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EXHIBIT 4.3
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GLOBALSTAR, L.P.
GLOBALSTAR CAPITAL CORPORATION,
Issuers
10 3/4% Senior Notes due 2004
INDENTURE
Dated as of October 15, 0000
XXX XXXX XX XXX XXXX,
Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310(a)(1) ........................................ 7.10
(a)(2) ........................................ 7.10
(a)(3) ........................................ N.A.
(a)(4) ........................................ N.A.
(b) ........................................ N.A.
(c) ........................................ N.A.
311(a) ........................................ 7.11
(b) ........................................ 7.11
(c) ........................................ N.A.
312(a) ........................................ N.A.
(b) ........................................ 11.03
(c) ........................................ 11.03
313(a) ........................................ 7.06
(b)(1) ........................................ N.A.
(b)(2) ........................................ 7.06
(c) ........................................ N.A.
(d) ........................................ N.A.
314(a) ........................................ N.A.
314(a)(4) ........................................ 4.14
(b) ........................................ N.A.
(c)(1) ........................................ N.A.
(c)(2) ........................................ N.A.
(c)(3) ........................................ N.A.
(d) ........................................ N.A.
(e) ........................................ N.A.
(f) ........................................ N.A.
315(a) ........................................ N.A.
(b) ........................................ N.A.
(c) ........................................ N.A.
(d) ........................................ N.A.
(e) ........................................ N.A.
316(a)(last sentence) .................................... N.A.
(a)(1)(A) ........................................ N.A.
(a)(1)(B) ........................................ N.A.
(a)(2) ........................................ N.A.
(b) ........................................ N.A.
317(a)(1) ........................................ N.A.
(a)(2) ........................................ N.A.
(b) ........................................ N.A.
318(a) ........................................ N.A.
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
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TABLE OF CONTENTS
ARTICLE 1 Page
Definitions and Incorporation by Reference
SECTION 1.01. Definitions ...................................... 1
SECTION 1.02. Other Definitions ................................ 22
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act .................................. 22
SECTION 1.04. Rules of Construction ............................ 23
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating .................................. 24
SECTION 2.02. Execution and Authentication ..................... 24
SECTION 2.03. Registrar and Paying Agent ....................... 25
SECTION 2.04. Paying Agent To Hold Money in Trust............... 25
SECTION 2.05. Securityholder Lists ............................. 26
SECTION 2.06. Transfer and Exchange ............................ 26
SECTION 2.07. Replacement Securities ........................... 27
SECTION 2.08. Outstanding Securities ........................... 27
SECTION 2.09. Temporary Securities ............................. 28
SECTION 2.10. Cancellation ..................................... 28
SECTION 2.11. Defaulted Interest ............................... 28
SECTION 2.12. CUSIP Numbers .................................... 29
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee ............................... 29
SECTION 3.02. Selection of Securities To Be
Redeemed ....................................... 29
SECTION 3.03. Notice of Redemption ............................. 30
SECTION 3.04. Effect of Notice of Redemption ................... 31
SECTION 3.05. Deposit of Redemption Price ...................... 31
SECTION 3.06. Securities Redeemed in Part ...................... 31
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ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities ............................ 31
SECTION 4.02. SEC Reports ...................................... 32
SECTION 4.03. Limitation on Consolidated Debt .................. 32
SECTION 4.04. Future Guarantors ................................ 35
SECTION 4.05. Limitation on Restricted Payments................. 35
SECTION 4.06. Dividend and Other Payment Restrictions
Affecting Subsidiaries .......................... 37
SECTION 4.07. Asset Dispositions ............................... 38
SECTION 4.08. Transactions with Affiliates ..................... 39
SECTION 4.09. Limitation on the Issuance and Sales
of Capital Stock of Restricted
Subsidiaries ................................... 41
SECTION 4.10. Change of Control ................................ 42
SECTION 4.11. Limitation on Liens .............................. 43
SECTION 4.12. Business Activities .............................. 45
SECTION 4.13. Maintenance of Insurance ......................... 45
SECTION 4.14. Compliance Certificates; Statement by
Officers as to Default.......................... 47
SECTION 4.15. Further Acts and Instruments ..................... 47
SECTION 4.16. Business Activities of Globalstar................. 47
SECTION 4.17. Calculation of Original Issue Discount............ 47
ARTICLE 5
Successor Company
SECTION 5.01. When Issuers May Merge or Transfer
Assets ......................................... 48
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default ................................ 49
SECTION 6.02. Acceleration ..................................... 52
SECTION 6.03. Other Remedies ................................... 52
SECTION 6.04. Waiver of Past Defaults .......................... 53
SECTION 6.05. Control by Majority .............................. 53
SECTION 6.06. Limitation on Suits .............................. 53
SECTION 6.07. Rights of Holders to Receive Payment ............. 54
SECTION 6.08. Collection Suit by Trustee ....................... 54
SECTION 6.09. Trustee May File Proofs of Claim ................. 54
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SECTION 6.10. Priorities ....................................... 55
SECTION 6.11. Undertaking for Costs ............................ 55
SECTION 6.12. Waiver of Stay or Extension Laws ................. 55
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee ................................ 56
SECTION 7.02. Rights of Trustee ................................ 57
SECTION 7.03. Individual Rights of Trustee ..................... 58
SECTION 7.04. Trustee's Disclaimer ............................. 58
SECTION 7.05. Notice of Defaults ............................... 58
SECTION 7.06. Reports by Trustee to Holders .................... 58
SECTION 7.07. Compensation and Indemnity ....................... 59
SECTION 7.08. Replacement of Trustee ........................... 60
SECTION 7.09. Successor Trustee by Merger ...................... 61
SECTION 7.10. Eligibility; Disqualification .................... 61
SECTION 7.11. Preferential Collection of Claims
Against Issuers ................................ 61
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities;
Defeasance ..................................... 62
SECTION 8.02. Conditions to Defeasance ......................... 63
SECTION 8.03. Application of Trust Money ....................... 64
SECTION 8.04. Repayment to Issuers ............................. 64
SECTION 8.05. Indemnity for Government Obligations ............. 65
SECTION 8.06. Reinstatement .................................... 65
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders ....................... 65
SECTION 9.02. With Consent of Holders .......................... 66
SECTION 9.03. Compliance with Trust Indenture .................. 67
SECTION 9.04. Revocation and Effect of Consents
and Waivers .................................... 67
SECTION 9.05. Notation on or Exchange of Securities ............ 68
SECTION 9.06. Trustee To Sign Amendments ....................... 68
SECTION 9.07. Payment for Consent .............................. 68
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ARTICLE 10
Subsidiary Guaranties
SECTION 10.01. Guaranties ......................................... 68
SECTION 10.02. Limitation on Liability ............................ 71
SECTION 10.03. Successors and Assigns ............................. 71
SECTION 10.04. No Waiver .......................................... 71
SECTION 10.05. Modification ....................................... 71
SECTION 10.06. Release of Subsidiary Guarantor .................... 72
ARTICLE 11
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls ....................... 72
SECTION 11.02. Notices ............................................ 72
SECTION 11.03. Communication by Holders with Other
Holders .......................................... 73
SECTION 11.04. Certificate and Opinion as to
Conditions Precedent ............................. 73
SECTION 11.05. Statements Required in Certificate
or Opinion ....................................... 73
SECTION 11.06. When Securities Disregarded ........................ 74
SECTION 11.07. Rules by Trustee, Paying Agent and
Registrar ........................................ 74
SECTION 11.08. Legal Holidays ..................................... 74
SECTION 11.09. Governing Law ...................................... 74
SECTION 11.10. No Recourse Against Others ......................... 74
SECTION 11.11. Successors ......................................... 75
SECTION 11.12. Multiple Originals ................................. 75
SECTION 11.13. Table of Contents; Headings ........................ 76
Exhibit A - Form of Security
Rule 144A/Regulation S Appendix
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INDENTURE dated as of October 15, 1997, among Globalstar,
L.P., a Delaware limited partnership ("Globalstar"),
Globalstar Capital Corporation, a Delaware corporation
("Globalstar Capital" and, together with Globalstar, the
"Issuers") and The Bank of New York, a New York banking
corporation (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Issuers' 10 3/4% Senior
Notes due 2004 (the "Initial Securities") and, if and when issued pursuant to a
registered exchange for Initial Securities, the Issuers' 10 3/4% Senior Notes
due 2004 (the "Exchange Securities") and if and when issued pursuant to a
private exchange for Initial Securities, the Issuers' 10 3/4% Senior Notes due
2004 (the "Private Exchange Securities", together with the Exchange Securities
and the Initial Securities, the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person, (i)
Debt of any other Person existing at the time such Person merges with or into or
consolidates with or becomes a Restricted Subsidiary of such specified Person
and (ii) Debt secured by a Lien encumbering any asset acquired by such specified
Person, which Debt or Lien was not Incurred in anticipation of, and was
outstanding prior to, such merger, consolidation or acquisition.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control. The terms "controlling" and "controlled" have
meanings correlative to the foregoing.
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"Asset Disposition" means any transfer, conveyance, sale, lease or
other disposition (collectively, any "disposition") by the Issuers or any
Restricted Subsidiary (including any disposition by means of a consolidation,
merger or similar transaction) but excluding a disposition by a Restricted
Subsidiary to the Issuers or a Wholly-Owned Restricted Subsidiary or by the
Issuers to a Wholly-Owned Restricted Subsidiary of (i) shares of Capital Stock
or other ownership interests of a Restricted Subsidiary, (ii) all or
substantially all of the assets of the Issuers or any Restricted Subsidiary
representing a division or line of business or (iii) other assets or rights of
such Person or any of its Restricted Subsidiaries other than a disposition (a)
in the ordinary course of business, (b) that constitutes a Restricted Payment
which is permitted pursuant to Section 4.05 or (c) that is subject to the
provisions set forth in Section 5.01(a); provided, however, that a transaction
described in clauses (i), (ii) and (iii) shall constitute an Asset Disposition
only to the extent that the aggregate consideration for all such transfers,
conveyances, sales, leases or other disposition exceeds $5 million in any
12-month period.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale and Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Debt or Preferred Stock, the quotient obtained by dividing (i) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such Debt or redemption or
similar payment with respect to such Preferred Stock multiplied by the amount of
such payment by (ii) the sum of all such payments.
"Bank Credit Agreement" means any one or more credit agreements
(which may include or consist of revolving credits) between Globalstar,
Globalstar Capital or any Restricted Subsidiary and one or more banks or other
financial institutions providing financing for the business of Globalstar and
its Restricted Subsidiaries.
"Build-out" means the construction, acquisition, improvement,
operation and development (including all costs related thereto) of the
Globalstar System, until such time
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as Globalstar shall have (i) constructed at least 64 satellites for use in the
Globalstar System; (ii) launched or attempted to launch (through "intentional
ignition") at least 56 satellites for use in the Globalstar System; and (iii)
commenced commercial service of the Globalstar System with at least 44
satellites in orbit and Operating.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" of any Person means an obligation that is
required to be classified and accounted for as a capital lease or a liability on
the face of a balance sheet of such Person in accordance with GAAP (a "Capital
Lease"). The Stated Maturity of such obligation shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty. The amount of such Debt represented by such obligation shall be the
capitalized amount thereof that would appear on the face of a balance sheet of
such Person in accordance with GAAP.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such Person and shall (i) include any Special Preferred Obligations
and other preferred equivalent obligations and (ii) exclude debt securities
convertible into Capital Stock.
"Change of Control" means:
(i) the sale, lease or transfer, in one transaction or a series of
related transactions, of all or substantially all the assets of Globalstar
and the Restricted Subsidiaries;
(ii) the adoption of a plan relating to the liquidation or
dissolution of Globalstar or Globalstar Capital;
(iii) one or more Dispositions which cause Loral's direct and
indirect equity interest in Globalstar to be reduced by more than 30% as
compared to its direct and indirect equity interest in Globalstar as of
December 31, 1996; or
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(iv) the first day on which:
(a) Globalstar fails to own, of record and beneficially, 100%
of the equity interests and voting stock of Globalstar Capital; or
(b) Loral fails to be, or, directly or indirectly, fails
solely to control, the sole managing general partner of Globalstar.
Notwithstanding clauses (i), (ii) and (iv)(b) above, neither the
acquisition by GTL, Loral or any Wholly Owned subsidiary of Loral of a majority
of the partnership interests in, or substantially all the assets of, Globalstar,
nor the merger of Globalstar with and into GTL, Loral or any Wholly Owned
subsidiary of Loral shall constitute a Change of Control; provided, however,
that with respect to clause (iv)(b), Loral continues to control, or is the
corporate successor to, Globalstar.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission and any
survivor agency.
"Consolidated Cash Flow Available for Fixed Charges" for any period
means the Consolidated Net Income of Globalstar and its Restricted Subsidiaries
for such period plus Consolidated Interest Expense of Globalstar and its
Restricted Subsidiaries for such period, plus the following to the extent
deducted in calculating such Consolidated Net Income: (i) Consolidated Income
Tax Expense of Globalstar and its Restricted Subsidiaries for such period, (ii)
the consolidated depreciation and amortization expense included in the income
statement of Globalstar and its Restricted Subsidiaries for such period and
(iii) any non-cash expense related to the issuance to employees of Globalstar or
any Restricted Subsidiary of Globalstar of options to purchase Capital Stock of
Globalstar or such Restricted Subsidiary; provided, however, that there shall be
excluded therefrom the Consolidated Cash Flow Available for Fixed Charges (if
positive) of any Restricted Subsidiary (calculated separately, for such
Restricted Subsidiary in the same manner as provided above for Globalstar) that
is subject to a restriction which prevents the payment of dividends or the
making of distributions to Globalstar or another Restricted Subsidiary to the
extent of such restriction; provided further, however, that if Consolidated Cash
Flow Available For Fixed Charges for any period shall be less than $1,
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Consolidated Cash Flow For Fixed Charges for such period shall be deemed to be
$1.
"Consolidated Income Tax Expense" for any period means the
consolidated provision for income taxes of Globalstar and the Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, for any period, the
consolidated interest expense included in a consolidated income statement
(excluding interest income) of Globalstar and the Restricted Subsidiaries for
such period calculated on a consolidated basis in accordance with GAAP, plus, to
the extent not so included, cash dividends paid during such period on Special
Preferred Obligations.
"Consolidated Net Income" means, for any period, the consolidated
net income (or loss) of Globalstar and the Restricted Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP, less the
amount of any cash dividends paid during such period on Special Preferred
Obligations; provided, however, that there shall be excluded therefrom (i) the
net income (or loss) of any Person acquired by Globalstar or a Restricted
Subsidiary in a pooling-of-interests transaction for any period prior to the
date of such transaction, (ii) the net income (and loss) of any Person that is
not a Restricted Subsidiary except to the extent of the amount of dividends or
other distributions actually paid to Globalstar or a Restricted Subsidiary by
such Person during such period, (iii) gains (but not losses) on Asset
Dispositions by Globalstar or any Restricted Subsidiary, (iv) all extraordinary
gains and losses, (v) the cumulative effect of changes in accounting principles,
(vi) non-cash gains or losses resulting from fluctuations in currency exchange
rates, (vii) any noncash gain or loss realized on the termination of any
employee pension benefit plan and (viii) the tax effect of any of the items
described in clauses (i) through (vii) above; provided further, however, that
for purposes of any determination pursuant to the provisions of Section 4.05,
(a) there shall further be excluded therefrom the net income (but not net loss)
of any Restricted Subsidiary that is subject to a restriction which prevents the
payment of dividends or the making of distributions to Globalstar or another
Restricted Subsidiary of Globalstar to the extent of such restriction and (b)
there shall further be deducted therefrom an amount equal to the Tax Amount paid
by Globalstar during such period.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined
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on a consolidated basis in accordance with GAAP, less amounts attributable to
Disqualified Stock of such Person; provided, however, that, with respect to
Globalstar, adjustments following the date of this Indenture to the accounting
books and records of Globalstar in accordance with Accounting Principles Board
Opinions Nos. 16 and 17 (or successor opinions thereto) or otherwise resulting
from the acquisition of control of Globalstar by another Person shall not be
given effect to.
