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EXHIBIT 4.2
----------------------------
Global TeleSystems Group, Inc. as Issuer
and
The Bank of New York, as Trustee
----------------------------
INDENTURE
Dated as of July 14, 1997
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Original Issuance of $135,000,000
Senior Subordinated Convertible Bonds due 2000
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TABLE OF CONTENTS
Page
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION............................1
Section 1.01 Definitions...............................................................1
Section 1.02 Rules of Construction....................................................14
ARTICLE TWO THE BONDS.........................................................................14
Section 2.01 Forms and Dating.........................................................14
Section 2.03 Securities Act Legends...................................................16
Section 2.04 Execution and Authentication.............................................17
Section 2.05 Registrar, Transfer Agents, Conversion Agents and Paying Agents..........17
Section 2.06 Paying Agent To Hold Money in Trust......................................18
Section 2.07 Bondholder Lists.........................................................18
Section 2.08 Transfer and Exchange....................................................18
Section 2.09 Replacement Bonds........................................................19
Section 2.10 Outstanding Bonds........................................................19
Section 2.11 (Reserved)...............................................................20
Section 2.12 Temporary Bonds..........................................................20
Section 2.13 Cancellation.............................................................20
Section 2.14 Default Interest.........................................................20
Section 2.15 CUSIP, ISIN and CINS Numbers.............................................20
Section 2.16 Deposit of Moneys........................................................21
Section 2.17 Book-Entry Provisions for the Global Certificates........................21
Section 2.18 Special Transfer Provisions..............................................22
Section 2.19 Payments.................................................................24
Section 2.20 Additional Amounts.......................................................24
ARTICLE THREE REDEMPTION OF BONDS.............................................................26
Section 3.01 Notices to the Trustee...................................................26
Section 3.02 Bonds To Be Redeemed in Part.............................................26
Section 3.03 Notice of Redemption.....................................................26
Section 3.04 Effect of Notice of Redemption...........................................27
Section 3.05 Deposit of Redemption Price..............................................27
Section 3.06 Bonds Redeemed or Purchased in Part......................................28
Section 3.07 Redemption for Tax Reasons...............................................28
Section 3.07 Redemption and Purchase..................................................28
Section 3.09 Notices to Trustee and Luxembourg Stock Exchange.........................29
ARTICLE FOUR COVENANTS........................................................................29
Section 4.01 Payment of Bonds.........................................................29
Section 4.02 Maintenance of Office or Agency..........................................30
Section 4.03 Corporate Existence......................................................30
Section 4.04 Payment of Taxes and Other Claims........................................31
Section 4.05 Maintenance of Properties; Insurance; Books and Records; Compliance with
Law...................................................................31
Section 4.06 Compliance Certificate...................................................32
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Section 4.07 SEC Reports...................................................32
Section 4.08 Limitation on Indebtedness....................................33
Section 4.09 Limitation on Restricted Payments.............................35
Section 4.10 Negative Pledge...............................................37
Section 4.11 Change of Control.............................................37
Section 4.12 Disposition of Proceeds of Asset Sales........................39
Section 4.13 Limitation on Transactions with Interested Persons............41
Section 4.14 Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries and Significant Joint Ventures......41
Section 4.15 Limitations on Sale-Leaseback Transactions....................42
Section 4.16 When Issuer May Merge, etc....................................43
Section 4.17 Successor Substituted.........................................44
Section 4.18 Limitation on Guarantees by Subsidiaries......................44
Section 4.19 Waiver of Stay, Extension or Usury Laws.......................44
Section 4.20 (Reserved)....................................................44
Section 4.21 Listing on the Luxembourg Stock Exchange......................45
Section 4.22 Reservation of GTS Shares.....................................45
Section 4.23 (Reserved)....................................................45
Section 4.24 Limitation on Other Subordinated Indebtedness.................45
Section 4.25 Effectiveness of Certain Covenants............................45
ARTICLE FIVE MEETINGS OF HOLDERS...................................................45
Section 5.01 Purpose for Which Meetings May Be Called......................45
Section 5.02 Call, Notice and Place of Meetings............................45
Section 5.03 Persons Entitled to Vote at Meetings..........................46
Section 5.04 Quorum; Action................................................46
Section 5.05 Determination of Voting Rights; Conduct and Adjournment
of Meetings................................................47
ARTICLE SIX EVENTS OF DEFAULT REMEDIES.............................................47
Section 6.01 Events of Default.............................................47
Section 6.02 Acceleration..................................................49
Section 6.03 Other Remedies................................................49
Section 6.04 Waiver of Past Defaults.......................................49
Section 6.05 Control by Majority...........................................49
Section 6.06 Limitation on Suits...........................................50
Section 6.07 Right of Holders To Receive Payment...........................50
Section 6.08 Collection Suit by Trustee....................................51
Section 6.09 Trustee May File Proofs of Claims.............................51
Section 6.10 Priorities....................................................51
Section 6.11 Undertaking for Costs.........................................51
Section 6.12 Restoration of Rights and Remedies............................52
Section 6.13 Notice to Holders of Event of Default.........................52
ARTICLE SEVEN TRUSTEE..............................................................52
Section 7.01 Duties........................................................52
Section 7.02 Rights of Trustee.............................................53
Section 7.03 Individual Rights of Trustee..................................54
Section 7.04 Trustee's Disclaimer..........................................54
Section 7.05 (Reserved)....................................................54
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Section 7.06 Money Held in Trust..................................................54
Section 7.07 Compensation and Indemnity...........................................54
Section 7.08 Replacement of Trustee...............................................55
Section 7.09 Successor Trustee by Merger, etc.....................................56
Section 7.10 Eligibility; Disqualification........................................56
ARTICLE EIGHT SATISFACTION AND DISCHARGE OF INDENTURE.....................................56
Section 8.01 Termination of the Issuer's Obligations..............................56
Section 8.02 Covenant Defeasance..................................................57
Section 8.03 Application of Trust Money...........................................59
Section 8.04 Repayment to Issuer..................................................59
Section 8.05 Reinstatement........................................................59
ARTICLE NINE AMENDMENTS,SUPPLEMENTS AND WAIVERS...........................................59
Section 9.01 Without Consent of Holders...........................................59
Section 9.02 With Consent of Holders..............................................60
Section 9.03 Effect of Supplemental Indenture.....................................61
Section 9.04 Revocation and Effect of Consents....................................61
Section 9.05 Notation on or Exchange of Securities................................61
Section 9.06 Trustee May Sign Amendments, etc.....................................61
ARTICLE TEN SUBORDINATION OF BONDS........................................................62
Section 10.01 Bonds Subordinate to Senior Indebtedness............................62
Section 10.02 Payment Over of Proceeds upon Dissolution, etc......................62
Section 10.03 Suspension of Payment When Senior Indebtedness in Default...........63
Section 10.04 Trustee's Relation to Senior Indebtedness...........................64
Section 10.05 Subrogation to Rights of Holders of Senior Indebtedness.............64
Section 10.06 Provisions Solely To Define Relative Rights.........................65
Section 10.07 Trustee To Effectuate Subordination.................................65
Section 10.08 No Waiver of Subordination Provisions...............................66
Section 10.09 Notice to Trustee...................................................66
Section 10.10 Reliance on Judicial Order or Certificate of Liquidating Agent......66
Section 10.11 Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights..................................67
Section 10.12 Article Applicable to Paying Agents.................................67
Section 10.13 No Suspension of Remedies...........................................67
ARTICLE ELEVEN CONVERSION OF BONDS........................................................67
Section 11.01 Conversion Right....................................................67
Section 11.02 Exercise of Conversion Right; Issuance of GTS Shares on Conversion..67
Section 11.03 Cash Payments in Lieu of Fractional Shares..........................70
Section 11.04 Conversion Price....................................................70
Section 11.05 (Reserved)..........................................................71
Section 11.06 Stamp and Other Duties Exchange Costs...............................71
Section 11.07 Reservation of Shares; Shares to Be Fully Paid; Listing
of GTS Shares.....................................................71
Section 11.08 Responsibility of Trustee...........................................72
Section 11.09 Notice to Holders Prior to Certain Actions..........................72
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ARTICLE TWELVE MISCELLANEOUS............................................................72
Section 12.01 Acts of Holders, Record Dates.....................................72
Section 12.02 Notices...........................................................73
Section 12.03 Communication by Holders with Other Holders.......................74
Section 12.04 Certificate and Opinion as to Conditions Precedent................74
Section 12.05 Statements Required in Certificate or Opinion.....................74
Section 12.06 Rules by Trustee, Transfer Agents, Paying Agents, Registrar.......75
Section 12.07 Governing Law.....................................................75
Section 12.08 No Interpretation of Other Agreements.............................75
Section 12.09 No Recourse Against Others........................................75
Section 12.10 Successors........................................................75
Section 12.11 Duplicate Originals...............................................75
Section 12.12 Separability......................................................75
Section 12.13 Table of Contents, Headings, etc..................................76
Section 12.14 Benefits of Indenture.............................................76
SIGNATURES......................................................................72
EXHIBIT A-1 Form of Security
ESHIBIT A-2 Form of Legends
EXHIBIT B Form of Certificate (DTC)
EXHIBIT C-1 Form of 144A Transfer Certificate
EXHIBIT C-2 Form of Regulation S Transfer Certificate
EXHIBIT C-3 Form of Transfer Certificate for Exchange or Transfer from
Restricted Global Bond or Restricted Definitive Bond to Permanent
Regulation S Global Certificate
EXHIBIT C-4 Form of Certificate to be Delivered in Connection With Cetain
Transfers to Accredited Investors
EXHIBIT C-5 Form of Regulation S Transfer Restriction Certificate
EXHIBIT D Registration Rights Agreement
SCHEDULE 1 Agreements with Interested Persons
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INDENTURE, dated as of July 14, 1997, between GLOBAL TELESYSTEMS GROUP,
INC., a corporation incorporated under the laws of the State of Delaware (the
"Issuer"), and THE BANK OF NEW YORK, a New York banking corporation, as trustee
(the "Trustee").
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Issuer's Senior
Subordinated Convertible Bonds due 2000 (the "Bonds").
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"Accredited Investor" means "accredited investors" as defined in Rule
501 of the Securities Act.
"Acquired Indebtedness" means, with respect to any specified person,
(i) Indebtedness of any other person at the time such other person merged with
or into or became a Subsidiary or Significant Joint Venture of any specified
person, and (ii) Indebtedness encumbering any asset acquired by any specified
person.
"Additional Amounts" are specified in Section 2.20.
"Affiliate" means, with respect to any specified person, any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person.
"Agent" means any Registrar, Conversion Agent, Transfer Agent, Paying
Agent, authenticating agent or co-Registrar of the Bonds.
"Agent Members" shall have the meaning set forth in Section 2.17(a).
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition to any person other than the Issuer or a Wholly-Owned
Subsidiary of the Issuer, in one or a series of related transactions, of (a)
any Capital Stock of any Subsidiary or Significant Joint Venture (other than in
respect of director's qualifying shares or investments by foreign nationals
mandated by applicable law); (b) all or substantially all of the properties and
assets of any division or line of business of the Issuer or any Subsidiary or
Significant Joint Venture; or (c) any other properties or assets of the Issuer
or any Subsidiary or Significant Joint Venture other than in the ordinary
course of business. For the purposes of this definition, the term "Asset Sale"
shall not include (i) any sale, transfer or other disposition of equipment,
tools or other assets (including Capital Stock or other equity of any
Subsidiary or Significant Joint Venture) by the Issuer or any of its
Subsidiaries or Significant Joint Ventures in one or a series of related
transactions in respect of which the Issuer or such Subsidiary or Significant
Joint Venture receives cash or property with an aggregate Fair Market Value of
U.S. $10,000,000 (or the foreign currency equivalent thereof) or less; (ii) any
sale, issuance, conveyance, transfer, lease or other disposition of properties
or assets that is governed by the provisions of Section 4.16 and Section 4.17
and (iii) any direct or indirect sale, transfer or other disposition of shares
of Capital Stock of Hermes so long as after such sale, transfer or other
disposition the Issuer owns or controls at least 51 per cent. of the Voting
Stock of Hermes.
"Asset Sale Offer" shall have the meaning set forth in Section 4.12.
"Asset Sale Offer Price" shall have the meaning set forth in Section
4.12.
"Asset Sale Purchase Date" shall have the meaning set forth in Section
4.12.
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"Average Life to State Maturity" means, with respect to any
Indebtedness, as at any date of determination, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years (or any
fraction thereof) from such date to the date or dates of each successive
scheduled principal payment (including, without limitation, any sinking fund
requirements) of such Indebtedness multiplied by (b) the amount of each such
principal payment by (ii) the sum of all such principal payments.
"Bankruptcy Law" means Title 11 of the United States Code of Federal
Regulations or any similar law for the relief of debtors.
"Board of Directors" means the board of directors of the Issuer or any
duly authorized committee of such board.
"Board Resolutions" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Issuer to have been duly adopted by
the Board of Directors of the Issuer and to be in full force and effect on the
date of such certification.
"Bonds" means the bonds that are issued under this Indenture, as
amended or supplemented from time to time pursuant to this Indenture.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
or Luxembourg, are authorized or obligated by law, regulation or executive
order to close.
"Capital Research Notes" means the aggregate $30 million of notes issued
pursuant to (i) the Senior Note Purchase Agreement, dated as of February 2,
1996, as amended, between the Issuer and Emerging Markets Growth Fund, Inc.,
and (ii) the Senior Note Purchase Agreement dated as of February 2, 1996, as
amended, between the Issuer and Capital International Emerging Markets Funds.
"Capital Stock" means, with respect to any person, any and all shares,
interests, participations, rights in or other equivalents (however designated)
of such person's capital stock, and any rights (other than debt securities
convertible into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation under a lease of
(or other agreement conveying the right to use) any property (whether real,
personal or mixed) that is required to be classified and accounted for as a
capital lease obligation under GAAP, and the amount of any such obligation at
any date shall be the capitalized amount thereof at such date, determined in
accordance with GAAP.
"Cash Equivalents" means, at any time, (a) any evidence of
Indebtedness with a maturity of 180 days or less issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof); (b) certificates of deposit
or acceptances with a maturity of 180 days or less of any financial institution
that is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less that U.S. $500,000,000; (c)
certificates of deposit with a maturity of 180 days or less of any financial
institution that is not organized under the laws of the United States, any
state thereof or the District of Columbia that are rated at least A-1 by S&P or
at least P-1 by Xxxxx'x or at least an equivalent rating category of another
nationally recognized securities rating agency; and (d) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the government of the United States of
America or issued by any agency thereof and backed by the full faith and credit
of the United States of America, in each case maturing within 180 days from the
date of acquisition; provided that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985.
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"CEDE" means Cede & Co. as DTC's nominee.
"Cedel" means Cedel Bank, societe anonyme.
"Change of Control" means the occurrence of any of the following
events:(a) any "person" or "group" (as such terms are used in Section 13(d)
and 14(d)of the Exchange Act), other than the Permitted Holders, is or
becomes the"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time, upon
the happening of an event or otherwise), directly or indirectly, of more than
40 per cent. of the total Voting Stock of the Issuer (50.1 per cent. in the
case of a Strategic Investor); (b) the Issuer consolidates with, or merges
with or into, another person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any person, or
any person consolidates with, or merges with or into, the Issuer, in any such
event pursuant to a transaction in which the outstanding Voting Stock of the
Issuer is converted into or exchanged for cash, securities or other property,
other than any such transaction where (i) the outstanding Voting Stock of the
Issuer is converted into or exchanged for (1) Voting Stock (other than
Redeemable Capital Stock) of the surviving or transferee corporation or (2)
cash, securities and other property in an amount which could then be paid by
the Issuer as a Restricted Payment under the Indenture, or a combination
thereof, and (ii) immediately after such transaction no "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding
Permitted Holders, is the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time, upon the happening of an event or otherwise), directly or
indirectly, of more than 50 per cent. of the total Voting Stock of the surviving
or transferee corporation; (c) at any time during any consecutive two-year
period, individuals who at the beginning of such period constituted the Board
of Directors of the Issuer (together with any new directors whose election by
such Board of Directors or whose nomination for election by the stockholders
of the Issuer was approved by a vote of 66 2/3 per cent. of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of the
Issuer then in office; or (d) the Issuer is liquidated or dissolved or adopts
a plan of liquidation.
