12.06. Payment Date Other Than a Business Day............... 77
SECTION 12.07. Governing Law; Consent to Jurisdiction and Service... 77
SECTION 12.08. No Adverse Interpretation of Other Agreements........ 77
SECTION 12.09. No Recourse Against Others........................... 77
SECTION 12.10. Successors........................................... 77
SECTION 12.11. Duplicate Originals.................................. 78
SECTION 12.12. Separability......................................... 78
SECTION 12.13. Table of Contents, Headings, Etc..................... 78
EXHIBIT A Form of Security............................................A-1
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Note: The Table of Contents shall not for any purposes be deemed to be a part of
the Indenture.
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INDENTURE, dated as of November [__], 1997, between GST
TELECOMMUNICATIONS, INC., a federally chartered Canadian corporation (the
"Company") and UNITED STATES TRUST COMPANY OF NEW YORK (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance initially of up to $200,000,000 aggregate
principal amount of the Company's [__]% Senior Subordinated Accrual Notes due
2007 (the "Securities") issuable as provided in this Indenture.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done, and the Company has done
all things necessary to make the Securities, when executed by the Company and
authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company as hereinafter provided.
This Indenture is subject to, and shall be governed by, the
provisions of the Trust Indenture Act of 1939, as amended, that are required to
be a part of and to govern indentures qualified under the Trust Indenture Act of
1939, as amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders, as follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Accumulated Interest Amount" means, as of any date, for each $1,000
principal amount of Securities, the amount of interest accrued on such
Securities from the Closing Date to such date, compounded semi-annually on each
Interest Accrual Date.
"Additional Amounts" has the meaning provided in Section 4.21.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined in conformity with GAAP; provided that the following
items shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income of any Person (other than net income
attributable to a Restricted Subsidiary) in which any Person (other than the
Company or any of its Restricted Subsidiaries) has an interest and the net
income of any Unrestricted Subsidiary, except to the extent of the amount of
dividends or other distributions
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actually paid to the Company or any of its Restricted Subsidiaries by such other
Person, or such Unrestricted Subsidiary, during such period; (ii) solely for the
purposes of calculating the amount of Restricted Payments that may be made
pursuant to clause (C) of the first paragraph of Section 4.05. (and in such
case, except to the extent includable pursuant to clause (i) above), the net
income (or loss) of any Person accrued prior to the date it becomes a Restricted
Subsidiary or is merged into or consolidated with the Company or any of its
Restricted Subsidiaries or all or substantially all of the property and assets
of such Person are acquired by the Company or any of its Restricted
Subsidiaries; (iii) the net income of any Restricted Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of such net income is not at the time permitted by the
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Restricted Subsidiary; (iv) any gains or losses (on an after-tax basis)
attributable to Asset Sales; (v) except for purposes of calculating the amount
of Restricted Payments that may be made pursuant to clause (C) of the first
paragraph of Section 4.05., any amount paid or accrued as dividends on Preferred
Stock of the Company or any Restricted Subsidiary owned by Persons other than
the Company and any of its Restricted Subsidiaries; and (vi) all extraordinary
gains and extraordinary losses.
"Adjusted Consolidated Net Tangible Assets" means the total amount
of assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the quarterly or annual consolidated balance
sheet of the Company and its Restricted Subsidiaries, prepared in conformity
with GAAP and most recently filed with the Commission pursuant to Section 4.19.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent, authenticating agent or
co-Registrar.
"Asset Acquisition" means (i) an investment by the Company or any of
its Restricted Subsidiaries in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged into or consolidated
with the Company or any of its Restricted Subsidiaries; provided that such
Person's primary business is related, ancillary or complementary to the
businesses of the Company and its Restricted Subsidiaries on the date of such
investment or (ii) an acquisition by the Company or any of its Restricted
Subsidiaries of the property and assets of any Person other than the Company or
any of its Restricted
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Subsidiaries that constitute substantially all of a division or line of business
of such Person; provided that the property and assets acquired are related,
ancillary or complementary to the businesses of the Company and its Restricted
Subsidiaries on the date of such acquisition.
"Asset Sale" means any sale, transfer or other disposition
(including by way of merger, consolidation or sale-leaseback transactions) in
one transaction or a series of related transactions by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property or assets of the Company or any of its Restricted
Subsidiaries outside the ordinary course of business of the Company or such
Restricted Subsidiary and, in each case, that is not governed by the provisions
of Article Five; provided that "Asset Sale" shall not include (A) sales or other
dispositions of inventory, receivables and other current assets; or (B) sales or
other dispositions of assets with a fair market value (as certified in an
Officers' Certificate) not in excess of $1 million; or (C) sales or other
dispositions of assets to the extent the Company or a Restricted Subsidiary
receives consideration at least equal to the fair market value of the assets
sold or disposed of, provided that the consideration received consists of
property or assets (other than current assets) of a nature or type or that are
used in a business (or a company having property or assets of a nature or type,
or engaged in a business) similar or related to the nature or type of the
property and assets of, or business of, the Company and its Restricted
Subsidiaries existing on the date of such sale or other disposition.
"Average Life" means, at any date of determination with respect to
any debt security, the quotient obtained by dividing (i) the sum of the products
of (a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of such Board of Directors duly
authorized to act with respect to this Indenture.
"Board Resolution" means, with respect to any Person, a copy of a
resolution, certified by the Secretary or Assistant Secretary of such Person to
have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in The City of New York, or in the city of the
Corporate Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) in equity
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of such Person, whether now outstanding or issued after the date of this
Indenture, including, without limitation, all Common Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) of which the discounted present
value of the rental obligations of such Person as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such Person; and
"Capitalized Lease Obligations" means the discounted present value of the rental
obligations under such lease.
"Change of Control" means such time as (i) a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes
the ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of Voting Stock representing more than 30% of the total voting power of the
Voting Stock of the Company on a fully diluted basis; (ii) individuals who on
the Closing Date constitute the Board of Directors (together with any new
directors whose election by the Board of Directors or whose nomination for
election by the Company's shareholders was approved by a vote of at least
two-thirds of the members of the Board of Directors then in office who either
were members of the Board of Directors on the Closing Date or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the members of the Board of Directors then in office;
or (iii) all of the Common Stock of GST USA is not beneficially owned by the
Company.
"Closing Date" means the date on which the Securities are originally
issued under this Indenture.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.
"Common Shares" means the common shares of the Company.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's common stock, whether now
outstanding or issued after the date of this Indenture, including, without
limitation, all series and classes of such common stock.
"Company" means the party named as such in the first paragraph of
this Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the name
of the Company (i) by its Chairman, a Vice Chairman, its President or a Vice
President and (ii) by its Chief Financial Officer, Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee;
provided, however, that such written request or order may be signed by any two
of the officers or directors listed in clause (i) above in lieu of being
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signed by one of such officers or directors listed in such clause (i) and one of
the officers listed in clause (ii) above.
"Consolidated EBITDA" means, for any period, the sum of the amounts
for such period of (i) Adjusted Consolidated Net Income, (ii) Consolidated
Interest Expense, to the extent such amount was deducted in calculating Adjusted
Consolidated Net Income, (iii) income taxes, to the extent such amount was
deducted in calculating Adjusted Consolidated Net Income (other than income
taxes (either positive or negative) attributable to either extraordinary and
non-recurring gains or losses or sales of assets), (iv) depreciation expense, to
the extent such amount was deducted in calculating Adjusted Consolidated Net
Income, (v) amortization expense, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income, and (vi) all other non-cash items
reducing Adjusted Consolidated Net Income (other than items that will require
cash payments and for which an accrual or reserve is, or is required by GAAP to
be, made), less all non-cash items increasing Adjusted Consolidated Net Income,
all as determined on a consolidated basis for the Company and its Restricted
Subsidiaries in conformity with GAAP; provided that, if any Restricted
Subsidiary is not a Wholly Owned Restricted Subsidiary, Consolidated EBITDA
shall be reduced (to the extent not otherwise reduced in accordance with GAAP)
by an amount equal to (A) the amount of the Adjusted Consolidated Net Income
attributable to such Restricted Subsidiary multiplied by (B) the quotient of (1)
the number of shares of outstanding Common Stock of such Restricted Subsidiary
not owned on the last day of such period by the Company or any of its Restricted
Subsidiaries divided by (2) the total number of shares of outstanding Common
Stock of such Restricted Subsidiary on the last day of such period.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including amortization of
original issue discount on any Indebtedness and the interest portion of any
deferred payment obligation, calculated in accordance with the effective
interest method of accounting; all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Subsidiaries during such
period; excluding, however, (i) any amount of such interest of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated
Net Income pursuant to clause (iii) of the definition thereof) and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in connection
with the offering of the Securities, all as determined on a consolidated basis
(without taking into account Unrestricted Subsidiaries) in conformity with GAAP.
"Consolidated Net Worth" means, at any date of determination,
shareholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than
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90 days prior to the date of such computation, and which shall not take into
account Unrestricted Subsidiaries), less any amounts attributable to Redeemable
Stock or any equity security convertible into or exchangeable for Indebtedness,
the cost of treasury stock and the principal amount of any promissory notes
receivable from the sale of Capital Stock of the Company or any of its
Restricted Subsidiaries, each item to be determined in conformity with GAAP
(excluding the effects of foreign currency exchange adjustments under Financial
Accounting Standards Board Statement of Financial Accounting Standards No. 52).
"Convertible Notes" means the 137/8% Convertible Senior Subordinated
Discount Notes due 2005 of the Company issued pursuant to the Convertible Notes
Indenture.
"Convertible Notes Indenture" means the convertible notes indenture
dated December 19, 1995 among the Company, as issuer, GST USA, as guarantor, and
United States Trust Company of New York, as trustee.
"Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any of its Restricted Subsidiaries against fluctuations in currency
values to or under which the Company or any of its Restricted Subsidiaries is a
party or a beneficiary on the date of this Indenture or becomes a party or a
beneficiary thereafter.
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees, and
their respective successors.
"Designated Senior Indebtedness" means the Senior Notes and any
Indebtedness constituting Senior Indebtedness that, at the date of
determination, has an aggregate principal amount outstanding of at least $25
million and that is specifically designated by the Company in the instrument
creating or evidencing such Senior Indebtedness as "Designated Senior
Indebtedness."
"Development Company" means a Restricted Subsidiary whose primary
business is the development, ownership and operation of alternative access
telecommunications networks.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.12.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"fair market value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors of the Company (whose
determination shall be conclusive) and evidenced by a Board Resolution.
"Final Accumulated Interest Amount" means, for each $1,000 principal
amount of Securities, the amount of interest accrued on such Securities from the
Closing Date, compounded semi-annually on each Interest Accrual Date, to the
Final Interest Accrual Date.
"Final Interest Accrual Date" means [______ __], 2002.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations contained in this
Indenture shall be computed in conformity with GAAP applied on a consistent
basis, except that calculations made for purposes of determining compliance with
the terms of the covenants and with other provisions of this Indenture shall be
made without giving effect to (i) the amortization of any expenses incurred in
connection with the offering of the Securities and (ii) except as otherwise
provided, the amortization of any amounts required or permitted by Accounting
Principles Board Opinion Nos. 16 and 17.
"Global Securities" has the meaning provided in Section 2.01.
"GST USA" means GST USA, Inc., a Delaware corporation and Wholly
Owned Subsidiary of the Company.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person (whether arising by virtue
of partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
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"Guaranteed Indebtedness" has the meaning provided in Section 4.08.
"Holder" or "Securityholder" means the then registered holder of any
Security.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "incurrence" of Indebtedness by reason of a Person
becoming a Restricted Subsidiary; provided that neither the accrual of interest
nor the accretion of original issue discount shall be considered an Incurrence
of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), (iv) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
which purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion of
such services, except Trade Payables, (v) all obligations of such Person as
lessee under Capitalized Leases, (vi) all Indebtedness of other Persons secured
by a Lien on any asset of such Person, whether or not such Indebtedness is
assumed by such Person; provided that the amount of such Indebtedness shall be
the lesser of (A) the fair market value of such asset at such date of
determination and (B) the amount of such Indebtedness, (vii) all Indebtedness of
other Persons Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person and (viii) to the extent not otherwise included in
this definition, obligations under Currency Agreements and Interest Rate
Agreements. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation, provided (A)
that the amount outstanding at any time of any Indebtedness issued with original
issue discount is the face amount of such Indebtedness less the unamortized
portion of the original issue discount of such Indebtedness at the time of its
issuance as determined in conformity with GAAP, (B) money borrowed and set aside
at the time of the Incurrence of any Indebtedness in order to pre-fund the
payment of interest as such Indebtedness shall be deemed not to be
"Indebtedness" and (C) that Indebtedness shall not include any liability for
federal, state, local or other taxes.
"Indebtedness to EBITDA Ratio" means, as at any date of
determination, the ratio of (i) the aggregate amount of Indebtedness of the
Company and its Restricted Subsidiaries on a consolidated basis as at the date
of determination (the "Transaction Date") to (ii) the Consolidated EBITDA of the
Company for the then most recent four full fiscal quarters for which reports
have been filed pursuant to Section 4.19. (such four full fiscal quarter period
being referred to herein as the "Four Quarter Period"); provided that (x) pro
forma effect shall be given to any Indebtedness Incurred from the beginning of
the Four Quarter Period through the Transaction Date (including any Indebtedness
Incurred on the Transaction Date), to the
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extent outstanding on the Transaction Date, (y) if during the period commencing
on the first day of such Four Quarter Period through the Transaction Date (the
"Reference Period"), the Company or any of its Restricted Subsidiaries shall
have engaged in any Asset Sale, Consolidated EBITDA for such period shall be
reduced by an amount equal to the EBITDA (if positive), or increased by an
amount equal to the EBITDA (if negative), directly attributable to the assets
which are the subject of such Asset Sale as if such Asset Sale had occurred on
the first day of such Reference Period or (z) if during such Reference Period
the Company or any of the Restricted Subsidiaries shall have made any Asset
Acquisition, Consolidated EBITDA of the Company shall be calculated on a pro
forma basis as if such Asset Acquisition and any Incurrence of Indebtedness to
finance such Asset Acquisition had taken place on the first day of such
Reference Period.
"Indenture" means this Indenture as originally executed or as it may
be amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.
"Interest Accrual Date" means each [______ __] and [______ __],
commencing [______ __], 1998.
"Interest Payment Date" means each semiannual interest payment date
on [___] and [____] of each year, commencing [______], 2003.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other similar agreement or
arrangement designed to protect the Company or any of its Restricted
Subsidiaries against fluctuations in interest rates in respect of Indebtedness
to or under which the Company or any of its Restricted Subsidiaries is a party
or a beneficiary on the date of this Indenture or becomes a party or a
beneficiary hereafter; provided that the notional principal amount thereof does
not exceed the principal amount of the Indebtedness of the Company and its
Restricted Subsidiaries that bears interest at floating rates.
"International Asset" has the meaning provided in Section 4.11.
"International Business" has the meaning provided in Section 4.11.
"Investment" in any Person means any direct or indirect advance,
loan or other extension of credit (including, without limitation, by way of
Guarantee or similar arrangement; but excluding advances to customers in the
ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable on the balance sheet of the Company or its Restricted
Subsidiaries) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, bonds,
notes, debentures or other similar instruments issued by, such Person and shall
include (i) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary and (ii) the fair market value of the Capital Stock (or
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any other Investment) held by the Company and its Restricted Subsidiaries of any
Person that has ceased to be a Restricted Subsidiary by reason of any
transaction permitted by clause (iii) of Section 4.07. For purposes of the
definition of "Unrestricted Subsidiary" and Section 4.05., (i) "Investment"
shall include the fair market value of the assets (net of liabilities to the
Company or any of its Restricted Subsidiaries) of any Restricted Subsidiary at
the time that such Restricted Subsidiary is designated an Unrestricted
Subsidiary and shall exclude the fair market value of the assets (net of
liabilities) of any Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined by the
Board of Directors in good faith.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof, any sale with
recourse against the seller or any Affiliate of the seller, or any agreement to
give any security interest).
"NACT" means NACT Telecommunications, Inc., a Delaware corporation.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (A) is
secured by a Lien on the property or assets sold or (B) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by the
Company or any Restricted Subsidiary as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP and (b) with respect
to any issuance or sale of Capital Stock, the proceeds of such issuance or sale
in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal, but
not interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to the Company or any Restricted Subsidiary) and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
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"Offer to Purchase" means an offer to purchase Securities by the
Company from the Holders commenced by mailing a notice to the Trustee and each
Holder stating: (i) the covenant pursuant to which the offer is being made and
that all Securities validly tendered will be accepted for payment on a pro rata
basis; (ii) the purchase price and the date of purchase (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date such
notice is mailed) (the "Payment Date"); (iii) that any Security not tendered
will continue to accrue interest pursuant to its terms; (iv) that, unless the
Company defaults in the payment of the purchase price, any Security accepted for
payment pursuant to the Offer to Purchase shall cease to accrue interest on and
after the Payment Date; (v) that Holders electing to have a Security purchased
pursuant to the Offer to Purchase will be required to surrender such Security,
together with the form entitled "Option of the Holder to Elect Purchase" on the
reverse side thereof completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the Business Day immediately
preceding the Payment Date; (vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close of business on
the third Business Day immediately preceding the Payment Date, a telegram,
facsimile transmission or letter setting forth the name of such Holder, the
principal amount of Securities delivered for purchase and a statement that such
Holder is withdrawing his election to have such Securities purchased; and (vii)
that Holders whose Securities are being purchased only in part will be issued
new Securities equal in principal amount to the unpurchased portion thereof;
provided that each Security purchased and each new Security issued shall be in a
principal amount of $1,000 or integral multiples thereof. On the Payment Date,
the Company shall (i) accept for payment on a pro rata basis Securities or
portions thereof tendered pursuant to an Offer to Purchase; (ii) deposit with
the Paying Agent money sufficient to pay the purchase price of all Securities or
portions thereof so accepted; and (iii) deliver, or cause to be delivered, to
the Trustee all Securities or portions thereof so accepted together with an
Officers' Certificate specifying the Securities or portions thereof accepted for
payment by the Company. The Paying Agent shall promptly mail to the Holders of
Securities so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail to such Holders a new Security
equal in principal amount to any unpurchased portion of the Security
surrendered; provided that each Security purchased and each new Security issued
shall be in a principal amount of $1,000 or integral multiples thereof. The
Company will publicly announce the results of an Offer to Purchase as soon as
practicable after the Payment Date. The Trustee shall act as the Paying Agent
for an Offer to Purchase. The Company will comply with Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable, in the event that the Company
is required to repurchase Securities pursuant to an Offer to Purchase.