"Debt" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (i) every obligation of such Person for money borrowed, (ii)
every obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments, including any such obligations Incurred in connection with
the acquisition of property, assets or businesses, (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (iv)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (including securities repurchase agreements but
excluding trade accounts payable or accrued liabilities arising in the ordinary
course of business which are not overdue or which are being contested in good
faith), (v) every Capital Lease Obligation of such Person, (vi) all Receivables
Sales of such Person, together with any obligation of such Person to pay any
discount, interest, fees, indemnities, penalties, recourse, expenses or other
amounts in connection therewith, (vii) all obligations to redeem Disqualified
Stock issued by such Person, (viii) all Attributable Debt, (ix) every obligation
under Interest Rate and Currency Protection Agreements of such Person, (x) every
obligation of the type referred to in clauses (i) through (ix) of another Person
secured by any Lien on any property or asset of such Person (whether or not such
obligation is assumed by such Person), the amount of such obligation being
deemed to be the lesser of the fair market value of such property or assets and
the amount of the obligation so secured and (xi) every obligation of the type
referred to in clauses (i) through (x) of another Person and all dividends of
another Person the payment of which, in either case, such Person has Guaranteed.
The "amount" or "principal amount" of Debt at any time of determination as used
herein represented by (a) any Debt issued at a price that is less than the
principal amount at maturity thereof, shall be the amount of the liability in
respect thereof determined in accordance with GAAP, (b) any Receivables Sales
shall be the amount of the unrecovered capital or principal investment of the
purchaser (other than
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Globalstar or a Wholly-Owned Restricted Subsidiary) thereof, excluding amounts
representative of yield or interest earned on such investment, (c) any
Disqualified Stock, shall be the maximum fixed redemption or repurchase price in
respect thereof, (d) any Capital Lease Obligation, shall be determined in
accordance with the definition thereof and (e) any Permitted Interest Rate or
Currency Protection Agreement shall be zero. In no event shall Debt include any
liability for taxes. For purposes of determining any particular amount of Debt,
Guarantees or Liens with respect to letters of credit supporting Debt otherwise
included in the determination of a particular amount shall not be included.
"Default" means an event that is, or after the passing of time or
the giving of notice both would be, an Event of Default.
"Disposition" means (i) the sale, transfer or other conveyance by
Loral or any of its Subsidiaries (other than to a Wholly Owned subsidiary, of
Loral) of (a) Globalstar partnership interests or (b) equity interests in any
entity (an "intermediate entity") which owns, directly or indirectly, Globalstar
partnership interests or (ii) the issue and sale by any such intermediate entity
of its equity securities to one or more third parties if and to the extent the
proceeds of such issue and sale are distributed by such intermediate entity to
Loral or any of its Subsidiaries.
"Disqualified Stock" of any Person means any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
first anniversary of the final Stated Maturity of the Securities; provided,
however, that any Preferred Stock which would not constitute Disqualified Stock
but for provisions thereof giving holders thereof the right to require
Globalstar to repurchase or redeem such Preferred Stock upon the occurrence of a
change of control occurring prior to the first anniversary of the final Stated
Maturity of the Securities shall not constitute Disqualified Stock if the change
of control provisions applicable to such Preferred Stock are no more favorable
to the holders of such Preferred Stock than the provisions applicable to the
Securities contained in Section 4.10 and such Preferred Stock specifically
provides that Globalstar will not
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repurchase or redeem any such stock pursuant to such provisions prior to
Globalstar's repurchase of such Securities as are required to be repurchased
pursuant to Section 4.10; provided further, however, that all Special Preferred
Obligations shall be deemed to be Disqualified Stock.
"11 3/8 Indenture" means the indenture dated as of February 15,
1997, among Globalstar, Globalstar Capital and The Bank of New York, as Trustee,
pursuant to which the 11 3/8 Notes were issued.
"11 1/4 Indenture" means the indenture dated as of June 1, 1997,
among Globalstar, Globalstar Capital and The Bank of New York, as Trustee,
pursuant to which the 11 1/4 Notes were issued.
"11 3/8 Notes" means the $500,000,000 aggregate principal amount of
11 3/8% Senior Notes due 2004 of the Issuers, together with any Exchange
Securities or Private Exchange Securities (as such terms are defined in the
11 3/8 Indenture) issued pursuant to the 11 3/8 Indenture.
"11 1/4 Notes" means the $325,000 aggregate principal amount of the
11 1/4 Senior Notes due 2004 of the Issuers, together with any Exchange
Securities or Private Exchange Securities (as such terms are defined in the
11 1/4 Indenture) issued pursuant to the 11 1/4 Indenture.
"Eligible Institution" means a commercial banking institution that
has combined capital and surplus of not less than $500 million or its equivalent
in foreign currency, whose debt is rated "A-3" or higher or "A-" or higher
according to Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings Group
(or such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the Securities
Act)) respectively, at the time as of which any investment or rollover therein
is made.
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any successor act) and the rules and regulations thereunder.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in (i) the opinions and pronouncements of the Accounting Principles
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Board of the American Institute of Certified Public Accountants, (ii) statements
and pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the Commission
governing the inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to Section 13 of
the Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
Commission.
"General Partners' Committee" means the committee consisting of
representatives of the general partners of Globalstar that governs the
activities of Globalstar.
"Globalstar System" means Globalstar's worldwide, low-earth orbit,
satellite-based digital telecommunications system as described in Globalstar's
Offering Memorandum dated October 23, 1997 with respect to the Securities.
"Globaltel Russia" means Globalstar-Space Telecommunications, a
Russian closed joint stock company.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which obligations
or guarantee the full faith and credit of the United States is pledged and which
have a remaining weighted Average Life to maturity of not more than one year
from the date of Investment therein.
"GTL" means Globalstar Telecommunications Limited, a Bermuda
company.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing, or having the economic effect of
guaranteeing, any Debt of any other Person, (the "primary obligor") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person, (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt,
(ii) to purchase property, securities or services for the purposes of assuring
the holder of such Debt of the payment of such Debt, or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Debt (and "Guaranteed", "Guaranteeing" and
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"Guarantor" shall have meanings correlative to the foregoing); provided,
however, that the Guarantee by any Person shall not include endorsements by such
Person for collection or deposit, in either case, in the ordinary course of
business.
"Holders" means the registered holders from time to time of the
Securities.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Debt or other obligation
including by acquisition of Subsidiaries or the recording, as required pursuant
to GAAP or otherwise, of any such Debt or other obligation on the balance sheet
of such Person (and "Incurrence", "Incurred" and "Incurring" shall have the
meanings correlative to the foregoing); provided, however, that a change in GAAP
that results in an obligation of such Person that exists at such time becoming
Debt shall not be deemed an Incurrence of such Debt and that neither the accrual
of interest nor the accretion of original issue discount shall be deemed an
Incurrence of Debt. Notwithstanding the foregoing, Globalstar may elect to treat
all or any portion of revolving credit debt of Globalstar or a Subsidiary as
being Incurred from and after any date beginning the date the revolving credit
commitment is extended to Globalstar or a Subsidiary, by furnishing notice
thereof to the Trustee, and any borrowings or reborrowings by Globalstar or a
Subsidiary under such commitment up to the amount of such commitment designated
by Globalstar as Incurred shall not be deemed to be new Incurrence of Debt by
Globalstar or such Subsidiary; provided, however, that the undrawn portion of
any such revolving credit debt shall be deemed to be outstanding Debt until such
time as the commitment thereunder is terminated. The accretion of principal of a
non-interest bearing or other discount security shall not be deemed the
Incurrence of Debt.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
judgment of the General Partners' Committee of Globalstar, qualified to perform
the task for which it has been engaged and disinterested and independent with
respect to the Issuers and their Subsidiaries and Affiliates.
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"Interest Rate or Currency Protection Agreement" of any Person means
any forward contract, futures contract, swap, option or other financial,
agreement or arrangement (including, without limitation, caps, floors, collars
and similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates or indices.
"Investment" by any Person means any direct or indirect loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) to, or purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Debt issued by, any other Person, including any payment on a
Guarantee of any obligation of such other Person, but excluding any loan,
advance or extension of credit to an employee of Globalstar or any Restricted
Subsidiary in the ordinary course of business, accounts receivables and other
commercially reasonable extensions of trade credit.
"Issue Date" means the date on which the Securities are first issued
and delivered.
"Lien" means, with respect to any property or assets, any mortgage
or deed of trust, pledge, hypothecation, assignment, Receivables Sale, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing or any
Sale and Leaseback Transaction).
"Liquidated Damages" means additional cash interest with respect to
the Securities payable upon the occurrence of certain events as specified in the
Registration Rights Agreement dated as of October 29, 1997, among Globalstar,
Globalstar Capital and the Initial Purchasers named therein.
"Loral" means Loral Space & Communications Ltd., a Bermuda company.
"Marketable Securities" means: (i) Government Securities; (ii) any
time deposit account, money market deposit and certificate of deposit maturing
not more than
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270 days after the date of acquisition issued by, or time deposit of, an
Eligible Institution; (iii) commercial paper maturing not more than 270 days
after the date of acquisition issued by a corporation (other than an Affiliate
of Globalstar) with a rating, at the time as of which any investment therein is
made, of "P-1" or higher according to Xxxxx'x Investors Service, Inc. or "A-1"
or higher according to Standard & Poor's Ratings Group (or such similar
equivalent rating by at least one "nationally recognized statistical rating
organization" (as defined in Rule 436 under the Securities Act)); (iv) any
banker's acceptances or money market deposit accounts issued or offered by an
Eligible Institution; (v) repurchase obligations with a term of not more than 7
days for Government Securities entered into with an Eligible Institution; and
(vi) any fund investing exclusively in investments of the types described in
clauses (i) through (v) above.
"Net Available Proceeds" from any Asset Disposition by any Person
means cash or Marketable Securities received (including by way of sale or
discounting of a note, installment receivable or other receivable, but excluding
any other consideration received in the form of assumption by the acquiror of
Debt or other obligations relating to such properties or assets) therefrom by
such Person, net of (i) all legal, title and recording tax expenses, commissions
and other fees and expenses Incurred and all federal, state, provincial, foreign
and local taxes (including taxes payable upon payment or other distribution of
funds from a foreign subsidiary to Globalstar or another Subsidiary of
Globalstar) required to be accrued as a liability as a consequence of such Asset
Disposition, (ii) all payments made by such Person or its Restricted
Subsidiaries on any Debt which is secured by such assets in accordance with the
terms of any Lien upon or with respect to such assets or which must by the terms
of such Lien, or in order to obtain a necessary consent to such Asset
Disposition or by applicable law, be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments made to minority
interest holders in Restricted Subsidiaries of such Person or joint ventures as
a result of such Asset Disposition, (iv) appropriate amounts to be provided by
such Person or any Restricted Subsidiary thereof, as the case may be, as a
reserve in accordance with GAAP against any liabilities associated with such
assets and retained by such Person or any Restricted Subsidiary thereof, as the
case may be, after such Asset Disposition, including, without limitation,
liabilities under any indemnification obligations and severance and other
employee termination costs associated with such Asset Disposition, in each case
as determined by
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the General Partners' Committee of Globalstar, in its reasonable good faith
judgment evidenced by a board resolution filed with the Trustee; provided,
however, that any reduction in such reserve within twelve months following the
consummation of such Asset Disposition will be treated for all purposes of this
Indenture and the Securities as a new Asset Disposition at the time of such
reduction with Net Available Proceeds equal to the amount of such reduction, and
(v) any consideration for an Asset Disposition (which would otherwise constitute
Net Available Proceeds) that is required to be held in escrow pending
determination of whether a purchase price adjustment will be made, but amounts
under this clause (v) shall become Net Available Proceeds at such time and to
the extent such amounts are released to such Person.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-Recourse Debt" means Debt:
(i) as to which neither the Issuers nor any Restricted Subsidiary:
(a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Debt);
(b) is directly or indirectly liable (as a guarantor or
otherwise); or
(c) constitutes the lender;
(ii) no default with respect to which (including any rights that
the holders thereof may have to take enforcement action against an Issuer
or any Unrestricted Subsidiary) would permit (upon notice, lapse of time
or both) any holder of any other Debt of the Issuers or any Restricted
Subsidiary to declare a default on such other Debt or cause the payment
thereof to be accelerated or payable prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that
they will not have any recourse to the
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stock or assets of the Issuers or any of their Restricted Subsidiaries.
"Offer to Purchase" means a written offer (the "Offer") sent by
Globalstar by first class mail, postage prepaid, to each holder at his address
appearing in the Securities register on the date of the Offer offering to
purchase up to the principal amount of Securities specified in such Offer at the
purchase price specified in such Offer (as determined pursuant to this
Indenture). Unless otherwise required by applicable law, the Offer shall specify
an expiration date (the "Expiration Date") of the Offer to Purchase which shall
be, subject to any contrary requirements of applicable law, not less than 30
days or more than 60 days after the date of such Offer and a settlement date for
purchase of Securities within five Business Days after the Expiration Date. The
Issuers shall notify the Trustee at least 15 Business Days (or such shorter
period as is acceptable to the Trustee) prior to the mailing of the Offer of
Globalstar's obligation to make an Offer to Purchase, and the Offer shall be
mailed by Globalstar or, at Globalstar's request, by the Trustee in the name and
at the expense of Globalstar. The Offer shall contain information concerning the
business of Globalstar and its Subsidiaries which Globalstar in good faith
believes will enable such holders to make an informed decision with respect to
the Offer to Purchase (which at a minimum will include (i) the most recent
annual and quarterly financial statements and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" contained in the
documents required to be filed with the Trustee pursuant to this Indenture
(which requirements may be satisfied by delivery of such documents together with
the Offer), (ii) a description of material developments in Globalstar's business
subsequent to the date of the latest of such financial statements referred to in
clause (i) (including a description of the events requiring Globalstar to make
the Offer to Purchase), (iii) if applicable, appropriate pro forma financial
information concerning the Offer to Purchase and the events requiring Globalstar
to make the Offer to Purchase and (iv) any other information required by
applicable law to be included therein). The Offer shall contain all instructions
and materials necessary to enable such holders to tender Securities pursuant to
the Offer to Purchase.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Issuers.
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"Officers' Certificate" means a certificate signed by two Officers.
"Operating" means, with respect to any satellite, that at least 50%
of the call circuits of such satellite are operating at design performance
specifications.
"Opinion of Counsel" means an opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Issuers or the Trustee.
"Permitted Interest Rate or Currency Protection Agreement" of any
Person means any Interest Rate or Currency Protection Agreement entered into
with one or more financial institutions in the ordinary course of business that
is designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with respect to the Debt being
hedged thereby and not for purposes of speculation.
"Permitted Investment" means an Investment by an Issuer or any
Restricted Subsidiary (i) in any Person as a result of which such Person becomes
a Restricted Subsidiary, (ii) in Marketable Securities, (iii) in Permitted
Interest Rate or Currency Protection Agreements, (iv) made as a result of the
receipt of noncash consideration from an Asset Disposition that was made
pursuant to and in compliance with Section 4.07 and (v) consisting of loans or
advances to employees made in the ordinary course of business not to exceed $3
million in the aggregate outstanding at any one time.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
"Preferred Stock" of any Person means Capital Stock of such Person
of any class or classes (however designated) that ranks prior, as to the payment
of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.
"principal" of a Security means the principal of the Security plus
the premium, if any, payable on the Secu-
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rity which is due or overdue or is to become due at the relevant time.
"Receivables" means receivables, chattel paper, instruments,
documents or intangibles evidencing or relating to the right to payment of money
in respect of the sale of goods or services.
"Receivables Sale" of any Person means any sale of Receivables of
such Person (pursuant to a purchase facility or otherwise), other than in
connection with a disposition of the business operations of such Person relating
thereto or a disposition of defaulted Receivables for purpose of collection and
not as a financing arrangement.
"Refinance" means in respect of any Debt, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other Debt
in exchange or replacement for, such Debt. "Refinanced" and "Refinancing" shall
have correlative meanings.