"Change of Control Offer" shall have the meaning set forth in Section
4.11.
"Change of Control Purchase Date" shall have the meaning set forth in
Section 4.11.
"Change of Control Purchase Price" shall have the meaning set forth in
Section 4.11.
"Chatterjee Notes" means the aggregate $40 million of notes issued
pursuant to (a) the Senior Note Purchase Agreement, dated as of January 19,
1996, as amended, among the Issuer, The Open Society Institute and Chatterjee
Fund Management, L.P. and (b) the Senior Note Purchase Agreement, dated as of
June 6, 1996, as amended, among the Issuer, The Open Society Institute,
Winston Partners II LDC and Winston Partners II LLC.
"Closing Price" means the closing price of the GTS Shares on a
Qualifying Stock Exchange or if the GTS Shares are listed on more than one
such exchange the average of such closing prices on all such exchanges.
"Common Stock" means, with respect to any person, any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or nonvoting) of, such person's common stock, whether
outstanding at the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
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"Complying Public Equity Conditions" means all of the following: (a)
the Issuer has made public sales of GTS Shares with a cumulative public offering
price of at least U.S. $100,000,000 to an aggregate of not less than 50
purchasers; (b) the GTS Shares have been listed or shall be listed in
connection with the offering on either the New York Stock Exchange, the London
Stock Exchange, the American Stock Exchange or the Nasdaq National Market, and
(c) the Issuer shall have registered additional GTS Shares from Private Equity
Offerings with a market value of at least U.S. $100,000,000 calculated using
the offering price in the Complying Public Equity Offering.
"Complying Public Equity Offering" means a public offering of GTS
Shares where, immediately following completion thereof, (a) the Complying
Public Equity Conditions have been met and (b) the aggregate number of GTS
Shares sold thereby, together with any GTS Shares sold in any prior public
offerings plus the number of GTS Shares into which the Bonds may be converted
(calculated as if such conversion were to be effected at the time of such
public offering) does not exceed 50 per cent. of the total GTS Shares
outstanding on a fully diluted basis.
"Consolidated Net Worth" means, with respect to any person at any date,
the consolidated stockholders' equity of such person less the amount of such
stockholders' equity attributable to Redeemable Capital Stock of such person
and its subsidiaries, as determined in accordance with GAAP.
"consolidation" means, with respect to any person, the consolidation of
the accounts of such person and each of its subsidiaries if and to the extent
the accounts of such person and each of its subsidiaries would normally be
consolidated with those of such person, all in accordance with GAAP. The term
"consolidated" shall have a meaning correlative to the foregoing.
"control" means, with respect to any specified person, the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Conversion Agent" has the meaning set forth in Section 2.05.
"Conversion Date" has the meaning set forth in Section 11.02.
"Conversion Notice" has the meaning set forth in Section 11.02.
"Conversion Price" has the meaning set forth in Section 11.04
"Conversion Right" has the meaning set forth in Section 11.01.
"Corporate Trust Office" means the corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which on the date hereof is located in New York, New
York.
"Covenant Defeasance" shall have the meaning set forth in Section
8.02(c).
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Issuer or any Subsidiary or any Significant Joint Venture against fluctuations
in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
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"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Definitive Securities" has the meaning set forth in Section 2.02.
"Depository" or "DTC" means the Depositary Trust Company, its nominees,
and their respective successors.
"Designated Senior Indebtedness" means Senior Indebtedness permitted
under this Indenture the principal amount of which is U.S. $30,000,000 (or the
foreign currency equivalent) or more and has been designated by the Issuer as
"Designated Senior Indebtedness" (which includes the Chatterjee Notes and the
Capital Research Notes).
"Eligible Joint Venture" means a Joint Venture (other than a
Subsidiary) (a) that is formed with respect to the construction, development,
acquisition, servicing, ownership, improvement, operation or management of a
telecommunications business, (b) in which the Issuer, directly or indirectly,
owns at least 25 per cent. of the Capital Stock or other ownership interest
therein and (c) in respect of which the Issuer, directly or indirectly, either
(i) controls, by voting power, membership on the board of directors or
management committee or other similar governing body, or through the provisions
of any applicable partnership, joint venture, shareholder or other similar
agreement or under an operating, maintenance or management agreement or
otherwise, the management and operation of the Joint Venture and any
telecommunications project of such Joint Venture or (ii) otherwise
has the right to control or veto material acts and decisions with respect to
the management or operation of the Joint Venture that, taken as a whole, are
substantially similar to the rights of the Issuer with respect to the Existing
Joint Ventures of the Issue Date.
"Euroclear" means Xxxxxx Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"Event of Default" has the meaning set forth in Section 6.01.
"Excess Proceeds" has the meaning set forth in Section 4.12.
"Existing Joint Venture" means each of Joint Stock Company of Closed
Type Russian-Dutch Joint Venture PrymTelefon Scientific-Production-Innovation
Firm Bancomsvyaz, a Limited Liability Company, Closed Joint Stock
Company TeleCommunications of Moscow, Hermes Europe Railtel B.V., Limited
Liability Company LvNet-Telport, GTS Monaco Access X.X.X, Sovam Telport Kiev
Division Limited Partnership, Limited Liability Partnership-Joint Venture
EDN Sovintel, all the entities in which SFMT-Rusnet, Inc. currently has an
interest, all the entities in which Vostok Mobile b.v. currently has an
interest and their respective successors.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to any asset, the price, as
determined by the Board of Directors of the Issuer, acting in good faith, which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of which is under
pressure or compulsion to complete the transaction; provided, however, that
with respect to any transaction or related series of transactions which
involves an asset or assets in excess of U.S. $10,000,000 (or the foreign
currency equivalent thereof), in the aggregate, such determination shall be
evidenced by a resolution of the majority of disinterested members of the Board
of Directors of the Issuer delivered to the Trustee.
"Final Maturity Date" means, with respect to the Bonds, June 30, 2000,
unless otherwise extended hereunder.
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"Fixed Charge Coverage Ratio" of the Issuer means, for any period, the
ratio of (a) the sum of Pro rata Combined Adjusted Net Income, Pro rata
Combined Interest Expense, Pro rata Combined Income Tax Expense and Pro rata
Combined Non-cash Charges deducted in computing Pro rata Combined Adjusted Net
Income, in each case, for such period to (b) Pro rata Combined Interest Expense
for such period.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by significant segment of the accounting
profession of the United States of America, which are applicable from time to
time and are consistently applied.
"Global Certificates" means the Restricted Global Certificates and the
Regulation S Global Certificates.
"GTS Shares" means the Common Stock, par value $0.0001 per share, of
the Issuer.
"guarantee" means, as applied to any obligation, (a) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Hermes" means Hermes Europe Railtel B.V.
"Holders" or Bondholder" means the person in whose name a Bond is
registered on the Registrar's books.
"Indebtedness" means, with respect to any person, without duplication,
(a) all liabilities of such person for borrowed money or for the deferred
purchase price of property or services, excluding any (i) trade account
payables arising in the ordinary course of business and (ii) other accrued
current liabilities incurred in the ordinary course of business, including,
without limitation, all obligations, contingent or otherwise, of such person in
connection with any letters of credit, banker's acceptance or other similar
credit transaction; (b) all obligations of such person evidenced by bonds,
debentures or other similar instruments; (c) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such person (even if the rights and remedies
of the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), but excluding trade accounts
payable arising in the ordinary course of business; (d) all Capitalized Lease
Obligations of such person; (e) all Indebtedness referred to in the preceding
clauses of other persons and all dividends of other persons, the payment of
which is secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon
property (including, without limitation, accounts and contract rights) owned by
such person, even though such person has not assumed or become liable for the
payment of such Indebtedness (the amount of such obligation being deemed to be
the lesser of the value of such property or asset or the amount of the
obligation so secured); (f) all guarantees of Indebtedness referred to in this
definition by such person; (g) all Redeemable Capital Stock of such person
valued at the greater of its voluntary or involuntary maximum fixed repurchase
price plus accrued dividends; (h) all obligations under or in respect of
Currency Agreements and Interest Rate Protection Obligations of such person;
(i) any Preferred Stock of such person that provides for payments of liquidation
value by way of a sinking fund, or by way of mandatory redemption, defeasance,
retirement, repurchase or otherwise, or allows the holder the option to redeem,
in each case prior to the 91st day prior to the Maturity of the Bonds (valued
at the sum of (without duplication) (A) the liquidation preference thereof, (B)
any mandatory redemption payment obligations in respect thereof and (C) accrued
dividends thereon); and (j) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types referred to in
clauses (a) through (i) above. For
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purposes hereof, the "maximum fixed repurchase price" of any Redeemable Capital
Stock which does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Redeemable Capital Stock as if such
Redeemable Capital Stock were purchased on any date on which Indebtedness shall
be required to be determined pursuant to this Indenture, and if such price is
based upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the board of
directors of the issuer of such Redeemable Capital Stock.
"Indenture" means this Indenture, as amended, modified or supplemented
from time to time.
"Independent Financial Advisor" means a firm (i) which does not, and
whose directors, officers and employees or Affiliates do not, have a material
direct or indirect financial interest in the Issuer, any Subsidiary or
Significant Joint Venture and (ii) which, in the judgment of the Board of
Directors of the Issuer, is otherwise independent and qualified to perform the
task for which it is to be engaged.
"interest" means, with respect to any Bond, the amount of all interest
accruing on such Bond, including all interest accruing subsequent to the
occurrence of any events specified in Sections 6.01(f) and (g) or which would
have accrued but for any such event, whether or not such claims are allowable
under applicable law.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Bonds, as set forth therein.
"Interest Rate Protection Agreement" means any arrangement with any
other person whereby, directly or indirectly, such person is entitled to receive
from time to time periodic payments calculated by applying either a floating or
a fixed rate of interest on a stated notional amount in exchange for periodic
payments made by such person calculated by applying a fixed or a floating rate
of interest on the same notional amount and shall include without limitation,
interest rate swaps, caps, floors, collars and similar agreements.
"Interest Rate Protection Obligations" means the obligations of any
person pursuant to an Interest Rate Protection Agreement.
"Investment" means, with respect to any person, any direct or indirect
loan or other extension of credit or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition by
such person of any Capital Stock, bonds, debentures or other securities or
evidences of Indebtedness issued by, any other person. "Investments" shall
exclude extensions of trade credit in the ordinary course of business in
accordance with normal trade practices.
"Issue Date" means July 14, 1997.
"Issuer" means the party named as such in this Indenture until a
successor replaces it (or any previous successor) pursuant to this Indenture,
and thereafter means such successor.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether corporation, partnership or other legal form where the
Issuer or one or more Subsidiaries has, directly or indirectly, less than a
majority of the Voting Stock or other ownership interest.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim, or preference
or priority or other encumbrance upon or with respect to any property of any
kind; provided that in no event shall an operating lease be deemed to
constitute a Lien. A person shall be deemed to own subject to a Lien any
property which such person has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement.
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"Material Joint Venture" means a Joint Venture that, as of the end of
the most recent four-quarter period, had (i) total assets which exceeded 10
percent of the total combined assets of the Issuer at the end of such period or
(ii) total revenues which exceeded 15 percent of the total combined revenues of
the Issuer for such period.
"Material Subsidiary" means a Subsidiary that, as of the end of the
most recent four-quarter period, had (i) total assets which exceeded 10
per cent. of the total combined assets of the Issuer at the end of such period
or (ii) total revenues which exceeded 15 per cent. of the total combined
revenues of the Issuer for such period.
"Maturity" means, (i) when used with respect to the Bonds, June 30,
2000, unless otherwise extended and (ii) when used with respect to any
Indebtedness other than the Bonds, the date specified in the instrument
governing such Indebtedness as the fixed date on which the principal of such
Indebtedness, or any installment of interest thereon, is due and payable.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Nasdaq" means the National Association of Securities Dealers Automated
Quotation System.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (except to the extent that such obligations are financed or sold
with recourse) net of (i) brokerage commissions and other fees and expenses
(including without limitation, fees and expenses of legal counsel and
investment bankers) related to such Asset Sale, (ii) provisions for all taxes
payable as a result of such Asset Sale, (iii) amounts required to be paid to any
person (other than the Issuer or any Subsidiary or Significant Joint Venture)
owning a beneficial interest in the assets subject to the Asset Sale and (iv)
appropriate amounts to be provided by the Issuer or any Subsidiary or
Significant Joint Venture, as the case may be, as a reserve required in
accordance with GAAP against any liabilities associated with such Asset Sale
and retained by the Issuer or any Subsidiary or Significant Joint Venture, as
the case may be, after such Asset Sale, including, without limitation, pension
and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as reflected in an Officers' Certificate
delivered to the Trustee.
"Non-Complying Equity Offering" means (i) a Private Equity Offering of
GTS Shares or (ii) a public offering of GTS Shares that is not a Complying
Public Equity Offering.
"Non-Complying Public Equity Offering" means a public equity offering
of GTS Shares that satisfies all the Complying Public Equity Conditions, except
that the cumulative public offering price is less than U.S.$100,000,000.
"Non-payment Default" means any event (other than a Payment Default)
the occurrence of which entitles one or more persons to act to accelerate the
maturity of any Designated Senior Indebtedness.
"Non-U.S Holder" has the meaning set forth in Section 2.20.
"Notice of Offering" means a notice given to the Trustee or the
Bondholders and, if required by this Indenture, the Luxembourg Stock Exchange,
that a Complying Public Equity Offering or a Non-Complying Public Equity
Offering has occurred.
"Officer" means the Chairman of the Board, the President, any Executive
Vice President, any Vice President, the Chief Financial Officer, the Treasurer,
the Secretary or the Controller of the Issuer.
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"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or Assistant Secretary of the Issuer
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Issuer.
"Pari Passu Indebtedness" means Indebtedness of the Issuer which ranks
pari passu in right of payment with the Bonds.
"Paying Agent" has the meaning set forth in Section 2.05.
"Payment Blockage Period" shall have the meaning set forth in Section
10.03.
"Payment Default" means any default in the payment of principal,
premium, if any, or interest on any Designated Senior Indebtedness beyond any
applicable grace period with respect thereto.
"Permitted Holder" means (A) Xxxx X. Xxxxxx and any entity controlled
by him, (B) one or more of Xxxxxx Xxxxx, Xxxxx Fund Management LL, Xxxxxxxx
Xxxxxxxxxx or Chatterjee Management Company or affiliates of any of the
foregoing, and any person or entity for which any such person or entity acts as
the investment advisor or investment manager and (C) any person that acquires
the Capital Stock of the Issuer in a Strategic Equity Offering.