"Officer" means, with respect to any Person, (i) the Chairman of the
Board, the Vice Chairman of the Board, the President, any Vice President, the
Chief Financial Officer, and (ii) the Treasurer or any Assistant Treasurer, or
the Secretary or any Assistant Secretary, in each case of such Person.
"Officers' Certificate" means a certificate signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in clause
(ii) of the definition thereof; provided, however, that any such certificate may
be signed by any two of the Officers listed in
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12
clause (i) of the definition thereof in lieu of being signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in clause
(ii) of the definition thereof. Each Officers' Certificate (other than
certificates provided pursuant to TIA Section 314(a)(4)) shall include the
statements provided for in TIA Section 314(e).
"Opinion of Counsel" means a written opinion signed by legal counsel
who may be an employee of or counsel to the Company. Each such Opinion of
Counsel shall include the statements provided for in TIA Section 314(e).
"Paying Agent" has the meaning provided in Section 2.03, except
that, for the purposes of Article Eight, the Paying Agent shall not be the
Company or a Subsidiary of the Company or an Affiliate of any of them. The term
"Paying Agent" includes any additional Paying Agent.
"Payment Date" has the meaning provided in the definition of "Offer
to Purchase."
"Permitted Investment" means (i) an Investment in a Restricted
Subsidiary or a Person which will, upon the making of such Investment, become a
Restricted Subsidiary or be merged or consolidated with or into or transfer or
convey all or substantially all its assets to, the Company or a Restricted
Subsidiary; provided that such person's primary business is related, ancillary
or complementary to the businesses of the Company and its Restricted
Subsidiaries on the date of such Investment; (ii) a Temporary Cash Investment;
(iii) payroll, travel and similar advances to cover matters that are expected at
the time of such advances ultimately to be treated as expenses in accordance
with GAAP; (iv) loans or advances to employees made in the ordinary course of
business that do not exceed $1 million in the aggregate at any time outstanding;
and (v) stock, obligations or securities received in satisfaction of judgments.
"Permitted Liens" means (i) Liens for taxes, assessments,
governmental charges or claims that are being contested in good faith by
appropriate legal proceedings promptly instituted and diligently conducted and
for which a reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made; (ii) statutory Liens of landlords
and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or
other similar Liens arising in the ordinary course of business and with respect
to amounts not yet delinquent or being contested in good faith by appropriate
legal proceedings promptly instituted and diligently conducted and for which a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made; (iii) Liens incurred or deposits made
in the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (iv) Liens incurred
or deposits made to secure the performance of tenders, bids, leases, statutory
or regulatory obligations, bankers' acceptances, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (v) easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the
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13
Company or any of its Restricted Subsidiaries; (vi) Liens (including extensions
and renewals thereof) upon real or personal property acquired after the Closing
Date; provided that (a) such Lien is created solely for the purpose of securing
Indebtedness Incurred, in accordance with Section 4.03, (1) to finance the cost
(including, without limitation, the cost of design, development, construction,
acquisition, installation or integration) of the item of property or assets
subject thereto and such Lien is created prior to, at the time of or within six
months after the later of the acquisition, the completion of construction or the
commencement of full operation of such property or (2) to refinance any
Indebtedness previously so secured, (b) the principal amount of the Indebtedness
secured by such Lien does not exceed 100% of such cost and (c) any such Lien
shall not extend to or cover any property or assets other than such item of
property or assets and any improvements on such item; (vii) leases or subleases
granted to others that do not materially interfere with the ordinary course of
business of the Company and its Restricted Subsidiaries, taken as a whole;
(viii) Liens encumbering property or assets under construction arising from
progress or partial payments by a customer of the Company or its Restricted
Subsidiaries relating to such property or assets; (ix) any interest or title of
a lessor in the property subject to any Capitalized Lease or operating lease;
(x) Liens arising from filing Uniform Commercial Code financing statements
regarding leases; (xi) Liens on property of, or on shares of stock or
Indebtedness of, any corporation existing at the time such corporation becomes,
or becomes a part of, any Restricted Subsidiary; provided that such Liens do not
extend to or cover any property or assets of the Company or any Restricted
Subsidiary other than the property or assets acquired; (xii) Liens in favor of
the Company or any Restricted Subsidiary; (xiii) Liens arising from the
rendering of a final judgment or order against the Company or any Restricted
Subsidiary that does not give rise to an Event of Default; (xiv) Liens securing
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the products
and proceeds thereof; (xv) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; (xvi) Liens encumbering customary initial
deposits and margin deposits, and other Liens that are either within the general
parameters customary in the industry and incurred in the ordinary course of
business, in each case, securing Indebtedness under Interest Rate Agreements and
Currency Agreements and forward contracts, options, future contracts, futures
options or similar agreements or arrangements designed to protect the Company or
any of its Restricted Subsidiaries from fluctuations in interest rates or the
price of commodities; (xvii) Liens arising out of conditional sale, title
retention, consignment or similar arrangements for the sale of goods entered
into by the Company or any of its Restricted Subsidiaries in the ordinary course
of business in accordance with the past practices of the Company and its
Restricted Subsidiaries prior to the Closing Date; and (xviii) Liens on or sales
of receivables.
"Person" means an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Phoenix Fiber" means Phoenix Fiber Access, Inc., a subsidiary of
GST USA.
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"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether now outstanding or issued after the date of this Indenture, including,
without limitation, all series and classes of such preferred or preference
stock.
"Principal" of a debt security, including the Securities, means the
principal amount due on the Stated Maturity as shown on such debt security.
"Protected Property" has the meaning provided in Section 4.10.
"Redeemable Preferred Shares" means the Series A Convertible
Preference Shares of the Company outstanding on the Closing Date.
"Redeemable Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Securities, (ii) redeemable at the option of the
holder of such class or series of Capital Stock at any time prior to the Stated
Maturity of the Securities or (iii) convertible into or exchangeable for Capital
Stock referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Securities; provided that any
Capital Stock that would not constitute Redeemable Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of an "asset sale" or "change of
control" occurring prior to the Stated Maturity of the Securities shall not
constitute Redeemable Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Section 4.12 and Section
4.13 and such Capital Stock specifically provides that such Person will not
repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Securities as are required to be repurchased
pursuant to Section 4.12 and Section 4.13.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which such Security is to be redeemed pursuant to
this Indenture.
"Registrar" has the meaning provided in Section 2.03.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the [______] or [______] (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the chairman
of the trust committee, the
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president, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and in each case having direct responsibility for the administration of
this Indenture and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Payments" has the meaning provided in Section 4.05.
"Restricted Subsidiary" means any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"Securities" means any of the securities, as defined in the first
paragraph of the recitals hereof, that are authenticated and delivered under
this Indenture. For all purposes of this Indenture, the term "Securities" shall
include the Securities initially issued on the Closing Date and any other
Securities issued after the Closing Date under this Indenture. For purposes of
this Indenture, all Securities shall vote together as one series of Securities
under this Indenture.
"Securities Act" means the Securities Act of 1933.
"Security Register" has the meaning provided in Section 2.03.
"Senior Indebtedness"means the following obligations of the Company,
whether outstanding on the Closing Date or thereafter Incurred: (i) all
Indebtedness and all other monetary obligations of the Company under its
guarantee of the Senior Notes, (ii) all other Indebtedness of the Company (other
than the Convertible Notes), including principal and interest on such
Indebtedness, unless such indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such Indebtedness is issued, is pari
passu with, or subordinated in right of payment to, the Securities, and (iii)
all fees, expenses and indemnities payable in connection with the Company's
guarantee of the Senior Notes (including any agreement pursuant to which the
Senior Notes are issued); provided that the term "Senior Indebtedness" shall not
include (a) any Indebtedness of the Company that, when Incurred and without
respect to any election under Section 1111(b) of the United States Bankruptcy
Code, was without recourse to the Company, (b) any Indebtedness of the Company
to a Subsidiary of the Company or to a joint venture in which the Company has an
interest, (c) any Indebtedness of the Company to the extent not permitted by
Section 4.03 or Section 4.04, (d) any repurchase, redemption or other obligation
in respect of Redeemable Stock, (e) any Indebtedness to any employee of the
Company or any of its Subsidiaries, (f) any liability for federal, state, local
or other taxes owed or owing by the Company or (g) any trade payables. Senior
Indebtedness will also include interest accruing subsequent to events of
bankruptcy of the Company and its Subsidiaries at the rate provided for in the
document governing such Senior Indebtedness, whether or not such interest is an
allowed claim enforceable against the debtor in a bankruptcy case under the
federal bankruptcy law.
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"Senior Notes" means the 137/8% Senior Discount Notes due 2005 of
GST USA issued pursuant to the Senior Notes Indenture.
"Senior Notes Indenture" means the senior notes indenture dated
December 19, 1995 among GST USA, as issuer, the Company, as guarantor, and
United States Trust Company of New York, as trustee.
"Senior Subordinated Obligations" means any principal of, premium,
if any, or interest on the Securities payable pursuant to the terms of the
Securities or upon acceleration, including any amounts received upon the
exercise of rights of rescission or other rights of action (including claims for
damages) or otherwise, to the extent relating to the purchase of Securities or
amounts corresponding to such principal, premium, if any, or interest on the
Securities.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"Stated Maturity" means, (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning provided in Section 4.08.
"Subsidiary Guarantor" means a Restricted Subsidiary that executes
and delivers a Subsidiary Guarantee.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof, (ii) time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by
the United States, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50 million (or the foreign currency
equivalent thereof) and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally
24
17
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by a registered broker-dealer
or mutual fund distributor, (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in clause
(ii) above, (iv) commercial paper, maturing not more than 90 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of America
with a rating at the time as of which any investment therein is made of "P-1"
(or higher) according to ▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" (or higher)
according to Standard & Poor's Ratings Services, and (v) securities with
maturities of six months or less from the date of acquisition issued or fully
and unconditionally guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
thereof, and rated at least "A" by Standard & Poor's Ratings Services or ▇▇▇▇▇'▇
Investors Service, Inc.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of
1939, as amended (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb), as in effect on the date
this Indenture was executed, except as provided in Section 9.06.
"Tomen" means Tomen Corporation or its Affiliates.
"Tomen Facility" means, collectively, the Tomen Master Agreement
together with all other agreements (including credit agreements), instruments
and documents executed or delivered pursuant thereto or in connection therewith,
in each case as such agreements, instruments or documents may be amended,
supplemented, extended, renewed, replaced or otherwise modified from time to
time.
"Tomen Master Agreement" means the Master Agreement dated October
24, 1994, among Tomen America Inc., the Company (formerly known as Greenstar
Telecommunications Inc.), GST Telecom Inc., Pacwest Network, Inc., Pacwest
Network L.L.C. and Pacific Lightwave, Inc.
"Trade Payables" means any accounts payable or any other
indebtedness or monetary obligations to trade creditors created, assumed or
Guaranteed by the Company or any of its Restricted Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services by the Company or its Restricted Subsidiaries.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph of
this Indenture until a successor replaces it in accordance with the provisions
of Article Seven of this Indenture and thereafter means such successor.
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"United States Bankruptcy Code" means the Bankruptcy Reform Act of
1978, as amended and as codified in Title 11 of the United States Code, as
amended from time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means (i) NACT or any other Subsidiary of
the Company that at the time of determination shall be designated an
Unrestricted Subsidiary by the Board of Directors in the manner provided below
and (ii) any Subsidiary of an Unrestricted Subsidiary; provided that NACT shall
be deemed to be a Restricted Subsidiary for purposes of Section 4.05 (except
that NACT shall be an Unrestricted Subsidiary for purposes of the limitation on
Investments by the Company and its Restricted Subsidiaries) and the definition
of "Asset Sale." The Board of Directors may designate any Restricted Subsidiary
(including any newly acquired or newly formed Subsidiary), other than GST USA or
a Subsidiary Guarantor, to be an Unrestricted Subsidiary unless such Subsidiary
owns any Capital Stock of, or owns or holds any Lien on any property of, the
Company or any Restricted Subsidiary; provided that (A) any Guarantee by the
Company or any Restricted Subsidiary of any Indebtedness of the Subsidiary being
so designated shall be deemed an Incurrence of such Indebtedness and an
Investment by the Company or such Restricted Subsidiary at the time of such
designation; (B) either (I) the Subsidiary to be so designated has total assets
of $1,000 or less or (II) if such Subsidiary has assets greater than $1,000,
that such designation would be permitted under Section 4.05 and (C) if
applicable, the Incurrence of Indebtedness and the Investment referred to in
clause (A) above would be permitted under Section 4.03 and Section 4.05. The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary of the Company; provided that immediately after giving effect to such
designation (x) the Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation are permitted to be Incurred for
all purposes of this Indenture and (y) no Default or Event of Default shall have
occurred and be continuing. Any such designation by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee a copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof at any time prior
to the Stated Maturity of the Securities, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation evidenced by such
depository receipt.
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"Voting Stock" means with respect to any Person, Capital Stock of
any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person,
such Subsidiary if all of the outstanding Capital Stock in such Subsidiary
(other than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) is owned by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder or 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 Company or any other
obligor on the 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 a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the
plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
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(vii) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the form annexed hereto
as Exhibit A with such appropriate insertions, substitutions and other
variations as are required or permitted under this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange
agreements to which the Company is subject or usage. The Company shall approve
the form of the Securities and any notation, legend or endorsement on the
Securities. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the form of the Securities
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. Each of the Company and the Trustee, by its execution
and delivery of this Indenture, expressly agrees to the terms and provisions of
the Securities applicable to it and to be bound thereby.
The Securities shall be issued initially in the form of one or more
global Securities in registered form, substantially in the form set forth in
Exhibit A (the "Global Securities"), deposited with, or on behalf of, the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. Each Global Security shall bear such legend as may be
required or reasonably requested by the Depositary.
The definitive Securities shall be typed, printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
SECTION 2.02. Execution, Authentication and Denominations. Subject
to Article Four, the aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited. Two Officers
shall execute the Securities for the Company by facsimile or manual signature in
the name and on behalf of the Company.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee or authenticating agent authenticates the
Security, the Security shall be valid nevertheless.
A Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
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At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall upon receipt of a
Company Order authenticate for original issue Securities in the aggregate
principal amount specified in such Company Order; provided that the Trustee
shall be entitled to receive an Officers' Certificate and an Opinion of Counsel
of the Company in connection with such authentication of Securities. The Opinion
of Counsel shall, if requested by the Trustee, be to the effect that:
(a) the form and terms of such Securities have been established by
or pursuant to a Board Resolution or, if applicable, an indenture
supplemental hereto in conformity with the provisions of this Indenture;
(b) such supplemental indenture, if any, when executed and delivered
by the Company and the Trustee, will constitute a valid and binding
obligation of the Company;
(c) such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and binding
obligations of the Company in accordance with their terms and will be
entitled to the benefits of this Indenture, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equitable principles; and
(d) the Company has been duly incorporated in, and is a validly
existing corporation in good standing under the laws of the jurisdiction
of its incorporation.
Such Company Order shall specify the amount of Securities to be authenticated
and the date on which the original issue of Securities is to be authenticated
and in case of an issuance of Securities pursuant to Section 2.12, shall certify
that such issuance is in compliance with Article Four.
The Trustee may appoint an authenticating agent to authenticate
Securities. 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 authenticating agent. An authenticating
agent has the same rights as an Agent to deal with the Company or an Affiliate
of the Company. The Trustee shall not be liable for the misconduct or negligence
of any authenticating agent appointed with due care.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 in principal amount and any integral
multiple of $1,000 in excess thereof.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar"), an office or agency where Securities
may be presented for payment (the "Paying Agent") and an office or agency where
notices and demands to or upon the Company
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in respect of the Securities and this Indenture may be served, which shall be in
the Borough of Manhattan, The City of New York and, in the event the Securities
are listed on the Luxembourg Stock Exchange, in Luxembourg. The Company shall
cause the Registrar to keep a register of the Securities and of their transfer
and exchange (the "Security Register"). The Company may have one or more
co-Registrars and one or more additional Paying Agents.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands for so long as such failure shall continue and shall be
entitled to compensation therefor pursuant to Section 7.07. The Company may
remove any Agent upon written notice to such Agent and the Trustee; provided
that no such removal shall become effective until (i) the acceptance of an
appointment by a successor Agent to such Agent as evidenced by an appropriate
agency agreement entered into by the Company and such successor Agent and
delivered to the Trustee or (ii) notification to the Trustee that the Trustee
shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company, any Subsidiary of the
Company, or any Affiliate of any of them may act as Paying Agent, Registrar or
co-Registrar, and/or agent for service of notice and demands; provided, however,
that neither the Company, a Subsidiary of the Company nor an Affiliate of any of
them shall act as Paying Agent in connection with the defeasance of the
Securities or the discharge of this Indenture under Article Eight.
The Company initially appoints the Trustee as Registrar, Paying
Agent, authenticating agent and agent for service of notice and demands. 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 Holders and shall
otherwise comply with TIA ss.312(a). If, at any time, the Trustee is not the
Registrar, the Registrar shall make available to the Trustee before each
Interest Payment Date and at such other times as the Trustee may reasonably
request, the names and addresses of the Holders as they appear in the Security
Register.
SECTION 2.04. Paying Agent to Hold Money in Trust. Not later than
11:00 a.m. New York City time on each due date of the principal, premium, if
any, and interest on any Securities, the Company shall deposit, or cause to be
deposited, with the Paying Agent money in immediately available funds sufficient
to pay such principal, premium, if any, and interest so becoming due. The
Company shall require each Paying Agent, if any, other than the Trustee to agree
in writing that such Paying Agent shall hold in trust for the benefit of the
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, and interest on the Securities (whether such
money has been paid to it by the Company or any other obligor on the
Securities), and that such Paying Agent shall promptly notify the Trustee in
writing of any default by the Company (or any other obligor on the Securities)
in making any such payment. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee and account for any funds disbursed,
and the Trustee
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may at any time during the continuance of any payment default, upon written
request to a Paying Agent, require such Paying Agent to pay all money held by it
to the Trustee and to account for any funds disbursed. Upon doing so, the Paying
Agent shall have no further liability for the money so paid over to the Trustee.
If the Company or any Subsidiary of the Company or any Affiliate of any of them
acts as Paying Agent, it will, on or before each due date of any principal of,
premium, if any, or interest on the Securities, segregate and hold in a separate
trust fund for the benefit of the Holders a sum of money sufficient to pay such
principal, premium, if any, or interest so becoming due until such sum of money
shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee in writing of its action or
failure to act as required by this Section 2.04.