"Refinancing Debt" means Debt that Refinances any Debt of the
Issuers or any Restricted Subsidiary existing on the Issue Date or Incurred in
compliance with this Indenture, including Debt that Refinances Refinancing Debt;
provided, however, that (i) such Refinancing Debt has a Stated Maturity no
earlier than the Stated Maturity of the Debt being Refinanced, (ii) such
Refinancing Debt has an Average Life at the time such Refinancing Debt is
Incurred that is equal to or greater than the Average Life of the Debt being
Refinanced, (iii) such Refinancing Debt has an aggregate principal amount (or if
Incurred with original issue discount, an aggregate issue price) that is equal
to or less than the aggregate principal amount (or if Incurred with original
issue discount, the aggregate accreted value) then outstanding or committed
(plus fees and expenses, including any premium and defeasance costs) under the
Debt being Refinanced, (iv) in the event the Debt being Refinanced constitutes a
Subordinated Obligation, the Refinancing Debt is subordinated to the Securities
to at least the same extent as the Debt being Refinanced and (v) Special
Preferred Obligations may only be Refinanced with Preferred Stock (other than
Preferred Stock that is Disqualified Stock), other Special Preferred Obligations
or Subordinated Obligations; provided, further, however, that Refinancing Debt
shall not include (x) Debt of a Subsidiary that Refinances Debt of the Issuers
or (y) Debt of the Issuers or a Restricted Subsidiary that Refinances Debt of an
Unrestricted Subsidiary.
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"Related Person" of any Person means any other Person directly or
indirectly owning (a) 10% or more of the outstanding common equity of such
Person (or, in the case of a Person that is not a corporation, 10% or more of
the equity interest in such Person) or (b) 10% or more of the combined voting
power of the Voting Stock of such Person.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the direct
or indirect holders of its Capital Stock (other than dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and
dividends or distributions payable solely to the Issuers or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly-Owned Restricted Subsidiary to minority
stockholders (or owners of an equivalent interest in the case of a Subsidiary
that is an entity other than a corporation)), (ii) the purchase, redemption or
other acquisition or retirement for value of any Capital Stock of an Issuer held
by any Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Issuers (other than a Restricted Subsidiary), including the
exercise of any option to exchange any Capital Stock (other than into Capital
Stock of the Issuers that is not Disqualified Stock), (iii) the purchase,
repurchase, redemption, defeasance or other acquisition or retirement for value,
prior to scheduled maturity, scheduled repayment or scheduled sinking fund
payment of any Subordinated Obligations (other than the purchase, repurchase or
other acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of acquisition) or (iv) the making
of any Investment in any Person (other than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of Globalstar, whether
existing on or after the Issue Date, unless such Subsidiary is an Unrestricted
Subsidiary.
"Sale and Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby an Issuer or a Restricted
Subsidiary transfers such property to a Person and an Issuer or a Restricted
Subsidiary leases it from such Person.
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"Securities" means the Securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended (or
any successor act) and the rules and regulations thereunder.
"Significant Subsidiary" means a Restricted Subsidiary that is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act and the Exchange Act.
"Special Preferred Obligations" means (i) preferred partnership
interests of Globalstar existing as of the Issue Date and (ii) any preferred
partnership interests, convertible preferred equivalent obligations or similar
preferred obligations of Globalstar issued after the Issue Date to finance the
Build-out; provided, however, that any such preferred partnership interests,
convertible preferred equivalent obligations or similar preferred obligations of
Globalstar issued after the Issue Date shall not constitute Special Preferred
Obligations if such interest or obligation, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable at the
option of the Holders), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the final Stated Maturity of the Securities; provided further, however,
that any such interest or obligation which would constitute Special Preferred
Obligations but for provisions thereof giving holders thereof the right to
require Globalstar to repurchase or redeem such interest or obligation upon the
occurrence of a change of control occurring prior to the final Stated Maturity
of the Securities shall constitute Special Preferred Obligations if the change
of control provisions applicable to such interest or obligation are no more
favorable to the holders of such interest or obligation than the provisions
applicable to the Securities contained in Section 4.10 and such interest or
obligation specifically provides that Globalstar will not repurchase or redeem
any such interest or obligation pursuant to such provisions prior to
Globalstar's repurchase of such Securities as are required to be repurchased
pursuant to Section 4.10. Notwithstanding the foregoing, preferred partnership
interests, convertible preferred equivalent obligations or similar preferred
obligations of Globalstar issued after the Issue Date shall not be Special
Preferred Obligations unless, at the time of their issuance, Globalstar shall
certify to the Trustee that such interests
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or obligations shall be designated Special Preferred Obligations.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Debt of the Issuers (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to the Securities pursuant to a written agreement to
that effect.
"Subsidiary" of any Person means (i) a corporation more than 50% of
the combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person or
(ii) any other Person (other than a corporation) in which such Person, or one or
more other Subsidiaries of such Person or such Person and one or more other
Subsidiaries of such Person, directly or indirectly, has at least a majority
ownership and power to direct the policies, management and affairs thereof.
"Subsidiary Guaranty" means the Guarantee by a Subsidiary Guarantor
of the Issuers' obligations with respect to the Securities contained in Article
10 hereof.
"Subsidiary Guarantor" means any Subsidiary which, pursuant to the
terms hereof, has executed a supplemental indenture in a form reasonably
satisfactory to the Trustee and become bound by the terms hereof, including
Article 10 hereof.
"Tax Amount" means, with respect to any year, an amount not to
exceed the sum of the ordinary income from trade or business activities and
other items of income, loss and deduction reported by Globalstar for that year
for United States federal income tax purposes multiplied by a percentage equal
to the sum of (a) the highest applicable federal corporation income tax rate for
that year (expressed as a percentage) plus (b) 8% multiplied by the excess of
100% over the highest applicable federal corporate income tax for that year
(expressed as a percentage).
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"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of this Indenture, except
as provided by Section 9.03.
"Transitory Equipment Subsidiary" means a Subsidiary of Globalstar
whose only business activity is acquiring equipment from Globalstar for the sole
purpose of selling such equipment to a service provider to Globalstar; provided,
however, that Globalstar retains a security interest in such equipment so long
as it is owned by such Subsidiary; provided further, however, that such
Subsidiary has no Debt outstanding at any time other than Debt represented by
such security interest.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of Globalstar
designated as such by the General Partner's Committee as set forth below where
(a) neither Globalstar nor any of its other Subsidiaries (other than another
Unrestricted Subsidiary) (1) provides credit support for, or Guarantee of, any
Debt of such Subsidiary or any Subsidiary of such Subsidiary (including any
undertaking, agreement or instrument evidencing such Debt), (2) is directly or
indirectly liable for any Debt of such Subsidiary or any Subsidiary of such
Subsidiary, or (3) has any obligation to make additional Investments in such
Subsidiary or any Subsidiary of such Subsidiary, (b) such Subsidiary has no Debt
other than Non-Recourse Debt; provided, however, that if any Unrestricted
Subsidiary Incurs any Debt other than Non-Recourse Debt or any Non-Recourse Debt
Incurred by such Unrestricted Subsidiary shall thereafter cease for any reason
to be Non-Recourse Debt, such event shall be deemed to constitute an Incurrence
of such Debt by Globalstar and such Unrestricted Subsidiary shall be deemed to
be a Restricted Subsidiary for purposes of Section 4.04 and (c) such Subsidiary
and each Subsidiary of such Subsidiary has at least one director on its board of
directors that is not a director or executive officer of Globalstar or any
Restricted Subsidiary and (ii) any Subsidiary of an Unrestricted Subsidiary. The
General Partner's Committee may designate any Subsidiary to be an Unrestricted
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21
Subsidiary unless such Subsidiary or any Subsidiary of such Subsidiary owns any
Capital Stock or Debt of, or owns or holds any Lien on any property of,
Globalstar or any other Subsidiary of Globalstar which is not a Subsidiary of
the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary;
provided, however, that either (A) the Subsidiary to be so designated has total
assets of $1,000 or less or (B) immediately after giving effect to such
designation, Globalstar could incur an additional $1.00 of Debt pursuant to
Section 4.03(a) and provided further, however, that Globalstar could make a
Restricted Payment in an amount equal to the greater of the fair market value
and the book value of such Subsidiary pursuant to Section 4.05 and such amount
is thereafter treated as a Restricted Payment for the purpose of calculating the
aggregate amount available for Restricted Payments thereunder. The General
Partners' Committee may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary, provided that, immediately after giving effect to such designation,
Globalstar could incur an additional $1.00 of Debt pursuant to Section 4.03(a).
Notwithstanding the foregoing, neither Globalstar Capital nor any of its
Subsidiaries shall be Unrestricted Subsidiaries.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is Pledged and which are not callable or redeemable at the issuer's option.
"Vendor Financing Facility" means any agreements between Globalstar,
Globalstar Capital and/or any Restricted Subsidiary and one or more vendors or
lessors of equipment to Globalstar, Globalstar Capital and/or any Restricted
Subsidiary (or any affiliate of any such vendor or lessor) providing financing
for the acquisition by Globalstar or any such Restricted Subsidiary of equipment
from any such vendor or lessor.
"Voting Stock" of any Person means Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly-Owned Restricted Subsidiary" means a Restricted Subsidiary
99% or more of the outstanding Capital Stock or other ownership interests of
which (other than
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directors' qualifying shares) shall at the time be owned by Globalstar or by one
or more Wholly-Owned Restricted Subsidiaries of Globalstar or by Globalstar and
one or more Wholly-Owned Restricted Subsidiaries of Globalstar.
SECTION 1.02. Other Definitions.
Defined in
Term Section
"Affiliate Transaction" ............................. 4.08
"Appendix" .......................................... 2.01
"Bankruptcy Law" .................................... 6.01
"Cash Insurance" ....... ............................ 4.13
"covenant defeasance option" ........................ 8.01(b)
"Custodian" ......................................... 6.01
"Debt Coverage Ratio" ............................... 4.03
"Event of Default" .................................. 6.01
"Exchange Securities" ............................... Recital
"Globalstar" ........................................ Preamble
"Globalstar Capital" ................................ Preamble
"Initial Securities" ................................ Recital
"In-orbit Insurance Event" .......................... 4.13
"Insurance Account" .... ............................ 4.13
"Insurance Proceeds" ................................ 4.13
"Issuers" ........................................... Preamble
"legal defeasance option" ........................... 8.01(b)
"Legal Holiday" ..................................... 11.08
"Notice of Default" ................................. 6.01
"Obligations" ....................................... 10.01
"Paying Agent" ...................................... 2.03
"Permitted Lien" .................................... 4.11
"Private Exchange Securities" ....................... Recital
"Registrar".......................................... 2.03
"Securities" ........................................ Recital
"Successor Issuers" ................................. 5.01
"Trustee" ........................................... Preamble
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the Commission;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
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"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Issuers and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or junior
to secured Debt merely by virtue of its nature as unsecured Debt;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared
in accordance with GAAP but accretion of principal on such security shall
not be deemed to be the Incurrence of Indebtedness;
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater;
(9) all references to the date the Securities were originally issued
shall refer to the date the Initial Securities were originally issued; and
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(10) the terms "redemption" and "redeemable" shall not be deemed to
refer to Offers to Purchase or to repurchases pursuant to Section 4.10 or
similar offers or repurchases.
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the Initial
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Rule 144A/Regulation S Appendix attached hereto (the "Appendix")
which is hereby incorporated in and expressly made part of this Indenture. The
Initial Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to the Appendix which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities, the Private Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Issuers are subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Issuers).
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in the Appendix and Exhibit A are part of the terms of this
Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall sign
the Securities for the Issuers by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and deliver Securities for original
issue upon a written order of the Issuers signed by two Officers or by an
Officer and either
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an Assistant Treasurer or an Assistant Secretary of the Issuers. Such order
shall specify the amount of the Securities to be authenticated and the date on
which the original issue of Securities is to be authenticated. The aggregate
principal amount of Securities outstanding at any time may not exceed that
amount except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Issuers to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Issuers shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Issuers may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Issuers shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Issuers shall notify
the Trustee of the name and address of any such agent. If the Issuers fail to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Issuers or any of their domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Issuers initially appoint the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest and Liquidated Damages (if any) on any
Security, the Issuers shall deposit with the Paying Agent a sum sufficient to
pay such principal and interest and Liquidated Damages (if any)
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when so becoming due. The Issuers shall require each Paying Agent (other than
the Trustee) to agree in writing that the Paying Agent shall hold in trust for
the benefit of Securityholders or the Trustee all money held by the Paying Agent
for the payment of principal of or interest and Liquidated Damages (if any) on
the Securities and shall notify the Trustee of any default by the Issuers in
making any such payment. If either Issuer or a Subsidiary acts as Paying Agent,
it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Issuers at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any funds disbursed by
the Paying Agent. Upon complying with this Section, the Paying Agent shall have
no further liability for the money delivered to the Trustee.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Issuers shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. The Securities shall be issued
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of Section 8-401(1)
(or any successor provision thereto) of the Uniform Commercial Code are met.
When Securities are presented to the Registrar or a co-registrar with a request
to exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met. To permit registration of transfers and exchanges, the
Issuers shall execute and the Trustee shall authenticate Securities at the
Registrar's or co-registrar's request. The Issuers may require payment of a sum
sufficient to pay all taxes, assessments or other governmental charges in
connection with any transfer or exchange pursuant to this Section. The Issuers
shall not be required to make and the Registrar need not register transfers or
exchanges of Securities selected for redemption (except, in the case of
Securities to be redeemed in part, the portion thereof not to be redeemed) or
any Securities
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for a period of 15 days before a selection of Securities to be redeemed or 15
days before an interest payment date.
Prior to the due presentation for registration of transfer of any
Security, the Issuers, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest and Liquidated Damages (if any) on such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and none of the Issuers, the Trustee, the Paying Agent, the Registrar
or any co-registrar shall be affected by notice to the contrary.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Issuers shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 (or any successor provision thereto) of the Uniform Commercial
Code are met and the Holder satisfies any other reasonable requirements of the
Trustee. Such Holder shall furnish an indemnity bond sufficient in the judgment
of the Issuers and the Trustee to protect the Issuers, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss which any of them may
suffer if a Security is replaced. The Issuers and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Issuers.
SECTION 2.08. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Issuers or an Affiliate of the Issuers holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee
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and the Issuers receive proof satisfactory to them that the replaced Security is
held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest and Liquidated Damages (if any) payable on that
date with respect to the Securities (or portions thereof) to be redeemed or
maturing, as the case may be, then on and after that date such Securities (or
portions thereof) cease to be outstanding and interest and Liquidated Damages
(if any) on them ceases to accrue.
SECTION 2.09. Temporary Securities. Until definitive Securities are
ready for delivery, the Issuers may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Issuers consider
appropriate for temporary Securities. Without unreasonable delay, the Issuers
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.10. Cancellation. The Issuers at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
may, but shall not be required to, destroy (subject to the record retention
requirements of the Exchange Act) all Securities surrendered for registration of
transfer, exchange, payment or cancellation unless the Issuers direct the
Trustee to deliver canceled Securities to the Issuers. The Issuers may not issue
new Securities to replace Securities they have redeemed, paid or delivered to
the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Issuers default in a
payment of interest and Liquidated Damages (if any) on the Securities, the
Issuers shall pay defaulted interest and Liquidated Damages (if any) (plus
interest on such defaulted interest and Liquidated Damages (if any) to the
extent lawful) in any lawful manner. The Issuers may pay the defaulted interest
and Liquidated Damages (if any) to the persons who are Securityholders on a
subsequent special record date. The Issuers shall fix or cause to be fixed any
such special record date and payment date to the reasonable satisfaction of the
Trustee and shall promptly mail to each Securityholder a notice that states the
special
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record date, the payment date and the amount of defaulted interest and
Liquidated Damages (if any) to be paid.
SECTION 2.12. CUSIP Numbers. The Issuers in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Issuers shall promptly notify the Trustee of any change in the CUSIP
numbers.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Issuers elect to redeem
Securities pursuant to paragraph 5 of the Securities, they shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
The Issuers shall give each notice to the Trustee provided for in
this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Issuers to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If less than
all the Securities are to be redeemed at any time, the Trustee shall select the
Securities to be redeemed by a method that complies with the requirements of the
principal national securities exchange, if any, on which the Securities are
listed, or if the Securities are not listed, on a pro rata basis, by lot or by
such method as the Trustee in its sole discretion shall deem to be fair and
appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions
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of the principal of Securities that have denominations larger than $1,000.