"Permitted Investments" means any of the following: (i) Investments in
any Subsidiary or Significant Joint Venture; (ii) Investments in any person
that is merged or consolidated with or into, or transfers or conveys all or
substantially all of its assets to, the Issuer or any Subsidiary or Significant
Joint Venture at the time such Investment is made; (iii) Investments in cash or
Cash Equivalents; (iv) Investments in deposits with respect to leases or
utilities provided to third parties in the ordinary course of business; (v)
Investments in the Bonds; (vi) Investments in Currency Agreements on
commercially reasonable terms entered into by the Issuer or any of its
Subsidiaries or Significant Joint ventures in the ordinary course of business
in connection with the operations of the business of the Issuer or its
Subsidiaries or Significant Joint Ventures to hedge against fluctuations in
foreign exchange rates; (vii) loans or advances to officers or employees of the
Issuer and its Subsidiaries or Significant Joint Ventures in the ordinary course
of business for bona fide business purposes of the Issuer, and its Subsidiaries
or Significant Joint Ventures (including travel and moving expenses) not in
excess of U.S.$5,000,000 (or the foreign currency equivalent) in the aggregate
at any one time outstanding; (viii) Investments in evidences of Indebtedness,
securities or other property received from another person by the Issuer or any
of its Subsidiaries or Significant Joint Ventures in connection with any
bankruptcy proceeding or by reason of a composition or readjustment of debt or
a reorganization of such person or as a result of foreclosure, perfection or
enforcement of any Lien in exchange for evidences of Indebtedness, securities
or other property of such person held by the Issuer or any of its Subsidiaries
or Significant Joint Ventures, or for other liabilities or obligations of such
other person is the Issuer or any of its Subsidiaries or Significant Joint
Ventures that were created, in accordance with the terms of this Indenture;
(ix) Investments in Interest Rate Protection Agreements on commercially
reasonable terms entered into by the Issuer or any of its Subsidiaries or
Significant Joint Ventures in the ordinary course of business in connection with
the operations of the business of the Issuer or its Subsidiaries or Significant
Joint Ventures to hedge against fluctuations in interest rates; and (x)
Investments in entities that are not Subsidiaries or Significant Joint
Ventures, to finance the construction, installation, improvement, acquisition
or operation of Telecommunication Assets, provided that such Investments do not
exceed in the aggregate, the greater of U.S.$25,000.000 (or the foreign
currency equivalent) or 10 per cent. of the pro rata combined assets of the
Issuer or, individually, the greater of U.S.$5,000,000 (or the foreign
currency equivalent) or 2 per cent. of the pro rata combined assets of the
Issuer.
" Permitted Junior Securities" shall have the meaning set forth in
Section 10.02.
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"person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, charitable
foundation, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.
"PORTAL" means the Private Offerings, Resales and Trading through
Automated Linkages market operated by the National Association of Securities
Dealers, Inc. or any successor thereto.
"Predecessor Bond" means, with respect to any particular Bond, every
previous Bond evidencing all or a portion of the same debt as that evidenced
by such particular Bond; and, for the purpose of this definition, any Bond
authenticated and delivered under Section 2.04 hereof in exchange for a
mutilated Bond or in lieu of a lost, destroyed or stolen Bond shall be deemed
to evidence the same debt as the mutilated, lost, destroyed or stolen Bond.
"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" means, with respect to any debt security, the principal of
the security plus, when appropriate, the premium, if any, on the security and
any interest on overdue principal.
"Private Equity Offering" means a private offering of GTS Shares
pursuant to an exemption from registration under the Securities Act.
"Pro rata Combined Adjusted Net Income" means, for any period, the pro
rata combined net income (or loss) of the Issuer and its Subsidiaries and
Significant Joint Ventures for such period, adjusted by excluding, without
duplication, (a) any net after-tax extraordinary gains or losses (less all fees
and expenses relating thereto), (b) any net after-tax gains or losses (less all
fees and expenses relating thereto) attributable to asset dispositions other
than in the ordinary course of business, and (c) the portion of net income (or
loss) of any person (other than the issuer or a Subsidiary or a Significant
Joint Venture), in which the Issuer or any such Subsidiary or Significant
Joint Venture has an ownership interest, except to the extent of the amount of
dividends or other distributions actually paid to the Issuer or any Subsidiary
or any Significant Joint Venture in cash dividends or distributions during
such period.
"Pro rata Combined Interest Expense" means, for any period, without
duplication,the sum of (a) the pro rata combined interest expense of the Issuer
and its Subsidiaries and its Significant Joint Ventures for such period,
including, without limitation, (i) amortization of debt discount, (ii) the net
cost of Interest Rate Protection Agreements (including amortization of
discounts), (iii) the interest portion of any deferred payment obligation and
(iv) amortization of debt issuance costs, plus (b) the pro rata combined
interest component of Capitalized Lease Obligations of the Issuer, its
Subsidiaries and Significant Joint Ventures during such period, less (c) pro
rata interest income of the Issuer, its Subsidiaries and Significant Joint
Ventures; provided that (x) the Pro rata Combined Interest Expense attributable
to interest on any Indebtedness computed on a pro forma basis and (A) bearing
a floating interest rate shall be computed as if the rate in effect on the date
of computation had been the applicable rate for the entire period and (B) which
was not outstanding during the period for which the computation is being made
but which bears, at the option of the Issuer, a Subsidiary or Significant Joint
Venture,as the case may be, a fixed or floating rate of interest shall be
computed by applying at the option of the issuer, either the fixed or floating
rate, and (y) in making such computation, the Pro rata Combined Interest
Expense attributable to interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period; provided
further that, notwithstanding the foregoing, the interest rate with respect to
any Indebtedness covered by any Interest Rate Protection Agreement shall be
deemed to be the effective interest rate with respect to such Indebtedness
after taking into account such Interest Rate Protection Agreement.
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"Pro rata Combined Income Tax Expense" means, for any period the
provision for federal, state, local and foreign income taxes of the Issuer, its
Subsidiaries and Significant Joint Ventures for such period as determined on a
pro rata combined basis.
"Pro rata Combined Non-cash Charges" means, for any period, the
aggregate depreciation, amortization and other non-cash expenses of the Issuer
and its Subsidiaries and Significant Joint Ventures reducing Pro rata Combined
Adjusted Net Income for such period, determined on a pro rata combined basis
(excluding any such non-cash charge that requires an accrual of or reserve for
cash charges for any future period).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualifying Stock Exchange" means the New York Stock Exchange, the
American Stock Exchange, the London Stock Exchange or the NASDAQ National
Market.
"Redeemable Capital Stock" means any shares of any class or series of
Capital Stock that, either by the terms thereof, by the terms of any security
into which it is convertible or exchangeable or by contract or otherwise, is or
upon the happening of an event or passage of time would be, required to be
redeemed prior to the Maturity with respect to the principal of the Bonds or is
redeemable at the option of the holder thereof at any time prior to any such
Maturity, or is convertible into or exchangeable for debt securities at any
time prior to any such Maturity.
"Redemption Date" means, with respect to any Bonds hereunder to be
redeemed, the date fixed by the Issuer for such redemption pursuant to this
Indenture and the Bonds.
"Redemption Price" means, with respect to any Bonds to be redeemed,
the price fixed for such redemption pursuant to the terms of this Indenture and
the Bonds.
"Registrar" has the meaning set forth in Section 2.05.
"Registration Rights Agreement" means the agreement in the form set
forth in Exhibit B among the parties thereto.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Certificate" has the meaning set forth in Section
2.02.
"Replacement Assets" has the meaning set forth in Section 4.12.
"Restricted Global Certificate" has the meaning set forth in Section
2.02.
"Restricted Payment" has the meaning set forth in Section 4.09.
"Restricted Period" means the period from the later of the Closing
Date, the initial Issue Date for any of the Bonds and the 366th day thereafter.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale-Leaseback Transaction" of any person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such person of any property or asset of such person which
has been or is being sold or transferred by such person after the acquisition
thereof or the completion of construction or commencement of operation thereof
to such lender or investor or to any person to whom funds have been or are to
be advanced by such lender or investor on the security of such property or
asset.
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The stated maturity of such arrangement shall be the date of the last payment
of rent or any other amount due under such arrangement prior to the first date
on which such arrangement may be terminated by the lessee without payment of a
penalty.
"SEC" means the Securities and Exchange Commission, as from time to
time constituted, or if at any time after the execution of the Indenture such
Commission is not existing and performing the applicable duties now assigned to
it, then the body or bodies performing such duties at such time.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Securities Act Legend" has the meaning set forth in Section 2.03.
"Securities Register" has the meaning set forth in Section 2.05.
"Senior Indebtedness" means the principal of, premium, if any, interest,
and other amounts payable on or in respect of any Indebtedness of the Issuer,
whether outstanding on the Issue Date or thereafter created, incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Bonds. Notwithstanding the foregoing, "Senior Indebtedness"
shall not include (a) Indebtedness evidenced by the Bonds, (b) Indebtedness
that is pursuant to the instrument creating such Indebtedness expressly
subordinate or junior in right of payment to any Indebtedness of the Issuer,
(c) Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Title 11 of the United States Code, without recourse to
the Issuer, (d) Indebtedness which is represented by Redeemable Capital Stock,
(e) Indebtedness for goods, materials or services purchased in the ordinary
course of business or Indebtedness consisting of trade account payables or
other current liabilities incurred in the ordinary course of business, (f)
Indebtedness of or amounts owed by the Issuer for compensation to employees or
for services rendered to the Issuer, (g) any liability for federal, state,
local or other taxes owed or owing by the Issuer, (h) other than the Chatterjee
Notes and the Capital Research Notes, Indebtedness of the Issuer to a
Wholly-Owned Subsidiary or any other Affiliate of the Issuer or any of such
Affiliate's Wholly-Owned Subsidiaries, (i) that portion of any Indebtedness
which is incurred by the Issuer in violation of this Indenture and (j) amounts
owing under leases (other than Capitalized Lease Obligations).
"Senior Representative" means any representative designated in writing
to the Trustee of the holders of any class or issue of Designated Senior
Indebtedness.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Issuer pursuant to the provisions of the Registration Rights
Agreement that covers the resale of all of the GTS Shares issuable upon
conversion of the Bonds to the extent and in the manner provided therein on an
appropriate form under Rule 415 of the Securities Act, or any similar rule that
may be adopted by the SEC, and all amendments and supplements to such
registration statement, and in each case including the prospectus contained
therein, exhibits thereto and material incorporated by reference therein.
"Significant Joint Venture" means any Existing Joint Venture or any
Eligible Joint Venture.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Strategic Equity Offering" means a private sale of more than 10 per
cent. and less than 30 per cent. (calculated on a fully-diluted basis after
giving effect to such offering) of GTS Shares to a Strategic Investor.
"Strategic Investor" means an entity that has a total market
capitalization of at least $3,000,000,000 or a rating of at least BBB- from S&P
and/or a rating of Baa3 from Moody's, and is engaged in the
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business of providing telecommunications services or in the manufacture and
sale of telecommunications equipment, or any subsidiary of such person.
"Stated Maturity" means, when used with respect to any security or any
installment of interest thereon, the date specified in such security as the
fixed date on which the principal of such security or such installment of
interest is due and payable, and when used with respect to any indebtedness,
means the date specified in the instrument governing such indebtedness as the
fixed date on which the principal of such indebtedness, or any installment of
interest thereon, is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Issuer which is by
its terms subordinated in right of payment to the Bonds.
"Subsidiary" means, with respect to the Issuer, (i) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
the Issuer, by one or more Subsidiaries of the Issuer or by the Issuer and one
or more Subsidiaries and (ii) any other person (other than a corporation),
including, without limitation, a joint venture, in which the Issuer, one or more
Subsidiaries or the Issuer and one or more Subsidiaries, directly or indirectly,
at the date or determination thereof, has at least majority ownership interest
entitled to vote in the election of directors, managers or trustees thereof (or
other person performing similar functions). For purposes of this definition,
any directors' qualifying shares or investments by foreign nationals mandated
by applicable law shall be disregarded in determining the ownership of a
Subsidiary.
"Surviving Entity" shall have the meaning set forth in Section 4.16.
"Telecommunications Assets" means, with respect to any person, any
tangible or intangible asset (including the capital stock of another person)
that is utilized by such person, directly or indirectly, for the design,
development, installation, integration, management or provision of
telecommunications systems and/or services, including, without limitation, any
business or services in which the Issuer, or any Subsidiary or any Significant
Joint Venture of the Issuer is engaged at the Issue Date.
"Temporary Regulation S Global Certificate" has the meaning set forth in
Section 2.02.
"Trading Days" means, with respect to a securities exchange or automated
quotation system, a day on which such exchange or system is open for a full day
of trading.
"Transfer Agent" has the meaning set forth in Section 2.05.
"Trust Officer" means any officer in the Corporate Trust Administration
of the Trustee or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above-designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Trustee" means the party named as such in this Indenture until a
successor replaces such party (or any previous successor) in accordance with
the provisions of this Indenture, and thereafter means such successor.
"U.S. Government Obligations" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S.
Government Obligations or a specific payment of principal of or interest on any
such U.S.
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Government Obligations held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the U.S. Government Obligations or the specific payment of
principal of or interest on the U.S. Government Obligations evidenced by such
depository receipt.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof under ordinary circumstances have the power to vote
in the election of the board of directors, managers or trustees of any person
(irrespective of whether or not, at the time, Capital Stock of any other class
or classes shall have, or might have, voting power by reason of the happening
of any contingency).
"Wholly-Owned Subsidiary" means any Subsidiary of the Issuer of which
100 per cent. of the outstanding Capital Stock is owned by the Issuer or by one
or more Wholly-Owned Subsidiaries of the Issuer or by the Issuer and one or
more Wholly-Owned Subsidiaries of the Issuer. For purposes of this definition,
any directors' qualifying shares or investments by foreign nationals mandated
by applicable law shall be disregarded in determining the ownership of a
Subsidiary.
Section 1.02 Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
1. a term has the meaning assigned to it;
2. words in the singular include the plural, and words in the
plural include the singular;
3. "or" is not exclusive;
4. provisions apply to successive events and transactions;
5. all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
6. the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
7. all references to $ or dollars shall refer to the lawful
currency of the United States of America.
ARTICLE TWO
THE BONDS
Section 2.01 Forms and Dating.
The Bonds and the Trustee's certificate of authentication thereon
shall be in substantially the form of Exhibit A-1 hereto, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with any applicable law or with the rules of any securities
exchange or as may, consistently herewith, be determined by the Officers
executing such
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Bonds, as evidenced by their execution thereof. Except as provided in Section
2.09 hereof, the Bonds shall be issued in an aggregate principal amount no
greater than U.S. $155,250,000. The Bonds shall be issuable only in registered
form without coupons and only in minimum denominations of U.S. $10,000 and
integral multiples of U.S. $1,000 in excess thereof.
The definitive Bonds shall be printed, typewritten, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Bonds may be listed, all as determined by the Officers executing such Bonds, as
evidenced by their execution of such Bonds. Each Bond shall be dated the date
of its authentication.
The terms and provisions contained in the form of the Bonds, annexed
hereto as Exhibit A-1 shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Issuer and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
To the extent the terms and provisions contained in such form differ
from those of this Indenture, the provisions of this Indenture shall control.
Section 2.02 Certificates.
(a) Any Bonds offered and sold in reliance on Rule 144A shall be
represented by beneficial interests in a single permanent global certificate in
definitive, fully registered form, without interest coupons, substantially in
the form set forth in Exhibit A-1 (the "Restricted Global Certificate"),
deposited with the Trustee, as custodian for the Depository and registered in
the name of a nominee of the Depository, duly executed by the Issuer and
authenticated by the Trustee as herein provided. The aggregate principal amount
of the Restricted Global Certificate may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository or its nominee, as hereinafter provided.
(b) Any Bonds offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of a single temporary global
certificate in definitive, fully registered form, without interest coupons,
substantially in the form set forth in Exhibit A-1 (the "Temporary Regulation S
Global Certificate") deposited with the Trustee, as custodian for the
Depository, and registered in the name of a nominee of the Depository for the
accounts of Euroclear and Cedel, duly executed by the Issuer and authenticated
by the Trustee as herein provided. At any time on or after the 366th day
following the latest of the Closing Date, Issue Date and any subsequent date of
issuance of Bonds with respect to any Bonds issued pursuant to the
over-allotment option of the managers and the closing date with respect to any
Bonds issued pursuant to the exercise of preemptive rights of the Issuer's
shareholders in connection with the initial offering upon receipt by the Trustee
and the Issuer of a duly executed certificate substantially in the form of
Exhibit C-5 hereto, a single permanent global certificate in definitive, fully
registered form, without interest coupons, substantially in the form set forth
in Exhibit A-1 (the "Regulation S Global Certificate," and together with the
Temporary Regulation S Global Certificate, the "Regulation S Global
Certificates") duly executed by the Issuer and authenticated by the Trustee as
herein provided shall be deposited with the Trustee, as custodian for the
Depositary, and the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the Temporary Regulation S Global
Certificate in an amount equal to the principal amount of the beneficial
interest in the Temporary Regulation S Global Certificate transferred.