SECTION 2.05. Transfer and Exchange. The Securities are issuable
only in registered form. A Holder may transfer a Security by written application
to the Registrar stating the name of the proposed transferee and otherwise
complying with the terms of this Indenture. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon
registration of the transfer by the Registrar in the Security Register. Prior to
the registration of any transfer by a Holder as provided herein, the Company,
the Trustee, and any agent of the Company shall treat the person in whose name
the Security is registered as the owner thereof for all purposes whether or not
the Security shall be overdue, and neither the Company, the Trustee, nor any
such agent shall be affected by notice to the contrary. Furthermore, any Holder
of or beneficial owner of an interest in a Global Security shall, by acceptance
of such Global Security, be deemed to have agreed that transfers of beneficial
interests in such Global Security may be effected only through a book-entry
system maintained by the Depositary (or its agent), and that ownership of a
beneficial interest in the Security shall be required to be reflected in a book
entry. When Securities are presented to the Registrar or a co-Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Securities of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transactions are met (including that such Securities are duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney who
is authorized in writing to act on behalf of the Holder). To permit
registrations of transfers and exchanges in accordance with the terms,
conditions and restrictions hereof, the Company shall execute and the Trustee
shall authenticate Securities at the Registrar's request. No service charge
shall be made to any Holder for any registration of transfer or exchange or
redemption of the Securities, but the Company may require payment by the Holder
of a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or other
similar governmental charge payable upon transfers, exchanges or redemptions
pursuant to Section 2.08, 3.08, 4.12, 4.13 or 9.04).
The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 3.03 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
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Notwithstanding any other provisions of this Section 2.05, unless
and until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a portion of the
Securities may not be transferred except as a whole by the Depositary to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.
If the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for the Global Securities or if at any time the
Depositary shall no longer be eligible under the next sentence of this
paragraph, the Company shall appoint a successor Depositary with respect to the
Securities. Each Depositary appointed pursuant to this Section 2.05 must, at the
time of its appointment and at all times while it serves as Depositary, be a
clearing agency registered under the Exchange Act and any other applicable
statute or regulation. The Company will execute, and the Trustee, upon receipt
of an authentication order, will authenticate and deliver, Securities in
definitive registered form in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing such Securities in exchange for such Global Security or
Securities if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for the Global Securities or if at any time the
Depositary shall no longer be eligible to serve as Depositary and a successor
Depositary for the Securities is not appointed by the Company within 60 days
after the Company receives such notice or becomes aware of such ineligibility or
(ii) an Event of Default has occurred and is continuing.
The Company may at any time and in its sole discretion determine
that the Securities shall no longer be represented by a Global Security or
Securities. In such event the Company will execute, and the Trustee will, upon
receipt of an authentication order, authenticate and deliver, Securities in
definitive registered form in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing such Securities in exchange for such Global Security or
Securities.
Upon the exchange of a Global Security for Securities in definitive
registered form without coupons, in authorized denominations, such Global
Security shall be cancelled by the Trustee. Securities in definitive registered
form issued in exchange for a Global Security pursuant to this Section 2.05
shall be registered in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Securities to or as directed by the Persons in whose names
such Securities are so registered.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
SECTION 2.06. Replacement Securities. If a mutilated Security is
surrendered to the Trustee or if the Holder claims that the Security has been
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Security of like
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tenor and principal amount and bearing a number not contemporaneously
outstanding; provided that the requirements of the second paragraph of Section
2.07 are met. If required by the Trustee or the Company, an indemnity bond must
be furnished that is sufficient in the judgment of both the Trustee and the
Company to protect the Company, the Trustee or any Agent from any loss that any
of them may suffer if a Security is replaced. The Company may charge such Holder
for its expenses and the expenses of the Trustee in replacing a Security. In
case any such mutilated, lost, destroyed or wrongfully taken Security has become
or is about to become due and payable, the Company in its discretion may pay the
principal of, premium, if any, and interest accrued on such Security instead of
issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the
Company and shall be entitled to the benefits of this Indenture.
SECTION 2.07. Outstanding Securities. Securities outstanding at any
time are all Securities that have been authenticated by the Trustee except for
those cancelled by it, those delivered to it for cancellation and those
described in this Section 2.07 as not outstanding.
If a Security is replaced pursuant to Section 2.06, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a bona fide
purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on the maturity date money sufficient to pay the principal of,
premium, if any, and interest accrued on Securities payable on that date, then
on and after that date such Securities cease to be outstanding and interest on
them shall cease to accrue.
A Security does not cease to be outstanding because the Company or
one of its Affiliates holds such Security, provided, however, that, in
determining whether the Holders of the requisite principal amount of the
outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer of the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
SECTION 2.08. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have insertions, substitutions, omissions and
other variations determined to be appropriate by the Officers executing the
temporary Securities, as evidenced by their execution of such temporary
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Securities. If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 4.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until so
exchanged, the temporary Securities shall be entitled to the same benefits under
this Indenture as definitive Securities.
SECTION 2.09. Cancellation. The Company at any time may deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold.
The Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for transfer, exchange or payment. The Trustee shall cancel
all Securities surrendered for transfer, exchange, payment or cancellation and
shall destroy them in accordance with its normal procedure. The Company shall
not issue new Securities to replace Securities it has paid in full or delivered
to the Trustee for cancellation.
SECTION 2.10. CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" or other identification numbers (if then generally in use), and,
if so, the Trustee shall use CUSIP numbers or other identification numbers, as
the case may be, in notices of redemption or exchange as a convenience to
Holders; provided that any such notice shall 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 redemption or exchange and that reliance may be
placed only on the other identification numbers printed on the Securities;
provided further that failure to use "CUSIP" or other identification numbers in
any notice of redemption or exchange shall not effect the validity or
sufficiency of such notice.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, it shall pay, or shall deposit with the
Paying Agent money in immediately available funds sufficient to pay the
defaulted interest, plus (to the extent lawful) any interest payable on the
defaulted interest, to the Persons who are Holders on a subsequent special
record date. A special record date, as used in this Section 2.11 with respect to
the payment of any defaulted interest, shall mean the 15th day next preceding
the date fixed by the Company for the payment of defaulted interest, whether or
not such day is a Business Day. At least 15 days before the subsequent special
record date, the Company shall mail to each Holder and to the Trustee a notice
that states the subsequent special record date, the payment date and the amount
of defaulted interest to be paid.
SECTION 2.12. Issuance of Additional Securities. The Company may, subject
to Article Four of this Indenture, issue additional Securities under this
Indenture. The Securities issued on the Closing Date and any additional
Securities subsequently issued shall be treated as a single class for all
purposes under this Indenture.
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption. (a) The Securities may be
redeemed at the option of the Company in whole or in part, at any time or from
time to time, on or after [____], 2002 and prior to maturity, at the following
Redemption Prices (expressed in percentages of their principal amount plus the
Final Accumulated Interest Amount), plus accrued and unpaid interest to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date that is on or prior to the Redemption Date to receive
interest due on an Interest Payment Date) if redeemed during the 12-month period
commencing [_____] of the years set forth below:
Year Redemption Price
---- ----------------
2002 [____]%
2003 [____]%
2004 and thereafter 100.0000%
(b) In addition, up to [___]% of the aggregate principal amount of
the Securities may be redeemed at the option of the Company, at any time prior
to [_______], 2000, from the proceeds of one or more sales of its Capital Stock
(other than Redeemable Stock), at [___]% of the sum of their principal amount
plus the Accumulated Interest Amount on the Redemption Date; provided that after
any such redemption at least $[____] million aggregate principal amount of
Securities remains outstanding.
(c) In addition, the Securities may be redeemed as a whole, but not
in part, at the option of the Company, at 100% of their principal amount on the
Redemption Date, together with accrued interest thereon, if any, to the
Redemption Date, in the event the Company has become or would become obligated
to pay, on the next date on which any amount would be payable with respect to
the Securities, any Additional Amounts as a result of a change in the laws
(including any regulations promulgated thereunder) of Canada (or any political
subdivision or taxing authority thereof or therein), or change in any official
position regarding the application or interpretation of such laws or
regulations, which change is announced or becomes effective on or after November
[___], 1997.
SECTION 3.02. Notices to Trustee. If the Company elects to redeem
Securities pursuant to Section 3.01, the Company shall notify the Trustee in
writing of the Redemption Date and the principal amount of Securities to be
redeemed.
The Company shall give each notice provided for in this Section 3.02
in an Officers' Certificate at least 25 days before mailing the notice to
Holders required pursuant to Section 3.04 (unless a shorter period shall be
satisfactory to the Trustee).
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SECTION 3.03. Selection of Securities to Be Redeemed. If less than
all of the Securities are to be redeemed at any time pursuant to Section 3.01,
the Trustee shall select the Securities to be redeemed in compliance with the
requirements, as certified to it by the Company, of the principal national
securities exchange, if any, on which the Securities are listed or, if the
Securities are not listed on a national securities exchange, on a pro rata
basis, by lot or by such other method as the Trustee in its sole discretion
shall deem fair and appropriate; provided, however, that no Securities of $1,000
in principal amount or less shall be redeemed in part.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption. Securities in denominations of $1,000
in principal amount may only be redeemed in whole. The Trustee may select for
redemption portions (equal to $1,000 in principal amount or any integral
multiple thereof) of Securities that have denominations larger than $1,000 in
principal amount. 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 Company and the Registrar promptly in writing of the
Securities or portions of Securities to be called for redemption.
SECTION 3.04. Notice of Redemption. With respect to any redemption
of Securities, at least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first class mail to each
Holder whose Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price;
(e) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date and the only remaining right of the Holders
is to receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Securities to the Paying Agent;
(f) that, if any Security is being redeemed in part, the portion of
the principal amount (equal to $1,000 in principal amount or any integral
multiple thereof) of such Security to be redeemed and that, on and after
the Redemption Date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof
will be reissued; and
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(g) that, if any Security contains a CUSIP or other identification
number as provided in Section 2.10, no representation is being made as to
the correctness of the CUSIP or other identification number either as
printed on the Securities or as contained in the notice of redemption and
that reliance may be placed only on the other identification numbers
printed on the Securities.
At the Company's request (which request may be revoked by the
Company at any time prior to the time at which the Trustee shall have given such
notice to the Holders), made in writing to the Trustee at least five days before
mailing the notice to Holders referred to in Section 3.01, the Trustee shall
give such notice of redemption in the name and at the expense of the Company.
If, however, the Company gives such notice to the Holders, the Company shall
concurrently deliver to the Trustee an Officers' Certificate stating that such
notice has been given.
SECTION 3.05. 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. Upon surrender of any
Securities to the Paying Agent, such Securities shall be paid at the Redemption
Price, plus accrued interest, if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed,
whether or not the Holder receives the notice. In any event, failure to give
such notice, or any defect therein, shall not affect the validity of the
proceedings for the redemption of Securities held by Holders to whom such notice
was properly given.
SECTION 3.06. Deposit of Redemption Price. Prior to any Redemption
Date, the Company shall deposit, or cause to be deposited, with the Paying Agent
(or, if the Company is acting as its own Paying Agent, shall segregate and hold
in trust as provided in Section 2.04) 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 thereof called for redemption on that date
that have been delivered by the Company to the Trustee for cancellation.
SECTION 3.07. Payment of Securities Called for Redemption. If notice
of redemption has been given in the manner provided above, the Securities or
portion of Securities specified in such notice to be redeemed shall become due
and payable on the Redemption Date at the Redemption Price stated therein,
together with accrued interest to such Redemption Date, and on and after such
date (unless the Company shall default in the payment of such Securities at the
Redemption Price and accrued interest to the Redemption Date, in which case the
principal and Accumulated Interest Amount, until paid, shall bear interest from
the Redemption Date at the rate prescribed in the Securities), such Securities
shall cease to accrue interest. Upon surrender of any Security for redemption in
accordance with a notice of redemption, such Security shall be paid and redeemed
by the Company at the Redemption Price, together with accrued interest, if any,
to the Redemption Date; provided that installments of interest shall be payable
to the Holders registered as such at the close of business on the relevant
Regular Record Date that is on or prior to the Redemption Date.
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SECTION 3.08. Securities Redeemed in Part. Upon surrender of any
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder a new Security equal in principal
amount to the unredeemed portion of such surrendered Security.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities. The Company shall pay the
principal of, premium, if any, and interest on the Securities on the dates and
in the manner provided in the Securities and this Indenture. An installment of
principal, premium, if any, or interest shall be considered paid on the date due
if the Trustee or Paying Agent (other than the Company, a Subsidiary of the
Company, or any Affiliate of any of them) holds on that date money designated
for and sufficient to pay the installment. If the Company or any Subsidiary of
the Company or any Affiliate of any of them, acts as Paying Agent, an
installment of principal, premium, if any, or interest shall be considered paid
on the due date if the entity acting as Paying Agent complies with the last
sentence of Section 2.04. As provided in Section 6.09, upon any bankruptcy or
reorganization procedure relative to the Company, the Trustee shall serve as the
Paying Agent and conversion agent, if any, for the Securities.
The Company shall pay interest on overdue principal, premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
the rate per annum specified in the Securities.
SECTION 4.02. Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
(which may be an office of the Trustee, Registrar or co-Registrar or any
Affiliate of any of them) where Securities may be surrendered for registration
of transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 12.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby initially designates the Corporate Trust Office
of the Trustee, located in the Borough of Manhattan, The City of New York, as
such office of the Company in accordance with Section 2.03.
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SECTION 4.03. Limitation on Indebtedness. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (other than the Securities and Indebtedness existing on the Closing
Date); provided that the Company and GST USA may Incur Indebtedness if, after
giving effect to the Incurrence of such Indebtedness and the receipt and
application of the proceeds therefrom, the Indebtedness to EBITDA Ratio would be
greater than zero and less than 5:1.
Notwithstanding the foregoing, the Company and any Restricted
Subsidiary (except as specified below) may Incur each and all of the following:
(i) Indebtedness outstanding at any time (including, but not limited
to, Indebtedness under the Tomen Facility) in an aggregate principal
amount not to exceed $320 million, less any amount of Indebtedness
permanently repaid as provided under Section 4.12;
(ii) Indebtedness (A) to the Company evidenced by a promissory note
or (B) to any of its Restricted Subsidiaries; provided that any subsequent
event which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any subsequent transfer of such Indebtedness
(other than to the Company or another Restricted Subsidiary) shall be
deemed, in each case, to constitute an Incurrence of such Indebtedness not
permitted by this clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to refinance or refund, then outstanding Indebtedness,
other than Indebtedness Incurred under clause (i), (ii), (iv), (v), (vii)
or (viii) of this paragraph, and any refinancings thereof in an amount not
to exceed the amount so refinanced or refunded (plus premiums, accrued
interest, fees and expenses); provided that Indebtedness the proceeds of
which are used to refinance or refund the Securities or Indebtedness that
is pari passu with, or subordinated in right of payment to, the Securities
shall only be permitted under this clause (iii) if (A) in case the
Securities are refinanced in part, or the Indebtedness to be refinanced is
pari passu with the Securities, such new Indebtedness, by its terms or by
the terms of any agreement or instrument pursuant to which such new
Indebtedness is outstanding, is expressly made pari passu with, or
subordinate in right of payment to, the remaining Securities, (B) in case
the Indebtedness to be refinanced is subordinated in right of payment to
the Securities, such new Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such new Indebtedness is
outstanding, is expressly made subordinate in right of payment to the
Securities at least to the extent that the Indebtedness to be refinanced
is subordinated to the Securities and (C) such new Indebtedness,
determined as of the date of Incurrence of such new Indebtedness, does not
mature prior to the Stated Maturity of the Indebtedness to be refinanced
or refunded, and the Average Life of such new Indebtedness is at least
equal to the remaining Average Life of the Indebtedness to be refinanced
or refunded; and provided further that in no event may Indebtedness of the
Company be refinanced by means of any Indebtedness of any Restricted
Subsidiary pursuant to this clause (iii);
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(iv) Indebtedness (A) in respect of performance, surety or appeal
bonds provided in the ordinary course of business, (B) under Currency
Agreements and Interest Rate Agreements; provided that such agreements do
not increase the Indebtedness of the obligor outstanding at any time other
than as a result of fluctuations in foreign currency exchange rates or
interest rates or by reason of fees, indemnities and compensation payable
thereunder; and (C) arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, or from Guarantees or
letters of credit, surety bonds or performance bonds securing any
obligations of the Company or any of the Restricted Subsidiaries pursuant
to such agreements, in any case Incurred in connection with the
disposition of any business, assets or Restricted Subsidiary (other than
Guarantees of Indebtedness Incurred by any Person acquiring all or any
portion of such business, assets or Restricted Subsidiary for the purpose
of financing such acquisition), in a principal amount not to exceed the
gross proceeds actually received by the Company or any Restricted
Subsidiary in connection with such disposition;
(v) Indebtedness of the Company not to exceed, at any one time
outstanding, two times the Net Cash Proceeds received by the Company after
the Closing Date from the issuance and sale of its Capital Stock (other
than Redeemable Stock) to a Person other than a Subsidiary of the Company
to the extent such Net Cash Proceeds have not been used pursuant to clause
(C)(2) of the first paragraph or clauses (iii), (iv) or (vi) of the second
paragraph of Section 4.05 to make a Restricted Payment; provided that such
Indebtedness does not mature prior to the Stated Maturity of the
Securities and has an Average Life longer than the Securities;
(vi) Indebtedness Incurred to finance the cost (including, without
limitation, the cost of design, development, construction, acquisition,
installation or integration) of network assets (including, without
limitation, equipment and real property and leasehold improvements that
are necessary to install or operate network assets; provided that in no
event shall the cost of any such real property and leasehold improvements
financed hereby exceed 20% of the total cost of the related network
assets) or inventory purchased or leased by the Company or any of its
Restricted Subsidiaries after the Closing Date;
(vii) Indebtedness under one or more revolving credit or working
capital facilities in an aggregate principal amount outstanding at any
time not to exceed the lesser of (A) $50 million and (B) 75% of the
consolidated book value of the accounts receivable of the Company and its
Restricted Subsidiaries; and
(viii) Indebtedness of the Company or GST USA to the extent the
proceeds thereof are promptly (a) used to purchase Securities tendered in
an Offer to Purchase made as a result of a Change of Control or (b)
deposited to defease the Securities under Article Eight.
(b) For purposes of determining any particular amount of
Indebtedness under this Section 4.03, (1) Indebtedness Incurred under the Tomen
Facility on or prior to the Closing Date shall be treated as Incurred pursuant
to clause (i) of the second paragraph of this Section 4.03
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and (2) Guarantees, Liens or obligations with respect to letters of credit
supporting Indebtedness otherwise included in the determination of such
particular amount shall not be included. For purposes of determining compliance
with this Section 4.03, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in the above
clauses, the Company, in its sole discretion, shall classify such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
SECTION 4.04. Limitation on Senior Subordinated Indebtedness. The
Company will not Incur any Indebtedness, other than the Securities, that is
expressly made subordinated in right of payment to any Senior Indebtedness
unless such Indebtedness, by its terms and by the terms of any agreement or
instrument pursuant to which such Indebtedness is outstanding is expressly made
pari passu with, or subordinated in right of payment to, the Securities pursuant
to provisions substantially similar to those contained in Article Eleven;
provided, however, that the foregoing limitation shall not apply to distinctions
between categories of Senior Indebtedness that exist by reason of any Liens or
Guarantees arising or created in respect of some but not all Senior
Indebtedness.