Securities and portions of them the Trustee selects shall be in amounts of
$1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Issuers promptly of the Securities or
portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Issuers shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder's registered address.
The notice shall identify the Securities (including CUSIP number(s),
if any)to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to
be redeemed;
(6) that, unless the Issuers default in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest and Liquidated Damages
(if any) on Securities (or portion thereof) called for redemption ceases
to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Issuers' request, the Trustee shall give the notice of
redemption in the Issuers' name and at the
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Issuers' expense. In such event, the Issuers shall provide the Trustee with the
information required by this Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest and Liquidated Damages (if
any) to the redemption date. Failure to give notice or any defect in the notice
to any Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. On or prior to the
redemption date, the Issuers shall deposit with the Paying Agent (or, if an
Issuer or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest and
Liquidated Damages (if any) on all Securities to be redeemed on that date other
than Securities or portions of Securities called for redemption which have been
delivered by the Issuers to the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Issuers shall execute and the Trustee
shall authenticate for the Holder (at the Issuers' expense) a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Issuers shall promptly pay
the principal of and interest and Liquidated Damages (if any) on the Securities
on the dates and in the manner provided in the Securities and in this Indenture.
Principal, interest and Liquidated Damages (if any) shall be considered paid on
the date due if on such date the Trustee or the Paying Agent holds in accordance
with this Indenture money sufficient to pay all principal, interest and
Liquidated Damages (if any) then due.
The Issuers shall pay interest on overdue principal at the rate
specified therefor in the Securities, and shall pay interest on overdue
installments of interest and Liquidated Damages (if any) at the same rate to the
extent lawful.
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SECTION 4.02. SEC Reports. Notwithstanding that the Issuers may not
be, or may not be required to remain, subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Issuers shall file with the
Commission (unless the Commission will not accept such filing) and provide the
Trustee and Holders of the Securities with such annual reports and such
information, documents and other reports as are specified in Sections 13 and
15(d) of the Exchange Act and applicable to a U.S. corporation subject to such
Sections, such information, documents and other reports to be so filed and
provided at the times specified for the filing of such information, documents
and reports under such Sections.
In addition, for so long as any Securities remain outstanding, the
Issuers shall furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuers'
compliance with any of their covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.03. Limitation on Consolidated Debt. (a) The Issuers may
not, and may not permit any Restricted Subsidiary to, Incur any Debt; provided,
however, that the Issuers or any Restricted Subsidiary may Incur Debt so long as
the ratio of (i) the aggregate consolidated principal amount of Debt of the
Issuers and the Restricted Subsidiaries outstanding as of the most recent
available quarterly or annual balance sheet, after giving pro forma effect to
the Incurrence of such Debt and any other Debt Incurred since such balance sheet
date and the receipt and application of the proceeds thereof to (ii)
Consolidated Cash Flow Available for Fixed Charges for the four full fiscal
quarters ending on the date of such balance sheet determined on a pro forma
basis as if any such Debt had been Incurred and the proceeds thereof had been
applied at the beginning of such four fiscal quarters, would be less than 4.0 to
1.0 (the "Debt Coverage Ratio").
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(b) Notwithstanding the foregoing limitation, the Issuers and any
Restricted Subsidiary may Incur the following:
(i) Debt Incurred under any one or more Bank Credit Agreements,
Vendor Financing Facilities or other agreements or arrangements to finance
the Build-out; provided, however, that Debt Incurred pursuant to this
clause (i), other than Debt Incurred pursuant to a Bank Credit Agreement
or a Vendor Financing Facility, shall not have a Stated Maturity on or
earlier than the Stated Maturity of the Securities, and shall not be
mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or be redeemable at the option of the holder thereof, in whole
or in part, on or prior to the Stated Maturity of the Securities;
(ii) Debt under any one or more Bank Credit Agreements or other
agreements or arrangements to finance working capital requirements of
Globalstar and any Refinancing Debt in respect of such Debt; provided,
however, at the time of the Incurrence of such Debt and after giving
effect thereto, the aggregate principal amount of all Debt Incurred
pursuant to this clause (ii) and then outstanding shall not exceed $100
million;
(iii) Debt owed by the Issuers to any Wholly-Owned Restricted
Subsidiary or Debt owed by any Wholly-Owned Restricted Subsidiary to the
Issuers or to another Wholly-Owned Restricted Subsidiary; provided,
however, that upon either (x) the transfer or other disposition by such
Wholly-Owned Restricted Subsidiary or the Issuers of any Debt so permitted
to a Person other than the Issuers or another Wholly-Owned Restricted
Subsidiary or (y) the issuance (other than directors' qualifying shares),
sale, lease, transfer or other disposition of shares of Capital Stock
(including by consolidation or merger) of such Wholly-Owned Restricted
Subsidiary to a Person other than the Issuers or another such Wholly-Owned
Restricted Subsidiary, the provisions of this clause (iii) shall no longer
be applicable to such Debt and such Debt shall be deemed to have been
Incurred by the Issuers thereof at the time of such issuance, sale, lease,
transfer or other disposition;
(iv) Refinancing Debt Incurred to Refinance Debt Incurred pursuant
to the first paragraph of this covenant or pursuant to clause (i), (vi) or
(vii) or this clause (iv) of this paragraph;
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(v) Debt consisting of Permitted Interest Rate and Currency
Protection Agreements;
(vi) Debt represented by the Securities;
(vii) Debt outstanding on the Issue Date (other than Debt described
in clause (i), (ii), (iii), (vi) or (viii) of this paragraph);
(viii) Debt (including Capital Lease Obligations) of Globalstar or
any Restricted Subsidiary financing the purchase, lease or improvement of
property (real or personal) or equipment (whether through the direct
purchase of assets or the Capital Stock of any Person owning such assets),
in each case Incurred no more than 180 days after such purchase, lease or
improvement of such property and any Refinancing Debt in respect of such
Debt, provided, however, that (x) the amount of such Debt (net of original
issue discount) does not exceed, at the time initially Incurred, 90% of
the fair market value of such acquired property or equipment and (y) at
the time of the Incurrence of such Debt and after giving effect thereto,
the aggregate amount of all Debt Incurred pursuant to this clause (viii)
and then outstanding shall not exceed $100 million;
(ix) Debt consisting of performance and other similar bonds and
reimbursement obligations Incurred in the ordinary course of business
securing the performance of contractual, franchise or license obligations
of the Issuers or a Restricted Subsidiary, or in respect of a letter of
credit obtained to secure such performance; and
(x) Debt in an aggregate principal amount which, together with all
other Debt of the Issuers and the Restricted Subsidiaries outstanding on
the date of such Incurrence (other than Debt permitted by clauses (i)
through (ix) above or Section 4.03(a)) does not exceed $50 million.
(c) For purposes of determining compliance with this Section 4.03,
in the event that an item of Debt meets the criteria of more than one of the
types of Debt the Issuers and the Restricted Subsidiaries are permitted to
Incur, the Issuers or such Restricted Subsidiary, as the case may be, shall have
the right, in their sole discretion, to classify such item of Debt at the time
of its Incurrence and shall only be required to include the amount and type of
such Debt under the clause permitting the Debt as so classified.
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SECTION 4.04. Future Guarantors. In the event that, after the Issue
Date, Globalstar shall acquire or create a Subsidiary, Globalstar shall cause
such Subsidiary (unless such Subsidiary is a Transitory Equipment Subsidiary or
is an Unrestricted Subsidiary) to become a Subsidiary Guarantor and to Guarantee
the Securities pursuant to a Subsidiary Guaranty.
SECTION 4.05. Limitation on Restricted Payments. (a) The Issuers may
not, and may not permit any Restricted Subsidiary, directly or indirectly, to
make a Restricted Payment if at the time such Issuers or such Restricted
Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) Globalstar is not able to Incur an additional $1.00 of Debt
pursuant to Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of:
(A) 50% of the Consolidated Net Income of Globalstar accrued
during the period (treated as one accounting period) from the
beginning of the fiscal quarter immediately following the fiscal
quarter during which the Issue Date occurs to the end of the most
recent fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such
deficit);
(B) the aggregate Net Cash Proceeds received by Globalstar
from the issuance or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Issue Date (other than an
issuance or sale to a Subsidiary of Globalstar and other than an
issuance or sale to an employee stock ownership plan or to a trust
established by Globalstar or any of its Subsidiaries for the benefit
of their employees);
(C) the amount by which Debt of Globalstar is reduced on the
balance sheet of Globalstar upon the conversion or exchange (other
than by a Subsidiary of Globalstar) subsequent to the Issue Date of
any Debt of Globalstar convertible or exchangeable for Capital Stock
(other than
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Disqualified Stock) of Globalstar (less the amount of any cash, or
the fair value of any other property, distributed by Globalstar upon
such conversion or exchange); and
(D) an amount equal to the sum of (i) the net reduction in
Investments in Unrestricted Subsidiaries resulting from dividends,
repayments of loans or advances or other transfers of assets, in
each case to Globalstar or any Restricted Subsidiary from
Unrestricted Subsidiaries, and (ii) the portion (proportionate to
Globalstar's equity interest in such Subsidiary) of the fair market
value of the net assets of an Unrestricted Subsidiary at the time
such Unrestricted Subsidiary is designated a Restricted Subsidiary;
provided, however, that the foregoing sum shall not exceed, in the
case of any Unrestricted Subsidiary, the amount of Investments
previously made (and treated as a Restricted Payment) by Globalstar
or any Restricted Subsidiary in such Unrestricted Subsidiary.
(b) Notwithstanding the foregoing, Globalstar may (i) subject to
clause (vi) below, pay any dividend on Capital Stock of any class within 60 days
after the declaration thereof if, on the date when the dividend was declared,
Globalstar could have paid such dividend in accordance with the foregoing
provisions; (ii) repurchase any shares of its Capital Stock or options to
acquire its Capital Stock from Persons who were formerly officers or employees
of Globalstar; provided, however, that the aggregate amount of all such
repurchases made pursuant to this clause (ii) shall not exceed $2 million, plus
the aggregate cash proceeds received by Globalstar since the Issue Date on sale
of its Capital Stock or options to acquire its Capital Stock to members,
officers, managers and employees of Globalstar or any of its Subsidiaries; (iii)
Refinance, and permit its Restricted Subsidiaries to Refinance, any Debt
otherwise permitted to be Refinanced by clause (iv) of Section 4.03(b); (iv) so
long as Globalstar is treated as a partnership for U.S. federal income tax
purposes, make distributions in respect of members' or partners' income tax
liability with respect to Globalstar in an amount not to exceed the Tax Amount;
(v) make distributions to GTL to pay GTL's ordinary and reasonable operating
expenses related to Globalstar, as set forth in an Officers' Certificate
delivered to the Trustee; (vi) pay any scheduled dividend on Special Preferred
Obligations; provided, however, that at the time of payment of any such dividend
(other than a dividend paid only by distributions
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of additional Special Preferred Obligations), no Default shall have occurred and
be continuing (or result therefrom); (vii) make any Restricted Payment by
exchange for, or out of the proceeds of the substantially concurrent sale of, or
capital contribution in respect of, Capital Stock of Globalstar (other than
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary
of Globalstar or an employee stock ownership plan or to a trust established by
Globalstar or any of its Subsidiaries for the benefit of their employees);
(viii) contribute its Investment in Globaltel Russia to an Unrestricted
Subsidiary; and (ix) make other Restricted Payments in an aggregate amount not
to exceed $10 million.
(c) Any Restricted Payment made pursuant to clauses (ii), (iii),
(iv), (vi), (vii), (viii) and (ix) of Section 4.05(b) shall be excluded from the
calculation of the aggregate amount of Restricted Payments made since the Issue
Date; provided, however, that the Net Cash Proceeds from the issuance of Capital
Stock pursuant to clauses (ii) and (vii) of Section 4.05(b) shall be excluded
from the calculation of amounts under clause (B) of Section 4.05(a)(3).
SECTION 4.06. Dividend and Other Payment Restrictions Affecting
Subsidiaries. (a) The Issuers may not, and may not permit any Restricted
Subsidiary, directly or indirectly, to create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions to the Issuers or
any of their Restricted Subsidiaries on its Capital Stock or with respect
to any other interest or participation in, or measured by, its profits;
(ii) pay any indebtedness owed to the Issuers or any Restricted
Subsidiary;
(iii) make loans or advances to the Issuers or any Restricted
Subsidiary; or
(iv) transfer any of its properties or assets to the Issuers or any
Restricted Subsidiary.
(b) Notwithstanding the foregoing, the Issuers may, and may permit
any Restricted Subsidiary to, suffer to exist any such encumbrance or
restriction (i) pursuant to any agreement in effect on the Issue Date; (ii)
pursuant to an agreement relating to any Acquired Debt, which encumbrance or
restriction is not applicable to any Person,
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or the properties or assets of any Person, other than the Person so acquired and
its Subsidiaries; (iii) pursuant to an agreement effecting a Refinancing of Debt
Incurred pursuant to an agreement referred to in clause (i) or (ii) above or
clause (iv) below, provided, however, that the provisions contained in such
Refinancing agreement relating to such encumbrance or restriction are no more
restrictive taken as a whole (as determined in good faith by the Chief Financial
Officer of Globalstar) than the provisions contained in the predecessor
agreement the subject thereof; (iv) in the case of clause (iii) of Section
4.06(a), consisting of restrictions contained in any security agreement
(including a Capital Lease Obligation) securing Debt of the Issuers or a
Restricted Subsidiary otherwise permitted under this Indenture, but only to the
extent such encumbrances or restrictions restrict the transfer of the property
subject to such security agreement; (v) in the case of clause (iv) of Section
4.06(a), consisting of customary nonassignment provisions entered into in the
ordinary course of business in leases governing leasehold interests, but only to
the extent such provisions restrict the transfer of the lease or the property
thereunder; (vi) with respect to a Restricted Subsidiary, imposed pursuant to an
agreement which has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Restricted Subsidiary;
provided, however, that after giving effect to such transaction no Default shall
have occurred or be continuing, that such restriction terminates if such
transaction is not consummated and that such consummation or abandonment of such
transaction occurs within one year of the date such agreement was entered into;
(vii) imposed pursuant to applicable law or regulations; (viii) imposed pursuant
to this Indenture and the Securities; or (ix) consisting of any restriction on
the sale or other disposition of assets or property securing Debt as a result of
a Permitted Lien on such assets or property.
SECTION 4.07. Asset Dispositions. (a) The Issuers may not, and may
not permit any Restricted Subsidiary to, directly or indirectly, make any Asset
Disposition unless: (i) Globalstar, Globalstar Capital or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Disposition at least equal to the fair market value (including as to the value
of all non-cash consideration) of the shares and assets subject to such Asset
Disposition, as determined by the General Partners' Committee of Globalstar in
good faith and evidenced by a resolution filed with the Trustee; (ii) at least
80% of the consideration thereof received by Globalstar, Globalstar Capital or
such Restricted
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Subsidiary, as the case may be, consists of (a) cash or Marketable Securities or
(b) the assumption of Debt (other than Subordinated Obligations) of Globalstar,
Globalstar Capital or such Restricted Subsidiary and the release of the Issuers
and the Restricted Subsidiaries, as applicable, from all liability on the Debt
assumed; and (iii) all Net Available Proceeds, less any amounts invested within
180 days of such disposition in assets that comply with Section 4.12, are
applied within 180 days of such disposition (A) first, to the permanent
repayment or reduction of Debt then outstanding under any Bank Credit Agreement
or Vendor Financing Facility, to the extent such agreement or facility would
require such application or prohibit payments pursuant to the following clause
(B), (B) second, to the extent of remaining Net Available Proceeds, to make an
Offer to Purchase outstanding Securities at 100% of their principal amount plus
accrued and unpaid interest and Liquidated Damages (if any) to the date of
purchase thereon and, to the extent required by the terms thereof, any other
Debt of Globalstar, Globalstar Capital or a Restricted Subsidiary that ranks
pari passu with the Securities at a price no greater than 100% of the principal
amount thereof plus accrued and unpaid interest to the date of purchase and (C)
third, to the extent of any remaining Net Available Proceeds following the
completion of the Offer to Purchase, to the repayment of other Debt of
Globalstar or Debt of a Restricted Subsidiary, to the extent permitted under the
terms thereof. To the extent any Net Available Proceeds remain after such uses,
Globalstar and the Restricted Subsidiaries may use such amounts for any purposes
not prohibited by this Indenture. Notwithstanding the foregoing, these
provisions shall not apply to any Asset Disposition which constitutes a
transfer, conveyance, sale, lease or other disposition of all or substantially
all of Globalstar's properties or assets pursuant to Section 5.01(a).