(c) Any Bonds originally purchased by Accredited Investors which are
not QIBs, shall be issued in the form of permanent certificated Bonds in
registered form, without interest coupons, in substantially the form set forth
in Exhibit A-1 (the "Definite Bonds"). Upon the transfer of Definitive Bonds
by an Accredited Investor either to a QIB (assuming that the Bonds can be
offered and sold in reliance on Rule 144A) or in accordance with Regulation S,
such Definitive Bonds shall, unless the relevant Global Certificate has
previously been exchanged in whole for Definitive Bonds pursuant to Section
2.17(b), be exchanged for an interest in such Global Certificate.
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SECTION 2.03. SECURITIES ACT LEGENDS.
(a) The Global Certificates and the Definitive Bonds and the
certificates for the GTS Shares converted therefrom (unless such GTS Shares
have been registered under the Securities Act or the transfer of which is not
subject to Section 5 of such Act) will bear a legend (the "Securities Act
Legend") to the following effect unless otherwise agreed to by the Issuer:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY
SECURITIES REGULATORY AUTHORITY OF ANY JURISDICTION. THE HOLDER HEREOF,
BY PURCHASING THIS SECURITY, AGREES THAT THIS SECURITY MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A)(1) TO GLOBAL
TELESYSTEMS GROUP, INC., (2) PROVIDED AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO
A PERSON THAT THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) IN ACCORDANCE WITH RULE
144A, (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904
OF REGULATION S UNDER THE SECURITIES ACT OR (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), OR (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, AND IN EACH CASE IN ACCORDANCE WITH
ANY AND ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND
AGREES THAT IT WILL NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT
(OTHER THAN A TRANSFER PURSUANT TO (B) ABOVE) OF THE RESALE
RESTRICTIONS REFERRED TO ABOVE. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF TWO YEARS FROM THE LATER OF THE ORIGINAL ISSUANCE OF THE
SENIOR SUBORDINATED CONVERTIBLE BONDS DUE 2000 OF GLOBAL TELESYSTEMS
GROUP, INC. OR IF THIS SECURITY HAS BEEN ACQUIRED BY SUCH ISSUER OR AN
AFFILIATE OF SUCH ISSUER, THE DATE ON WHICH IT IS SUBSEQUENTLY
TRANSFERRED TO A NON-AFFILIATE OF THE ISSUER, OR UPON THE EARLIER
SATISFACTION OF THE ISSUER HEREOF OR ITS TRANSFER AGENT OR REGISTRAR
THAT THIS SECURITY HAS BEEN OR IS BEING SOLD IN COMPLIANCE WITH RULE
904 OF REGULATION S UNDER THE SECURITIES ACT."
If a transfer or conversion of Bonds or a transfer of GTS Shares is
proposed to be made while the Bonds or such shares continue to constitute
"restricted securities" under United States securities laws, the beneficial
holder will be required to provide the Trustee (or the Transfer Agent for the
GTS Shares, as the case may be) such certifications, legal opinions or other
information as the Issuer may reasonably request to confirm that the proposed
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. Any bond (or
GTS Shares issued upon conversion thereof as to which restrictions on transfer
shall have expired or as to which the conditions for removal of the foregoing
legend have been satisfied, whether pursuant to the Indenture or under
applicable law, may be exchanged for a new Bond of like term and aggregate
principal amount, which shall not bear such legend.
(b) Each Global Certificate shall also bear the following legend:
"UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, CONVERSION, EXCHANGE OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH
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OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, CONVERSION PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTION 2.18 OF THE INDENTURE."
SECTION 2.04. EXECUTION AND AUTHENTICATION.
Two Officers shall execute the Bonds on behalf of the Issuer by either
manual or facsimile signature.
If an Officer whose signature is on a Bond no longer holds that office
at the time the Trustee authenticates the Bond or at any time thereafter, the
Bond shall be valid nevertheless.
A Bond shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Bond. Such signature
shall be conclusive evidence that the Bond has been authenticated under this
Indenture.
The Trustee shall authenticate Bonds for original issue upon receipt of
an Officers' Certificate signed by two Officers of the Issuer directing the
Trustee to authenticate the Bonds and certifying that all conditions precedent
to the issuance of the Bonds contained herein have been complied with and any
opinion of counsel that it may reasonably request in connection with such
authentication.
The Trustee may appoint an authenticating agent acceptable to the
Issuer to authenticate Bonds. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Bonds whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. Such authenticating agent shall have the same
rights as the Trustee in any dealings hereunder with the Issuer or with any of
the Issuer's Affiliates.
SECTION 2.05. REGISTRAR, TRANSFER AGENTS, CONVERSION AGENTS AND PAYING
AGENTS.
The Issuer shall maintain an office or agency (which shall be located
in the Borough of Manhattan, The City of New York, State of New York) where
Bonds may be presented for registration of transfer or for exchange (the
"Registrar" or "Transfer Agent"), where Bonds may be presented for payment of
principal, premium, if any, and interest (the "Paying Agent"), where Bonds may
be presented for conversion (the "Conversion Agent") and where notices and
demands to or upon the Issuer in respect of the Bonds and this Indenture may be
served. The Registrar shall keep a register (the "Bond Register") of the Bonds
and of their transfer and exchange. The Issuer may have one or more
co-Registrars and one or more additional Transfer Agents, Conversion Agents and
Paying Agents. The term "Paying Agent" includes any additional paying agent.
The Issuer or any Affiliate thereof may not act as Paying Agent.
The Issuer shall enter into an appropriate agency agreement with any
Registrar or Paying, Transfer and Conversion Agent not a party to this
Indenture. The agreement shall implement the provisions of this Indenture that
relate to such Registrar, Transfer Agent, Conversion Agent or Paying Agent. The
Issuer shall notify the Trustee of the name and address of any such Registrar,
Transfer Agent, Conversion Agent or Paying
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Agent. If the Issuer fails to maintain a Registrar, Transfer Agent, Conversion
Agent, Paying Agent or agent for service of notices and demands, or fails to
give the foregoing notice, the Trustee shall act as such and shall be entitled
to appropriate compensation in accordance with Section 7.07.
The Issuer also shall maintain a Registrar, Paying Agent, Transfer Agent
and Conversion Agent in Luxembourg so long as the Bonds are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so
require.
The Issuer initially appoints the Trustee as Registrar, Transfer Agent,
Conversion Agent, Paying Agent and agent for service of notices and demands in
connection with the Bonds in New York and Banque Internationale a Luxembourg
S.A., as additional Registrar, Transfer Agent, Conversion Agent and Paying
Agent in Luxembourg.
Section 2.06 Paying Agent to Hold money in Trust.
Each Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money held by the Paying Agent for the payment of principal of, or
interest on, the Bonds (whether such money has been distributed to it by the
Issuer or any other obligor on the Bonds), and the Issuer (or any other obligor
on the Bonds, as the case may be) and the Paying Agent shall notify the Trustee
of any default by the Issuer (or such other obligor on the Bonds, as the case
may be) in making any such payment. The Issuer at any time may require a
Paying Agent to distribute all money held by it to the Trustee and account for
any funds disbursed and the Trustee may at any time during the continuance of
any Payment Default with respect to the Bonds, upon written request to a Paying
Agent, require such Paying Agent to pay all money held by it to the Trustee and
to account for any funds distributed. Upon doing so, the Paying Agent (other
than an obligor on the Bonds) shall have not further liability for the money
so paid over to the Trustee.
Section 2.07 Bondholder 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
Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the
Trustee at least ten 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 Holders, which list may be conclusively relied upon by the Trustee.
Section 2.08 Transfer and Exchange.
The Bonds are issuable only in registered form. A Holder may transfer a
Bond by written application to the Registrar stating the name of the proposed
transferee and otherwise complying with the terms of this Indenture. No such
transfer shall be effected until, and such transferee shall succeed to the
rights of a Holder only upon final acceptance and registration of the transfer
by the Registrar in the Register. Prior to the registration of any transfer by
a Holder as provided herein, the Issuer, the Trustee, and any agent of the
Issuer shall treat the person in whose name the Bond is registered as the owner
thereof for all purposes whether or not the Bond shall be overdue, and neither
the Issuer, the Trustee, nor any such agent shall be affected by notice to the
contrary. Furthermore, the Depository shall, by acceptance of a Global
Certificate, agree that transfers of beneficial interests in such Global
Certificate may be effected only through a book-entry system maintained by the
Depository (or its agent), and that ownership of a beneficial interest in the
Bond shall be required to be reflected in a book-entry. When Bonds are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Bonds or to exchange such Bonds for an equal principal amount
of Bonds of other authorized denominations, the Registrar or co-Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transaction are met; provided, however, that the Bonds surrendered for
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing. To permit
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registration of transfers and exchanges, the Issuer shall execute and the
Trustee shall authenticate Bonds at the Registrar's or co-Registrar's request.
No service charge shall be made for any transfer, exchange or redemption, but
the Issuer may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon exchanges or
transfers pursuant to Sections 2.02(b), 2.09, 2.10, 2.12, 3.06, 3.07, 3.08,
4.11, or 9.05). The Registrar or co-Registrar shall not be required to register
the transfer of or exchange of any Bond (a) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Bonds and ending at the close of business on the day of such mailing and (b)
selected for redemption in whole or in part pursuant to Article Three, except
the unredeemed portion of any Bond being redeemed in part.
Section 2.09. Replacement Bonds.
If a mutilated Bond is surrendered to the Trustee or if the Holder of
a Bond produces evidence to the satisfaction of the Issuer and the Trustee that
the Bond has been lost, destroyed or wrongfully taken, the Issuer shall issue
and the Trustee shall authenticate a replacement Bond if the Trustee's
requirements are met. If required by the Trustee or the Issuer, such Holder
must provide an indemnity bond or other indemnity, sufficient in the judgment
of both the Issuer and the Trustee, to protect the Issuer, the Trustee or any
Paying Agent or Registrar from any loss which any of them may suffer if a Bond
is replaced. The Issuer may charge such Holder for its reasonable,
out-of-pocket expenses in replacing a Bond, including reasonable fees and
expenses of counsel. Every replacement Bond is an additional obligation of the
Issuer and shall be entitled to the benefits of this Indenture.
In case any such mutilated, lost, destroyed or wrongfully take Bond
has become or is about to become due and payable, the Issuer in its discretion
may, instead of issuing a new Bond pay such Bond.
Section 2.10. Outstanding Bonds.
(a) Bonds outstanding at any time are all the Bonds that have been
authenticated by the Trustee except those cancelled by it, those delivered to
it for cancellation and those described in this Section as not outstanding. A
Bond does not cease to be outstanding because the Issuer or any of its
Affiliates holds the Bond; provided, however, that, in determining whether the
Holders of the requisite principal amount of the outstanding Bonds have given
any request, demand, authorization, direction, notice, consent or wavier
hereunder, Bonds owned by the Issuer or any other obligor upon the Bonds or any
Affiliate of the Issuer or of such other obligor shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Bonds which the Trustee knows to be
so owned shall be so disregarded. Bonds so owned which have been pledged in
good faith may be regarded as outstanding if the pledge establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Bonds and that the pledgee is not the Issuer or any other obligor upon the
Bonds or any Affiliate of the Issuer or of such other obligor.
(b) If a Bond is replaced pursuant to Section 2.09 (other than a
mutilated Bond surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Bond is held by
a bona fide purchaser. A mutilated Bond ceases to be outstanding upon
surrender of such Bond and replacement thereof pursuant to Section 2.09.
(c) If on a Redemption Date or a Maturity Date the Paying Agent
holds cash or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Bonds payable on that date, and is not
prohibited from paying such cash or U.S. Government Obligations to the Holders
of such Bonds pursuant to the terms of this Indenture, then on and after that
date such Bonds cease to be outstanding and interest on them shall cease to
accrue.
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Section 2.11. [Reserved].
Section 2.12. Temporary Bonds.
Until definitive Bonds are prepared and ready for delivery, the Issuer
may prepare and the Trustee shall authenticate temporary Bonds. Temporary
Bonds shall be substantially in the form of definitive Bonds but may have
variations that the Issuer considers appropriate for temporary Bonds. Without
unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate
definitive Bonds in exchange for temporary Bonds. Until such exchange,
temporary Bonds shall be entitled to the same rights, benefits and privileges
as definitive Bonds.
Section 2.13. Cancellation.
The Issuer at any time may deliver Bonds to the Trustee for
cancellation. A Registrar and the any Paying Agent shall forward to the
Trustee any Bonds surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar(s), Transfer Agents,
or Paying Agents, and no one else, shall promptly cancel and, at the written
direction of the Issuer, shall return to the Issuer all Bonds surrendered for
transfer, exchange, payment or cancellation. Subject to Section 2.17, the
Issuer may not issue new Bonds to replace Bonds that it has paid or delivered
to the Trustee for cancellation. If the Issuer shall acquire any of the Bonds,
such acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Bonds unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.13.
Section 2.14. Defaulted Interest.
If the Issuer defaults on a payment of interest on the Bonds, it shall
pay defaulted interest on such overdue amount (to the extent permitted by law)
at the rate of interest then applicable to the Bonds, plus (to the extent
permitted by law) any interest payable on the defaulted interest, in
accordance with the terms hereof, to the persons who are Holders on a
subsequent special record date, which date shall be at least five Business Days
prior to the payment date. The Issuer shall fix such special record date and
payment date in a manner satisfactory to the Trustee. At least 15 days before
such special record date, the Issuer shall mail to each Holder a notice that
states the special record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be paid.
Section 2.15. CUSIP, ISIN and CINS Numbers.
The Issuer in issuing the Bonds may use "CUSIP", "ISIN" and "CINS"
numbers (if then generally in use), and if so, the Trustee may use the CUSIP,
ISIN or CINS numbers, as the case may be, in notices of redemption or exchange
as a convenience to Holders; provided, however, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP,
ISIN or CINS number printed in the notice or on the Bonds, and that reliance
may be placed only on the other identification numbers printed on the Bonds.
The Issuer will promptly notify the Trustee of any change in the CUSIP, ISIN or
CINS numbers.
Section 2.16. Deposit of Moneys.
On or before each Interest Payment Date, Maturity and any other due
date for the payment of moneys hereunder, the Issuer shall deposit with the
Trustee or Paying Agent in immediately available funds money sufficient to make
cash payments, if any, due on such Interest Payment Date, Maturity or due date,
as the case may be, in a timely manner which permits the Paying Agents to remit
payment to the Holders on such Interest Payment Date or Maturity or other due
date, as the case may be.
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Section 2.17. Book-Entry Provisions for the Global Certificates.
(a) The Global Certificates initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for the Depository and (iii) bear legends as set forth
in Section 2.03. Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Certificates held on their behalf by the Depository, or the Trustee as its
custodian, and the Depository shall be treated by the Issuer, the Trustee and
any agent of the Issuer or the Trustee as the absolute owner of such Global
Certificates for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer
or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Bond.
(b) Transfers of any Global Certificate shall be limited to
transfers of such Global Certificate in whole, but not in part, to the
Depository, its successors or their respective nominees. Beneficial interests
in any Global Certificates may be transferred in accordance with the applicable
rules and procedures of the Depository and, if applicable, Euroclear and Cedel
and the provisions of Section 2.18. Other than as permitted in the next
sentence and other than in the case of the initial issuance of Bonds to
Accredited Investors, a beneficial owner may not exchange an interest in a
Global Certificate for Definitive Bonds. Definitive Bonds shall be transferred
to all beneficial owners in exchange for their beneficial interests in any Bond
only if (i) the Depository notifies the Issuer that it is unwilling or unable
to continue as Depository for such Global Certificate and a successor
Depository is not appointed by the Issuer within 90 days of such notice or (ii)
the Trustee has instituted or been directed to institute any judicial
proceeding in a court to enforce the rights of Holders under the Bonds and has
been advised by counsel that it is necessary or appropriate to obtain
possession of Definitive Bonds.