SECTION 4.05. Limitation on Restricted Payments. The Company will
not, and will not permit any Restricted Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or make any distribution on its Capital Stock
(other than dividends or distributions payable solely in shares of its or such
Restricted Subsidiary's Capital Stock (other than Redeemable Stock) of the same
class held by such holders or in options, warrants or other rights to acquire
such shares of Capital Stock) held by Persons other than the Company or any of
its Restricted Subsidiaries (and other than pro rata dividends or distributions
on Common Stock of Restricted Subsidiaries), (ii) purchase, redeem, retire or
otherwise acquire for value any shares of Capital Stock of the Company
(including options, warrants or other rights to acquire such shares of Capital
Stock) held by Persons other than any Wholly Owned Restricted Subsidiaries,
(iii) make any voluntary or optional principal payment, or voluntary or optional
redemption, repurchase, defeasance, or other acquisition or retirement for
value, of Indebtedness of the Company that is subordinated in right of payment
to the Securities, or (iv) make any Investment, other than a Permitted
Investment, in any Person (such payments or any other actions described in
clauses (i) through (iv) being collectively "Restricted Payments") if, at the
time of, and after giving effect to, the proposed Restricted Payment: (A) a
Default or Event of Default shall have occurred and be continuing, (B) the
Company could not Incur at least $1.00 of Indebtedness under the first paragraph
of Section 4.03 or (C) the aggregate amount of all Restricted Payments (the
amount, if other than in cash, to be determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a Board
Resolution) made after the Closing Date shall exceed the sum of (1) 50% of the
aggregate amount of the Adjusted Consolidated Net Income (or, if the Adjusted
Consolidated Net Income is a loss, minus 100% of such amount) (determined by
excluding income resulting from transfers of assets by the Company or a
Restricted Subsidiary to an Unrestricted Subsidiary) accrued on a cumulative
basis during the period (taken as one accounting period) beginning on the first
day of the fiscal quarter immediately following the Closing Date and ending on
the last day of the last fiscal quarter preceding the Transaction Date for which
reports have been filed pursuant to Section 4.19 plus (2) the aggregate Net Cash
Proceeds received by the Company after the Closing Date from the
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issuance and sale permitted by this Indenture of its Capital Stock (other than
Redeemable Stock) to a Person who is not a Subsidiary of the Company, or from
the issuance to a Person who is not a Subsidiary of the Company of any options,
warrants or other rights to acquire Capital Stock of the Company (in each case,
exclusive of any Redeemable Stock or any options, warrants or other rights that
are redeemable at the option of the holder, or are required to be redeemed,
prior to the Stated Maturity of the Securities), in each case except to the
extent such Net Cash Proceeds are used to Incur Indebtedness pursuant to clause
(v) of the second paragraph of Section 4.03, plus (3) an amount equal to the net
reduction in Investments (other than reductions in Permitted Investments and
reductions in Investments made pursuant to clause (vi) of the second paragraph
of this Section 4.05) in any Person resulting from payments of interest on
Indebtedness, dividends, repayments of loans or advances, or other transfers of
assets, in each case to the Company or any Restricted Subsidiary (except to the
extent any such payment is included in the calculation of Adjusted Consolidated
Net Income), or from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of
"Investments"), not to exceed the amount of Investments previously made by the
Company and its Restricted Subsidiaries in such Person.
The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the date of
declaration thereof if, at said date of declaration, such payment would
comply with the foregoing paragraph;
(ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of
payment to the Securities, including premium, if any, and accrued and
unpaid interest, with the proceeds of, or in exchange for, Indebtedness
Incurred under clause (iii) of the second paragraph of Section 4.03;
(iii) the repurchase, redemption or other acquisition of Capital
Stock of the Company in exchange for, or out of the proceeds of a
substantially concurrent offering of, shares of Capital Stock (other than
Redeemable Stock) of the Company;
(iv) the acquisition of Indebtedness of the Company which is
subordinated in right of payment to the Securities, in exchange for, or
out of the proceeds of, a substantially concurrent offering of, shares of
the Capital Stock of the Company (other than Redeemable Stock);
(v) payments or distributions, in the nature of satisfaction of
dissenters' rights, pursuant to or in connection with a consolidation,
merger or transfer of assets that complies with the provisions of Article
Five;
(vi) Investments in any Person or Persons (other than an Affiliate
(other than a Subsidiary) of the Company), the primary business of which
is related, ancillary or complementary to the business of the Company and
its Restricted Subsidiaries on the date of such Investments, in an
aggregate amount not to exceed $50 million plus, (a) in any
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fiscal year, an amount not to exceed 10% of the Company's Consolidated
EBITDA (if positive) for the immediately preceding fiscal year, (b) an
amount not to exceed the Net Cash Proceeds received by the Company after
May 13, 1997 from the issuance and sale permitted by this Indenture of its
Capital Stock (other than Redeemable Stock) to a Person that is not a
Subsidiary of the Company, except to the extent such Net Cash Proceeds are
used to Incur Indebtedness pursuant to clause (v) under Section 4.03 or to
make Restricted Payments pursuant to clause (C)(2) of the first paragraph
or clause (iii) or (iv) of this paragraph of this Section 4.05 and (c) the
net reduction in Investments in any Person made pursuant to this clause
(vi), except to the extent such reduction is included in the calculation
of Adjusted Consolidated Net Income; provided that the net reduction in
any such Investment shall not exceed the amount of Investments previously
made in such Person;
(vii) Investments by the Company or a Restricted Subsidiary made
pursuant to the second paragraph of Section 4.11, in an aggregate amount
not to exceed $25 million; and
(viii) cash payments in lieu of the issuance of fractional Common
Shares upon conversion (including mandatory conversion) of the Convertible
Notes provided for in the Convertible Notes Indenture or the Redeemable
Preferred Shares;
provided that, except in the case of clauses (i) and (iii), no Default or Event
of Default shall have occurred and be continuing or occur as a consequence of
the actions or payments set forth herein.
Each Restricted Payment permitted pursuant to the preceding
paragraph (other than the Restricted Payment referred to in clause (ii) thereof
and an exchange of Capital Stock for Capital Stock or Indebtedness referred to
in clause (iii) or (iv) thereof), and the Net Cash Proceeds from any issuance of
Capital Stock referred to in clauses (iii), (iv) and (vi) shall be included in
calculating whether the conditions of clause (C) of the first paragraph of this
Section 4.05 have been met with respect to any subsequent Restricted Payments.
In the event the proceeds of an issuance of Capital Stock of the Company are
used for the redemption, repurchase or other acquisition of the Securities or
Indebtedness that is pari passu with the Securities, then the Net Cash Proceeds
of such issuance shall be included in clause (C) of the first paragraph of this
Section 4.05 only to the extent such proceeds are not used for such redemption,
repurchase or other acquisition of Indebtedness.
SECTION 4.06. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (iii) make loans or
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advances to the Company or any other Restricted Subsidiary or (iv) transfer any
of its property or assets to the Company or any other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions:
(i) existing on the Closing Date in this Indenture or any other
agreement in effect on the Closing Date, and any extensions, refinancings,
renewals or replacements of such agreements; provided that the
encumbrances and restrictions in any such extensions, refinancings,
renewals or replacements are no less favorable in any material respect to
the Holders than those encumbrances or restrictions that are then in
effect and that are being extended, refinanced, renewed or replaced;
(ii) existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or assets
of such Person acquired by the Company or any Restricted Subsidiary,
existing at the time of such acquisition and not incurred in contemplation
thereof, which encumbrances or restrictions are not applicable to any
Person or the property or assets of any Person other than such Person or
the property or assets of such Person so acquired;
(iv) in the case of clause (iv) of the first paragraph of this
Section 4.06, (A) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease, license,
conveyance or contract or similar property or asset, (B) existing by
virtue of any transfer of, agreement to transfer, option or right with
respect to, or Lien on, any property or assets of the Company or any
Restricted Subsidiary not otherwise prohibited by this Indenture or (C)
arising or agreed to in the ordinary course of business, not relating to
any Indebtedness, and that do not, individually or in the aggregate,
detract from the value of property or assets of the Company or any
Restricted Subsidiary in any manner material to the Company or any
Restricted Subsidiary;
(v) with respect to a Restricted Subsidiary and imposed pursuant to
an agreement that has been entered into for the sale or disposition of all
or substantially all of the Capital Stock of, or property and assets of,
such Restricted Subsidiary;
(vi) with respect to any Development Company, imposed pursuant to or
in connection with any Indebtedness Incurred by such Development Company
to finance at least 50% of the total financing required for the
development and construction of all of such Development Company's
alternative access networks or any Indebtedness Incurred to refinance or
replace such Indebtedness; provided that (a) such Indebtedness (including
such refinancing Indebtedness) is permitted to be Incurred under Section
4.03, (b) such encumbrances and restrictions are no more restrictive in
any material respect than those encumbrances and restrictions existing
under the Tomen Facility as in effect on the Closing Date and (c) such
encumbrances and restrictions shall only apply to such Development Company
for so long as such Indebtedness (or such refinancing Indebtedness)
remains outstanding; or
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(vii) with respect to any Development Company (a "Restricted
Development Company"), imposed pursuant to or in connection with any
Indebtedness Incurred by another Development Company to finance at least
50% of the total financing required for the development and construction
of all of such other Development Company's alternative access networks or
any Indebtedness Incurred to refinance or replace such Indebtedness;
provided that (a) such encumbrances and restrictions shall not apply to
such Restricted Development Company prior to the occurrence of an event of
default under such Indebtedness (or refinancing Indebtedness), (b) such
Indebtedness (including such refinancing Indebtedness) is permitted to be
Incurred under Section 4.03, (c) such encumbrances and restrictions are no
more restrictive in any material respect than those contemplated by the
Tomen Facility as in effect on the Closing Date and (d) at least 50% of
the total financing required for the development and construction of all
of such Restricted Development Company's alternative access networks was
provided by the holder of the Indebtedness of such other Development
Company.
Nothing contained in this Section 4.06 shall prevent the Company or
any Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.10 or (2) restricting the sale
or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 4.07. Limitation on the Issuance and Sale of Capital Stock
of Restricted Subsidiaries. The Company will not sell, and will not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) except
(i) to the Company or a Wholly Owned Restricted Subsidiary;
(ii) issuances or sales to foreign nationals of shares of Capital
Stock of foreign Restricted Subsidiaries, to the extent required by
applicable law;
(iii) if, immediately after giving effect to such issuance or sale,
such Restricted Subsidiary would no longer constitute a Restricted
Subsidiary; or
(iv) a sale of Common Stock of Phoenix Fiber, and in connection and
concurrently with such sale, a sale of Common Stock of GST Tucson
Lightwave, Inc.; provided that the proceeds of any such sale under this
clause (iv) shall be applied in accordance with clause (A) or (B) of the
first paragraph of Section 4.12.
SECTION 4.08. Limitation on Issuances of Guarantees by Restricted
Subsidiaries. The Company will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee any Indebtedness of the Company ("Guaranteed
Indebtedness"), unless (i) such Restricted Subsidiary simultaneously executes
and delivers a supplemental indenture to this Indenture providing for a
Guarantee (a "Subsidiary Guarantee") of payment of the Securities by
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such Restricted Subsidiary and (ii) such Restricted Subsidiary waives and will
not in any manner whatsoever claim or take the benefit or advantage of, any
rights of reimbursement, indemnity or subrogation or any other rights against
the Company as a result of any payment by such Restricted Subsidiary under its
Subsidiary Guarantee; provided that this paragraph shall not be applicable to
any Guarantee of any Restricted Subsidiary that (x) existed at the time such
Person became a Restricted Subsidiary and (y) was not Incurred in connection
with, or in contemplation of, such Person becoming a Restricted Subsidiary. If
the Guaranteed Indebtedness is (A) pari passu with the Securities then the
Guarantee of such Guaranteed Indebtedness shall be pari passu with, or
subordinated to, the Subsidiary Guarantee or (B) subordinated to the Securities,
then the Guarantee of such Guaranteed Indebtedness shall be subordinated to the
Subsidiary Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Securities.
Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary may provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Company of all of the Company's
and each Restricted Subsidiary's Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by this Indenture) or (ii) the release or discharge of the
Guarantee which resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such Guarantee.
SECTION 4.09. Limitation on Transactions with Shareholders and
Affiliates. The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any holder (or any
Affiliate of such holder) of 5% or more of any class of Capital Stock of the
Company or any Restricted Subsidiary or with any Affiliate of the Company or any
Restricted Subsidiary, except upon fair and reasonable terms no less favorable
to the Company or such Restricted Subsidiary than could be obtained at the time
of such transaction or, if such transaction is pursuant to a written agreement,
at the time of the execution of the agreement providing therefor, in a
comparable arm's-length transaction with a Person that is not such a holder or
an Affiliate.
The foregoing limitation does not limit, and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors or (B) for which the Company or a Restricted Subsidiary
delivers to the Trustee a written opinion of a nationally recognized investment
banking firm stating that the transaction is fair to the Company or such
Restricted Subsidiary from a financial point of view; (ii) any transaction
solely between the Company and any of its Wholly Owned Restricted Subsidiaries
or solely between Wholly Owned Restricted Subsidiaries; (iii) the payment of
reasonable and customary regular fees (including through the issuance of shares
of Common Stock of the Company or options, warrants or other rights to acquire
such shares) to directors of the Company who are not employees of the Company or
any of its Subsidiaries; (iv) any payments or other transactions pursuant to any
tax-sharing agreement between the Company and any other Person with which the
Company files a consolidated tax return or with which the Company is part of a
consolidated group for tax purposes; or (v) any Restricted Payments not
prohibited by Section 4.05. Notwithstanding the
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foregoing, any transaction or series of transactions covered by the first
paragraph of this Section 4.09 and not covered by clauses (ii) through (vi) of
this paragraph, the aggregate amount of which exceeds $500,000 in value, must be
approved or determined to be fair in the manner provided for in clause (i)(A) or
(B) above.
SECTION 4.10. Limitation on Liens. The Company will not, and will
not permit any Restricted Subsidiary to, create, incur, assume or suffer to
exist any Lien on any of its assets or properties of any character, or any
shares of Capital Stock or Indebtedness of any Restricted Subsidiary
(collectively, "Protected Property"), without making effective provision for all
of the Securities and all other amounts due under this Indenture to be directly
secured equally and ratably with (or, if the obligation or liability to be
secured by such Lien is subordinated in right of payment to the Securities,
prior to) the obligation or liability secured by such Lien.
The foregoing limitation does not apply to
(i) Liens existing on the Closing Date;
(ii) Liens granted after the Closing Date on any assets or Capital
Stock of the Company or its Restricted Subsidiaries securing the
Securities or created in favor of the Trustee or the Holders of the
Securities;
(iii) Liens with respect to the assets of a Restricted Subsidiary
granted by such Restricted Subsidiary to the Company or a Wholly Owned
Restricted Subsidiary to secure Indebtedness owing to the Company or such
other Restricted Subsidiary;
(iv) Liens securing Indebtedness which is Incurred to refinance
secured Indebtedness which is permitted to be Incurred under clause (iii)
of the second paragraph of Section 4.03; provided that such Liens do not
extend to or cover any property or assets of the Company or any Restricted
Subsidiary other than the property or assets securing the Indebtedness
being refinanced;
(v) Liens upon or Capital Leases with respect to inventory, property
or equipment acquired or held by the Company or any of its Restricted
Subsidiaries to secure all or a part of the purchase price therefor or the
Company's or such Restricted Subsidiary's obligations under such lease;
provided that such Liens do not extend to or cover any property or assets
of the Company or any Restricted Subsidiary other than the inventory,
property or equipment acquired;
(vi) Liens on assets or property of, or the Capital Stock of, a
Development Company securing Indebtedness Incurred under clause (i) of the
second paragraph of Section 4.03 to finance at least 50% of the total
financing for the development and construction of the alternative access
networks owned by such Development Company; provided such Liens do not
extend to or cover any other property or assets of the Company or any of
its Restricted Subsidiaries;
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(vii) Liens securing Senior Indebtedness permitted to be Incurred
under this Indenture;
(viii) Liens on any property or assets of a Restricted Subsidiary
securing Indebtedness of such Restricted Subsidiary permitted to be
Incurred under this Indenture; or
(ix) Permitted Liens.
SECTION 4.11. Limitation on Investments. The Company will not, and
will not permit any Restricted Subsidiary to, (i) make any Investment in any
Person (including an Unrestricted Subsidiary) that during its most recent fiscal
year derived or in its current fiscal year is expected by the Board of Directors
of the Company to derive more than $250,000 in revenues from, or in its most
recent fiscal year spent or in its current fiscal year is expected by the Board
of Directors of the Company to spend more than $250,000 on, operations or
activities located outside the continental United States (other than in the
State of Hawaii or between the continental United States and the State of
Hawaii) (an "International Business") or (ii) acquire or own (directly or
indirectly), other than through an Unrestricted Subsidiary, any entity, business
or asset that is primarily located outside the continental United States (other
than in the State of Hawaii) or any right with respect to any of the foregoing
(an "International Asset").
Notwithstanding the foregoing, and subject to Section 4.05, the
Company and its Restricted Subsidiaries may make an Investment in an
Unrestricted Subsidiary which owns, intends to acquire or has rights with
respect to an International Business or International Asset provided that the
aggregate amount of such Investments does not exceed (i) $25 million plus, (A)
in any fiscal year, an amount not to exceed 10% of the Company's Consolidated
EBITDA (if positive) for the immediately preceding fiscal year and (B) an amount
not to exceed the Net Cash Proceeds received by the Company after May 13, 1997
from the issuance and sale permitted by this Indenture of its Capital Stock
(other than Redeemable Stock) to a Person who is not a Subsidiary of the
Company, less (ii) the amount of any Investments made pursuant to the first
paragraph, or the amount of any Restricted Payment made pursuant to clause
(iii), (iv) or (vi) of the second paragraph, of Section 4.05; provided that the
International Business or International Assets are related, ancillary or
complementary to the primary business of the Company and its Restricted
Subsidiaries on the date of such Investment.