(b) The Issuers shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.07. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.07, the Issuers shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached their obligations under this Section 4.07 by virtue
thereof.
SECTION 4.08. Transactions with Affiliates. (a) The Issuers may not,
and may not permit any Restricted Subsidiary, directly or indirectly, to enter
into any
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transactions (or series of related transactions) with an Affiliate or Related
Person of the Issuers (other than the Issuers or a Wholly-Owned Restricted
Subsidiary) (an "Affiliate Transaction") unless:
(i) such Affiliate Transaction is on terms that are no less
favorable to Globalstar, Globalstar Capital or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable
transaction by Globalstar, Globalstar Capital or such Restricted
Subsidiary, as the case may be, with an unrelated Person; and
(ii) Globalstar delivers to the Trustee:
(A) with respect to any Affiliate Transaction involving
aggregate consideration in excess of $1 million (other than
financing transactions that are not vendor financing transactions
pursuant to a Vendor Financing Facility) and entered into in
connection with the Build-out, a certificate of the Chief Executive
Officer of Globalstar to the effect that a majority of the
disinterested limited partners of Globalstar have approved such
Affiliate Transaction; provided, however, that there is at least one
disinterested limited partner at the time of such Affiliate
Transaction; provided further, however, that any limited partner
receiving any compensation in respect of its approval shall be
deemed not to be a disinterested limited partner; or
(B) (1) with respect to any Affiliate Transaction involving
aggregate consideration in excess of $1 million, a certificate of
the Chief Executive Officer of Globalstar to the effect that such
Affiliate Transaction complies with clause (i) above; and (2) with
respect to any Affiliate Transaction involving aggregate
consideration in excess of $10 million, an opinion as to the
fairness to Globalstar, Globalstar Capital or such Restricted
Subsidiary, as the case may be, of such Affiliate Transaction from a
financial point of view issued by an Independent Financial Advisor
or, with respect to telecommunications-related matters, a recognized
expert in the satellite telecommunications industry.
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(b) Notwithstanding the foregoing Section 4.08(a), the following
shall be deemed not to be Affiliate Transactions:
(i) employee compensation arrangements entered into in the ordinary
course of business and approved by the General Partners' Committee of
Globalstar;
(ii) transactions solely between or among the Issuers and the
Restricted Subsidiaries;
(iii) Restricted Payments permitted by Section 4.05;
(iv) Investments by an Affiliate or Related person of Globalstar or
Globalstar Capital in the Capital Stock (other than Disqualified Stock) of
Globalstar or any Restricted Subsidiary; and
(v) an Affiliate or Related Person of the Issuers acting as agent
for the placement or acquisition of launch services or insurance on behalf
of the Issuers or any Restricted Subsidiary.
SECTION 4.09. Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries. The Issuers may not, and may not permit any Restricted
Subsidiary to, issue, transfer, convey, sell or otherwise dispose of any shares
of Capital Stock of a Restricted Subsidiary or securities convertible or
exchangeable into, or options, warrants, rights or any other interest with
respect to, Capital Stock of a Restricted Subsidiary to any person other than
Globalstar, Globalstar Capital or a Wholly-Owned Restricted Subsidiary except
(i) in a transaction consisting of a sale of all the Capital Stock of such
Restricted Subsidiary and that complies with the provisions of Section 4.07 to
the extent such provisions apply; (ii) if required, the issuance, transfer,
conveyance, sale or other disposition of directors' qualifying shares; (iii) in
a transaction in which, or in connection with which, an Issuer or a Restricted
Subsidiary acquires at the same time sufficient Capital Stock of such Restricted
Subsidiary to at least maintain the same percentage ownership interest it had
prior to such transaction; and (iv) Disqualified Stock of a Restricted
Subsidiary Incurred to Refinance Disqualified Stock of such Restricted
Subsidiary; provided, however, that the amounts of the redemption obligations of
such Disqualified Stock shall not exceed the amounts of the redemption
obligations of, and such Disqualified Stock shall have redemption obligations no
earlier than those required by, the Disqualified Stock being Refinanced.
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SECTION 4.10. Change of Control. (a) Upon the occurrence of a Change
of Control, each Holder of Securities shall have the right to require that the
Issuers repurchase such Holder's Securities at a purchase price in cash equal to
101% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages (if any) to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest and Liquidated
Damages (if any) due on the relevant interest payment date).
(b) Within 30 days following any Change of Control, the Issuers
shall mail a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Issuers to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages (if any) to the date of
purchase (subject to the right of Holders of record on the relevant record
date to receive interest and Liquidated Damages (if any) on the relevant
interest payment date);
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization, each after giving effect to such
Change of Control);
(3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Issuers, consistent with this
Section 4.10, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Security purchased will be required
to surrender the Security, with an appropriate form duly completed, to the
Issuers at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Issuers receive not later than one Business Day prior to
the purchase date, a facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.
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(d) On the purchase date, all Securities purchased by the Issuers
under this Section shall be delivered by the Trustee for cancelation, and the
Issuers shall pay the purchase price plus accrued and unpaid interest and
Liquidated Damages (if any), if any, to the Holders entitled thereto.
(e) The Issuers shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Issuers shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached their obligations under this Section by virtue thereof.
SECTION 4.11. Limitation on Liens. The Issuers may not, and may not
permit any Restricted Subsidiary, directly or indirectly, to Incur or permit to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except for the following Liens (each, a "Permitted Lien"):
(i) Liens to secure up to $675,000,000 of Debt permitted to be
Incurred under this Indenture (including the Debt outstanding at any time
under the 11 3/8 Indenture and under the 11 1/4 Indenture) so long as
effective provision is made to secure the Securities equally and ratably
with (or prior to) the obligations so secured;
(ii) Liens in favor of Holders of the Securities;
(iii) Liens in favor of the Issuers;
(iv) Liens on property or shares of Capital Stock of another Person
at the time such other Person becomes a Subsidiary of such Person;
provided, however, that such Liens are not created, incurred or assumed in
connection with, or in contemplation of, such other Person becoming such a
Subsidiary; provided further, however, that such Lien may not extend to
any other property owned by such Person or any of its Subsidiaries (other
than inventory and receivables generated in the ordinary course of
business and substitute property);
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(v) Liens on property at the time such Person or any of its
Subsidiaries acquires such property, including any acquisition by means of
a merger or consolidation with or into such Person or a Subsidiary of such
Person; provided, however, that such Liens are not created, incurred or
assumed in connection with, or in contemplation of, such acquisition;
provided further, however, that the Liens may not extend to any other
property owned by such Person or any of its Subsidiaries;
(vi) Liens securing Debt Incurred pursuant to clause (viii) of
Section 4.03(b); provided, however, that the Lien may not extend to any
assets owned by an Issuer or any Restricted Subsidiary other than (a) the
assets being financed or refinanced and income and proceeds therefrom and
(b) any other assets of such obligor securing other Debt of such obligor
to the same secured party;
(vii) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like
nature incurred in the ordinary course of business;
(viii) Liens existing on the Issue Date;
(ix) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided, however, that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made therefor;
(x) Liens incurred in the ordinary course of business of the Issuers
and the Restricted Subsidiaries with respect to obligations that do not
exceed $10.0 million at any one time outstanding and that:
(A) are not incurred in connection with the borrowing of money
or the obtaining of advances or credit (other than trade credit in
the ordinary course of business); and
(B) do not in the aggregate materially detract from the value
of the property or materially impair the use thereof in the
operation of business by the Issuers and the Restricted
Subsidiaries.
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SECTION 4.12. Business Activities. The Issuers may not, and may not
permit any Restricted Subsidiary to, engage in any business other than that
which is related to the design, development, procurement, installation,
operation and ownership of telecommunications systems and businesses.
SECTION 4.13. Maintenance of Insurance.
(a) The Issuers shall:
(i) maintain, with respect to each satellite in the Globalstar
System, for the period beginning at least 45 days prior to, and at all
times up to and including, the launch of such satellite, launch insurance
with respect to such satellite in an amount sufficient to provide for the
construction, launch and insurance of a replacement satellite to be
payable in the event of a launch failure; and
(ii) in the event that more than 16 of Globalstar's satellites have
ceased Operating for 90 consecutive days and fewer than 44 satellites are
Operating as part of the Globalstar System (such an event, an "In-orbit
Insurance Event"), obtain (within 60 days of such In-orbit Insurance
Event), and thereafter maintain, in-orbit insurance in an amount
sufficient to provide for the construction, launch and insurance of
replacement satellites for at least 16 of Globalstar's satellites still
operating or, if such in-orbit insurance in such amount is not then
commercially available from traditional insurance providers, such lesser
amount as is so available.
(b) The obligation of the Issuers to maintain insurance pursuant to
this covenant may be satisfied by any combination of:
(i) insurance commitments obtained from any recognized insurance
provider;
(ii) insurance commitments obtained from any other entity if the
General Partners' Committee of Globalstar determines in good faith that
such entity is creditworthy and otherwise capable of bearing the financial
risk of providing such insurance;
(iii) unrestricted cash segregated and maintained by Globalstar in a
segregated account (the "Insurance Account") solely for disbursement in
accordance with Section 4.13(d) ("Cash Insurance"); and
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(iv) in respect of the insurance described in clause (i) of Section
4.13(a), self-insurance for the launch of up to 12 satellites; provided,
however, that no earlier than 60 days prior to the scheduled launch of any
such satellites:
(a) the Issuers deliver an Officers' Certificate to the
Trustee certifying that they have sufficient committed capital to
construct, launch and insure at least 44 satellites, in addition to
the satellites with respect to which the Issuers are self-insuring;
and
(b) the Issuers obtain an opinion from an investment banking
firm that is an Independent Financial Advisor to the effect that the
Issuers would be able to raise sufficient capital in the capital
markets to replace, relaunch and insure such satellites in the event
of a failure to successfully launch such satellites.
(c) Within 30 days following any date on which the Issuers are
required to obtain insurance pursuant to this Indenture, the Issuers will
deliver to the Trustee an insurance certificate certifying the amount of
insurance then carried and an Officers' Certificate stating that such insurance,
together with any other insurance or Cash Insurance maintained by the Issuers,
complies with this Indenture. In addition, the Issuers will cause to be
delivered to the Trustee no less than once each year an insurance certificate
setting forth the amount of insurance then carried, which insurance certificate
shall entitle the Trustee to:
(i) notice of any claim under any such insurance policy; and
(ii) at least 30 days' notice from the provider of such insurance
prior to the cancelation of any such insurance.
In the event that the Issuers maintain any Cash Insurance in satisfaction of any
part of their obligation to maintain insurance pursuant to this Section 4.13,
the Issuers shall deliver an Officers' Certificate to the Trustee in lieu of any
insurance certificate otherwise required by this Section 4.13.
(d) In the event that the Issuers receive any proceeds of any launch
or in-orbit insurance that they are required to maintain pursuant to this
Section 4.13, such
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proceeds shall constitute "Insurance Proceeds". In addition, if the Issuers
maintain any Cash Insurance in satisfaction of any part of their obligations to
maintain in-orbit insurance pursuant to this Section 4.13, then upon the
occurrence of the event (i.e., the in-orbit failure) that would have entitled
the Issuers to the payment of insurance had the Issuers purchased insurance from
an insurance provider, the cash maintained in the Insurance Account shall
constitute "Insurance Proceeds". Promptly following the receipt of any Insurance
Proceeds, the Issuers shall apply such Insurance Proceeds in accordance with the
provisions of Section 4.07; provided, however, that Insurance Proceeds shall
only be required to be so applied to the extent that the aggregate amount of all
Insurance Proceeds received by the Issuers exceeds $5 million in any 12-month
period.
SECTION 4.14. Compliance Certificate; Statement by Officers as to
Default. The Issuers shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Issuers an Officers' Certificate, one of the signers
of which shall be the principal executive, principal financial or principal
accounting officer of the Issuers, stating that in the course of the performance
by the signers of their duties as Officers of the Issuers they would normally
have knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Issuers are taking or propose to take
with respect thereto. The Issuers also shall comply with TIA Section 314(a)(4).
SECTION 4.15. Further Instruments and Acts. Upon request of the
Trustee, the Issuers will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.16. Business Activities of Globalstar Capital. Globalstar
Capital shall not engage in any trade or business, and shall conduct no business
activity, other than the Incurrence of Debt permitted by Section 4.03 and the
issuance of Capital Stock to Globalstar or any Wholly-Owned Restricted
Subsidiary and activities incidental thereto.
SECTION 4.17. Calculation of Original Issue Discount. The Issuers
shall file with the Trustee promptly at the end of each calendar year (i) a
written notice specifying the amount of original issue discount (including daily
rates and accrual periods) accrued on outstanding
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Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the Code,
as amended from time to time.
ARTICLE 5
Successor Issuers
SECTION 5.01. When Issuers May Merge or Transfer Assets. (a) Neither
Globalstar nor Globalstar Capital may consolidate with or merge with or into, or
convey, transfer or lease, in one transaction or a series of transactions, all
or substantially all its assets to any Person; provided, however, that
Globalstar may consolidate with or merge with or into, or convey, transfer or
lease, in one transaction or a series of transactions, all or substantially all
its assets to any Person, if:
(i) the resulting, surviving or transferee Person (the "Successor
Issuer") shall be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia
and the Successor Issuer (if not Globalstar) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of Globalstar under
the Securities and this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Debt which becomes an obligation of the Successor Issuer or
any Subsidiary as a result of such transaction as having been Incurred by
the Successor Issuer or such Subsidiary at the time of such transaction),
no Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Issuer would be able to Incur an additional $1.00 of Debt
pursuant to Section 4.03(a);
(iv) immediately after giving effect to such transaction, the
Successor Issuer shall have Consolidated Net Worth in an amount that is
not less than the Consolidated Net Worth of Globalstar immediately prior
to such transaction; and
(v) Globalstar shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel,
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each stating that such transaction and such supplemental indenture (if
any) comply with this Indenture.
The Successor Issuer shall be the successor to Globalstar and shall
succeed to, and be substituted for, and may exercise every right and power of,
Globalstar under this Indenture, and Globalstar (other than in the case of a
lease) shall be released from the obligation to pay the principal of and
interest and Liquidated Damages (if any) on the Securities.
(b) Globalstar shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless: (i) the resulting, surviving or transferee Person (if not
such Subsidiary) shall be a Person organized and existing under the laws of the
jurisdiction under which such Subsidiary was organized or under the laws of the
United States of America, or any State thereof or the District of Columbia, and
such Person shall expressly assume, by a guaranty agreement in a form acceptable
to the Trustee, all the obligations of such Subsidiary, if any, under its
Subsidiary Guaranty; (ii) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Debt which becomes an
obligation of the resulting, surviving or transferee Person as a result of such
transaction as having been issued by such Person at the time of such
transaction), no Default shall have occurred and be continuing; and (iii)
Globalstar delivers to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
guaranty agreement, if any, complies with this Indenture.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) the Issuers default in any payment of interest or Liquidated
Damages (if any) on any Security when the same becomes due and payable,
and such default continues for a period of 30 days;
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(2) the Issuers (i) default in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity,
upon optional redemption, upon required repurchase, upon declaration or
otherwise, or (ii) fail to redeem or purchase Securities when required
pursuant to this Indenture or the Securities;
(3) the Issuers fail to comply with Section 5.01;
(4) the Issuers fail to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 or 4.16 (other than a
failure to purchase Securities when required under Section 4.07 or 4.10)
and such failure continues for 30 days after the notice specified below;
(5) the Issuers fail to comply with any of their agreements in the
Securities or this Indenture (other than those referred to in clause (1),
(2), (3) or (4) above) and such failure continues for 60 days after the
notice specified below;
(6) Debt of the Issuers or any Significant Subsidiary is not paid
within any applicable grace period after final maturity or is accelerated
by the holders thereof because of a default and the total amount of such
Debt unpaid or accelerated exceeds $10.0 million, or its foreign currency
equivalent at the time and such failure continues for 10 days after the
notice specified below;
(7) any Issuer or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
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(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Issuers or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Issuers or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Issuers or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of
$10.0 million or its foreign currency equivalent at the time is entered
against the Issuers or any Significant Subsidiary, remains outstanding for
a period of 60 days following the entry of such judgment or decree and is
not discharged, waived or the execution thereof stayed within 10 days
after the notice specified below; or
(10) a Subsidiary Guaranty ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guaranty) or a
Subsidiary Guarantor denies or disaffirms its obligations under its
Subsidiary Guaranty.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clauses (4), (5), or (9) is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount of the
outstanding Securities notify the Issuers of the Default and the Issuers do not
cure such Default within the time specified after receipt of such notice. Such
notice must specify the Default, demand
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that it be remedied and state that such notice is a "Notice of Default".