(c) Any beneficial interest in one of the Global Certificates that
is transferred to a person who takes delivery in the form of an interest in the
other Global Certificate will, upon transfer, cease to be an interest in such
Global Certificate and become an interest in the other Global Certificate and,
accordingly, will thereafter be subject to all transfer restrictions, if any,
and other procedures applicable to beneficial interests in such other Global
Certificate for as long as it remains such an interest.
(d) In connection with the transfer of an entire Global Certificate
to beneficial owners pursuant to paragraph (b) of this Section, such Global
Certificate shall be deemed to be surrendered to the Trustee for cancellation,
and the Issuer shall execute, and the Trustee shall authenticate and deliver,
to each beneficial owner identified by the Depository in exchange for its
beneficial interest in such Global Certificate an equal aggregate principal
amount of Definitive Bonds of authorized denominations.
(e) Any Definitive Bond delivered in exchange for an interest in
the Restricted Global Certificate or the Temporary Global Regulation S
Certificate pursuant to paragraphs (b) or (d) of this Section shall, except as
otherwise provided by paragraph (f) of Section 2.18 bear the legend regarding
transfer restrictions applicable to the Definitive Bond set forth in Section
2.03.
(f) The registered holder of a Global Certificate 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 Bonds.
Section 2.18. Special Transfer Provisions.
(a) Transfers to Accredited Investors. Registration of any proposed
transfer of a Bond to any Accredited Investor, other than an Accredited
Investor who is also a QIB and other than in connection with the original
issuance of such Bond, shall not be effected without the prior consent of the
Issuer and
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accompanied by a certificate substantially in the form of Exhibit C-1 together
which such opinions of counsel and other documentation as the Issuer and the
Trustee may request.
(b) Transfer To QIBS. The following provisions shall apply with respect
to the registration of any proposed transfer of a Bond to a QIB in reliance on
Rule 144A.
(i) If the Bond to be transferred consists of Definitive Bonds
or a beneficial interest in the Temporary Regulation S Global
Certificate or a beneficial interest in the Restricted Global
Certificate, the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided
for on the form of Bond stating, or has otherwise advised the Issuer
and the Registrar in writing (substantially to the effect of Exhibit
C-1, Part I), that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Bond stating, or has
otherwise advised the Issuer and the Registrar in writing
(substantially to the effect of Exhibit C-1, Part II), that it is
purchasing the Bond 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 QIB within the meaning of Rule 144A, 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 Issuer as it 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
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member and the Bond
to be transferred consists of Definitive Bonds or an interest in the
Temporary Regulation S Global Certificate, upon receipt by the
Registrar of the documents referred to in clause (i) and instructions
given in accordance with the Depository's and the Registrar's
procedures, the Registrar shall reflect on its books and records the
date and an increase in the principal amount of the Restricted Global
Certificate in an amount equal to the principal amount of the
Definitive Bonds or the interest in the Temporary Regulation S Global
Certificate, as the case may be, to be transferred, and the Trustee
shall cancel the Definitive Bonds or decrease the amount of the
Temporary Regulation S Global Certificate so transferred.
(c) Transfers of Interest in the Temporary Regulation S Global
Certificate. The following provisions shall apply with respect to registration
of any proposed transfer of interests in the Temporary Regulation S Global
Certificate:
(i) The Registrar shall register the transfer of any Bond (x)
if the proposed transferee is a non-U.S. person and the proposed
transferor has delivered to the Registrar a certificate substantially
in the form of Exhibit C-2 hereto or (y) if the proposed transferee is
a U.S. person that is a QIB relying on the exemption from registration
provided by Rule 144A (if available) and the proposed transferor has
checked the box provided for on the form of Bond stating, or has
otherwise advised the Issuer and the Registrar in writing
(substantially to the effect of Exhibit C-1, Part I), that the sale has
been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
Bond stating, or has otherwise advised the Issuer and the Registrar in
writing (substantially to the effect of Exhibit C-1, Part II),that it
is purchasing the Bond 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 QIB within the meaning of Rule 144A, 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 Issuer
as it 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 its foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
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(ii) If the proposed transferee is an Agent Member, upon
receipt by the Registrar of the documents referred to in clause (i)(y)
above and instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the
Restricted Global Certificate in an amount equal to the principal amount
of the Temporary Regulation S Global Certificate to be transferred, and
the Trustee shall decrease the amount of the Temporary Regulation S
Global Certificate.
(d) Transfers of Interests in the permanent Regulation S Global
Certificate to Any Persons. The following provision shall apply with respect
to any transfer of interests in the Regulation S Global Certificate to any
persons. The Registrar shall registrar the transfer of any Bond representing a
beneficial interest in the permanent Regulation S Global Certificate without
requiring any additional certification and shall remove the Securities Act
Legend therefrom.
(e) Transfers to Non-U.S. Persons at any Time. The following
provisions shall apply with respect to any transfer of a Bond to a non-U.S.
person:
(i) Prior to the end of the Restricted Period, the
Registrar shall register any proposed transfer of a Bond to a non-U.S.
person upon receipt of a certificate substantially in the form of
Exhibit C-2 hereto from the proposed transferor.
(ii) On and after the end of the Restricted Period, the
Registrar shall register any proposed transfer to any non-U.S. person if
the Bond to be transferred is an interest in the Restricted Global
Certificate, upon receipt of a certificate substantially in the form of
Exhibit C-3 from the proposed transferor.
(iii) (a) If the proposed transferor is an Agent Member
holding a beneficial interest in the Restricted Global Certificate, upon
receipt by the Registrar of (x) the documents, if any, required by paragraph
(ii) and (y) instructions in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of the Restricted Global
Certificate in an amount equal to the principal amount of the beneficial
interest in the Restricted Global Certificate to be transferred, and (b) if the
proposed transferee is an Agent Member, upon receipt by the Registrar of
instructions given in accordance with the Depository's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date and
an increase in the principal amount of the Regulations S Global Certificate in
an amount equal to the principal amount of the Restricted Global Certificate to
be transferred, and the Trustee shall decrease the amount of the Restricted
Global Certificate.
(f) Securities Act Legend. Upon the transfer, exchange or
replacement of Bonds not bearing the Securities Act Legend set forth in Section
2.03, the Registrar shall deliver Bonds that do not bear the Securities Act
Legend. Upon the transfer, exchange or replacement of Bonds bearing the
Securities Act Legend, the Registrar shall deliver only Bonds that bear the
Securities Act Legend unless either (i) the circumstances contemplated by
paragraph (d) of this Section 2.18 exist or (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to the Issuer, the
Registrar and the Trustee to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.
(g) General. The provisions of Article Two hereof shall be
qualified in their entirety by any applicable securities laws of the United
States and any other applicable jurisdiction and by the procedures of any
applicable clearing agency, in each case as in effect from time to time, and
all such laws and clearing procedures shall be deemed to be incorporated herein
by reference. By its acceptance of any Bond bearing the Securities Act legend,
each Holder of such a Bond shall be deemed to acknowledge the restrictions on
transfer of such Bond set forth in this Indenture and in the Securities Act
Legend and
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agrees that it will transfer such Bond only as provided in this
Indenture. The Registrar shall not register a transfer of any Bond
unless such transfer complies with the restrictions on transfer of such
Bond set forth in this Indenture. In connection with any transfer of
Bonds, each Holder agrees by its acceptance of the Bonds to furnish the
Registrar or the Issuer such certifications, legal opinions or other
information as either of them may reasonably require to confirm that
such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Issuer with
respect to) the sufficiency of any such certifications, legal opinions
or other information.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.17 or this Section
2.18. The Issuer shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
Section 2.19. Payments.
(a) The principal of, and premium, if any, on the Bonds will
be paid against surrender thereof at the main office of the Paying Agent in the
City of New York or, subject to applicable laws and regulations, at the offices
of the Paying Agent in Luxembourg by U.S. dollar check drawn on a bank in the
City of New York, or by a wire transfer to a U.S. dollar account maintained by
the payee with a bank in the City of New York.
(b) Payment in respect of interest on any Interest Payment Date
with respect to any Bond will be made to the person in whose name such Bond is
registered at the close of business on the June 15 or December 15, as the case
may be, preceding such Interest Payment Date by U.S. dollar check drawn on a
bank in the City of New York mailed to such person at the address specified in
the Register on such day or, if requested by the payee, by wire transfer to a
U.S. dollar account maintained by the payee with a bank in the City of New
York, provided that a written request from such holder to such effect
designating such account is received by the relevant Paying Agent no later than
fifteen days before the relevant Interest Payment Date. Unless such designation
is revoked, any such designation made by such person with respect to such Bond
will remain in effect with respect to any future payments with respect to such
Bond payable to such person.
(c) If any payment on a Bond is due on a day that is, at any
place of payment, a day on which banking institutions are authorized or
obligated by law or executive order to close, then, at each place of payment,
such payment need not be made on such day but may be made on the next succeeding
day that is not, at such place of payment, a day on which banking institutions
are authorized or obligated by law or executive order to close, with the same
force and effect as if made on the originally scheduled date of such payment,
and no interest will accrue for the period from and after such date.
Section 2.20. Additional Amounts.
All payments of principal, premium, if any, and interest with
respect to the Bonds will be made without withholding or deduction at source
for, or on account of, any present or future taxes, fee, duties, assessments or
governmental charges of whatever nature imposed or levied by the United States
or any political subdivision or taxing authority thereof or therein, unless such
withholding or deduction is required by (i) the laws (or any regulations or
rulings promulgated thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (ii) an official position
regarding the application, administration, interpretation or enforcement of any
such laws, regulations or rulings (including, without limitation, a holding by a
court of competent jurisdiction or by a taxing authority in the United states or
any political subdivision thereof). If a withholding or deduction at source is
required, the Issuer will, subject to certain limitations and exceptions (set
forth below), pay to a holder of bonds who is a Non-U.S. Holder (as defined
herein) such additional amounts ("Additional Amounts") as may be necessary so
that every net payment of principal, premium, if any, or interest with respect
to such Bond after such withholding or deduction, will not be less than the
amount provided for the
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Bonds. However, the Issuer shall not be required to make any payment of
Additional Amounts for or on account of:
(a) any tax, fee, duty, assessment or other governmental charge
which would not have been imposed but for (i) the existence of any
present or former connection between such Holder (or between a
fiduciary, settlor, beneficiary, member or shareholder of, or possessor
of a power over, such Holder, if such Holder is an estate, trust,
partnership or corporation) and the United States, including without
limitation, such Holder (or such fiduciary, settlor, beneficiary,
member, shareholder or possessor) being or having been a citizen or
resident thereof or being or having been present or engaged in trade or
business therein or having or having had a permanent establishment
therein, or (ii) the presentation of a Bond for payment on a date more
than 15 days after the date on which such payment became due and payable
or the date on which payment thereof is duly provided for, whichever
occurs later;
(b) any estate, inheritance, gift, sales, transfer, personal property
or similar tax, assessment or other governmental charge;
(c) any tax, fee, duty, or future assessment or other governmental
charge imposed by reason of such Holder's past or present status as a
personal holding company, foreign personal holding company, passive
foreign investment company or controlled foreign corporation with
respect to the United States or as a corporation which accumulated
earnings to avoid United States federal income tax;
(d) any tax, fee, duty, assessment or other governmental charge which
is payable otherwise than by withholding from payments of principal or
interest with respect to the Bonds;
(e) any tax, fee, duty, assessment or other governmental charge
imposed on any interest received (x) by a Holder or beneficial owner of
Bonds that for U.S. federal income tax purposes is treated as actually
or constructively owning 10 per cent. or more of the voting power of the
Issuer's stock, (y) on an extension of credit made pursuant to a loan
agreement entered into in the ordinary course of business by a Holder or
beneficial owner of Bonds that is a bank and (z) by a holder or
beneficial owner of Bonds that is a controlled foreign corporation and
with respect to which the Issuer is a related person;
(f) any tax, fee, duty, assessment or other governmental charge
required to be withheld by any paying agent from any payment of
principal, premium, if any, or interest with respect to any Bond if such
payment can be made without such withholding by any other paying agent
with respect to the Bonds;
(g) any tax, fee, duty, assessment or other governmental charge
which would not have been imposed but for the failure to comply with
certification, identification, documentation, information or other
reporting requirements concerning the nationality, residence, identity
or connection with the United States of the Holder or of the beneficial
owner of such Bond, if such compliance is required by a present or
future statute, treaty, regulation, ruling or administrative practice as
a precondition to a reduction of or relief or exemption from such tax,
assessment or other governmental charge; or
(h) any combination of items (a),(b),(c),(d),(e),(f) and (g);
nor shall Additional Amounts be paid to any Holder who is a fiduciary or
partnership or other than the sole beneficial owner of the Bond to the
extent a beneficiary or settlor with respect to such fiduciary or a
member of such partnership or a beneficial owner of the Bond would not
have been entitled to payment of the Additional Amounts had such
beneficiary, settlor, member or beneficial owner been the Holder of the
Bond.
The term "Non-U.S. Holder" means any corporation, individual,
fiduciary or partnership that for United States federal income tax
purposes is a foreign corporation, nonresident alien individual,
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nonresident alien fiduciary of a foreign estate or trust, or foreign
partnership one or more members of which is a foreign corporation,
nonresident alien individual or nonresident alien fiduciary of foreign
estate or trust.
The term "interest" herein shall be deemed to include Additional
Amounts, if any.
ARTICLE THREE
REDEMPTION OF BONDS
SECTION 3.01. NOTICES TO THE TRUSTEE.
If the Issuer elects to redeem Bonds pursuant to Section 3.07 or
Section 3.08(d), it shall notify the Trustee of the Redemption Date and
principal amount of Bonds to be redeemed by an Officer's Certificate, stating
that such redemption will comply with the provisions hereof and of the Bonds,
at least 90 days before the Redemption Date.
SECTION 3.02. BONDS TO BE REDEEMED IN PART.
If less than all the Bonds are to be redeemed, the particular
Bonds to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Bonds outstanding not previously called
for redemption, by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions of the
principal of Bonds, provided, however, that no such partial redemption shall
reduce the portion of the principal amount of a Bond not redeemed to less than
$10,000.
The Trustee shall promptly notify the Issuer in writing of the
Bonds selected for redemption and, in the case of any Bonds selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Bonds shall
relate, in the case of any Bond redeemed or to be redeemed only in part, to the
portion of the principal amount of such Bond which has been or is to be
redeemed.
SECTION 3.03. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date (other than as set forth in Section 3.08(d)), to each Holder of Bonds to
be redeemed, at the address of such Holder appearing in the Bond register
maintained by the Registrar. Such notice shall be given by the Issuer or, at
the Issuer's request, by the Trustee.
All notices of redemption shall identify the Bonds to be
redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(3) that, unless the Issuer defaults in making the
redemption payment, interest on Bonds called for redemption ceases to
accrue on and after the Redemption Date, and the only remaining right of
the Holders of such Bonds is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Bonds redeemed;
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(4) if less than all Bonds outstanding are to be redeemed, the
identification of (and, in case of a partial redemption, the principal amounts,
subject to minimum authorized denominations) of the particular Bonds to be
redeemed;
(5) if any Bond is to be redeemed in part, the portion of the
principal amount (equal to $1,000 or any integral multiple thereof) of such
Bond to be redeemed and that on and after the Redemption Date, upon surrender
for cancellation of such original Bond to the Paying Agent, a new Bond or Bonds
in the aggregate principal amount equal to the unredeemed portion thereof will
be issued without charge to the Holder, subject to minimum authorized
denominations;
(6) that Bonds called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price and the name and address of the Paying
Agent:
(7) the CUSIP, ISIN or CINS numbers, if any, relating to such Bonds,
but no representation is made as to the correctness or accuracy of any such
CUSIP, ISIN or CINS numbers; and
(8) the Section of this Indenture pursuant to which the Bonds are
being redeemed
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is sent to Holders. Bonds called for
redemption become due and payable on the Redemption Date and at the Redemption
Price. Upon surrender to the Paying Agents, such Bonds called for redemption
shall be paid at the Redemption Price plus accrued interest to the Redemption
Date, but interest installments whose maturity is on or prior to such Redemption
Date will be payable on the relevant Interest Payment Dates to the Holders of
record at the close of business on the relevant record dates referred to in the
Bonds.