SECTION 4.12. Limitation on Asset Sales. The Company will not, and
will not permit any Restricted Subsidiary to, consummate any Asset Sale, unless
(i) the consideration received by the Company or such Restricted Subsidiary is
at least equal to the fair market value of the assets sold or disposed of and
(ii) at least 85% of the consideration received consists of cash or Temporary
Cash Investments; provided, however, that clause (ii) shall not apply to
long-term assignments of capacity in a network. In the event and to the extent
that the Net Cash Proceeds received by the Company or its Restricted
Subsidiaries from one or more Asset Sales occurring on or after the Closing Date
in any period of 12 consecutive months exceed 10% of Adjusted Consolidated Net
Tangible Assets (determined as of the date closest to the commencement of such
12-month period for which a consolidated balance sheet of the Company
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and its Subsidiaries has been prepared), then the Company shall or shall cause
the relevant Restricted Subsidiary to (i) within 12 months after the date Net
Cash Proceeds so received exceed 10% of Adjusted Consolidated Net Tangible
Assets (A) apply an amount equal to such excess Net Cash Proceeds to permanently
repay Senior Indebtedness of the Company, Indebtedness of the Company ranking
pari passu with the Securities or Indebtedness of any Restricted Subsidiary, in
each case owing to a Person other than the Company or any of its Restricted
Subsidiaries or (B) invest an equal amount, or the amount not so applied
pursuant to clause (A) (or enter into a definitive agreement committing to so
invest within 12 months after the date of such agreement), in property or assets
of a nature or type or that are used in a business (or in a company having
property and assets of a nature or type, or engaged in a business) similar or
related to the nature or type of the property and assets of, or the business of,
the Company and its Restricted Subsidiaries existing on the date of such
investment (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution) and (ii)
apply (no later than the end of the 12-month period referred to in clause (i))
such excess Net Cash Proceeds (to the extent not applied pursuant to clause (i))
as provided in the following paragraph of this Section 4.12. The amount of such
excess Net Cash Proceeds required to be applied (or to be committed to be
applied) during such 12-month period as set forth in clause (i) of the preceding
sentence and not applied as so required by the end of such period shall
constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount
of Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to
this Section 4.12 totals at least $5.0 million, the Company must commence, not
later than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders on a pro rata basis an aggregate principal amount of
Securities equal to the Excess Proceeds on such date, at a purchase price equal
to 101% of the principal amount of the Securities plus the Accumulated Interest
Amount, plus, in each case, other accrued interest to the Payment Date.
SECTION 4.13. Repurchase of Securities upon a Change of Control. The
Company must commence, within 30 days of the occurrence of a Change of Control,
and consummate an Offer to Purchase for all Securities then outstanding, at a
purchase price equal to 101% of the principal amount thereof plus the
Accumulated Interest Amount, plus other accrued interest to the Payment Date.
Prior to the mailing of the notice to Holders commencing such Offer to Purchase,
but in any event within 30 days following any Change of Control, the Company
covenants to (i) repay in full all indebtedness of the Company that would
prohibit the repurchase of the Securities pursuant to such Offer to Purchase or
(ii) obtain any requisite consents under instruments governing any such
indebtedness of the Company to permit the repurchase of the Securities. The
Company shall first comply with the covenant in the preceding sentence before it
shall repurchase Securities pursuant to this Section 4.13.
SECTION 4.14. Existence. Subject to compliance with the terms of
Articles Four and Five of this Indenture, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence and the existence of each of its Restricted Subsidiaries in accordance
with the respective organizational documents of the Company and each such
Subsidiary and the rights (whether pursuant to charter, partnership
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certificate, agreement, statute or otherwise), material licenses and franchises
of the Company and each such Subsidiary; provided that the Company shall not be
required to preserve any such right, license or franchise, or the existence of
any Restricted Subsidiary (other than of the Company), if the maintenance or
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries taken as a whole.
SECTION 4.15. Payment of Taxes and Other Claims. The Company will
pay or discharge and shall cause each of its Subsidiaries to pay or discharge,
or cause to be paid or discharged, before the same shall become delinquent (i)
all material taxes, assessments and governmental charges levied or imposed upon
(a) the Company or any such Subsidiary, (b) the income or profits of any such
Subsidiary which is a corporation or (c) the property of the Company or any such
Subsidiary and (ii) all material lawful claims for labor, materials and supplies
that, if unpaid, might by law become a lien upon the property of the Company or
any such Subsidiary; provided that the Company shall not be required to pay or
discharge, or cause to be paid or discharged, any such tax, assessment, charge
or claim the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings and for which adequate reserves have been
established.
SECTION 4.16. Maintenance of Properties and Insurance. The Company
will cause all properties used or useful in the conduct of its business or the
business of any of its Restricted Subsidiaries, to be maintained and kept in
reasonable condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the reasonable
business judgment of the Company may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; provided that nothing in this Section 4.16 shall prevent the Company or
any such Subsidiary from discontinuing the use, operation or maintenance of any
of such properties or disposing of any of them, if such discontinuance or
disposal is, in the reasonable business judgment of the Company, desirable in
the conduct of the business of the Company or such Subsidiary.
The Company will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, including, but not limited to,
products liability insurance and public liability insurance, with reputable
insurers or with the government of the United States of America, or an agency or
instrumentality thereof, in such amounts, with such deductibles and by such
methods as shall be customary for corporations similarly situated in the
industry in which the Company or such Restricted Subsidiary, as the case may be,
is then conducting business.
SECTION 4.17. Notice of Defaults. In the event that the Company
becomes aware of any Default or Event of Default, the Company, promptly after it
becomes aware thereof, will give written notice thereof to the Trustee.
SECTION 4.18. Compliance Certificates. (a) The Company shall deliver
to the Trustee, within 90 days after the end of the Company's fiscal year, an
Officers' Certificate
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stating whether or not the signers know of any Default or Event of Default that
occurred during such fiscal year. Such certificates shall contain a
certification from the principal executive officer, principal financial officer
or principal accounting officer of the Company that a review has been conducted
of the activities of the Company and the Restricted Subsidiaries and the
Company's and the Restricted Subsidiaries' performance under this Indenture and
that, to the best knowledge of such officer, the Company has complied with all
conditions and covenants under this Indenture. For purposes of this Section
4.18, such compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Indenture. If any such officer
knows of such a Default or Event of Default, the certificate shall describe any
such Default or Event of Default and its status.
(b) The Company shall deliver to the Trustee, within 90 days after
the end of its fiscal year, a certificate signed by the Company's independent
certified public accountants stating (i) that their audit examination has
included a review of the terms of this Indenture and the Securities as they
relate to accounting matters, (ii) that they have read the most recent Officers'
Certificate delivered to the Trustee pursuant to paragraph (a) of this Section
4.18 and (iii) whether, in connection with their audit examination, anything
came to their attention that caused them to believe that the Company was not in
compliance with any of the terms, covenants, provisions or conditions of Article
Four and Section 5.01 of this Indenture as they pertain to accounting matters
and, if any Default or Event of Default has come to their attention, specifying
the nature and period of existence thereof; provided that such independent
certified public accountants shall not be liable in respect of such statement by
reason of any failure to obtain knowledge of any such Default or Event of
Default that would not be disclosed in the course of an audit examination
conducted in accordance with generally accepted auditing standards in effect at
the date of such examination.
(c) Within 90 days of the end of each of the Company's fiscal years,
the Company shall deliver to the Trustee a list of all Significant Subsidiaries.
The Trustee shall have no duty with respect to any such list except to keep it
on file and make it available for inspection by the Holders upon reasonable
notice to the Trustee and during normal business hours.
SECTION 4.19. Commission Reports and Reports to Holders. Whether or
not the Company is required to file reports with the Commission, if any
Securities are outstanding, the Company shall file with the Commission all such
reports and other information as it would be required to file with the
Commission by Sections 13(a) or 15(d) under the Exchange Act. The Company shall
supply the Trustee and each Holder of Securities or shall supply to the Trustee
for forwarding to each Holder, without cost to such Holder or the Trustee,
copies of such reports or other information.
SECTION 4.20. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will 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 or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or that may
affect
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the covenants or the performance of this Indenture; and (to the extent that it
may lawfully do so) the Company hereby expressly waives all benefit or advantage
of any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.21. Additional Amounts. Any payments made by the Company
under or with respect to the Securities will be made free and clear of and
without withholding or deduction for or on account of any present or future tax,
duty, levy, impost, assessment or other governmental charge (including
penalties, interest and other liabilities related thereto) imposed or levied by
or on behalf of the Government of Canada or of any province or territory thereof
or by any authority or agency therein or thereof having power to tax
(hereinafter "Taxes"), unless the Company is required to withhold or deduct
Taxes by law or by the interpretation or administration thereof. If the Company
is required to withhold or deduct any amount for or on account of Taxes from any
payment made under or with respect to the Securities, the Company will pay such
additional amounts ("Additional Amounts") as may be necessary, so that the net
amount received by each Holder of Securities (including Additional Amounts)
after such withholding or deduction will not be less than the amount such Holder
would have received if such Taxes had not been withheld or deducted; provided,
however, that no Additional Amounts will be payable with respect to a payment
made to a Holder (an "Excluded Holder") (i) with which the Company does not deal
at arm's length (within the meaning of the Income Tax Act (Canada)) at the time
of making such payment, or (ii) which is subject to such Taxes by reason of its
being connected with Canada or any province or territory thereof otherwise than
solely by reason of the Holder's activity in connection with purchasing the
Securities, by the mere holding of Securities or by reason of the receipt of
payments thereunder. The Company will, upon written request of any Holder (other
than an Excluded Holder), reimburse such Holder, for the amount of (i) any Taxes
so levied or imposed and paid by such Holder as a result of payments made under
or with respect to the Securities and (ii) any Taxes so levied or imposed with
respect to any reimbursement under the foregoing clause (i), but excluding any
such Taxes on such Holder's net income so that the net amount received by such
Holder after such reimbursement will not be less than the net amount the Holder
would have received if Taxes on such reimbursement had not been imposed.
At least 30 days prior to each date on which any payment under or
with respect to the Securities is due and payable, if the Company will be
obligated to pay Additional Amounts with respect to such payment, the Company
will deliver to the Trustee an Officers' Certificate stating the fact that such
Additional Amounts will be payable and the amounts so payable and will set forth
such other information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date. Whenever in this Indenture there is
mentioned, in any context, the payment of principal (or premium, if any),
Redemption Price, interest or any other amount payable under or with respect to
any Security, such mention shall be deemed to include mention of the payment of
Additional Amounts to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof.
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ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Consolidation, Merger and Sale of Assets. The Company
shall not consolidate with, merge with or into, or sell, convey, transfer, lease
or otherwise dispose of all or substantially all of its property and assets (as
an entirety or substantially an entirety in one transaction or a series of
related transactions) to, any Person (other than a consolidation or merger with
or into a Wholly Owned Restricted Subsidiary with a positive net worth; provided
that, in connection with any such merger or consolidation, no consideration
(other than Common Stock in the surviving Person) shall be issued or distributed
to the stockholders of the Company) or permit any Person to merge with or into
the Company unless:
(i) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the
Company is merged or that acquired or leased such property and assets of
the Company shall be a corporation organized and validly existing under
the laws of the United States of America or any jurisdiction thereof and
shall expressly assume, by a supplemental indenture, executed and
delivered to the Trustee, all of the obligations of the Company on all of
the Securities and under this Indenture;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a pro
forma basis, the Company or any Person becoming the successor obligor of
the Securities shall have a Consolidated Net Worth equal to or greater
than the Consolidated Net Worth of the Company immediately prior to such
transaction;
(iv) immediately after giving effect to such transaction on a pro
forma basis the Company or any Person becoming the successor obligor of
the Securities could Incur at least $1.00 of Indebtedness under the first
paragraph of Section 4.03(a); and
(v) the Company delivers to the Trustee an Officers' Certificate
(attaching the arithmetic computations to demonstrate compliance with
clauses (iii) and (iv)) and Opinion of Counsel, in each case stating that
such consolidation, merger or transfer and such supplemental indenture
complies with this provision and that all conditions precedent provided
for herein relating to such transaction have been complied with; provided,
however, that clauses (iii) and (iv) above do not apply if, in the good
faith determination of the Board of Directors of the Company, whose
determination shall be evidenced by a Board Resolution, the principal
purpose of such transaction is to change the jurisdiction of incorporation
of the Company to a state in the United States and any such transaction
shall not have as one of its purposes the evasion of the foregoing
limitations.
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SECTION 5.02. Successor Substituted. Upon any consolidation or
merger, or any sale, conveyance, transfer or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; provided that the Company shall not be released from its
obligations to pay the principal of, premium, if any, or interest on the
Securities in the case of a lease of all or substantially all of its property
and assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. An "Event of Default" shall occur
with respect to the Securities if:
(a) the Company defaults in the payment of principal of (or premium,
if any, on) any Security when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise;
(b) the Company defaults in the payment of interest on any Security
when the same becomes due and payable, and such default continues for a
period of 30 days;
(c) the Company defaults in the performance of or breaches any other
covenant or agreement in this Indenture or under the Securities and such
default or breach continues for a period of 30 consecutive days after
written notice by the Trustee or the Holders of 25% or more in aggregate
principal amount of Securities;
(d) there occurs with respect to any issue or issues of Indebtedness
of the Company or any Significant Subsidiary having an outstanding
principal amount of $5 million or more in the aggregate for all such
issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (I) an event of default that has caused the holder
thereof to declare such Indebtedness to be due and payable prior to its
Stated Maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled within 30 days of
such acceleration and/or (II) the failure to make a principal payment at
the final (but not any interim) fixed maturity and such defaulted payment
shall not have been made, waived or extended within 30 days of such
payment default;
(e) any final judgment or order (not covered by insurance) for the
payment of money in excess of $5 million in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Significant Subsidiary and shall not
be paid or discharged, and there shall be any period of 30 consecutive
days following
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entry of the final judgment or order that causes the aggregate amount for
all such final judgments or orders outstanding and not paid or discharged
against all such Persons to exceed $5 million during which a stay of
enforcement of such final judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect;
(f) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (B)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all of the property and assets of
the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary
and, in each case, such decree or order shall remain unstayed and in
effect for a period of 30 consecutive days; or
(g) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an
order for relief in an involuntary case under any such law, (B) consents
to the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Company or any Significant Subsidiary or for all or substantially all of
the property and assets of the Company or any Significant Subsidiary or
(C) effects any general assignment for the benefit of creditors.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in clause (f) or (g) of Section 6.01 that occurs with
respect to the Company) occurs and is continuing under this Indenture, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Securities, by written notice to the Company (and to the Trustee if
such notice is given by the Holders), may, and the Trustee at the request of
such Holders shall, declare the principal of, premium, if any, and accrued
interest, on the Securities to be immediately due and payable. Upon a
declaration of acceleration, such principal, premium, if any, and accrued
interest shall be immediately due and payable. In the event of a declaration of
acceleration because an Event of Default set forth in clause (d) of Section 6.01
has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (d) shall be remedied or cured by the
Company or the relevant Significant Subsidiary or waived by the holders of the
relevant Indebtedness within 60 days after the declaration of acceleration with
respect thereto. If an Event of Default specified in clause (f) or (g) of
Section 6.01 occurs with respect to the Company the principal of, premium, if
any, and accrued interest on the Securities then outstanding shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may, and at the direction of the Holders of not less
than a majority of the outstanding principal amount of the Securities shall,
pursue any available remedy by
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proceeding at law or in equity to collect the payment of principal of, premium,
if any, 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.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections 6.02,
6.07 and 9.02, the Holders of at least a majority in principal amount of the
outstanding Securities, by written notice to the Company and to the Trustee, may
waive all past Defaults and Events of Default and rescind and annul a
declaration of acceleration (except a Default in the payment of principal of,
premium, if any, or interest on any Security as specified in clause (a) or (b)
of Section 6.01 or in respect of a covenant or provision of this Indenture which
cannot be modified or amended without the consent of the holder of each
outstanding Security affected) if (i) all existing Events of Default, other than
the nonpayment of principal of, premium, if any, or interest on the Securities
that have become due solely by such declaration of acceleration, have been cured
or waived and (ii) the rescission would not conflict with any judgment or decree
of a court of competent jurisdiction. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.
SECTION 6.05. Control by Majority. The Holders of at least a
majority in aggregate principal amount of the outstanding Securities may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture, that may involve the Trustee in personal liability, or that
the Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Securities not joining in the giving of such direction and may take
any other action it deems proper that is not inconsistent with any such
direction received from Holders of Securities pursuant to this Section 6.05.
SECTION 6.06. Limitation on Suits. A Holder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(i) the Holder gives the Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(iii) such Holder or Holders offer and, if requested provide, the
Trustee indemnity satisfactory to the Trustee against any costs,
liabilities or expenses which may be incurred in compliance with such
request;
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(iv) the Trustee does not comply with the request within 60 days
after receipt of the written request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Securities do not give the
Trustee a direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section
6.06, the Trustee shall comply with TIA Section 316(a) in making any
determination of whether the Holders of the required aggregate principal amount
of outstanding Securities have concurred in any request or direction of the
Trustee to pursue any remedy available to the Trustee or the Holders with
respect to this Indenture or the Securities or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Security to
receive payment of the principal of, premium, if any, or interest on such
Security, or to bring suit for the enforcement of any such payment, on or after
the due date expressed in such Security, shall not be impaired or affected
without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default in
payment of principal, premium or interest specified in clause (a), (b) or (c) of
Section 6.01 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Company or any other
obligor of the Securities for the whole amount of principal, premium, if any,
and accrued interest remaining unpaid, together with interest on overdue
principal, premium, if any, and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
specified in the Securities, and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Securities), its creditors or its
property and shall be entitled and empowered to collect and receive any monies,
securities or other property payable or deliverable upon conversion or exchange
of the Securities or upon any such claims and to distribute the same, and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such 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 to it for the
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reasonable compensation, expenses, disbursements and advances of the Trustee,
its agent and counsel, and any other amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to empower the Trustee to authorize or
consent to, or accept or adopt on behalf of any Holder, any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money pursuant
to this Article Six, it shall pay out the money in the following order:
First: to the Trustee for all amounts due under Section 7.07;
Second: to the Holders for amounts then due and unpaid for principal
of, premium, if any, and interest on the Securities in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities for principal, premium, if any, and interest,
respectively; and
Third: to the Company or any other obligors of the Securities, as
their interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
6.10.
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 may require any party
litigant in such suit to file an undertaking to pay the costs of the suit, and
the court may assess reasonable costs, including reasonable attorneys' fees,
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 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 of this Indenture, or a suit by Holders of more than 10% in principal
amount of the outstanding Securities.
SECTION 6.12. Restoration of Rights and Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then,
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Company, Trustee and the Holders shall continue as though no
such proceeding had been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Securities in Section 2.06, no right or remedy herein
conferred upon or reserved to the Trustee
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or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article Six or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General. The duties and responsibilities of the
Trustee shall be as provided by the TIA and as set forth herein. Notwithstanding
the foregoing, no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. Whether or not herein expressly so provided, 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 Article Seven.