The Issuers shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Issuers are taking or
propose to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Issuers) occurs and is continuing, the Trustee by notice to the Issuers, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Issuers and the Trustee, may declare the principal of and accrued but unpaid
interest and Liquidated Damages (if any) on all the Securities to be due and
payable. Upon such a declaration, such principal, interest and Liquidated
Damages (if any) shall be due and payable immediately. If an Event of Default
specified in Section 6.01(7) or (8) with respect to the Issuers occurs, the
principal of and interest and Liquidated Damages (if any) on all the Securities
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Securityholders. The
Holders of a majority in principal amount of the Securities by notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest and
Liquidated Damages (if any) that has become due solely because of acceleration.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest and Liquidated Damages (if any) on the Securities or
to enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquies-
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cence in the Event of Default. No remedy is exclusive of any other remedy. All
available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (i) a Default in the payment of the
principal of or interest and Liquidated Damages (if any) on a Security or (ii) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Securityholder affected. When a Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to reasonable
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest and Liquidated
Damages (if any) when due, no Securityholder may pursue any remedy with respect
to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
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(5) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction inconsistent with the request during
such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest and Liquidated Damages (if any) on the
Securities held by such Holder, on or after the respective due dates expressed
in the Securities, or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuers for the whole amount then due and owing (together with interest on any
unpaid interest and Liquidated Damages (if any) to the extent lawful) and the
amounts provided for in Section 7.07.
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 and the Securityholders
allowed in any judicial proceedings relative to the Issuers, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
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SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal, interest and Liquidated Damages (if any),
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal, interest and
Liquidated Damages (if any), respectively; and
THIRD: to the Issuers.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such record
date, the Issuers shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Issuers (to the
extent they may lawfully do so) shall not at any time insist upon, or plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Issuers (to
the extent that they may lawfully do so) hereby expressly waive all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the exe-
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cution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
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(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper per son. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
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(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust Officer has actual knowledge thereof or unless
written notice of any event which is in fact such a default is received by the
Trustee at the principal corporate trust office of the Trustee, and such notice
references the Securities and this Indenture.
SECTION 7.03. 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 Issuers or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Issuers'
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Issuers in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest and Liquidated
Damages (if any) on any Security (including payments pursuant to the mandatory
redemption provisions of such Security, if any), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. If required by TIA
Section 313(a), as promptly as practicable after each May 15 beginning with the
May 15, 1998, and in any event prior to July 15 in each year, the Trustee shall
mail
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to each Securityholder a brief report dated as of May 15 that complies with such
TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the Commission and each stock exchange (if any) on which the
Securities are listed. The Issuers agree to notify promptly the Trustee whenever
the Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Issuers shall pay to
the Trustee from time to time such compensation as shall be agreed in writing
between the Issuers and the Trustee for its services. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuers shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Issuers shall indemnify
the Trustee against any and all loss, damage, claim, liability or reasonable
expense (including reasonable attorneys' fees and expenses) incurred by it in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder. The Trustee shall notify the Issuers
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Issuers shall not relieve the Issuers of their obligations
hereunder. The Issuers shall defend the claim and the Trustee may have separate
counsel and the Issuers shall pay the reasonable fees and expenses of such
counsel. The Issuers need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith.
To secure the Issuers' payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest and Liquidated Damages (if any) on particular
Securities.
The Issuers' payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or (8) with respect to
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the Issuers, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Issuers. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Issuers shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Issuers or by the Holders
of a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuers shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition, at the expense of the
Issuers, any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
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Notwithstanding the replacement of the Trustee pursuant to this
Section, the Issuers' obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Issuers are out standing if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Issuers. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
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ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
When (i) the Issuers deliver to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article 3 hereof and
the Issuers irrevocably deposit with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities, including interest and
Liquidated Damages (if any) thereon to maturity or such redemption date (other
than Securities replaced pursuant to Section 2.07), and if in either case the
Issuers pay all other sums payable hereunder by the Issuers, then this Indenture
shall, subject to Sections 8.01(c), cease to be of further effect. The Trustee
shall acknowledge satisfaction and discharge of this Indenture on demand of the
Issuers accompanied by an Officers' Certificate and an Opinion of Counsel and at
the cost and expense of the Issuers.
(b) Subject to Sections 8.01(c) and 8.02, the Issuers at any time
may terminate (i) all their obligations under the Securities and this Indenture
("legal defeasance option") or (ii) their obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 and 4.16 and the
operation of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8), 6.01(9) and 6.01(10)
(but, in the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries) and the limitations contained in Sections 5.01(a)(iii) and (iv)
("covenant defeasance option"). The Issuers may exercise their legal defeasance
option notwithstanding their prior exercise of their covenant defeasance option.
If the Issuers exercise their legal defeasance option, payment of
the Securities may not be accelerated because of an Event of Default with
respect thereto. If the Issuers exercise their covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of Default
specified in Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8), 6.01(9) and 6.01(10)
(but, in the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries) or because of the failure of the Issuers to comply with Section
5.01(a)(iii) or (iv). If the Issuers exercise their legal defeasance option or
their covenant defeasance option, each Subsidiary Guarantor, if any, shall
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be released from all its obligations with respect to its Subsidiary Guaranty.
Upon satisfaction of the conditions set forth herein and upon
request of the Issuers, the Trustee shall acknowledge in writing the discharge
of those obligations that the Issuers terminate.
(c) Notwithstanding clauses (a) and (b) above, the Issuers'
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Issuers' obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Issuers may exercise
their legal defeasance option or their covenant defeasance option only if:
(1) the Issuers irrevocably deposit in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of and
interest and Liquidated Damages (if any) on the Securities to maturity or
redemption, as the case may be;
(2) the Issuers deliver to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest and Liquidated
Damages (if any) when due and without reinvestment on the deposited U.S.
Government Obligations plus any deposited money without investment will
provide cash at such times and in such amounts as will be sufficient to
pay principal and interest and Liquidated Damages (if any) when due on all
the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Sections 6.01(7) or (8) with respect to the
Issuers occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Issuers;
(5) the Issuers deliver to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Issuers Act of 1940;
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(6) in the case of the legal defeasance option, the Issuers shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Issuers have received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the Issue Date there has been a
change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Securityholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Issuers shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Security holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such covenant defeasance
had not occurred; and
(8) the Issuers deliver to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Issuers may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest and Liquidated Damages (if any) on the
Securities.
SECTION 8.04. Repayment to Issuers. The Trustee and the Paying Agent
shall promptly turn over to the Issuers upon written request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Issuers
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upon request any money held by them for the payment of principal or interest and
Liquidated Damages (if any) that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look to the Issuers for
payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Issuers
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Issuers' obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Issuers have made any payment of interest and Liquidated Damages (if any) on or
principal of any Securities because of the reinstatement of their obligations,
the Issuers shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Issuers and the
Trustee may amend this Indenture or the Securities without notice to or consent
of any Security holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
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tion 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities, including any
Subsidiary Guaranties, or to secure the Securities or to release such
guaranties in accordance with the terms of Section 4.04;
(5) to add to the covenants of the Issuers for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Issuers;
(6) to comply with any requirements of the Commission in connection
with qualifying, or maintaining the qualification of, this Indenture under
the TIA; or
(7) to make any change that does not adversely affect the rights of
any Securityholder.
After an amendment under this Section becomes effective, the Issuers
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Issuers and the Trustee
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities then outstanding (including consents obtained in
connection with a tender offer or exchange for the Securities). However, without
the consent of each Securityholder affected thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest
and Liquidated Damages (if any) on any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security
or change the time at which any Security may be redeemed in accordance
with Article 3;
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(5) make any Security payable in money other than that stated in the
Security;
(6) make any change in Section 6.04 or 6.07 or the second sentence
of this Section; or
(7) make any change in any Subsidiary Guaranty that would adversely
affect the Securityholders.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Issuers
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder.
An amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Issuers may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders
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after such record date. No such consent shall be valid or effective for more
than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Issuers or the Trustee so determines, the Issuers
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Issuers nor any
Affiliate of the Issuers shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend (and,
if appropriate, tender their Securities) in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE 10
Subsidiary Guaranties
SECTION 10.01. Guaranties. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest and Liquidated Damages (if any) on
the Securities when due, whether at maturity, by
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acceleration, by redemption or otherwise, and all other monetary obligations of
the Issuers under this Indenture and the Securities and (b) the full and
punctual performance within applicable grace periods of all other obligations of
the Issuers under this Indenture and the Securities (all the foregoing being
hereinafter collectively called the "Obligations"). Each Subsidiary Guarantor
further agrees that the Obligations may be extended or renewed, in whole or in
part, without notice or further assent from such Subsidiary Guarantor and that
such Subsidiary Guarantor will remain bound under this Article 10
notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Issuers of any of the Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Securities or the Obligations. The Obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Issuers or any other Person under this Indenture, the
Securities or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Obligations or any of them; (e) the failure of any Holder or the Trustee to
exercise any right or remedy against any other guarantor of the Obligations; or
(f) any change in the ownership of such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Obligations.
Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06,
the obligations of each Subsidiary Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
Obligations of each Subsidiary Guarantor herein shall not be discharged or
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impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Securities or any other agreement, by any waiver or modification of any thereof,
by any default, failure or delay, willful or otherwise, in the performance of
the obligations, or by any other act or thing or omission or delay to do any
other act or thing which may or might in any manner or to any extent vary the
risk of such Subsidiary Guarantor or would otherwise operate as a discharge of
such Subsidiary Guarantor as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest and Liquidated
Damages (if any) on any Obligation is rescinded or must otherwise be restored by
any Holder or the Trustee upon the bankruptcy or reorganization of the Issuers
or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Issuers to pay
the principal of or interest and Liquidated Damages (if any) on any Obligation
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, or to perform or comply with any other Obligation, each
Subsidiary Guarantor hereby promises to and will, upon receipt of written demand
by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or
the Trustee an amount equal to the sum of (i) the unpaid amount of such
Obligations, (ii) accrued and unpaid interest and Liquidated Damages (if any) on
such Obligations (but only to the extent not prohibited by law) and (iii) all
other monetary Obligations of the Issuers to the Holders and the Trustee.
Each Subsidiary Guarantor agrees that, as between it, on the one
hand, and the Holders and the Trustee, on the other hand, (x) the maturity of
the Obligations Guaranteed hereby may be accelerated as provided in Article 6
for the purposes of such Subsidiary Guarantor's Subsidiary Guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such Obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purposes of this
Section.
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Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Trustee or any Holder in enforcing any rights under this Section.
SECTION 10.02. Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum, aggregate amount of
the Obligations guaranteed hereunder by any Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 10.03. Successors and Assigns. This Article 10 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 10.04. No Waiver. Neither a failure nor a delay on the part
of either the Trustee or the Holders in exercising any right, power or privilege
under this Article 10 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 10 at law,
in equity, by statute or otherwise.
SECTION 10.05. Modification. No modification, amendment or waiver of
any provision of this Article 10, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
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SECTION 10.06. Release of Subsidiary Guarantor. Upon the sale or
other disposition (including by way of consolidation or merger) of a Subsidiary
Guarantor or the sale or disposition of all or substantially all the assets of
such Subsidiary Guarantor (in each case other than to the Issuers or an
Affiliate of the Issuers), such Subsidiary Guarantor shall be deemed released
from all Obligations under this Article 10 without any further action required
on the part of the Trustee or any Holder. At the request of the Issuers, the
Trustee shall execute and deliver an appropriate instrument evidencing such
release.
ARTICLE 11
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 11.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Issuers:
Globalstar, L.P.
Globalstar Capital Corporation
0000 Xxxxxx Xxxx
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Secretary
Facsimile: (000) 000-0000
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
The Issuers or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Secu-
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rityholder's address as it appears on the registration books of the Registrar
and shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Issuers, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take or refrain
from taking any action under this Indenture, the Issuers shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or
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investigation as is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been complied with;
and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 11.06. When Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Issuers or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuers shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which a Trust Officer of the Trustee actually knows are so owned
shall be so disregarded. Also, subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 11.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in
the State of New York. If a payment date is a Legal Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday, and no interest and
Liquidated Damages (if any) shall accrue for the intervening period. If a
regular record date is a Legal Holiday, the record date shall not be affected.
SECTION 11.09. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles of conflicts of law
to the extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 11.10. No Recourse Against Others. Any past, present or
future director, officer, partner (including any general partner) employee,
incorporator or stockholder, as such, of the Issuers shall not have any
liability for any obligations of the Issuers under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
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shall waive and release all such liability. The waiver and release shall be part
of the consideration for the issue of the Securities.
SECTION 11.11. Successors. All agreements of the Issuers in this
Indenture and the Securities shall bind their successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
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SECTION 11.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
GLOBALSTAR, L.P.,
by
LORAL/QUALCOMM SATELLITE
SERVICES, L.P., its managing
general partner,
by
LORAL/QUALCOMM PARTNERSHIP,
L.P. its general partner,
by
LORAL GENERAL PARTNER, INC.,
its general partner,
by /s/ XXXX X. XXXXXX
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GLOBALSTAR CAPITAL CORPORATION,
by /s/ XXXX X. XXXXXX
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
THE BANK OF NEW YORK, as Trustee
by /s/ XXXXXX X. XXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
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EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE
SECURITY]
*/
**/
No. $
10 3/4% Senior Notes due 2004 CUSIP:
Globalstar, L.P., a Delaware limited partnership, and Globalstar Capital
Corporation, a Delaware corporation, each promise to pay to
, or registered assigns, the principal sum of
Dollars on November 1, 2004.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
Additional provisions of this Security are set forth on the other side of this
Security.
GLOBALSTAR, L.P., by
LORAL/QUALCOMM SATELLITE
SERVICES, L.P., its managing
general partner, by
LORAL/QUALCOMM PARTNERSHIP, L.P.
its general partner, by LORAL
GENERAL PARTNER, INC. its
general partner,
by ____________________________
Vice President
____________________________
Secretary
GLOBALSTAR CAPITAL CORPORATION,
by ____________________________
Vice President
____________________________
Secretary
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Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by _____________________________
Authorized Signatory
______________________
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to the Rule 144A/Regulation S Appendix and the attachment
from such Exhibit 1 captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL SECURITY".
**/ If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to the Rule 144A/Regulation S
Appendix and replace the Assignment Form included in this Exhibit A with the
Assignment Form included in such Exhibit 1.
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[FORM OF REVERSE SIDE OF EXCHANGE SECURITY OR PRIVATE
EXCHANGE SECURITY]
10 3/4% Senior Note due 2004
1. Interest and Liquidated Damages
Globalstar, L.P., a Delaware limited partnership and Globalstar
Capital Corporation, a Delaware corporation (such limited partnership and such
corporation, and their successors and assigns under the Indenture hereinafter
referred to, being herein called the "Issuers"), promise to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, Liquidated Damages (as defined in the Registration Rights
Agreement) shall accrue on this Security in an amount equal to $.05 per week per
$1,000 principal amount of Securities held by each Holder (over and above the
interest set forth in the title of this Security) from and including the date on
which any such Registration Default shall occur until the earlier of (i) the
date on which all such Registration Defaults have been cured or (ii) the date
which is 90 days after the date such Registration Default occurred. The
Liquidated Damages will increase by an additional $.05 per week per $1,000
principal amount of the Securities held by each Holder during each subsequent
90-day period until the date on which all such Registration Defaults have been
cured; provided, however, that the aggregate amount of Liquidated Damages shall
not exceed a maximum of $.50 per week per $1,000 principal amount of the
Securities held by each Holder. The Issuers will pay interest hereon and
Liquidated Damages (if any) semiannually on May 1, and November 1, of each year
commencing May 1, 1998. Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid or
provided for, from October 29, 1997. Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Issuers shall pay interest on overdue
principal at the rate borne by the Securities plus 1% per annum, and it shall
pay interest on overdue installments of cash interest at such higher rate to the
extent lawful.