Section 3.05 Deposit of Redemption Price
(a) On or prior to 10:00 am New York time on any Redemption Date, the
issuer shall deposit with the Paying Agents an amount of money in same day funds
sufficient to pay the Redemption Price of, and accrued interest on, all the
Bonds or portions thereof which are to be redeemed on that date, other than
Bonds or portions thereof called for redemption on that date which have been
delivered by the Issuer to the Trustee for cancellation.
(b) If the Issuer complies with the preceding paragraph, then, unless
the Issuer defaults in the payment of such Redemption Price, interest on the
Bonds to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Bonds are presented for payment. If any
Bond called for redemption shall not be so paid upon surrender thereof for
redemption, the principal, premium, if any, and, to the extent lawful, accrued
interest thereon shall until paid, bear interest from the Redemption Date at the
rate provided in the Bonds.
Section 3.06 Bonds Redeemed or Purchased in Part.
Upon surrender to the Paying Agents of a Bond which is to be redeemed
in part, the Issuer shall execute and the Trustee shall authenticate and
deliver to the Holder of such Bond without service charge, a new Bond or Bonds
of any authorized denomination as requested by such Holder in aggregate
principal amount equal to, and in exchange for, the unredeemed portion of the
principal of the Bond so surrendered that is not redeemed.
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Section 3.07. Redemption for Tax Reasons
(a) The Issuer may redeem any Bond in whole but not in part at any time
at a Redemption Price equal to the principal amount thereof together, if
appropriate, with accrued interest to but excluding the Redemption Date, if the
Issuer shall determine, based upon a written opinion of independent counsel
selected by the Issuer, that as a result of any change in or amendment to the
laws (or any regulations or rulings promulgated thereunder) of (i) the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, the relevant taxing jurisdiction or any change in
application or official interpretation of such laws, regulations or rulings,
which amendment or change is effective on or after the date of issuance of such
Bond, the Issuer would be required to pay Additional Amounts on the occasion of
the next payment due with respect to such Bond.
(b) Notice of intention to redeem Bonds pursuant to this Section will be
given not less than 30 days or more than 60 days prior to the date fixed for
redemption, provided that no such notice of redemption shall be given earlier
than 90 days prior to the effective date of such change or amendment and that
at the time notice of such redemption is given, such obligation to pay such
Additional Amounts remains in effect and cannot be avoided by the Issuer's
taking reasonable measures available to it. From and after any Redemption
Date, if monies for the redemption of Bonds shall have been made available for
redemption on such Redemption Date, such Bonds shall cease to bear interest, if
applicable, and the only right of the Holders of such Bonds appertaining
thereto shall be to receive payment on the principal amount thereof, premium if
any, and, if appropriate, all unpaid interest accrued to such Redemption Date.
Section 3.08 Redemption and Purchase
(a) Final Redemption at Maturity. Unless previously redeemed or
converted or to be converted or purchased and cancelled, at Maturity outstanding
Bonds will be redeemed by the Issuer at their principal amount plus accrued
interest, if any. However, in the event that a Complying Public Equity
Offering has not occurred prior to June 30, 2000, outstanding Bonds will be
redeemed at Maturity at 121.0 per cent of their principal amount, plus, accrued
interest, if any.
(b) Acceleration following an Event of Default. If the Bonds are
accelerated following the occurrence of an Event of Default, the Bonds will be
repaid at their principal amount multiplied by 106.5 per cent. plus accrued
interest to the date of acceleration, if the date of acceleration occurs on or
before June 30, 1998; 113.5 per cent. plus accrued interest to the date of
acceleration if the date of acceleration occurs after such date but on or
before June 30, 1999; and 121.0 per cent. plus accrued interest to the date of
acceleration if the date of acceleration occurs thereafter, provided that
notwithstanding the foregoing, each Holder shall have the option to exercise
his Conversion Right, if any.
(c) Cancellation. All Bonds redeemable pursuant to this Indenture or
purchased by the Issuer in the open market will be forthwith cancelled and may
not be reissued or sold. The Issuer will not permit its Subsidiaries and will
to the fullest extent of the rights available to it under the relevant
contractual or organizational documents not permit its Significant Joint
Ventures to purchase any of the Bonds.
(d) Limited Optional Redemption by Issuer. The Bonds are redeemable at
the option of the Issuer, in whole but not in part, on or after the second
anniversary of a Complying Public Equity Offering, on not less than 90 nor more
than 120 days' prior notice (which notice shall provide the Trustee and the
Holders information concerning the right of Holders to convert prior to the
Redemption Date and information pertinent to the Conversion Price) at the
principal amount thereof plus accrued interest to the Redemption Date, provided
that the GTS Shares into which Bonds are convertible would not be at the time
of redemption "restricted securities" in the hands of any Holder not affiliated
with the Issuer, within the meaning of the Securities Act, and provided,
further, that the average Closing Price of the GTS Shares for the 20
consecutive Trading Days prior to the date of
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the Issuer's notice of redemption is greater than 130 per cent. of the
Conversion Price determined in conjunction with such Complying Public Equity
Offering.
Section 3.09. Notices to Trustee and Luxembourp, Stock
Exchange.
All notices required to be furnished to the Holders hereunder
shall concurrently therewith be furnished to the Trustee and the Luxembourg
Stock Exchange.
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Bonds.
(a) The Issuer will pay, or cause to be paid, the principal of
and interest on the Bonds on the dates and in the manner provided in the Bonds
and this Indenture. An installment of principal or interest shall be considered
paid on the date due if the Trustee or Paying Agent holds on that date money
designated and set aside for and sufficient to pay the installment in a timely
manner and is not prohibited from paying such money to the Holders of the Bonds
pursuant to the terms of this Indenture.
(b) The Bonds bear interest payable at the rate of 8.75 per
cent. per annum from and including the date of their issuance to but excluding
June 30, 1998, which rate will increase to 9.25 per cent. per annum from and
including June 30, 1998 to but excluding June 30, 1999 and which rate will
increase to 9.75 per cent. per annum from and including June 30, 1999 until
Maturity. However, in the event of a Complying Public Equity Offering, the
interest rate will remain at the interest rate prevailing on the day
immediately preceding such Complying Public Equity Offering until Maturity of
the Bonds. Interest on each Bond will cease to accrue from the Redemption Date
or Conversion Date thereof unless, upon due presentation of such Bond, payment
of principal is improperly withheld or refused or conversion is not
consummated, as the case may be. In such event, interest will continue to
accrue on such Bond up to and including (a) the date on which payment in full
of the principal thereof (plus accrued interest) is made or (if earlier) the
date on which the funds for the payment in full of the principal thereof (plus
accrued interest) have been received in New York City by the Trustee or (b) the
Bonds are converted to GTS Shares. Interest shall be computed on the basis of a
360 day year consisting of twelve (12) months of 30 days each and, in the case
of an incomplete month, the number of days elapsed.
(c) Interest is payable semiannually in arrears on July 15 and
January 15 of each year commencing January 15, 1998 (each, an "Interest Payment
Date"), to the person in whose name a Bond (or any predecessor Bond) is
registered at the close of business on the preceding June 30 or December 31,
as the case may be. Each Bond will carry a right to interest in respect of all
periods from the date of issue thereof, or the date from which interest has
been paid to, whichever is later, up to but excluding the relevant Redemption
Date or Conversion Date.
(d) The Issuer will pay interest on overdue principal at the
rate and in the manner provided herein and in the Bonds; it shall pay interest
on overdue installments of interest at the same rate and in the same manner, to
the extent lawful.
(e) The Issuer will pay additional interest in the form of
liquidated damages in accordance with the terms of the Registration Rights
Agreement entered into on the date hereof by the Issuer with the Trustee and
the Lead Manager of the initial distribution of the Bonds (and in the form of
Exhibit C hereto).
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(f) The Issuer will inform the Luxembourg Stock Exchange of
each change in the interest rate of the Bonds on the date of such change.
Section 4.02. Maintenance of Office or Agency.
(a) The Issuer will maintain in the Borough of Manhattan, The
City of New York, an office or agency where Bonds may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Issuer in respect of the Bonds and this
Indenture may be served. The Issuer will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Issuer shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee as set forth in Section 12.02.
(b) The Issuer may also from time to time designate one or
more other offices or agencies where the Bonds may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Issuer of its obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York, for such purposes.
The Issuer will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
(c) The Issuer hereby initially designates the office of the
Trustee located at 000 Xxxxxxx Xxxxxx, Xxxxx 21 West, in the Borough of
Manhattan, City of Xxx Xxxx, Xxx Xxxx 00000 as such office of the Issuer in
accordance with this Section 4.02.
(d) The provisions of this Section shall not in any way
relieve the Issuer of any of its obligations under Section 2.05.
Section 4.03. Corporate Existence.
Subject to Section 4.16, the Issuer shall do or cause to be
done all things necessary to and will cause each of its Subsidiaries and will,
to the fullest extent of the rights available to it under the relevant
contractual or organizational documents, cause each of its Significant Joint
Ventures to, preserve and keep in full force and effect the corporate or
partnership existence and rights (charter and statutory), licenses and/or
franchises of the Issuer, such Subsidiaries or Significant Joint Ventures;
provided, however, that the Issuer or any of its Subsidiaries or any of its
Significant Joint Ventures shall not be required to preserve any such rights,
licenses or franchises if the Board of Directors of the Issuer shall reasonably
determine that (x) the preservation thereof is no longer desirable in the
conduct of the business of the Issuer and its Subsidiaries and its Significant
Joint Ventures taken as a whole or (y) the loss thereof is not materially
adverse to either the Issuer and its Subsidiaries and its Significant Joint
Ventures taken as a whole or to the ability of the Issuer to otherwise satisfy
its obligations hereunder.
Section 4.04. Payment of Taxes and Other Claims.
The Issuer will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes, assessments
and governmental charges levied or imposed upon the Issuer or any of its
Subsidiaries or any of its Significant Joint Ventures or upon the income,
profits or property of the Issuer or any of its Subsidiaries or any of its
Significant Joint Ventures, and (b) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a Lien upon the property of the
Issuer or any Subsidiary or Significant Joint Venture of the Issuer, provided,
however, that subject to the other provisions of this Indenture the Issuer
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim the amount, applicability or validity of
which is being contested in good faith by appropriate proceedings and for
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which adequate provision has been made or where the failure to effect such
payment or discharge is not adverse in any material respect to the Issuer.
Section 4.05. Maintenance of Properties Insurance; Books and
Records; Compliance with Law.
(a) The Issuer shall, and shall cause each of its Subsidiaries
and shall, to the fullest extent of the rights available to it under the
relevant contractual or organizational documents, cause each of its Significant
Joint Ventures to, cause all of their respective properties and assets used or
held for use in the conduct of its business to be maintained and kept in good
condition, repair and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment, and shall cause to be made all necessary
repairs, renewals, replacements, additions, betterments and improvements
thereto, as shall be reasonably necessary for the proper conduct of its
business; provided, however, that subject to the other provisions of this
Indenture, nothing in this Section 4.05(a) shall prevent the Issuer or any of
its Subsidiaries or any of its Significant Joint Ventures from discontinuing
the operation and maintenance of any of their respective properties or assets
if such discontinuance is, in the judgment of the Board of Directors of the
Issuer or such Subsidiary or such Significant Joint Venture, desirable in the
conduct of its business or if such discontinuance is not materially adverse to
either the Issuer, its Subsidiaries and its Significant Joint Ventures taken as
a whole or the ability of the Issuer to otherwise satisfy its obligations
hereunder.
(b) The Issuer shall, and shall cause each of its Subsidiaries
and shall, to the fullest extent of the rights available to it under the
relevant contractual or organizational documents, cause each of its Significant
Joint Ventures to, maintain with financially sound and reputable insurers such
insurance as may be required by law (other than with respect to any
environmental impairment liability insurance not commercially available) and
such other insurance to such extent and against such hazards and liabilities,
as is customarily maintained by companies similarly situated (which may include
self-insurance in the same form as is customarily maintained by companies
similarly situated).
(c) The Issuer shall, and shall cause each of its Subsidiaries
and shall, to the fullest extent of the rights available to it under the
relevant contractual or organizational documents, cause each of its Significant
Joint Ventures to, keep proper books of record and account, in which full and
correct entries shall be made of all business and financial transactions of the
Issuer and each Subsidiary and each Significant Joint Venture of the Issuer and
reflect on its financial statements adequate accruals and appropriations to
reserves, all in accordance with GAAP consistently applied to the Issuer, its
Subsidiaries, and its Significant Joint Ventures taken as a whole.
(d) The Issuer shall and shall cause each of its Subsidiaries
and shall, to the fullest extent of the rights available to it under the
relevant contractual or organizational documents, cause each of its Significant
Joint Ventures to comply with all statutes, laws, ordinances, or government
rules and regulations to which it is subject, non-compliance with which would
have a Material Adverse Effect, as defined in Section 6.01.
Section 4.06. Compliance Certificate.
(a) The Issuer will deliver to the Trustee within 60 days
after the end of each of the Issuers first three fiscal quarters an Officers'
Certificate, and a certificate from its principal executive, financial or
accounting officer within 90 days after the end of the Issuer's fiscal year
stating whether or not the signer or signers know of any Default or Event of
Default under this Indenture by the Issuer or an event which, with notice or
lapse of time or both, would constitute a default by the Issuer under any
Senior Indebtedness that occurred during such fiscal period. If the signer or
signers do know of such a Default, Event of Default or default, the certificate
shall describe any such Default, Event of Default or default and its status.
The first certificate to be delivered pursuant to this Section 4.06(a) shall be
for the first fiscal quarter of the Issuer beginning after the Issue Date.
(b) The Issuer will deliver to the Trustee as soon as
possible, and in any event within 30 days after the Issuer becomes aware or
should reasonably have become aware of the occurrence of any Default, Event of
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Default or an event which, with notice or lapse of time or both, would
constitute a default by the Issuer under any Senior Indebtedness, an Officers'
Certificate specifying such Default. Event of Default or default and what
action the Issuer is taking or proposes to take with respect thereto.
(c) Copies of all reports distributed to Holders or the
Trustee pursuant to this Section shall be distributed concurrently to the
Luxembourg Stock Exchange for so long as the Bonds are listed thereon.
Section 4.07. SEC Reports.
(a) For the fiscal quarters ending June 30, 1997 and September
30, 1997 and for the fiscal year ended December 31, 1997 the Issuer will (i)
transmit by mail to all Holders, as their names and addresses appear in the
Register, without cost to such Holders, and (ii) file with the Trustee copies
of the quarterly and audited annual financial reports of the Issuer (including
the condensed, combining financial data in the form and scope set forth in the
condensed, consolidated financial statements of the Issuer for the first
quarter of 1997 and for the fiscal year ending December 31, 1996, respectively)
that are generally distributed to its shareholders at the time such reports are
so distributed.
(b) Beginning with the financial statements of the Issuer for
the quarter ending March 31, 1998 and thereafter, whether or not the Issuer is
subject to Section 13(a) or 15(d) of the Exchange Act, or any successor
provision thereto, the Issuer shall prepare the annual and quarterly reports
which the Issuer would have been required to file with the SEC pursuant to such
Section 13(a) or 15(d) or any successor provision thereto (including the
condensed, combining financial data in the form and scope set forth in the
condensed, consolidated financial statements described above) on or prior to
the respective dates (the "Required Filing Dates") by which the Issuer would
have been required so to file such documents. The Issuer shall also in any
event within 15 days of each Required Filing Date (i) transmit by mail to all
Holders, as their names and addresses appear in the Register, without cost to
such Holders, and (ii) file with the Trustee, copies of such annual and
quarterly reports.