SECTION 7.02. Certain Rights of Trustee. Subject to TIA Sections
315(a) through (d):
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
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 and may in good faith conclusively rely as to the
truth of the statements and the correctness of the opinions therein;
(ii) before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in
reliance on such certificate, opinion and/or an accountants' certificate;
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(iii) the Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care;
(iv) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to
the Trustee security or indemnity reasonably satisfactory to it against
the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction;
(v) the Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its
rights or powers or for any action it takes or omits to take in accordance
with the direction of the Holders of a majority in principal amount of the
outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; provided that the Trustee's conduct does not constitute
negligence or bad faith;
(vi) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(vii) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company personally or by agent or attorney; and
(viii) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Order and any resolution of
the Board of Directors may be sufficiently evidenced by a Board
Resolution.
SECTION 7.03. 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 Company or its Affiliates with the same rights
it would have if it were not the Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the
Securities, (ii) shall not be accountable for
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the Company's use or application of the proceeds from the Securities and (iii)
shall not be responsible for any statement in the Securities other than its
certificate of authentication.
SECTION 7.05. Notice of Default. If any Default or any Event of
Default occurs and is continuing and if such Default or Event of Default is
known to an officer assigned to administer corporate trust matters of the
Trustee, the Trustee shall mail to each Holder in the manner and to the extent
provided in TIA Section 313(c) notice of the Default or Event of Default within
45 days after it occurs, unless such Default or Event of Default has been cured;
provided, however, that, except in the case of a default in the payment of the
principal of, premium, if any, or interest on any Security, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after
each May 15, beginning with May 15, 1998, the Trustee shall mail to each Holder
as provided in TIA Section 313(c) a brief report that complies with TIA Section
313(a) dated as of such May 15, if required by TIA Section 313(a).
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time such compensation as shall be agreed upon in
writing for its services. The compensation of the Trustee shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
(including costs of collection) and advances incurred or made by the Trustee.
Such expenses shall include the reasonable compensation and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability or expense incurred by it without negligence or
bad faith on its part in connection with the acceptance or administration of
this Indenture and its duties under this Indenture and the Securities,
including, without limitation, the costs and expenses of defending itself
against any claim or liability and of complying with any process served upon it
or any of its officers in connection with the exercise or performance of any of
its powers or duties under this Indenture and the Securities.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of, premium, if any, and interest on
particular Securities.
If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in clause (f) or (g) of Section
6.01, the expenses and the compensation for the services will be intended to
constitute expenses of administration under Title 11 of the United States
Bankruptcy Code or any applicable federal or state law for the relief of
debtors.
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SECTION 7.08. Replacement of Trustee. A resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Securities may
remove the Trustee by so notifying the Trustee in writing and may appoint a
successor Trustee with the consent of the Company. The Company may at any time
remove the Trustee, by Company Order given at least 30 days prior to the date of
the proposed removal if: (i) the Trustee is no longer eligible under Section
7.10; (ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver
or other public officer takes charge of the Trustee or its property; or (iv) the
Trustee becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount of the outstanding Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07, (i) the retiring Trustee shall transfer all property held by it as Trustee
to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee shall become effective and (iii) the successor Trustee shall have all
the rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Holder.
If the Trustee is no longer eligible under Section 7.10, any Holder
who satisfies the requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
The Company shall give notice of any resignation and any removal of
the Trustee and each appointment of a successor Trustee to all Holders. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue indefinitely
for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business
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to, another corporation or national banking association, the resulting,
surviving or transferee corporation or national banking association without any
further act shall be the successor Trustee with the same effect as if the
successor Trustee had been named as the Trustee herein.
SECTION 7.10. Eligibility. This Indenture shall always have a
Trustee who satisfies the requirements of TIA Section 310(a)(1). The Trustee
shall have a combined capital and surplus of at least $25,000,000 as set forth
in its most recent published annual report of condition.
SECTION 7.11. Money Held in Trust. The Trustee shall not be liable
for interest on any money received by it except as the Trustee may agree in
writing with the Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law and except for
money held in trust under Article Eight of this Indenture.
SECTION 7.12. Withholding Taxes. The Trustee, as agent for the
Company, shall exclude and withhold from each payment of principal and interest
and other amounts due hereunder or under the Securities any and all withholding
taxes applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any amounts
payable in respect of the Securities, to withhold such amounts and timely pay
the same to the appropriate authority in the name of and on behalf of the
holders of the Securities, that it will file any necessary withholding tax
returns or statements when due, and that, as promptly as possible after the
payment thereof, it will deliver to each holder of a Security appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such holders may reasonably request from time to time.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. Except as
otherwise provided in this Section 8.01, the Company may terminate the Company's
obligations under the Securities and this Indenture if:
(i) all Securities previously authenticated and delivered (other
than destroyed, lost or stolen Securities that have been replaced or
Securities that are paid pursuant to Section 4.01 or Securities for whose
payment money or securities have theretofore been held in trust and
thereafter repaid to the Company, as provided in Section 8.05) have been
delivered to the Trustee for cancellation and the Company has paid all
sums payable by it hereunder; or
(ii) (A) the Securities mature within one year or all of them are to
be called for redemption within one year under arrangements satisfactory
to the Trustee for giving the notice of redemption, (B) the Company
irrevocably deposits in trust with the Trustee
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during such one-year period, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, as trust
funds solely for the benefit of the Holders for that purpose, money or
U.S. Government Obligations sufficient (in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee), without consideration of
any reinvestment of any interest thereon, to pay principal, premium, if,
any, and interest on the Securities to maturity or redemption, as the case
may be, and to pay all other sums payable by it hereunder, (C) no Default
or Event of Default with respect to the Securities shall have occurred and
be continuing on the date of such deposit, (D) such deposit will not
result in a breach or violation of, or constitute a default under, this
Indenture or any other agreement or instrument to which the Company is a
party or by which it is bound and (E) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, in each case
stating that all conditions precedent provided for herein relating to the
satisfaction and discharge of this Indenture have been complied with.
With respect to the foregoing clause (i), the Company's obligations
under Section 7.07 shall survive. With respect to the foregoing clause (ii), the
Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.11, 4.01,
4.02, 4.21, 7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the Securities
are no longer outstanding. Thereafter, only the Company's obligations in
Sections 7.07, 8.05 and 8.06 shall survive. After any such irrevocable deposit,
the Trustee upon request shall acknowledge in writing the discharge of the
Company's obligations under the Securities and this Indenture except for those
surviving obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The Company
will be deemed to have paid and the Company will be discharged from any and all
obligations in respect of the Securities on the 123rd day (or, to the extent
applicable under clause (B) below, one year) after the deposit referred to in
clause (A) of this Section 8.02 if:
(A) the Company has irrevocably deposited or caused to be
irrevocably deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10) and conveyed all right, title and interest
for the benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust funds
in trust, specifically pledged to the Trustee for the benefit of the
Holders as security for payment of the principal of, premium, if any, and
interest, if any, on the Securities, and dedicated solely to, the benefit
of the Holders, in and to (1) money in an amount, (2) U.S. Government
Obligations that, through the payment of interest, premium, if any, and
principal in respect thereof in accordance with their terms, will provide,
not later than one day before the due date of any payment referred to in
this clause (A), money in an amount or (3) a combination thereof in an
amount sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of, premium, if any,
and accrued interest on the outstanding
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Securities at the Stated Maturity of such principal or interest; provided
that the Trustee shall have been irrevocably instructed to apply such
money or the proceeds of such U.S. Government Obligations to the payment
of such principal, premium, if any, and interest with respect to the
Securities;
(B) the Company shall have delivered to the Trustee (i) either (x)
an Opinion of Counsel to the effect that Holders will not recognize
income, gain or loss for United States federal income tax purposes as a
result of the Company's exercise of its option under this Section 8.02 and
will be subject to United States federal income tax on the same amount and
in the same manner and at the same times as would have been the case if
such option had not been exercised, which Opinion of Counsel must be based
upon (and accompanied by a copy of) a ruling of the United States Internal
Revenue Service to the same effect unless there has been a change in
applicable United States federal income tax law after the Closing Date
such that a ruling is no longer required or (y) a ruling directed to the
Trustee received from the United States Internal Revenue Service to the
same effect as the aforementioned Opinion of Counsel; (ii) an Opinion of
Counsel or a ruling from Revenue Canada, Customs, Excise & Taxation to the
effect that Holders will not recognize income, gain or loss for Canadian
federal, provincial or territorial income tax or other tax purposes as a
result of such deposit and defeasance and will be subject to Canadian
federal or provincial income tax and other tax on the same amounts, in the
same manner and at the same times as would have been the case had such
deposit and defeasance not occurred (and for purposes of such opinion,
such Canadian counsel shall assume that Holders of the Securities include
Holders who are not resident in Canada); and (iii) an Opinion of Counsel
to the effect that (x) the creation of the defeasance trust does not
violate the Investment Company Act of 1940 and (y) after the passage of
123 days following the deposit (except, with respect to any trust funds
for the account of any Holder who may be deemed to be an "insider" for
purposes of the United States Bankruptcy Code, after one year following
the deposit), the trust funds will not be subject to the effect of ▇▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law in a case commenced by or against the Company
under either such statute, and either (I) the trust funds will no longer
remain the property of the Company (and therefore will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally) or (II) if a court
were to rule under any such law in any case or proceeding that the trust
funds remained property of the Company (a) assuming such trust funds
remained in the possession of the Trustee prior to such court ruling to
the extent not paid to the Holders, the Trustee will hold, for the benefit
of the Holders, a valid and perfected security interest in such trust
funds that is not avoidable in bankruptcy or otherwise (except for the
effect of Section 552(b) of the United States Bankruptcy Code on interest
on the trust funds accruing after the commencement of a case under such
statute), (b) the Holders will be entitled to receive adequate protection
of their interests in such trust funds if such trust funds are used in
such case or proceeding and (c) no property, rights in property or other
interests granted to the Trustee or the Holders in exchange for, or with
respect to, such trust funds will be subject to any prior rights of
holders of other Indebtedness of the Company or any of its Subsidiaries;
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(C) immediately after giving effect to such deposit on a pro forma
basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or during the period ending on the
123rd day (or one year) after the date of such deposit, and such deposit
shall not result in a breach or violation of, or constitute a default
under, any other agreement or instrument to which the Company or any of
its respective Subsidiaries is a party or by which the Company or any of
its respective Subsidiaries is bound;
(D) if the Securities are then listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Securities will not be delisted as a result
of such deposit, defeasance and discharge; and
(E) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day (or
one year) period referred to in clause (B)(iii)(y) of this Section 8.02, none of
the Company's obligations under this Indenture shall be discharged. Subsequent
to the end of such 123-day (or one year) period with respect to this Section
8.02, the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.11,
4.01, 4.02, 4.21, 7.07, 7.08, 8.05 and 8.06 shall survive until the Securities
are no longer outstanding. Thereafter, only the Company's obligations in
Sections 7.07, 8.05 and 8.06 shall survive. If and when a ruling from the United
States Internal Revenue Service or an Opinion of Counsel referred to in clause
(B)(i) of this Section 8.02 may be provided specifically without regard to, and
not in reliance upon, the continuance of the Company's obligations under Section
4.01, then the Company's obligations under such Section 4.01 shall cease upon
delivery to the Trustee of such ruling or Opinion of Counsel and compliance with
the other conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 8.03. Defeasance of Certain Obligations. The Company may
omit to comply with any term, provision or condition set forth in clauses (iii)
and (iv) of Section 5.01 and Sections 4.03 through 4.13, and clause (c) of
Section 6.01 with respect to clauses (iii) and (iv) of Section 5.01 and Sections
4.03 through 4.13, and clauses (d) and (e) of Section 6.01 shall be deemed not
to be Events of Default, in each case with respect to the outstanding Securities
if:
(i) the Company has irrevocably deposited or caused to be
irrevocably deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10) and conveyed all right, title and interest
to the Trustee for the benefit of the Holders, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
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Trustee as trust funds in trust, specifically pledged to the Trustee for
the benefit of the Holders as security for payment of the principal of,
premium, if any, and interest, if any, on the Securities, and dedicated
solely to, the benefit of the Holders, in and to (A) money in an amount,
(B) U.S. Government Obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will provide,
not later than one day before the due date of any payment referred to in
this clause (i), money in an amount or (C) a combination thereof in an
amount sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of, premium, if any,
and interest on the outstanding Securities on the Stated Maturity of such
principal or interest; provided that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to the payment of such principal, premium, if any,
and interest with respect to the Securities;
(ii) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company or any of its respective Subsidiaries is a
party or by which it is bound;
(iii) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(iv) the Company has delivered to the Trustee an Opinion of Counsel
to the effect that (A) the creation of the defeasance trust does not
violate the Investment Company Act of 1940, (B) the Holders have a valid
first-priority security interest in the trust funds, (C) the Holders will
not recognize income, gain or loss for United States federal income tax
purposes as a result of such deposit and the defeasance of the obligations
referred to in the first paragraph of this Section 8.03 and will be
subject to United States federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred, (D) the Holders will not
recognize income, gain or loss for Canadian federal, provincial or
territorial income tax or other tax purposes as a result of such deposit
and the defeasance of the obligations referred to in the first paragraph
of this Section 8.03 and will be subject to Canadian federal or provincial
income tax and other tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit and defeasance
had not occurred and (E) after the passage of 123 days following the
deposit (except, with respect to any trust funds for the account of any
Holder who may be deemed to be an "insider" for purposes of the United
States Bankruptcy Code, after one year following the deposit), the trust
funds will not be subject to the effect of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Bankruptcy Code or Section 15 of the New York Debtor and Creditor
Law in a case commenced by or against the Company under either such
statute, and either (1) the trust funds will no longer remain the property
of the Company (and therefore will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors'
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rights generally) or (2) if a court were to rule under any such law in any
case or proceeding that the trust funds remained property of the Company
(x) assuming such trust funds remained in the possession of the Trustee
prior to such court ruling to the extent not paid to the Holders, the
Trustee will hold, for the benefit of the Holders, a valid and perfected
security interest in such trust funds that is not avoidable in bankruptcy
or otherwise (except for the effect of Section 552(b) of the United States
Bankruptcy Code on interest on the trust funds accruing after the
commencement of a case under such statute), (y) the Holders will be
entitled to receive adequate protection of their interests in such trust
funds if such trust funds are used in such case or proceeding and (z) no
property, rights in property or other interests granted to the Trustee or
the Holders in exchange for, or with respect to, such trust funds will be
subject to any prior rights of holders of other Indebtedness of the
Company or any of its Subsidiaries;
(v) if the Securities are then listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit and defeasance will not cause the
Securities to be delisted;
(vi) such deposit and defeasance is not prohibited by Article
Eleven; and
(vii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. Application of Trust Money. Subject to Section 8.06,
the Trustee or Paying Agent shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the
case may be, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with the Securities and this Indenture to
the payment of principal of, premium, if any, and interest on the Securities;
but such money need not be segregated from other funds except to the extent
required by law.
SECTION 8.05. Repayment to the Company. Subject to Sections 7.07,
8.01, 8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Company upon request any excess money held by them at any time and thereupon
shall be relieved from all liability with respect to such money. The Trustee and
the Paying Agent shall pay to the Company any money held by them for the payment
of principal, premium, if any, or interest that remains unclaimed for two years;
provided that the Trustee or such Paying Agent before being required to make any
payment may cause to be published at the expense of the Company once in a
newspaper of general circulation in The City of New York and, in the event the
Securities are listed on the Luxembourg Stock Exchange, in Luxembourg or mail to
each Holder entitled to such money at such Holder's address (as set forth in the
Security Register) notice that such money remains unclaimed and that after a
date specified therein (which shall be at least 30 days from the date of such
publication or mailing) any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company, Holders entitled to such
money must look to the Company for payment as general creditors unless an
applicable law
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designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
Section 8.01, 8.02 or 8.03, as the case may be, 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
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.01, 8.02
or 8.03, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 8.01, 8.02 or 8.03, as the case may be; provided that, if the
Company has made any payment of principal of, premium, if any, or interest on
any Securities because of the reinstatement of its obligations, the Company
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.
SECTION 8.07. Insiders. With respect to the determination of the
Persons constituting beneficial owners of Securities and whether any such Person
is an "insider" for purposes of Sections 8.02(B)(iii)(y) and 8.03(iv)(E), the
Trustee may rely on an Officers' Certificate.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company, when
authorized by resolutions of its Board of Directors, and the Trustee may amend
or supplement this Indenture or the Securities without notice to or the consent
of any Holder:
(a) to cure any ambiguity, defect or inconsistency in this
Indenture; provided that such amendments or supplements shall not
adversely affect the interests of the Holders in any material respect;
(b) to comply with Article Five;
(c) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA;
(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee; or
(e) to make any change that, in the opinion of the Board of
Directors of the Company evidenced by a Board Resolution, does not
materially and adversely affect the rights of any Holder.
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SECTION 9.02. With Consent of Holders. Subject to Sections 6.04 and
6.07 and without prior notice to the Holders, the Company, when authorized by
its Board of Directors (as evidenced by a Board Resolution), and the Trustee may
amend this Indenture and the Securities with the written consent of the Holders
of a majority in aggregate principal amount of the outstanding Securities, and
the Holders of a majority in aggregate principal amount of the outstanding
Securities by written notice to the Trustee may waive future compliance by the
Company with any provision of this Indenture or the Securities.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Security;
(ii) reduce the principal of, or premium, if any, or interest on,
any Security or adversely affect any right of repayment at the option of
any Holder of any Security;
(iii) change the place or currency of payment of principal of, or
premium, if any, or interest on, any Security;
(iv) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of a redemption,
on or after the Redemption Date) of any Security;
(v) reduce the percentage of outstanding Securities the consent of
whose Holders is required for any such supplemental indenture or for any
waiver of compliance with certain provisions of this Indenture or certain
Defaults and their consequences provided for in this Indenture;
(vi) waive a default in the payment of principal of, premium, if
any, or interest on the Securities;
(vii) amend or modify the terms of Article Eleven in a manner
materially adverse to the Holders; or
(viii) modify any of the provisions of this Section 9.02, except to
increase any such percentage or to provide that certain other provisions
of this Indenture cannot be modified or waived without the consent of the
Holder of each outstanding Security affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
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After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. The Company will
mail supplemental indentures to Holders upon request. Any failure of the Company
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. Revocation and Effect of Consent. Until an amendment
or waiver becomes effective, a consent to it by a Holder is a continuing consent
by the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the Security of the consenting Holder, even if
notation of the consent is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to its Security or portion of its
Security. Such revocation shall be effective only if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Securities.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies) and only those
persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in any of clauses (i)
through (viii) of Section 9.02. In case of an amendment or waiver of the type
described in clauses (i) through (viii) of Section 9.02, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder of a
Security that evidences the same indebtedness as the Security of the consenting
Holder.