2. Method of Payment
The Issuers will pay interest and Liquidated Damages (if any) on the
Securities (except defaulted interest) to the Persons who are registered holders
of Securities at the close of business on the May 1 or November
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1 next preceding the interest payment date even if Securities are canceled after
the record date and on or before the interest payment date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Issuers will pay principal and interest and Liquidated Damages (if any) in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of Securities (including
principal, premium, interest and Liquidated Damages (if any) will be made by
wire transfer of immediately available funds to the accounts specified by the
holders thereof or, if no U.S. dollar account maintained by the payee with a
bank in the United States is designated by any holder to the Trustee or the
Paying Agent at least 30 days prior to the relevant due date for payment (or
such other date as the Trustee may accept in its discretion), by mailing a check
to the registered address of such holder.
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking corporation
("Trustee"), will act as Paying Agent and Registrar. The Issuers may appoint and
change any Paying Agent, Registrar or co-registrar without notice. The Issuers
or any of their domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture
The Issuers issued the Securities under an Indenture dated as of
October 15, 1997 ("Indenture"), between the Issuers and the Trustee. 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 of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are unsecured senior obligations of the Issuers
limited to $325,000,000 aggregate principal amount (subject to Section 2.07 of
the Indenture). The Indenture contains certain covenants which, among other
things, limit (a) the incurrence of additional debt by the Issuers and certain
of its subsidiaries and the issuance of capital stock by such subsidiaries, (b)
the payment of dividends on capital stock of certain subsidiaries and the
purchase, redemption or retirement of capital stock or subordinated
indebtedness, (c) certain investments, (d)
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certain transactions with affiliates, (e) the incurrence of liens, (f) sales of
assets, including capital stock of subsidiaries, (g) certain consolidations and
mergers, (h) the Issuers' and certain of their subsidiaries' lines of business
and (i) the Issuers' ability to operate without certain insurance coverage. The
Indenture also will prohibit certain restrictions on distributions from
subsidiaries. In addition, the Issuers may be obligated, under certain
circumstances, to offer to repurchase Securities at a purchase price equal to
101% of the principal amount of the Securities plus accrued and unpaid interest
and Liquidated Damages (if any) to the date of repurchase.
5. Optional Redemption
The Securities may not be redeemed prior to November 1, 2002. On and
after that date, the Issuers may redeem the Securities in whole or in part, at
any time or from time to time at the following redemption prices (expressed in
percentages of principal amount), plus accrued and unpaid interest and
Liquidated Damages (if any) to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest and Liquidated
Damages (if any) due on the related interest payment date):
If redeemed during the 12-month period commencing November 1, of the
years set forth below:
PERIOD PERCENTAGE
------ ----------
2002...................................................... 105.375%
2003...................................................... 102.688%
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued interest
and Liquidated Damages (if any) on all Securities (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or before
the redemption date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
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7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right to cause the Issuers to repurchase all or any part of the Securities of
such Holder at a repurchase price equal to 101% of the principal amount of the
Securities plus accrued and unpaid interest and Liquidated Damages (if any) to
be repurchased (subject to the right of holders of record on the relevant record
date to receive interest and Liquidated Damages (if any) due on the relevant
interest payment date) as provided in, and subject to the terms of, the
Indenture.
8. Guarantees
This Security may be jointly and severally guaranteed by certain
Subsidiaries of the Issuers to the extent provided in the Indenture. The Issuers
have covenanted pursuant to the Indenture to cause any Subsidiary created or
acquired after the date of the Indenture (unless such Subsidiary is a Transitory
Equipment Subsidiary or is an Unrestricted Subsidiary), to execute and deliver
to the Trustee a Subsidiary Guaranty pursuant to which such Subsidiary will
guaranty this Security on the same terms and conditions as those set forth in
the Indenture.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Issuers are not required to transfer or exchange any Securities
selected for redemption (except, in the case of a Security to be redeemed in
part, the portion of the Security not to be redeemed) or any Securities for a
period of 15 days before a selection of Securities to be redeemed.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another
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Person. After any such payment, Holders entitled to the money must look only to
the Issuers and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Issuers at any time may terminate
some or all of their obligations under the Securities and the Indenture if the
Issuers deposit with the Trustee money or U.S. Government Obligations for the
payment of principal and interest and Liquidated Damages (if any) on the
Securities to redemption or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Issuers and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, to provide for the assumption by a successor corporation of the
obligations of Globalstar under the Indenture, to provide for uncertificated
Securities in addition to or in place of certificated Securities, to add
guarantees with respect to the Securities, to release such guarantees, to secure
the Securities, to add to the covenants of the Issuers for the benefit of the
Holders of the Securities or to surrender any right or power conferred upon the
Issuers, to make any change that does not adversely affect the rights of any
Holder of the Securities or to comply with any requirement of the SEC in
connection with the qualification of the Indenture under the Trust Indenture
Act.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest or Liquidated Damages (if any) on the Securities;
(ii) default in payment of principal on the Securities, upon redemption pursuant
to paragraph 5 of the Securities, upon required repurchase upon declaration or
otherwise, or failure by the Issuers to redeem or purchase Securities when
required; (iii) failure by the Issuers to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations
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(including failure to pay within any grace period after final maturity) of other
Debt of the Issuers if the amount accelerated (or so unpaid) exceeds $10
million; (v) certain events of bankruptcy or insolvency with respect to the
Issuers and the Significant Subsidiaries; (vi) certain judgments or decrees for
the payment of money in excess of $10 million, subject to lapse of time and
notice; and (vii) certain events with respect to the guarantees of the Issuers'
obligations under the Securities by certain of their subsidiaries. However, a
default under clauses (iii) and (vi) will not constitute an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
Securities outstanding notify the Issuers of the default and the Issuers do not
cure such default within the time specified after receipt of such notice. If an
Event of Default occurs and is continuing, the Trustees or the Holders of at
least 25% in principal amount of the Securities outstanding may declare the
principal of and all accrued but unpaid interest and Liquidated Damages (if any)
on all the Securities to be due and payable immediately. Certain events of
bankruptcy, insolvency or reorganization are Events of Default which will result
in the Securities being due and payable immediately upon the occurrence of such
Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may with hold from Securityholders notice of any continuing
Default (except a Default in payment of principal or interest or Liquidated
Damages (if any)) if it determines that withholding notice is in the interest of
the Holders.
15. Trustee Dealings with the Issuers
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Issuers or their
Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
Any past, present or future director, officer, partner (including
general partners), employee, incorporator or stockholder, as such, of the
Issuers or the Trustee shall not have any liability for any obligations of the
Issuers
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under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
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19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Securities and have directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Issuers to the extent provided
therein.
21. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE ISSUERS WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE SECURITY HOLDER A COPY OF THE INDENTURE. REQUESTS MAY
BE MADE TO:
GLOBALSTAR, L.P.
0000 XXXXXX XXXX
XXX 000000
XXX XXXX, XX 00000-0000
ATTENTION OF XXXXXXX X. XXXXXX
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of Globalstar. The agent may substitute another to act
for him.
________________________________________________________________________________
Date: _______________________ Your Signature: _________________________________
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.07 or 4.10 of the Indenture, check the box:
/ /
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to Section 4.07 or 4.10 of the Indenture, state the amount:
Date: _______________________ Your Signature: _________________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:____________________________________________________________
[Signature must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan
associations and credit unions) with membership in an
approved guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15]
95
RULE 144A/REGULATION S APPENDIX
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO
RULE AND TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN
RELIANCE ON REGULATION S.
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions. For the purposes of this Appendix the following terms
shall have the meanings indicated below:
"Definitive Security" means a certificated Initial Security bearing
the restricted securities legend set forth in Section 2.3(d) and which is held
by an IAI in accordance with Section 2.1(c).
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Exchange Securities" means the 10 3/4% Senior Notes due 2004 to be
issued pursuant to this Indenture in connection with a Registered Exchange Offer
pursuant to the Registration Rights Agreement.
"Initial Purchasers" means Bear, Xxxxxxx & Co. Inc., Xxxxxx Brothers
Inc. and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation.
"Initial Securities" means the 10 3/4% Senior Notes due 2004, issued
under this Indenture on or about the date hereof.
"Private Exchange" means the offer by the Issuers, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
the Initial Purchasers in exchange for the Initial Securities held by the
Initial Purchasers as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means the 11 1/4% Senior Notes due
2004 to be issued pursuant to this Indenture to the Initial Purchasers in a
Private Exchange.
"Purchase Agreement" means the Purchase Agreement dated October 21,
1997, among the Issuers and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
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"Registered Exchange Offer" means the offer by the Issuers, pursuant
to the Registration Rights Agreement, to certain Holders of Initial Securities,
to issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means the Registration Rights
Agreement dated October 29, 1997, among the Issuers and the Initial Purchasers.
"Securities" means the Initial Securities, the Exchange Securities
and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depositary), or any successor person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement
issued by the Issuers, in connection with the offer and sale of Initial
Securities or Private Exchange Securities, pursuant to the Registration Rights
Agreement.
"Transfer Restricted Securities" means Definitive Securities and
Securities that bear or are required to bear the legend set forth in Section
2.3(d) hereto.
1.2 Other Definitions
Defined in
Term Section:
"Agent Members"...................................................... 2.1(b)
"Global Security".................................................... 2.1(a)
"Regulation S"....................................................... 2.1(a)
"Rule 144A".......................................................... 2.1(a)
2. The Securities
2.1 Form and Dating. The Initial Securities are being offered and sold by
the Issuers pursuant to the Purchase Agreement.
(a) Global Securities. Initial Securities offered and sold to a QIB
in reliance on Rule 144A under the
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Securities Act ("Rule 144A") or in reliance on Regulation S under the Securities
Act ("Regulation S"), in each case as provided in the Purchase Agreement, shall
be issued initially in the form of one or more permanent global Securities in
definitive, fully registered form without interest coupons with the global
securities legend and restricted securities legend set forth in Exhibit 1 hereto
(each, a "Global Security"), which shall be deposited on behalf of the
purchasers of the Initial Securities represented thereby with the Trustee, at
its New York office, as custodian for the Depositary (or with such other
custodian as the Depositary may direct), and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Issuers and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depositary or its
nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depositary.
The Issuers shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary or by the Trustee as the custodian of the
Depositary or under such Global Security, and the Depositary may be treated by
the Issuers, the Trustee and any agent of the Issuers or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the
Trustee or any agent of the Issuers or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this Section 2.1
or Section 2.3 or 2.4, owners of beneficial interests in Global Securities will
not be entitled to receive
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physical delivery of certificated Securities. Purchasers of Initial Securities
who are IAIs and are not QIBs and did not purchase Initial Securities sold in
reliance on Regulation S will receive Definitive Securities; provided, however,
that upon transfer of such Definitive Securities to a QIB, such Definitive
Securities will, unless the Global Security has previously been exchanged, be
exchanged for an interest in a Global Security pursuant to the provisions of
Section 2.3.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
Initial Securities for original issue in an aggregate principal amount of
$325,000,000 and (2) Exchange Securities or Private Exchange Securities for
issue only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to the Registration Rights Agreement, for a like principal amount of
Initial Securities, in each case upon a written order of the Company signed by
two Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of each of the Issuers. Such order shall specify the amount of the
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated and whether the Securities are to be Initial
Securities, Exchange Securities or Private Exchange Securities. The aggregate
principal amount of Securities outstanding at any time may not exceed
$325,000,000 except as provided in Section 2.07 of this Indenture.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive
Securities. When Definitive Securities are presented to the Registrar or a
co-registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Issuers and the Registrar
or co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section
2.3(b) or pursuant to clause
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(A), (B) or (C) below, and are accompanied by the following additional
information and documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect
(in the form set forth on the reverse of the Security); or
(B) if such Definitive Securities are being transferred to
either of the Issuers, a certification to that effect (in the form
set forth on the reverse of the Security); or
(C) if such Definitive Securities are being transferred (w)
pursuant to an exemption from registration in accordance with Rule
144; or (x) in reliance on another exemption from the registration
requirements of the Securities Act: (i) a certification to that
effect (in the form set forth on the reverse of the Security) and
(ii) if the Issuers or Registrar so requests, an opinion of counsel
or other evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the legend set forth
in Section 2.3(d)(i).
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, duly endorsed or accompanied by appropriate instruments
of transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is being transferred (A) to a QIB
in accordance with Rule 144A, or (B) outside the United States in an
offshore transaction within the meaning of Regulation S and in compliance
with Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information
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regarding the Depositary account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding, the Company shall issue and the Trustee
shall authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new Global Security in the appropriate aggregate
principal amount.
(c) Transfer and Exchange of Global Securities. (i) The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depositary therefor. A transferor of a beneficial interest in a Global Security
shall deliver to the Registrar a written order given in accordance with the
Depositary's procedures containing information regarding the participant account
of the Depositary to be credited with a beneficial interest in the Global
Security. The Registrar shall, in accordance with such instructions, instruct
the Depositary to credit to the account of the Person specified in such
instructions a beneficial interest in the Global Security and to debit the
account of the Person making the transfer of the beneficial interest in the
Global Security being transferred.
(ii) Notwithstanding any other provisions of this Rule
144A/Regulation S Appendix (other than the provisions set forth in Section
2.4), a Global Security may not be transferred as a whole except by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary.
(iii) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 or
Section 2.09 of the Indenture prior to the consummation of a Registered
Exchange Offer or the effectiveness of a Shelf Registration Statement with
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respect to such Securities, such Securities may be exchanged only in
accordance with such procedures as are substantially consistent with the
provisions of this Section 2.3 (including the certification requirements
set forth on the reverse of the Initial Securities intended to ensure that
such transfers comply with Rule 144A or Regulation S, as the case may be)
and such other procedures as may from time to time be adopted by the
Company.
(d) Legends.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or
in substitution thereof) shall bear a legend in substantially the
following form:
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
WITHIN THE "UNITED STATES" OR TO "U.S. PERSONS" (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY, BY
ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE
BENEFIT OF THE ISSUERS THAT: (I) IT HAS ACQUIRED A "RESTRICTED"
SECURITY WHICH HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT;
(II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY,
PRIOR TO THE DATE WHEN THIS SECURITY NO LONGER CONSTITUTES A
"RESTRICTED" SECURITY UNDER RULE 144(K) OF THE SECURITIES ACT EXCEPT
(A) TO EITHER OF THE ISSUERS, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (D) OUTSIDE THE UNITED STATES IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE
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EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY APPLICABLE JURISDICTION;
AND (III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER FROM IT OF THIS SECURITY OF THE RESALE RESTRICTIONS
SET FORTH IN (II) ABOVE. ANY OFFER, SALE OR OTHER DISPOSITION
PURSUANT TO THE FOREGOING CLAUSES (II)(D) AND (E) IS SUBJECT TO THE
RIGHT OF THE ISSUERS OF THIS SECURITY AND THE TRUSTEE OR TRANSFER
AGENT FOR SUCH SECURITIES TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN
FORM AND SUBSTANCE. [THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.]
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof
to exchange such Transfer Restricted Security for a certificated
Security that does not bear the legend set forth above and rescind
any restriction on the transfer of such Transfer Restricted
Security; and
(B) in the case of any Transfer Restricted Security that is
represented by a Global Security, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security for a
certificated Security that does not bear the legend set forth above
and rescind any restriction on the transfer of such Transfer
Restricted Security, if the Holder certifies in writing to the
Registrar that its request for such exchange was made in reliance on
Rule 144 (such certification to be in the form set forth on the
reverse of the Security).