(c) To permit compliance with Rule 144A under the Securities
Act in connection with sales of Bonds or GTS Shares issued on conversion of
such Bonds, upon request of a holder of Bonds or such GTS Shares, the Issuer
(with respect to information relating to it) will furnish to such holder and
any prospective purchaser designated by such holder the information required to
be delivered under Rule 144A(d)(4) under the Securities Act if at the time of
the request the Issuer is not a reporting company under Section 13 or Section
15(d) of the Exchange Act.
(d) Copies of all reports distributed to Holders or the
Trustee pursuant to this Section shall be distributed concurrently to the
Luxembourg Stock Exchange for so long as the Bonds are listed thereon.
Section 4.08. Limitation on Indebtedness.
(a) The Issuer will not, and will not permit any of its
Subsidiaries to, and will to the fullest extent of the rights available to it
under the relevant contractual or organizational documents not permit its
Significant Joint Ventures to, directly or indirectly, create, incur, issue,
assume, guarantee or in any manner become directly or indirectly liable,
contingently or otherwise for the payment of (in each case, to "incur") any
Indebtedness (including any Acquired Indebtedness); provided, however, that the
Issuer, any Subsidiary or any Significant Joint Venture will be permitted to
incur Indebtedness (including Acquired Indebtedness) if (a) at the time of such
incurrence, no Default or Event of Default under this Indenture has occurred
and is continuing, (b) at the time of such incurrence, the Fixed Charge
Coverage Ratio for the four full fiscal quarters immediately preceding the
incurrence of such Indebtedness taken as one period (and after giving pro forma
effect to (i) the incurrence of such Indebtedness and (if applicable) the
application of the net proceeds therefrom, including to refinance other
Indebtedness, as if such Indebtedness was incurred, and the application of such
proceeds occurred, on the first day of such four-quarter period, (ii) the
incurrence, repayment or retirement of any other Indebtedness by the Issuer,
its Subsidiaries and its Significant Joint Ventures since the first day of such
four-quarter period
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(except that, in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based upon the average daily
balance of such Indebtedness during such four-quarter period) and (iii) the
acquisition (whether by purchase, merger or otherwise) or disposition (whether
by sale, merger or otherwise) of any company, entity or business acquired or
disposed of by the Issuer or its Subsidiaries or its Significant Joint
Ventures, as the case may be, since the first day of such four-quarter period),
would have been at least equal to 2:1 and (c) in the case of the incurrence, of
Subordinated Indebtedness or Pari Passu Indebtedness, such Indebtedness has no
scheduled principal payment prior to the 91st day after the Maturity of the
Bonds.
(b) Notwithstanding the provisions of Section 4.08(a), the
Issuer and its Subsidiaries and Significant Joint Ventures may, to the extent
specifically set forth below, incur each and all of the following:
(a) Indebtedness of the Issuer evidenced by the Bonds;
(b) Indebtedness of the Issuer, any Subsidiary or any
Significant Joint Venture outstanding on the Issue Date;
(c) Indebtedness of the Issuer, any Subsidiary and any
Significant Joint Venture in an aggregate principal amount at any one
time outstanding not to exceed U.S.$75,000,000 (or the foreign
currency equivalent thereof);
(d) (i) Interest Rate Protection Obligations of the Issuer or
any Subsidiary or any Significant Joint Venture covering Indebtedness
of the Issuer, such Subsidiary or such Significant Joint Venture;
provided, however, that, (x) any Indebtedness to which any such
Interest Rate Protection Obligations relate bears interest at
fluctuating interest rates and is otherwise permitted to be incurred
under this covenant and (y) the notional principal amount of any such
Interest Rate Protection Obligations does not exceed the principal
amount of the Indebtedness to which such Interest Rate Protection
Obligations relate;
(e) Indebtedness of any Subsidiary or Significant Joint
Venture owed to and held by the Issuer, another Subsidiary or
Significant Joint Venture, in each case which is not subordinated in
right of payment to any Indebtedness of such Subsidiary or Significant
Joint Venture, except that (i) any transfer of such Indebtedness by
the Issuer or a Subsidiary or a Significant Joint Venture (other than
to the Issuer or to another Subsidiary or Significant Joint Venture)
and (ii) the sale, transfer or other disposition by the Issuer or any
Subsidiary or Significant Joint Venture of the Capital Stock of any
Subsidiary or ownership interest in any Significant Joint Venture
which is owed Indebtedness from another Subsidiary or Significant
Joint Venture such that the first such Subsidiary or Significant Joint
Venture ceases to be a Subsidiary or Significant Joint Venture shall,
in each case in (i) and (ii), be an incurrence of Indebtedness by the
second such Subsidiary or Significant Joint Venture, as the case may
be, subject to the other provisions of this covenant;
(f) Indebtedness of the Issuer owed to and held by any
Subsidiary or any Significant Joint Venture which is unsecured and
subordinated in right of payment to the payment and performance of the
Issuer's obligations under the Indenture and the Bonds, provided that
any subsequent issuance or transfer of Capital Stock or other
ownership interest or any other event which results in any such
Subsidiary or Significant Joint Venture ceasing to be a Subsidiary or
Significant Joint Venture, as the case may be, or any subsequent
transfer of any such Indebtedness (except to the Issuer or another
Subsidiary or another Significant Joint Venture) shall be deemed, in
each case, be an incurrence of Indebtedness by the Issuer, subject to
the other provisions of this covenant;
(g) Indebtedness under Currency Agreements; provided that in
the case of Currency Agreements which relate to Indebtedness, such
Currency Agreements do not increase the outstanding Indebtedness of
the Issuer or any Subsidiary or any Significant Joint Venture other
than as a result of
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fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(h) Indebtedness of the Issuer or any of its Subsidiaries or
any of its Significant Joint Ventures in an aggregate amount on the
date of incurrence, not in excess of 80 per cent. of the average of
the outstanding accounts receivable balances of the Issuer, its
Subsidiaries and Significant Joint Ventures on a combined basis at
each of the three preceding quarterly balance sheet dates;
(i) Indebtedness of Hermes as to which the Issuer or any
Subsidiary or any Significant Joint Venture is not directly or
indirectly liable by virtue of being the primary obligor on, guarantor
of or otherwise liable with respect to, such Indebtedness;
(j) Indebtedness of the Issuer or any Subsidiary or any
Significant Joint Venture represented by letters of credit for the
account of the Issuer or such Subsidiary or such Significant Joint
Venture, as the case may be, in order to provide security for workers'
compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of
business;
(k) Indebtedness and Acquired Indebtedness incurred by the
Issuer or any Subsidiary or Significant Joint Venture in order to
finance the construction, acquisition, installation or improvement of
Telecommunications Assets to be used in Europe and/or Asia (including
the Russian Federation and the Commonwealth of Independent States) by
the Issuer, any Subsidiary or any Significant Joint Venture;
(l) (i) Indebtedness of the Issuer the proceeds of which are
used solely to refinance (whether by amendment renewal, extension or
refunding) Indebtedness of the Issuer or any Subsidiary or any
Significant Joint Venture and (ii) Indebtedness of any Subsidiary or
Significant Joint Venture, the proceeds of which are used solely to
refinance (whether by amendment, renewal, extension or refunding)
Indebtedness of such Subsidiary or such Significant Joint Venture, in
each case other than the Indebtedness incurred under the preceding
clauses (c) through (g) and (i) through (k) of this Section 4.08;
provided, however, that (x) the principal amount of Indebtedness
incurred pursuant to this clause (1) (or, if such Indebtedness
provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration of the maturity
thereof, the original issue price of such Indebtedness) shall not
exceed the sum of the outstanding principal amount of Indebtedness so
refinanced, plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of such
Indebtedness or the amount of any premium reasonably determined by the
Board of Directors of the Issuer as necessary to accomplish such
refinancing by means of a tender offer or privately negotiated
purchase, plus the amount of expenses in connection therewith, (y) in
the case of Indebtedness incurred by the Issuer pursuant to this
clause (l) to refinance Subordinated Indebtedness, such Indebtedness
(A) has no scheduled principal payment prior to the 91st day after
the Maturity of the Bonds, (B) has an Average Life to Stated Maturity
greater than the remaining Average Life to Stated Maturity of the
Bonds and (C) is subordinated to the Bonds in the same manner and to
the same extent that the Subordinated Indebtedness being refinanced is
subordinated to the Bonds and (z) in the case of Indebtedness incurred
by the Issuer pursuant to this clause (l) to refinance Pari Passu
Indebtedness, such Indebtedness (A) has no scheduled principal payment
prior to the 91st day after the Maturity of the Bonds, (B) has an
Average Life to Stated Maturity greater than the remaining Average
Life to Stated Maturity of the Bonds and (C) constitutes Pari Passu
Indebtedness or Subordinated Indebtedness.
Section 4.09. Limitation on Restricted Payments.
(a) The Issuer will not, and will not permit any of its
Subsidiaries to, and will to the fullest extent of the rights available to it
under the relevant contractual and organizational documents not permit its
Significant Joint Ventures to, directly or indirectly:
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(i) declare or pay any dividend or make any other
distribution or payment on or in respect of Capital Stock of
the Issuer or any Subsidiary or any Significant Joint Venture
or any payment to the direct or indirect holders (in their
capacities as such) of Capital Stock of the Issuer or any
Subsidiary or any Significant Joint Venture (other than (x)
dividends or distributions payable solely in Capital Stock of
the Issuer, such Subsidiary or such Significant Joint Venture
(other than, in each case, Redeemable Capital Stock) or in
options, warrants or other rights to purchase Capital Stock of
the Issuer (other than, in each case, Redeemable Capital
Stock), (y) the declaration or payment of dividends or other
distributions to the extent declared or paid to the Issuer or
any Subsidiary or any Significant Joint Venture and (z) the
declaration or payment of dividends or other distributions by
any such entity to all holders of equity or similar economic
interests of such entity on a pro rata basis),
(ii) purchase, redeem, defease or otherwise acquire
or retire for value any Capital Stock or other ownership
interest of the Issuer or any Subsidiary or any Significant
Joint Venture (other than any such Capital Stock or other
ownership interest owned by a Wholly-Owned Subsidiary),
(iii) make any principal payment on, or purchase,
defease, repurchase, redeem or otherwise acquire or retire for
value, prior to any scheduled maturity, scheduled repayment,
scheduled sinking fund payment or other Maturity, any
Subordinated Indebtedness (other than any such Indebtedness
owned by the Issuer or a Wholly-Owned Subsidiary), or
(iv) make any Investment (other than any Permitted
Investment) in any person
(such payments or Investments described in the preceding
clauses (i), (ii), (iii) and (iv) are collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to the proposed
Restricted Payment (the amount of any such Restricted Payment, if other than
cash, shall be the Fair Market Value on the date of such Restricted Payment of
the asset(s) proposed to be transferred by the Issuer or the relevant entity
described above, as the case may be, pursuant to such Restricted Payment), (A)
no Default or Event of Default under this Indenture shall have occurred and be
continuing, (B) immediately prior to and after giving effect to such Restricted
Payment, the Issuer would be able to incur $1.00 of additional Indebtedness
pursuant to Section 4.08 (assuming a market rate of interest with respect to
such additional Indebtedness) and (C) the aggregate amount of all Restricted
Payments declared or made from and after the Issue Date would not exceed the
sum of (1) 50 per cent. of the aggregate Pro rata Combined Adjusted Net Income
accrued on a cumulative basis during the period beginning on the first day of
the fiscal quarter of the Issuer during which the Issue Date occurs and ending
on the last day of the fiscal quarter of the Issuer immediately preceding the
date of such proposed Restricted Payment, which period shall be treated as a
single accounting period (or, if such aggregate cumulative Pro rata Combined
Adjusted Net Income for such period shall be a deficit, minus 100 per cent. of
such deficit) plus (2) the aggregate net cash proceeds received by the Issuer,
a Subsidiary or Significant Joint Venture either (x) as capital contributions
after the Issue Date from any person (other than a Subsidiary or Significant
Joint Venture) or (y) from the issuance or sale of Capital Stock (excluding
Redeemable Capital Stock, but including Capital Stock issued upon the
conversion of convertible Indebtedness or from the exercise of options,
warrants or rights to purchase Capital Stock (other than Redeemable Capital
Stock)) of such entity to any person (other than to a Wholly-Owned Subsidiary)
after the Issue Date plus (3) in the case of the disposition or repayment of
any Investment constituting a Restricted Payment made after the Issue Date
(excluding any Investment described in clause (v) of the following paragraph),
an amount equal to the lesser of the return of capital with respect to such
Investment and the cost of such Investment, in either case, less the cost of
the disposition of such Investment. For purposes of the preceding clause
(C)(2), the value of the aggregate net proceeds received by the Issuer upon the
issuance of Capital Stock upon the conversion of convertible Indebtedness or
upon the exercise of options, warrants or rights will be the net cash proceeds
received upon the issuance of such Indebtedness, options, warrants or rights
plus the incremental cash amount received by the Issuer upon the conversion or
exercise thereof.
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(b) None of the provisions of Section 4.09(a) will prohibit (i)
the payment of any dividend within 60 days after the date of its declaration,
if at the date of declaration such payment would be permitted by the foregoing
paragraph; (ii) the redemption, repurchase or other acquisition or retirement
of any shares of any class of Capital Stock of the Issuer or any Subsidiary of
the Issuer in exchange for, or out of the net cash proceeds of, a substantially
concurrent (x) capital contribution to the Issuer from any person (other than a
Subsidiary or Joint Venture) or (y) issue and sale of other shares of Capital
Stock (other than Redeemable Capital Stock) of the Issuer to any person (other
than to a Subsidiary or Joint Venture); provided, however, that the amount of
any such net cash proceeds that are utilized for any such redemption,
repurchase or other acquisition or retirement shall be excluded from clause
(C)(2) of the preceding paragraph (a); (iii) any redemption, repurchase or
other acquisition or retirement of Subordinated Indebtedness by exchange for,
or out of the net cash proceeds of, a substantially concurrent (x) capital
contribution to the Issuer from any person (other than a Subsidiary or Joint
Venture) or (y) (1) issue and sale of Capital Stock (other than Redeemable
Capital Stock) of the Issuer to any person (other than to a Subsidiary or Joint
Venture); provided, however, that the amount of any such net cash proceeds that
are utilized for any such redemption, repurchase or other acquisition or
retirement shall be excluded from clause (C)(2) of the preceding paragraph or
(2) Indebtedness of the Issuer issued to any person (other than to a
Subsidiary), so long as such Indebtedness is Subordinated Indebtedness which
(A) has no Maturity earlier than the 91st day after the Maturity of the
Bonds, (B) has an Average Life to Stated Maturity equal to or greater than the
remaining Average Life to Stated Maturity of the Bonds and (C) is subordinated
to the Bonds in the same manner and at least to the same extent as the
Subordinated Indebtedness so purchased, exchanged, redeemed, acquired or
retired; (iv) so long as no Default or Event of Default shall have occurred and
be continuing, any redemption, repurchase or other acquisition or retirement of
Pari Passu Indebtedness by exchange for, or out of the net cash proceeds of, a
substantially concurrent (x) capital contribution to the Issuer from any person
(other than a Subsidiary or Joint Venture) or (y) (1) issue and sale of Capital
Stock (other than Redeemable Capital Stock) of the Issuer to any person (other
than to a Subsidiary or Joint Venture); provided, however, that the amount of
any such net cash proceeds that are utilized for any such redemption,
repurchase or other acquisition or retirement are excluded from clause (C)(2)
of the preceding paragraph; or (2) Indebtedness of the Issuer from any person
(other than a Subsidiary or Joint Venture), so long as such Indebtedness is
Subordinated Indebtedness or Pari Passu Indebtedness which (A) has no Stated
Maturity earlier than the 91st day after the Final Maturity Date and (B) has
an Average Life to Stated Maturity equal to or greater than the remaining
Average Life to Stated Maturity of the Bonds; (v) Investments constituting
Restricted Payments made as a result of the receipt of non-cash consideration
from any Asset Sale made pursuant to and in compliance with Section 4.12; (vi)
payments or other actions described in clauses (i) through (vi) in Section
4.09(a) that would otherwise be Restricted Payments in an aggregate amount not
to exceed U.S.$10 million (or the foreign currency equivalent thereof); and
(vii) so long as no Default or Event of Default has occurred and is continuing,
repurchases by the Issuer of Common Stock of the Issuer from employees of the
Issuer or any of its Subsidiaries or their authorized representatives upon the
death, disability or termination of employment of such employees, in an
aggregate amount not exceeding U.S.$10 million (or the foreign currency
equivalent thereof) in any calendar year. In computing the amount of Restricted
Payments previously made for purposes of clause (C) of the preceding paragraph
(a), Restricted Payments made under the preceding clauses (vi) and (vii) shall
be included and clauses (i), (ii), (iii) (iv) and (v) of this paragraph (b)
shall not be so included.