SECTION 9.04. Notation on or Exchange of Securities. If an
amendment, supplement or waiver changes the terms of a Security, the Trustee may
require the Holder to deliver such Security to the Trustee. At the Company's
expense the Trustee may place an appropriate notation on the Security about the
changed terms and return it to the Holder and the Trustee may place an
appropriate notation on any Security thereafter authenticated. Alternatively, if
the Company or the Trustee so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms.
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is
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authorized or permitted by this Indenture. Subject to the preceding sentence,
the Trustee shall sign such amendment, supplement or waiver if the same does not
adversely affect the rights of the Trustee. The Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver that affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.06. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article Nine shall conform to
the requirements of the TIA as then in effect.
ARTICLE TEN
MEETINGS OF HOLDERS
SECTION 10.01. Purposes for Which Meetings May Be Called.
A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article Ten for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to waive or to consent to the waiving of
any Default or Event of Default hereunder and its consequences, or to take
any other action authorized to be taken by Holders pursuant to any of the
provisions of Article Six;
(b) to remove the Trustee or appoint a successor Trustee pursuant to
the provisions of Article Seven;
(c) to consent to an amendment, supplement or waiver pursuant to the
provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on behalf
of the Holders of any specified aggregate principal amount of the
Securities under any other provision of this Indenture, or authorized or
permitted by law.
SECTION 10.02. Manner of Calling Meetings.
The Trustee may at any time call a meeting of Holders to take any
action specified in Section 10.01, to be held at such time and at such place in
The City of New York, New York or elsewhere as the Trustee will determine.
Notice of every meeting of Holders, setting forth the time and place of such
meeting and in general terms the action proposed to be taken at such meeting,
will be mailed by the Trustee, first-class postage prepaid, to the Company and
to the Holders at their last addresses as they will appear on the registration
books of the Registrar not less than 10 nor more than 60 days prior to the date
fixed for a meeting.
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Any meeting of Holders will be valid without notice if the Holders
of all outstanding Securities are present in Person or by proxy, or if notice is
waived before or after the meeting by the Holders of all outstanding Securities,
and if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
SECTION 10.03. Call of Meetings by Company or Holders.
In case at any time the Company, pursuant to a Board Resolution, or
the Holders of not less than 10% in aggregate principal amount of the
outstanding Securities will have requested the Trustee to call a meeting of
Holders to take any action specified in Section 10.01, by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee will not have mailed the notice of such meeting within
20 days after receipt of such request, then the Company or the Holders of
Securities in the amount above specified may determine the time and place in The
City of New York, New York or elsewhere for such meeting and may call such
meeting for the purpose of taking such action, by mailing or causing to be
mailed notice thereof as provided in Section 10.02, or by causing notice thereof
to be published at least once in each of two successive calendar weeks (on any
Business Day during such week) in a newspaper or newspapers printed in the
English language, customarily published at least five days a week of a general
circulation in The City of New York, State of New York and, in the event the
Securities are listed on the Luxembourg Stock Exchange, in Luxembourg, the first
such publication to be not less than 10 nor more than 60 days prior to the date
fixed for the meeting.
SECTION 10.04. Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Holders, a Person will (i)
be a registered Holder of one or more Securities, or (ii) be a Person appointed
by an instrument in writing as proxy for the registered Holder or Holders of
Securities. The only Persons who will be entitled to be present or to speak at
any meeting of Holders will be the Persons entitled to vote at such meeting and
their counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 10.05. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
outstanding Securities shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 10.02, except that such notice need be given only
once and not less than five days prior to the date on which the meeting is
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scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage of the principal amount of the outstanding
Securities which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting
adjourned for a lack of a quorum, the Persons entitled to vote 25% in principal
amount of the outstanding Securities at the time shall constitute a quorum for
the taking of any action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any action or matter, except as otherwise
specified herein, shall be effectively passed and decided if passed or decided
by the Persons entitled to vote not less than a majority in principal amount of
outstanding Securities represented and voting at such meeting.
Any action or matter passed or decision taken at any meeting of
Holders of Securities duly held in accordance with this Section 10.05 shall be
binding on all the Holders of Securities, whether or not present or represented
at the meeting.
SECTION 10.06. Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment.
Notwithstanding any other provision of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any action by
or any meeting of Holders, in regard to proof of the holding of Securities and
of the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, and submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it will think appropriate. Such regulations may fix a
record date and time for determining the Holders of record of Securities
entitled to vote at such meeting, in which case those and only those Persons who
are Holders of Securities at the record date and time so fixed, or their
proxies, will be entitled to vote at such meeting whether or not they will be
such Holders at the time of the meeting.
The Trustee will, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting will have been called by the Company
or by Holders as provided in Section 10.03, in which case the Company or the
Holders calling the meeting, as the case may be, will in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting will be elected by vote of the Holders of a majority in principal amount
of the Securities represented at the meeting and entitled to vote.
At any meeting each Holder or proxy will, subject to the provisions
of Section 10.04 hereof, be entitled to one vote for each $1,000 principal
amount of Securities held or represented by him or her; provided, however, that
no vote will be cast or counted at any meeting in respect of any Securities
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman may adjourn any such meeting if he is unable to
determine whether any Holder or proxy will be entitled to vote at such meeting.
The
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chairman of the meeting will have no right to vote other than by virtue of
Securities held by him or instruments in writing as aforesaid duly designating
him as the proxy to vote on behalf of other Holders. Any meeting of Holders duly
called pursuant to the provisions of Section 10.02 or Section 10.03 may be
adjourned from time to time by vote of the Holders of a majority in aggregate
principal amount of the Securities represented at the meeting and entitled to
vote, and the meeting may be held as so adjourned without further notice.
SECTION 10.07. Voting at the Meeting and Record to Be Kept.
The vote upon any resolution submitted to any meeting of Holders
will be by written ballots on which will be subscribed the signatures of the
Holders of Securities or/of their representatives by proxy and the principal
amount of the Securities voted by the ballot. The permanent chairman of the
meeting will appoint two inspectors of votes, who will count all votes cast at
the meeting for or against any resolution and will make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Holders will be prepared by the secretary of the meeting and there
will be attached to such record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts, setting forth a copy of the notice of the meeting and
showing that such notice was mailed as provided in Section 10.02. The record
will be signed and verified by the affidavits of the permanent chairman and the
secretary of the meeting and one of the duplicates will be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified will be conclusive evidence of the
matters therein stated.
SECTION 10.08. Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting.
Nothing contained in this Article Ten will be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to the Holders under any of the provisions of this Indenture or of
the Securities.
SECTION 10.09. Procedures Not Exclusive.
The procedures set forth in this Article Ten are not exclusive and
the rights and obligations of the Company, the Trustee and the Holders under
other Articles of this Indenture (including, without limitation, Articles Six,
Seven, Eight and Nine) will in no way be limited by the provisions of this
Article Ten.
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ARTICLE ELEVEN
SUBORDINATION
SECTION 11.01. Securities Subordinated to Senior Indebtedness. The
Company and the Trustee each covenants and agrees, and each Holder, by its
acceptance of a Security, likewise covenants and agrees that all Securities
shall be issued subject to the provisions of this Article Eleven; and each
Person holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that Senior Subordinated
Obligations shall, to the extent and in the manner set forth in this Article
Eleven, be subordinated in right of payment to the prior payment in full, in
cash or cash equivalents acceptable to the holders of Senior Indebtedness, of
all amounts payable under Senior Indebtedness, including, without limitation,
the Company's obligations under its guarantee of the Senior Notes and the
Company's obligations under its guarantee of the intercompany notes issued by
GST USA to GST Equipment Funding, Inc. for the purchase of equipment (including
any interest accruing subsequent to an event specified in Sections 6.01(f) and
6.01(g) of this Indenture, whether or not such interest is an allowed claim
enforceable against the debtor under the United States Bankruptcy Code).
SECTION 11.02. No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment, redemption, repurchase, retirement,
distribution, acquisition for value (or deposit in connection therewith) by or
on behalf of the Company of Senior Subordinated Obligations, whether pursuant to
the terms of the Securities or upon acceleration or otherwise, shall be made if,
at the time of such payment, there exists a default in the payment of all or any
portion of the obligations of any Senior Indebtedness of the Company, and such
default shall not have been cured or waived or the benefits of this sentence
waived by or on behalf of the holders of such Senior Indebtedness.
(b) During the continuance of any other event of default with
respect to any Designated Senior Indebtedness pursuant to which the maturity
thereof may be accelerated, upon receipt by the Trustee of written notice from
the trustee or other representative or agent for the holders of such Designated
Senior Indebtedness (or the holders of at least a majority in principal amount
of such Designated Senior Indebtedness then outstanding), no direct or indirect
payment, redemption, repurchase, retirement, distribution, acquisition for value
(or deposit in connection therewith) of or on account of Senior Subordinated
Obligations may be made by or on behalf of the Company upon or in respect of the
Securities for a period (a "Payment Blockage Period") commencing on the date of
receipt of such notice and ending 159 days thereafter (unless, in each case,
such Payment Blockage Period shall be terminated by written notice to the
Trustee from such trustee of, or other representatives or agents for, such
holders or by payment in full in cash or cash equivalents acceptable to the
holders of Senior Indebtedness of such Designated Senior Indebtedness). Not more
than one Payment Blockage Period may be commenced with respect to the Securities
during any period of 360 consecutive days. Notwithstanding anything in this
Indenture to the contrary, there must be 180 consecutive days in any 360-day
period in which no Payment Blockage Period is in effect. For all purposes of
this Section 11.02(b), no event of default that existed or was continuing (it
being acknowledged that any subsequent action that would give rise to an event
of default pursuant to any provision under which an event of default
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previously existed or was continuing shall constitute a new event of default for
this purpose) on the date of the commencement of any Payment Blockage Period
with respect to the Designated Senior Indebtedness initiating such Payment
Blockage Period shall be, or shall be made, the basis for the commencement of a
second Payment Blockage Period by the representative for, or the holders of,
such Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such event of default shall have been cured or waived
for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 11.02(a) or 11.02(b) of this Indenture, the Trustee shall promptly
notify the holders of Senior Indebtedness of such prohibited payment and such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that, upon notice from the Trustee
to the holders of Senior Indebtedness that such prohibited payment has been
made, the holders of the Senior Indebtedness (or their representative or agent
or representatives of a trustee) within 30 days of receipt of such notice from
the Trustee notify the Trustee of the amounts then due and owing on the Senior
Indebtedness, if any, and only the amounts specified in such notice to the
Trustee shall be paid to the holders of Senior Indebtedness and any excess above
such amounts due and owing on Senior Indebtedness shall be paid to the Company.
SECTION 11.03. Payment over Proceeds upon Dissolution, Etc. (a) Upon
any payment or distribution of assets or securities of the Company of any kind
or character, whether in cash, property or securities, by set-off or otherwise,
in connection with any dissolution or winding up or total or partial liquidation
or reorganization of the Company, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due or to
become due upon all Senior Indebtedness (including any interest accruing
subsequent to an event specified in Sections 6.01(f) and 6.01(g) of this
Indenture, whether or not such interest is an allowed claim enforceable against
the debtor under the United States Bankruptcy Code) shall first be paid in full,
in cash or cash equivalents acceptable to the holders of Senior Indebtedness,
before the Holders or the Trustee on their behalf shall be entitled to receive
any payment by the Company on account of Senior Subordinated Obligations, or any
payment to acquire any of the Securities for cash, property or securities, or
any distribution with respect to the Securities of any cash, property or
securities. Before any payment may be made by, or on behalf of, the Company on
any Senior Subordinated Obligations in connection with any such dissolution,
winding up, liquidation or reorganization, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities, to which the Holders or the Trustee on their behalf would be
entitled, but for the provisions of this Article Eleven, shall be made by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person making such payment or distribution, or by the Holders or
the Trustee if received by them or it, directly to the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders) or their representatives or agents or
to any trustee or trustees under any other
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indenture pursuant to which any such Senior Indebtedness may have been issued,
as their respective interests appear, to the extent necessary to pay all such
Senior Indebtedness in full, in cash or cash equivalents acceptable to the
holders of Senior Indebtedness after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Senior
Indebtedness.
(b) To the extent any payment of Senior Indebtedness (whether by or
on behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Indebtedness or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred. To the extent the obligation to repay any Senior
Indebtedness is declared to be fraudulent, invalid, or otherwise set aside under
any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then the obligations so declared fraudulent, invalid or otherwise set aside (and
all other amounts that would come due with respect thereto had such obligation
not been so affected) shall be deemed to be reinstated and outstanding as Senior
Indebtedness for all purposes hereof as if such declaration, invalidity or
setting aside had not occurred.
(c) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any Holder at a time when
such payment or distribution is prohibited by Section 11.03(a) of this Indenture
and before all obligations in respect of Senior Indebtedness are paid in full,
in cash or cash equivalents acceptable to the holders of Senior Indebtedness,
such payment or distribution shall be received and held in trust for the benefit
of, and shall be paid over or delivered to, the holders of Senior Indebtedness
(pro rata to such holders on the basis of such respective amount of Senior
Indebtedness held by such holders) or their representatives or agents, or to the
trustee or trustees under any indenture pursuant to which any such Senior
Indebtedness may have been issued, as their respective interests appear, for
application to the payment of Senior Indebtedness remaining unpaid until all
such Senior Indebtedness has been paid in full, in cash or cash equivalents
acceptable to the holders of Senior Indebtedness, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.
(d) For purposes of this Section 11.03, the words "cash, property or
securities" shall not be deemed to include, so long as the effect of this clause
is not to cause the Securities to be treated in any case or proceeding or
similar event described in this Section 11.03 as part of the same class of
claims as the Senior Indebtedness or any class of claims pari passu with, or
senior to, the Senior Indebtedness for any payment or distribution, securities
of the Company or any other corporation provided for by a plan of reorganization
or readjustment that are subordinated, at least to the extent that the
Securities are subordinated, to the payment of all Senior Indebtedness then
outstanding; provided that (1) if a new corporation results from such
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reorganization or readjustment, such corporation assumes the Senior Indebtedness
and (2) the rights of the holders of the Senior Indebtedness are not, without
the consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company with or into,
another corporation or the liquidation or dissolution of the Company following
the sale, conveyance, transfer, lease or other disposition of all or
substantially all of its property and assets to another corporation upon the
terms and conditions provided in Article Five of this Indenture shall not be
deemed a dissolution, winding up, liquidation or reorganization for the purposes
of this Section 11.03 if such other corporation shall, as a part of such
consolidation, merger, sale, conveyance, transfer, lease or other disposition,
comply (to the extent required) with the conditions stated in Article Five of
this Indenture.
SECTION 11.04. Subrogation. (a) Upon the payment in full of all
Senior Indebtedness in cash or cash equivalents acceptable to the holders of
Senior Indebtedness, the Holders shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company made on such Senior Indebtedness until the
principal of, premium, if any, and interest on the Securities shall be paid in
full; and, for the purposes of such subrogation, no payments or distributions to
the holders of the Senior Indebtedness of any cash, property or securities to
which the Holders or the Trustee on their behalf would be entitled except for
the provisions of this Article Eleven, and no payment pursuant to the provisions
of this Article Eleven to the holders of Senior Indebtedness by Holders or the
Trustee on their behalf shall, as between the Company, its creditors other than
holders of Senior Indebtedness, and the Holders, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness. It is understood that
the provisions of this Article Eleven are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
the Senior Indebtedness, on the other hand.
(b) If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article Eleven shall
have been applied, pursuant to the provisions of this Article Eleven, to the
payment of all amounts payable under Senior Indebtedness, then, and in such
case, the Holders shall be entitled to receive from the holders of such Senior
Indebtedness any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount required to make payment in full, in cash
or cash equivalents acceptable to the holders of Senior Indebtedness, of such
Senior Indebtedness of such holders.
SECTION 11.05. Obligations of Company Unconditional. (a) Nothing
contained in this Article Eleven or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company and the Holders,
the obligation of the Company, which is absolute and unconditional, to pay to
the Holders the principal of, premium, if any, and interest on 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 and
creditors of the Company other than the holders of the Senior Indebtedness, nor
shall anything herein or therein prevent the Holders or the Trustee on their
behalf from exercising all remedies otherwise
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permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article Eleven of the holders of the Senior
Indebtedness.
(b) Without limiting the generality of the foregoing, nothing
contained in this Article Eleven will restrict the right of the Trustee or the
Holders to take any action to declare the Securities to be due and payable prior
to their Stated Maturity pursuant to Section 6.01 of this Indenture or to pursue
any rights or remedies hereunder; provided, however, that all Senior
Indebtedness then due and payable or thereafter declared to be due and payable
shall first be paid in full, in cash or cash equivalents acceptable to the
holders of Senior Indebtedness, before the Holders or the Trustee are entitled
to receive any direct or indirect payment from the Company of Senior
Subordinated Obligations or the Company is entitled to redeem, repurchase,
retire any of, undertake an acquisition for value (or make a deposit in
connection with any of the foregoing) on account of, any of the Senior
Subordinated Obligations.
SECTION 11.06. Notice to Trustee. (a) The Company shall give prompt
written notice to the Trustee of any fact known to the Company that would
prohibit the making of any payment to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article Eleven. The Trustee shall
not be charged with the knowledge of the existence of any default or event of
default with respect to any Senior Indebtedness or of any other facts that would
prohibit the making of any payment to or by the Trustee unless and until the
Trustee shall have received notice in writing at its Corporate Trust Office to
that effect signed by an Officer of the Company, or by a holder of Senior
Indebtedness or trustee or agent thereof; and prior to the receipt of any such
written notice, the Trustee shall, subject to Article Seven, be entitled to
assume that no such facts exist; provided that, if the Trustee shall not have
received the notice provided for in this Section 11.06 at least two Business
Days prior to the date upon which, by the terms of this Indenture, any monies
shall become payable for any purpose (including, without limitation, the payment
of the principal of, premium, if any, or interest on any Security), then,
notwithstanding anything herein to the contrary, the Trustee shall have full
power and authority to receive any monies from the Company and to apply the same
to the purpose for which they were received, and shall not be affected by any
notice to the contrary that may be received by it on or after such prior date
except for an acceleration of the Securities prior to such application. Nothing
contained in this Section 11.06 shall limit the right of the holders of Senior
Indebtedness to recover payments as contemplated by this Article Eleven. The
foregoing shall not apply if the Payment Agent is the Company. The Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Indebtedness (or a
trustee on behalf of, or other representative or agent of, such holder) to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative or agent on behalf of any such
holder.