(iii) After a transfer of any Initial Securities or Private Exchange
Securities during the period of the effectiveness of a Shelf Registration
Statement with
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respect to such Initial Securities or Private Exchange Securities, as the
case may be, all requirements pertaining to legends on such Initial
Security or such Private Exchange Security will cease to apply, the
requirements requiring any such Initial Security or such Private Exchange
Security issued to certain Holders to be issued in global form will cease
to apply, and a certificated Initial Security or Private Exchange Security
without legends will be available to the transferee of the Holder of such
Initial Securities or Private Exchange Securities upon exchange of such
transferring Holder's certificated Initial Security or Private Exchange
Security or directions to transfer such Holder's interest in the Global
Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such
Initial Securities are offered Exchange Securities in exchange for their
Initial Securities, all requirements pertaining to such Initial Securities
that Initial Securities issued to certain Holders be issued in global form
will cease to apply and certificated Initial Securities with the
Restricted Securities Legend set forth in Exhibit 1 hereto will be
available to Holders of such Initial Securities that do not exchange their
Initial Securities, and Exchange Securities in certificated or global form
will be available to Holders that exchange such Initial Securities in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities pursuant to which Holders of such Initial Securities
are offered Private Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
still apply, and Private Exchange Securities in global form with the
Restricted Securities Legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Securities in such Private
Exchange.
(e) Cancelation or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, such
Global Security shall be returned to the Depositary for cancelation or retained
and canceled by the Trustee. At any time prior to such cancelation, if any
beneficial interest in a Global Security is exchanged for certificated or
Definitive Securities, redeemed, repurchased or canceled, the principal amount
of Securities represented by such Global Security shall
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be reduced and an adjustment shall be made on the books and records of the
Trustee (if it is then the Securities Custodian for such Global Security) with
respect to such Global Security, by the Trustee or the Securities Custodian, to
reflect such reduction.
(f) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the Issuers
shall execute and the Trustee shall authenticate certificated Securities,
Definitive Securities and Global Securities at the Registrar's or
co-registrar's request.
(ii)No service charge shall be made for any registration of transfer
or exchange, but the Issuers may require payment of a sum sufficient to
cover any transfer tax, assessments or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessments
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 3.06, 4.10 and 9.05 of the Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any certificated or Definitive
Security selected for redemption in whole or in part pursuant to Article 3
of this Indenture, except the unredeemed portion of any certificated or
Definitive Security being redeemed in part, or (b) any Security for a
period beginning 15 Business Days before the mailing of a notice of an
offer to repurchase or redeem Securities or 15 Business Days before an
interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Issuers, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for
all other purposes whatsoever, whether or not such Security is overdue,
and none of the Issuers, the Trustee, the Paying Agent, the Registrar or
any co-registrar shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
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(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of or a participant in the
Depositary or other Person with respect to the accuracy of the records of
the Depositary or its nominee or of any participant or member thereof with
respect to any ownership interest in the Securities or with respect to the
delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice (including any notice of
redemption) or the payment of any amount under or with respect to such
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be
the Depositary or its nominee in the case of a Global Security). The
rights of beneficial owners in any Global Security shall be exercised only
through the Depositary subject to the applicable rules and procedures of
the Depositary. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depositary with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depositary participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
2.4 Certificated Securities.
(a) A Global Security deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies the Issuers
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary
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is not appointed by the Issuers within 90 days of such notice, or (ii) an Event
of Default has occurred and is continuing or (iii) the Issuers, in their sole
discretion, notify the Trustee in writing that they elect to cause the issuance
of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the Depositary
to the Trustee located in the Borough of Manhattan, The City of New York, to be
so transferred, in whole or from time to time in part, without charge, and the
Trustee shall authenticate and deliver, upon such transfer of each portion of
such Global Security, an equal aggregate principal amount of certificated
Initial Securities of authorized denominations. Any portion of a Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depositary shall direct.
Any certificated Initial Security delivered in exchange for an interest in the
Global Security shall, except as otherwise provided by Section 2.3(d), bear the
Restricted Securities Legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of either of the events specified
in Section 2.4(a), the Issuers will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
107
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUERS OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED WITHIN THE "UNITED STATES" OR TO "U.S. PERSONS"
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS,
ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE ISSUERS THAT: (I) IT HAS ACQUIRED
A "RESTRICTED" SECURITY WHICH HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT;
(II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE
DATE WHEN THIS SECURITY NO LONGER CONSTITUTES A "RESTRICTED" SECURITY UNDER RULE
144(K) OF THE SECURITIES ACT EXCEPT (A) TO EITHER OF THE ISSUERS, (B) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (D) OUTSIDE
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2
THE UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
APPLICABLE JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY OF THE RESALE
RESTRICTIONS SET FORTH IN (II) ABOVE. ANY OFFER, SALE OR OTHER DISPOSITION
PURSUANT TO THE FOREGOING CLAUSES (II)(D) AND (E) IS SUBJECT TO THE RIGHT OF THE
ISSUERS OF THIS SECURITY AND THE TRUSTEE OR TRANSFER AGENT FOR SUCH SECURITIES
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS OR OTHER
INFORMATION ACCEPTABLE TO THEM IN FORM AND SUBSTANCE. [THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.]
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S.
109
3
No. $
CUSIP:
10 3/4% Senior Notes due 2004
Globalstar, L.P., a Delaware limited partnership and Globalstar Capital
Corporation, a Delaware corporation, promise to pay to ,
or registered assigns, the principal sum of Dollars on
November 1, 2004.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
Additional provisions of this Security are set forth on the other
side of this Security.
GLOBALSTAR, L.P., by
LORAL/QUALCOMM SATELLITE
SERVICES, L.P., its managing
general partner, by
LORAL/QUALCOMM PARTNERSHIP, L.P.
its general partner, by LORAL
GENERAL PARTNER, INC. its
general partner,
by _____________________________
Vice President
_____________________________
Secretary
GLOBALSTAR CAPITAL CORPORATION
by _____________________________
Vice President
_____________________________
Secretary
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4
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by_____________________________
Authorized Signatory
111
5
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
10 3/4% Senior Note due 2004
1. Interest and Liquidated Damages
Globalstar, L.P., a Delaware limited partnership and Globalstar
Capital Corporation, a Delaware corporation (such limited partnership and such
corporation, and their successors and assigns under the Indenture hereinafter
referred to, being herein called the "Issuers"), promise to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, Liquidated Damages (as defined in the Registration Rights
Agreement) shall accrue on this Security in an amount equal to $.05 per week per
$1,000 principal amount of Securities held by each Holder (over and above the
interest set forth in the title of this Security) from and including the date on
which any such Registration Default shall occur until the earlier of (i) the
date on which all such Registration Defaults have been cured or (ii) the date
which is 90 days after the date such Registration Default occurred. The
Liquidated Damages will increase by an additional $.05 per week per $1,000
principal amount of the Securities held by each Holder during each subsequent
90-day period until the date on which all such Registration Defaults have been
cured; provided, however, that the aggregate amount of Liquidated Damages shall
not exceed a maximum of $.50 per week per $1,000 principal amount of the
Securities held by each Holder. The Issuers will pay interest hereon and
Liquidated Damages (if any) semiannually on May 1, and November 1, of each year
commencing May 1, 1998. Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid or
provided for, from October 29, 1997. Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Issuers shall pay interest on overdue
principal at the rate borne by the Securities plus 1% per annum, and it shall
pay interest on overdue installments of cash interest at such higher rate to the
extent lawful.
2. Method of Payment
The Issuers will pay interest and Liquidated Damages (if any) on the
Securities (except defaulted interest) to the Persons who are registered holders
of Securities at the close of business on the February 1 or
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6
August 1 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Issuers will pay principal and interest and Liquidated Damages (if
any) in money of the United States that at the time of payment is legal tender
for payment of public and private debts. Payments in respect of Securities
(including principal, premium, interest and Liquidated Damages (if any)) will be
made by wire transfer of immediately available funds to the accounts specified
by the holders thereof or, if no U.S. dollar account maintained by the payee
with a bank in the United States is designated by any holder to the Trustee or
the Paying Agent at least 30 days prior to the relevant due date for payment (or
such other date as the Trustee may accept in its discretion), by mailing a check
to the registered address of such holder.
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking corporation
("Trustee"), will act as Paying Agent and Registrar. The Issuers may appoint and
change any Paying Agent, Registrar or co-registrar without notice. The Issuers
or any of their domestically incorporated Wholly-Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture
The Issuers issued the Securities under an Indenture dated as of
February 15, 1997 ("Indenture"), between the Issuers and the Trustee. 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 of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are unsecured senior obligations of the Issuers
limited to $325,000,000 aggregate principal amount (subject to Section 2.07 of
the Indenture). The Indenture contains certain covenants which, among other
things, limit (a) the incurrence of additional debt by the Issuers and certain
of its subsidiaries and the issuance of capital stock by such subsidiaries, (b)
the payment of dividends on capital stock of certain subsidiaries and the
purchase, redemption or retirement of capital stock or subordinated
indebtedness, (c) certain investments, (d)
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7
certain transactions with affiliates, (e) the incurrence of liens, (f) sales of
assets, including capital stock of subsidiaries, (g) certain consolidations and
mergers, (h) the Issuers' and certain of their subsidiaries' lines of business
and (i) the Issuers' ability to operate without certain insurance coverage. The
Indenture also will prohibit certain restrictions on distributions from
subsidiaries. In addition, the Issuers may be obligated, under certain
circumstances, to offer to repurchase Securities at a purchase price equal to
101% of the principal amount of the Securities plus accrued and unpaid interest
and Liquidated Damages (if any) to the date of repurchase.
5. Optional Redemption
The Securities may not be redeemed prior to November 1, 2002. On and
after that date, the Issuers may redeem the Securities in whole or in part, at
any time or from time to time at the following redemption prices (expressed in
percentages of principal amount), plus accrued and unpaid interest and
Liquidated Damages (if any) to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest and Liquidated
Damages (if any) due on the related interest payment date):
if redeemed during the 12-month period commencing November 1 of the
years set forth below:
Period Percentage
------ ----------
2002...................................................... 105.375%
2003...................................................... 102.688%
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued interest
and Liquidated Damages (if any) on all Securities (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or before
the redemption date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
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8
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right to cause the Issuers to repurchase all or any part of the Securities of
such Holder at a repurchase price equal to 101% of the principal amount of the
Securities plus accrued and unpaid interest and Liquidated Damages (if any) to
be repurchased (subject to the right of holders of record on the relevant record
date to receive interest and Liquidated Damages (if any) due on the relevant
interest payment date) as provided in, and subject to the terms of, the
Indenture.
8. Guarantees
This Security may be jointly and severally guaranteed by certain
Subsidiaries of the Issuers to the extent provided in the Indenture. The Issuers
have covenanted pursuant to the Indenture to cause any Subsidiary created or
acquired after the date of the Indenture (unless such Subsidiary is a Transitory
Equipment Subsidiary or is an Unrestricted Subsidiary), to execute and deliver
to the Trustee a Subsidiary Guaranty pursuant to which such Subsidiary will
guaranty this Security on the same terms and conditions as those set forth in
the Indenture.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Issuers are not required to transfer or exchange any Securities
selected for redemption (except, in the case of a Security to be redeemed in
part, the portion of the Security not to be redeemed) or any Securities for a
period of 15 days before a selection of Securities to be redeemed.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another
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9
Person. After any such payment, Holders entitled to the money must look only to
the Issuers and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Issuers at any time may terminate
some or all of their obligations under the Securities and the Indenture if the
Issuers deposit with the Trustee money or U.S. Government Obligations for the
payment of principal and interest and Liquidated Damages (if any) on the
Securities to redemption or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Issuers and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, to provide for the assumption by a successor corporation of the
obligations of Globalstar under the Indenture, to provide for uncertificated
Securities in addition to or in place of certificated Securities, to add
guarantees with respect to the Securities, to release such guarantees, to secure
the Securities, to add to the covenants of the Issuers for the benefit of the
Holders of the Securities or to surrender any right or power conferred upon the
Issuers, to make any change that does not adversely affect the rights of any
Holder of the Securities or to comply with any requirement of the SEC in
connection with the qualification of the Indenture under the Trust Indenture
Act.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest or Liquidated Damages (if any) on the Securities;
(ii) default in payment of principal on the Securities, upon redemption pursuant
to paragraph 5 of the Securities, upon required repurchase upon declaration or
otherwise, or failure by the Issuers to redeem or purchase Securities when
required; (iii) failure by the Issuers to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations
116
10
(including failure to pay within any grace period after final maturity) of other
Debt of the Issuers if the amount accelerated (or so unpaid) exceeds $10
million; (v) certain events of bankruptcy or insolvency with respect to the
Issuers and the Significant Subsidiaries; (vi) certain judgments or decrees for
the payment of money in excess of $10 million, subject to lapse of time and
notice; and (vii) certain events with respect to the guarantees of the Issuers'
obligations under the Securities by certain of their subsidiaries. However, a
default under clauses (iii) and (vi) will not constitute an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
Securities outstanding notify the Issuers of the default and the Issuers do not
cure such default within the time specified after receipt of such notice. If an
Event of Default occurs and is continuing, the Trustees or the Holders of at
least 25% in principal amount of the Securities outstanding may declare the
principal of and all accrued but unpaid interest and Liquidated Damages (if any)
on all the Securities to be due and payable immediately. Certain events of
bankruptcy, insolvency or reorganization are Events of Default which will result
in the Securities being due and payable immediately upon the occurrence of such
Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may with hold from Securityholders notice of any continuing
Default (except a Default in payment of principal or interest or Liquidated
Damages (if any)) if it determines that withholding notice is in the interest of
the Holders.
15. Trustee Dealings with the Issuers
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Issuers or their
Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
Any past, present or future director, officer, partner (including
general partners), employee, incorporator or stockholder, as such, of the
Issuers or the Trustee shall not have any liability for any obligations of the
Issuers
117
11
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
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12
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Securities and have directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Issuers to the extent provided
therein.
21. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE ISSUERS WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE. REQUESTS MAY
BE MADE TO:
GLOBALSTAR, L.P.
0000 XXXXXX XXXX
XXX 000000
XXX XXXX, XX 00000-0000
ATTENTION OF: XXXXXXX X. XXXXXX
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13
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security on the books of Globalstar. The agent may substitute
another to act for him.
________________________________________________________________________________
Date: ____________________ Your Signature: _____________________________________
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
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14
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by either of the Issuers or any Affiliate of either of the Issuers, the
undersigned confirms that such Securities are being transferred in accordance
with its terms:
CHECK ONE BOX BELOW
(1) / / to either of the Issuers; or
(2) / / pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) / / inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933)
that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that
such transfer is being made in reliance on Rule 144A, in each
case pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(4) / / outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act in
compliance with Rule 904 under the Securities Act of 1933; or
(5) / / pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that
if box (4) or (5) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Issuers have reasonably
requested to confirm that such transfer is being made
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15
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act.
__________________________________
Signature
Signature Guarantee:
________________________ __________________________________
[Signature must be guaranteed Signature
by an eligible Guarantor
Institution (banks, stock
brokers, savings and loan
associations and credit
unions) with membership in
an approved guarantee
medallion program pursuant
to Securities and Exchange
Commission Rule 17Ad-15]
________________________________________________________________________________
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Issuers as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: ____________________ ________________________________________
NOTICE: To be executed by
an executive officer
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16
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have
been made:
Date of Amount of decrease Amount of increase Principal amount Signature of
Exchange in Principal in Principal of this Global authorized
-------- Amount of this Amount of this Security following signatory of
Global Security Global Security such decrease or Trustee or
--------------- --------------- increase Securities
-------- Custodian
---------
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by any of the
Issuers pursuant to Section 4.07 or 4.10 of the Indenture, check the box:
/ /
If you want to elect to have only part of this Security purchased by
any of the pursuant to Section 4.07 or 4.10 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: ___________________________________________________________
[Signature must be guaranteed by an eligible
Guarantor Institution (banks, stock brokers, savings
and loan associations and credit unions) with
membership in an approved guarantee medallion program
pursuant to Securities and Exchange Commission Rule
17Ad-15]