(b) In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Eleven, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such
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Person under this Article Eleven and, if such evidence is not furnished to the
Trustee, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 11.07. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article Eleven, the Trustee and the Holders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar Person making
such payment or distribution, delivered to the Trustee or to the Holders for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
Eleven.
SECTION 11.08. Trustee's Relation to Senior Indebtedness. (a) The
Trustee and any Paying Agent shall be entitled to all the rights set forth in
this Article Eleven with respect to any Senior Indebtedness that may at any time
be held by it in its individual or any other capacity to the same extent as any
other holder of Senior Indebtedness and nothing in this Indenture shall deprive
the Trustee or any Paying Agent of any of its rights as such holder.
(b) With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Eleven, and no implied covenants
or obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness (except as provided in
Sections 11.02(c) and 11.03(c) of this Indenture) and shall not be liable to any
such holders if the Trustee shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other person
cash, property or securities to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article Eleven or otherwise.
SECTION 11.09. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Indebtedness. No right of any
present or future holders of any Senior Indebtedness to enforce subordination as
provided in this Article Eleven will at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms of this Indenture, regardless of any knowledge
thereof that any such holder may have or otherwise be charged with. The
provisions of this Article Eleven are intended to be for the benefit of, and
shall be enforceable directly by, the holders of Senior Indebtedness.
SECTION 11.10. Holders Authorize Trustee to Effectuate Subordination
of Securities. Each Holder by his acceptance of any Securities authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Eleven, and appoints the Trustee his attorney-in-fact for
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such purposes, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
property and assets of the Company, the filing of a claim for the unpaid balance
of its Securities in the form required in those proceedings. If the Trustee does
not file a proper claim or proof in indebtedness in the form required in such
proceeding at least 30 days before the expiration of the time to file such claim
or claims, each holder of Senior Indebtedness is hereby authorized to file an
appropriate claim for and on behalf of the Holders.
SECTION 11.11. Not to Prevent Events of Default. The failure to make
a payment when due on account of principal of, premium, if any, or interest on
the Securities by reason of any provision of this Article Eleven will not be
construed as preventing the occurrence of an Event of Default.
SECTION 11.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article Eleven will apply to amounts due to the Trustee pursuant to other
sections of this Indenture, including Section 7.07.
SECTION 11.13. No Waiver of Subordination Provisions. Without in any
way limiting the generality of Section 11.09, the holders of Senior Indebtedness
may, at any time and from time to time, without the consent of or notice to the
Trustee or the Holders, without incurring responsibility to the Holders and
without impairing or releasing the subordination provided in this Article Eleven
or the obligations hereunder of the Holders to the holders of Senior
Indebtedness, do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding or secured; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Senior Indebtedness; and (d) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 11.14. Payments May Be Paid Prior to Dissolution. Nothing
contained in this Article Eleven or elsewhere in this Indenture shall prevent
(i) the Company except under the conditions described in Section 11.02 or 11.03,
from making payments of principal of, premium, if any, and interest on the
Securities, or from depositing with the Trustee any money for such payments, or
(ii) the application by the Trustee of any money deposited with it for the
purpose of making such payments of principal of, premium, if any, and interest
on the Securities to the Holders entitled thereto unless, at least two Business
Days prior to the date upon which such payment becomes due and payable, the
Trustee shall have received the written notice provided for in Section 11.02(b)
of this Indenture (or there shall have been an acceleration of the Securities
prior to such application) or in Section 11.06 of this Indenture. The Company
shall give prompt written notice to the Trustee of any dissolution, winding up,
liquidation or reorganization of the Company.
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SECTION 11.15. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article Eight by the Trustee
for the payment of principal of, premium, if any, and interest on the Securities
shall not be subordinated to the prior payment of any Senior Indebtedness
(provided that at the time deposited, such deposit did not violate any then
outstanding Senior Indebtedness), and none of the Holders shall be obligated to
pay over any such amount to any holder of Senior Indebtedness.
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act of 1939. Prior to the
effectiveness of the Registration Statement, this Indenture shall incorporate
and be governed by the provisions of the TIA that are required to be part of and
to govern indentures qualified under the TIA. After the effectiveness of the
Registration Statement, this Indenture shall be subject to the provisions of the
TIA that are required to be a part of this Indenture and shall, to the extent
applicable, be governed by such provisions.
SECTION 12.02. Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail addressed as follows:
if to the Company:
GST Telecommunications, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
if to the Trustee:
United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Division
The Company 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 Holder shall be mailed to
him at his address as it appears on the Security Register by first class mail
and shall be sufficiently given to him if so mailed within the time prescribed.
Copies of any such communication or notice to a Holder shall also be mailed to
the Trustee and each Agent at the same time.
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Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. Except for
a notice to the Trustee, which is deemed given only when received, and except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided in this Section 12.02, it is duly given, whether or not the
addressee receives it.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 12.03. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate 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
(ii) an Opinion of Counsel stating that, in the opinion of such
Counsel, all such conditions precedent have been complied with.
SECTION 12.04. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statement or opinion contained in such
certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided,
however, that, with respect to
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matters of fact, an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
SECTION 12.05. Rules by Trustee, Paying Agent or Registrar. The
Trustee may make reasonable rules for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 12.06. Payment Date Other Than a Business Day. If an
Interest Payment Date, Redemption Date, Payment Date, Stated Maturity or date of
maturity of any Security shall not be a Business Day, then payment of principal
of, premium, if any, or interest on such Security, as the case may be, need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date, Payment Date,
Redemption Date, or at the Stated Maturity or date of maturity of such Security;
provided that no interest shall accrue for the period from and after such
Interest Payment Date, Payment Date, Redemption Date, Stated Maturity or date of
maturity, as the case may be.
SECTION 12.07. Governing Law; Consent to Jurisdiction and Service.
This Indenture and the Securities shall be governed by the laws of the State of
New York. The Company will appoint ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome & ▇▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. as its
agent for service of process in any suit, action or proceeding with respect to
this Indenture or the Securities and for actions brought under federal or state
securities laws brought in any federal or state court located in The City of New
York and the Company agrees to submit to the jurisdiction of any such court.
SECTION 12.08. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any of its Subsidiaries. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 12.09. No Recourse Against Others. No recourse for the
payment of the principal of, premium, if any, or interest on any of the
Securities, or for any claim based thereon or otherwise in respect thereof, and
no recourse under or upon any obligation, covenant or agreement of the Company
contained in this Indenture, or in any of the Securities, or because of the
creation of any Indebtedness represented thereby, shall be had against any
incorporator or against any past, present or future partner, shareholder, other
equityholder, officer, director, employee or controlling person, as such, of the
Company or of any successor Person, either directly or through the Company or
any successor Person, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Securities.
SECTION 12.10. Successors. All agreements of the Company in this
Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
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SECTION 12.11. Duplicate 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.
SECTION 12.12. Separability. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 12.13. Table of Contents, Headings, Etc. The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms and provisions hereof.
86
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
GST TELECOMMUNICATIONS, INC.
By:
------------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK
By:
------------------------------------
Name:
Title:
87
EXHIBIT A
[FACE OF NOTE]
GST TELECOMMUNICATIONS, INC.
[___]% Senior Subordinated Accrual Note due 2007
[CUSIP _______]
No. ____________ $_________
GST TELECOMMUNICATIONS, INC., a federally chartered Canadian
corporation (the "Company") for value received, promises to pay to __________,
or its registered assigns, the principal sum of $__________, and the Final
Accumulated Interest Amount thereon, on [______], 2007.
Interest Accrual Dates: [_____] and [_____], commencing [_____], 1998
Interest Payment Dates: [____] and [______], commencing [_____], 2003
Regular Record Dates: [_____] and [______]
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
88
A-2
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
Date: ____________ GST TELECOMMUNICATIONS, INC.
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the [___]% Senior Subordinated Accrual Notes due 2007 described
in the within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:
-----------------------------------
Authorized Signatory
89
A-3
[REVERSE SIDE OF Security]
GST TELECOMMUNICATIONS, INC.
[___]% Senior Subordinated Accrual Notes due 2007
1. Principal and Interest.
The Company will pay the principal and the Final Accumulated
Interest Amount of this Security on [____], 2007.
Until [_____], 2002 (the "Final Interest Accrual Date"), interest
will accrue and be compounded semi-annually on each [____] and [____] (each an
"Interest Accrual Date"), commencing [____], 1998, but will not be payable in
cash. From and after [___], 2002, interest on the sum of the principal amount of
each Security and the accrued and unpaid interest thereon through the Final
Interest Accrual Date (the "Final Accumulated Interest Amount") will be payable
semiannually (to Holders of record at the close of business on [____] or [____]
immediately preceding the Interest Payment Date) on [____] and [____] of each
year, commencing [____], 2003.
After the Final Interest Accrual Date, interest on the principal of,
and Final Accumulated Interest Amount on, the Securities will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the Final Interest Accrual Date; provided that, if there is no
existing default in the payment of interest and this Security is authenticated
between a Regular Record Date referred to on the face hereof and the next
succeeding Interest Payment Date, as the case may be, interest shall accrue from
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year of 12 30-day months.
The Company shall pay interest on overdue principal and premium, if
any, and (to the extent lawful) interest on overdue installments of interest at
the rate per annum borne by the Securities.
2. Method of Payment.
The Company will pay principal and the Final Accumulated Interest
Amount as provided above and, after [______], 2002, interest (except defaulted
interest) on the principal amount of, and the Final Accumulated Interest Amount
on, the Securities as provided above on each [_____] and [_____] to the persons
who are Holders (as reflected in the Security Register at the close of business
on the [______] and [______] immediately preceding the Interest Payment Date),
in each case, even if the Security is cancelled on registration of transfer or
registration of exchange after such record date; provided that, with respect to
the payment of principal and the Final Accumulated Interest Amount, the Company
will not make payment to the Holder unless this Security is surrendered to a
Paying Agent.
90
A-4
The Company will pay principal, premium, if any, and interest in
money of the United States of America that at the time of payment is legal
tender for payment of public and private debts. If a payment date is a date
other than a Business Day at a place of payment, payment may be made at that
place on the next succeeding day that is a Business Day and no interest shall
accrue for the intervening period.
3. Paying Agent and Registrar.
Initially, the Trustee will act as authenticating agent, Paying
Agent and Registrar. The Company may change any authenticating agent, Paying
Agent or Registrar without notice. The Company, any Subsidiary or any Affiliate
of any of them may act as Paying Agent, Registrar or co-Registrar.
4. Indenture; Limitations.
The Company issued the Securities under an Indenture dated as of
November [___], ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Trust Company of New York (the "Trustee"). Capitalized terms herein are used as
defined in the Indenture unless otherwise indicated. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act. The Securities are subject to all such
terms, and Holders are referred to the Indenture and the Trust Indenture Act for
a statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Security and the terms of
the Indenture, the terms of the Indenture shall control.
The Securities are unsecured, senior subordinated indebtedness of
the Company, will rank pari passu in right of payment with all existing and
future unsecured, senior subordinated indebtedness of the Company, will be
subordinate in right of payment to all existing and future senior indebtedness
of the Company and will be senior in right of payment to all subordinated
indebtedness of the Company.
5. Redemption.
The Securities will be redeemable, at the Company's option, in whole
or in part, at any time and from time to time on or after [____], 2002 and prior
to maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holders' last address as it appears in the Security
Register, at the following Redemption Prices (expressed in percentages of their
principal amount plus the Final Accumulated Interest Amount), plus accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of Holders
of record on the relevant Regular Record Date that is on or prior to the
Redemption Date to receive interest due on an Interest Payment Date) if redeemed
during the 12-month period commencing on [____] of the applicable year set forth
below:
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Year Redemption Price
---- ----------------
2002 [____]%
2003 [____]%
2004 and thereafter 100.0000%
In addition, up to [___]% of the aggregate principal amount of the
Securities may be redeemed at the option of the Company, at any time prior to
[___], 2000, from the proceeds of one or more sales of its Capital Stock (other
than Redeemable Stock), at [___]% of the sum of their principal amount plus the
Accumulated Interest Amount on the Redemption Date, provided that after any such
redemption at least $[_____] million aggregate principal amount of Securities
remains outstanding.
In addition, the Securities may be redeemed as a whole, but not in
part, at the option of the Company, at 100% of their principal amount on the
Redemption Date, together with accrued interest thereon to the Redemption Date,
in the event the Company has become or would become obligated to pay, on the
next date on which any amount would be payable with respect to the Securities,
any Additional Amounts as a result of a change in the laws (including any
regulations promulgated thereunder) of Canada (or any political subdivision or
taxing authority thereof or therein), or change in any official position
regarding the application or interpretation of such laws or regulations, which
change is announced or becomes effective on or after November [___], 1997.
6. Notice of Redemption.
Notice of any optional redemption will be mailed at least 30 days
but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at such Holder's last address as it appears in the
Security Register. Securities in original denominations larger than $1,000 may
be redeemed in part; provided that Securities will only be issued in
denominations of $1,000 principal amount or integral multiples thereof. On and
after the Redemption Date, interest ceases to accrue on Securities or portions
of Securities called for redemption, unless the Company defaults in the payment
of the Redemption Price.
7. Repurchase upon Change in Control.
Upon the occurrence of any Change of Control, each Holder shall have
the right to require the repurchase of its Securities by the Company in cash
pursuant to the offer described in the Indenture at a purchase price equal to
101% of the sum of principal amount thereof and the Accumulated Interest Amount
thereon, plus other accrued and unpaid interest, if any, to the date of purchase
(the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30 days
after any Change of Control occurs to each Holder at his last address as it
appears in the Security Register. Securities in original denominations larger
than $1,000 may be sold to the Company in part; provided that Securities will
only be issued in denominations of $1,000 principal amount or integral multiples
thereof. On and after the applicable Payment Date, interest ceases to accrue
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on Securities or portions of Securities surrendered for purchase by the Company,
unless the Company defaults in the payment of the Change of Control Payment.
8. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons in
denominations of $1,000 of principal amount and integral multiples thereof. A
Holder may register the transfer or exchange of Securities in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer or exchange of any Securities selected for redemption.
Also, it need not register the transfer or exchange of any Securities for a
period of 15 days before a selection of Securities to be redeemed is made.
9. Persons Deemed Owners.
A Holder shall be treated as the owner of a Security for all
purposes.
10. Unclaimed Money.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company. After that, Holders entitled to the money must look
to the Company for payment, unless an applicable law designates another Person,
and all liability of the Trustee and such Paying Agent with respect to such
money shall cease.
11. Discharge Prior to Redemption or Maturity.
If the Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Securities (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Securities, except in
certain circumstances for certain sections thereof, and (b) to the Stated
Maturity, the Company will be discharged from certain covenants set forth in the
Indenture.
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12. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Securities then outstanding, and any
existing default or compliance with any provision may be waived with the consent
of the Holders of at least a majority in principal amount of the Securities then
outstanding. Without notice to or the consent of any Holder, the parties thereto
may amend or supplement the Indenture or the Securities to, among other things,
cure any ambiguity, defect or inconsistency and make any change that does not
materially and adversely affect the rights of any Holder.
13. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries, among other things, to incur additional
indebtedness; create liens; pay dividends or make distributions in respect of
their capital stock; make investments or make certain other restricted payments;
sell assets; issue or sell stock of Restricted Subsidiaries; enter into
transactions with stockholders or affiliates; acquire assets or businesses
located outside the continental United States and Hawaii; or, consolidate, merge
or sell all or substantially all of its assets. Within 90 days after the end of
the last quarter of each fiscal year, the Company must report to the Trustee on
compliance with such limitations.
14. Successor Persons.
Generally, when a successor person or other entity assumes all the
obligations of its predecessor under the Securities and the Indenture, the
predecessor person will be released from those obligations.
15. Defaults and Remedies.
The following events constitute "Events of Default" under the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Security when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise; (b) default in the payment of interest on
any Security when the same becomes due and payable, and such default continues
for a period of 30 days; (c) the Company defaults in the performance of or
breaches any other covenant or agreement of the Company in the Indenture or
under the Securities and such default or breach continues for a period of 30
consecutive days after written notice by the Trustee or the Holders of 25% or
more in aggregate principal amount of the Securities; (d) there occurs with
respect to any issue or issues of Indebtedness of the Company or any Significant
Subsidiary having an outstanding principal amount of $5,000,000 or more in the
aggregate for all such issues of all such Persons, whether such Indebtedness now
exists or shall hereafter be created, (I) an event of default that has caused
the holder thereof to declare such Indebtedness to be due and payable prior to
its Stated Maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled within 30 days of such
acceleration and/or (II) the failure to make a principal payment at the final
(but not any interim) fixed maturity and such
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defaulted payment shall not have been made, waived or extended within 30 days of
such payment default; (e) any final judgment or order (not covered by insurance)
for the payment of money in excess of $5,000,000 in the aggregate for all such
final judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Significant Subsidiary and shall not be paid or discharged, and
there shall be any period of 30 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such Persons to
exceed $5,000,000 during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; (f) a
court having jurisdiction in the premises enters a decree or order for (A)
relief in respect of the Company or any Significant Subsidiary in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 30 consecutive days; or (g) the Company or any Significant Subsidiary (A)
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors.
If an Event of Default (other than an Event of Default specified in
clause (f) or (g) above that occurs with respect to the Company) occurs and is
continuing under the Indenture, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Securities, then outstanding, by written
notice to the Company (and to the Trustee if such notice is given by the
Holders), may, and the Trustee at the request of such Holders shall, declare the
principal amount of, premium, if any, and accrued interest, if any, on the
Securities to be immediately due and payable. If a bankruptcy or insolvency
default with respect to the Company occurs and is continuing, the principal of
the Securities automatically becomes due and payable. Holders may not enforce
the Indenture or the Securities except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of at least a majority in
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power.
16. Additional Amounts.
Any payments by the Company under or with respect to the Securities
may require the payment of Additional Amounts as may become payable under
Section 4.21 of the Indenture.
17. Trustee Dealings with Company.
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The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
No incorporator or any past, present or future partner, shareholder,
other equity holder, officer, director, employee or controlling person as such,
of the Company or of any successor Person shall have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder by accepting a Security waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Securities.
19. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
21. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to GST
Telecommunications, Inc., ▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Chief Executive Officer.
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[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
_______________________________________________________________________________
Please print or typewrite name and address including zip code of assignee
_______________________________________________________________________________
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing _______________________________________ attorney to transfer said
Security on the books of the Company with full power of substitution in the
premises.
Date: ____________ _____________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
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OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant
to Section 4.12 or Section 4.13 of the Indenture, check the Box: |_|
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 4.12 or Section 4.13 of the Indenture, state the
amount (in principal amount):
$________________.
Date:
Your Signature:
_______________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: ______________________________