Section 4. 10. Negative Pledge.
The Issuer will not, and will not permit any of its
Subsidiaries to, and will to the fullest extent of the rights available to it
under the relevant contractual and organizational documents not permit its
Significant Joint Ventures to, directly or indirectly create, incur, assume or
suffer to exist any Lien that secures obligations under any Pari Passu
Indebtedness or Subordinated Indebtedness on any asset or property of the
Issuer or such Subsidiary or such Significant Joint Venture, or any income or
profits therefrom, or assign or convey any right to receive income therefrom,
unless the Bonds are equally and ratably secured with the obligations so
secured (provided that any Lien securing Subordinated Indebtedness shall be
subordinate and junior to the Lien securing the Bonds with the same relative
priority as such Subordinated Indebtedness shall have with respect to the
Bonds) or until such time as such obligations are no longer secured by a Lien.
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Section 4.11. Change of Control.
(a) Upon the occurrence of a Change of Control, the Issuer
shall be obligated to make an offer to purchase (a "Change of Control Offer")
all of the outstanding Bonds at a purchase price (the "Change of Control
Purchase Price") equal to 106.5 per cent. (if the date of such purchase occurs
on or before June 30, 1998), 113.5 per cent. (if the date of such purchase
occurs after June 30, 1998 but on or before June 30, 1999) or 121.0 per cent.
(if the date of such purchase occurs after June 30, 1999), as applicable, of
the principal amount thereof plus accrued and unpaid interest, if any, to the
purchase date which shall be no earlier than 60 days and no later than 90 days
from the date the notice of the Change of Control Offer is distributed to the
Holders and the Trustee (the "Change of Control Purchase Date"). The Issuer
shall be required to purchase all Bonds properly tendered (or the portions
thereof equal to U.S.$10,000 or increments of U.S.$1,000 in excess thereof
that are so tendered by a Holder in the case of a partial tender) in the Change
of Control Offer and not withdrawn on the Change of Control Purchase Date. The
Change of Control Offer is required to remain open for at least 20 Business
Days and until the close of business on the Change of Control Purchase Date.
(b) Notice of a Change of Control Offer shall be distributed
by the Issuer not later than the 30th day after the occurrence of a Change of
Control to the Holders of Bonds at their last registered addresses with a copy
to the Trustee and the Paying Agents and to the Luxembourg Stock Exchange. The
Change of Control Offer shall remain open from the time of first distribution
to Holders for at least 20 Business Days and until 5:00 p.m., New York City
time, on the Change of Control Purchase Date. The notice, which shall govern
the terms of the Change of Control Offer, shall include such disclosures as are
required by law and shall state:
(i) that the Change of Control Offer is being made
pursuant to this Section 4.11 and that all Bonds validly
tendered into the Change of Control Offer and not withdrawn
will be accepted for payment;
(ii) the purchase price (including the amount of
accrued interest, if any) for each Bond, the Change of Control
Purchase Date and the date on which the Change of Control
Offer expires;
(iii) that any Bond not tendered for payment will
continue to accrue interest in accordance with the terms
thereof;
(iv) that, unless the Issuer shall default in the
payment of the purchase price, any Bond accepted for payment
pursuant to the Change of Control Offer shall cease to accrue
interest after the Change of Control Purchase Date;
(v) that Holders electing to have Bonds purchased
pursuant to a Change of Control Offer will be required to
surrender their Bonds to a Paying Agent at the address
specified in the notice prior to 5:00 p.m., New York City
time, on the Change of Control Purchase Date and must complete
any form of letter of transmittal proposed by the Issuer and
reasonably acceptable to the Trustee and the Paying Agents;
(vi) that Holders of Bonds will be entitled to
withdraw their election if the Paying Agent receives, not
later than 5:00 p.m., New York City time, on the Change of
Control Purchase Date, a tested telex, facsimile transmission
or letter setting forth the name of the Holder, the principal
amount of Bonds the Holder tendered for purchase, the Bond
certificate number (if any) and a statement that such Holder
is withdrawing its election to have such Bonds purchased;
(vii) that Holders whose Bonds are tendered only in
part will be issued Bonds equal in principal amount to the
unpurchased portion of the Bonds surrendered (subject to
minimum authorized denominations);
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(viii) the instructions that Holders must follow in
order to tender their Bonds; and
(ix) information concerning the business of the
Issuer, the most recent annual and quarterly reports of the
Issuer filed with the SEC pursuant to the Exchange Act (or, if
the Issuer is not then permitted to file any such reports with
the SEC, the comparable reports prepared pursuant to Section
4.07), a description of material developments in the Issuer's
business, information with respect to pro forma historical
financial information after giving effect to such Change of
Control and such other information concerning the
circumstances and relevant facts regarding such Change of
Control Offer as would be material to a Holder of Bonds in
connection with the decision of such Holder as to whether or
not it should tender Bonds pursuant to the Change of Control
Offer.
(c) On the Change of Control Purchase Date, the Issuer shall
(i) accept for payment Bonds or portions thereof validly tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agents money, in
immediately available funds, sufficient to pay the purchase price of all Bonds
or portions thereof so tendered and accepted and (iii) deliver to the Trustee
the Bonds so accepted together with an Officers' Certificate setting forth the
Bonds or portions thereof tendered to and accepted for payment by the Issuer.
The Paying Agents shall promptly mail or deliver to the Holders of Bonds so
accepted payment in an amount equal to the purchase price, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new Bond
equal in principal amount (subject to minimum authorized denominations) to any
unpurchased portion of the Bond surrendered. Any Bonds not so accepted shall be
promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer
will publicly announce the results of the Change of Control Offer not later
than the first Business Day following the Change of Control Purchase Date.
(d) The Issuer shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements applicable to a Change of Control Offer made by the Issuer and
purchases all Bonds validly tendered and not withdrawn under such Change of
Control Offer.
(e) The Issuer shall comply with the requirements of Section
14(e) of the Exchange Act, and any other securities laws or regulations in
connection with the repurchase of Bonds pursuant to a Change of Control Offer.
Section 4.12. Disposition of Proceeds of Asset Sales.
(a) The Issuer will not, and will not permit any of its
Subsidiaries to, and will to the fullest extent of the rights available to it
under the relevant contractual and organizational documents not permit its
Significant Joint Ventures to, make any Asset Sale unless (a) the Issuer or
such entity, as the case may be, receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the shares or assets sold
or otherwise disposed of and (b) at least 75 per cent. of such consideration
consists of cash or Cash Equivalents or the assumption of Indebtedness of the
Issuer or such Subsidiary or such Significant Joint Venture or other
obligations relating to such assets and release from all liability on the
Indebtedness or other obligations assumed, or such consideration consists of
(x) property or assets that will be owned by the Issuer, or a Subsidiary or a
Significant Joint Venture of the Issuer and are to be used in a
telecommunications business or in related activities or services that
thereafter will be conducted by the Issuer or such Subsidiary or such
Significant Joint Venture or (y) Capital Stock or other securities issued by a
party to the transaction or an Affiliate thereof, which Capital Stock or other
securities are freely tradeable and which are sold for cash within 90 days of
the consummation of the Asset Sale in connection with which they were acquired.
To the extent the Net Cash Proceeds of any Asset Sale are not required to be
applied to repay, and permanently reduce the commitments under, Senior
Indebtedness or Indebtedness of a Subsidiary or Indebtedness of a Significant
Joint Venture or are not so applied, the Issuer or such entity, as the case may
be, within 360 days of such Asset Sale, will apply such Net Cash Proceeds to an
investment in properties and assets that replace the properties and assets that
were the subject of such Asset Sale or in properties and assets that
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will be used in the business of the Issuer and such entities existing on the
Issue Date or in businesses reasonably related thereto ("Replacement Assets").
Any Net Cash Proceeds from any Asset Sale that are neither used to repay, and
permanently reduce the commitments under, the Senior Indebtedness or
Indebtedness of a Subsidiary or Indebtedness of a Significant Joint Venture,
nor invested in Replacement Assets within the 360-day period described above
constitute "Excess Proceeds" subject to disposition as provided below.
(b) When the aggregate amount of Excess Proceeds equals or exceeds US
$10,000,000, the Issuer shall make an offer to purchase (an "Asset Sale
Offer"), from all Holders of the Bonds, on a date not more than 40 Business
Days thereafter (the "Asset Sale Purchase Date"), an aggregate principal amount
of Bonds equal to such Excess Proceeds, at a price in cash, equal to 100 per
cent. of the outstanding principal amount thereof plus accrued and unpaid
interest, if any, to the purchase date (the "Asset Sale Offer Price"). To the
extent that the aggregate principal amount of Bonds tendered pursuant to an
Asset Sale Offer is less than the Excess Proceeds, the Issuer may use such
excess for general corporate purposes. If the aggregate principal amount of
Bonds validly tendered and not withdrawn by Holders thereof is greater than the
Excess Proceeds, Bonds to be purchased will be selected on a pro rata basis.
Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall
be reset to zero.
(c) Notice of an Asset Sale Offer shall be mailed by the Issuer to all
Holders of Bonds not less than 20 Business Days nor more than 40 Business Days
before the Asset Sale Purchase Date at their last registered address with a
copy to the Trustee, the Paying Agents and the Luxembourg Stock Exchange. The
Asset Sale Offer shall remain open from the time of mailing for at least 20
Business Days and until at least 5:00 p.m., New York City time, on the Asset
Sale Purchase Date. The notice, which shall govern the terms of the Asset Sale
Offer, shall include such disclosures as are required by law and shall state:
(i) that the Asset Sale Offer is being made pursuant to this
Section 4.12;
(ii) the Asset Sale Offer Price (including the amount of
accrued interest, if any) for each Bond, the Asset Sale Purchase Date
and the date on which the Asset Sale Offer expires;
(iii) that any Bond not tendered or accepted for payment will
continue to accrue interest in accordance with the terms thereof,
(iv) that, unless the Issuer shall default in the payment of
the Asset Sale Offer Price, any Bond accepted for payment pursuant to
the Asset Sale Offer shall cease to accrue interest after the Asset
Sale Purchase Date;
(v) that Holders electing to have Bonds purchased pursuant to
an Asset Sale Offer will be required to surrender their Bonds to a
Paying Agent at the address specified in the notice prior to 5:00
p.m., New York City time, on the Asset Sale Purchase Date and must
complete any form of letter of transmittal proposed by the Issuer and
reasonably acceptable to the Trustee and the Paying Agent;
(vi) that Holders will be entitled to withdraw their election
if a Paying Agent receives, not later than 5:00 p.m., New York City
time, on the Asset Sale Purchase Date, a tested telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of Bonds the Holder delivered for purchase, the Bond
certificate number (if any) and a statement that such Holder is
withdrawing its election to have such Bonds purchased;
(vii) that if Bonds in a principal amount in excess of the
Holder's pro rata share of the amount of Excess Proceeds are tendered
pursuant to the Asset Sale Offer, the Issuer shall purchase Bonds on a
pro rata basis among the Bonds tendered (with such adjustments as may
be
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deemed appropriate by the Issuer so that only Bonds in denominations
of U.S. $10,000 or integral multiples of U.S. $1,000 in excess
thereof shall be acquired);
(viii) that Holders whose Bonds are purchased only in part
will be issued new Bonds equal in principal amount to the unpurchased
portion of the Bonds surrendered;
(ix) the instructions that Holders must follow in order to
tender their Bonds; and
(x) information concerning the business of the Issuer, the
most recent annual and quarterly reports of the Issuer filed with the
SEC pursuant to the Exchange Act (or, if the Issuer is not permitted
to file any such reports with the Commission, the comparable reports
prepared pursuant to Section 4.07), a description of material
developments in the Issuer's business, information with respect to pro
forma historical financial information after giving effect to such
Asset Sale and Asset Sale Offer and such other information concerning
the circumstances and relevant facts regarding such Asset Sale Offer
as would be material to a Holder of Bonds in connection with the
decision of such Holder as to whether or not it should tender Bonds
pursuant to the Asset Sale Offer.
(d) On the Asset Sale Purchase Date, the Issuer shall (i) accept for
payment, on a pro rata basis, Bonds or portions thereof tendered pursuant to
the Asset Sale Offer, (ii) deposit with the Paying Agent money, in immediately
available funds, in an amount sufficient to pay the Asset Sale Offer Price of
all Bonds or portions thereof so tendered and accepted and (iii) deliver to the
Trustee the Bonds so accepted together with an Officers' Certificate setting
forth the Bonds or portions thereof tendered to and accepted for payment by the
Issuer. The Paying Agent shall promptly mail or deliver to Holders of Bonds so
accepted payment in an amount equal to the Asset Sale Offer Price, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Bond equal in principal amount to any unpurchased portion of the Bond
surrendered. Any Bonds not so accepted shall be promptly mailed or delivered by
the Issuer to the Holder thereof. The Issuer will publicly announce, and publish
in the Luxembourg Wort, the results of the Asset Sale Offer not later than the
first Business Day following the Asset Sale Purchase Date. To the extent that
the aggregate principal amount of Bonds tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Issuer may use such deficiency for
general corporate purposes. Upon completion of such Asset Sale Offer, the
amount of Excess Proceeds shall be reset to zero. For purposes of this Section
4.12, the Trustee shall act as Paying Agent.
(e) The Issuer shall comply with Rule 14e-1 under the Exchange Act and
any other securities laws or regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Bonds pursuant
to the Asset Sale Offer.
Section 4.13. Limitation on Transactions with Interested Persons.
The Issuer will not, and will not permit any of its Subsidiaries to,
and will to the fullest extent of the rights available to it under the relevant
contractual and organizational documents not permit its Significant Joint
Ventures to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, transfer, disposition, purchase, exchange or lease of assets,
property or services) with, or for the benefit of, any Affiliate of the Issuer,
any Subsidiary or Significant Joint Venture or any beneficial owner (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has
the right to acquire, whether such right is exercisable immediately, after the
passage of time or upon the happening of an event) of 5 per cent. or more of
the Capital Stock or other ownership interest of any of the foregoing entities
at any time outstanding (each of the foregoing being "Interested Persons"),
unless (a) such transaction or series of related transactions is on terms that
are no less favorable to the Issuer or such Subsidiary or such Significant
Joint Venture, as the case may be, than those which could have been obtained in
a comparable transaction at such time from persons who are not Affiliates of
the Issuer or Interested Persons, (b) with respect to a transaction or series
of transactions involving
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aggregate payments or value equal to or greater than U.S.$20,000,000 (or the
foreign currency equivalent thereof) the Issuer has obtained a written opinion
from an Independent Financial Advisor stating that the terms of such
transaction or series of transactions are fair to the Issuer or such Subsidiary
or such Significant Joint Venture, as the case may be, from a financial point
of view and (c) with respect to a transaction or series of transactions
involving aggregate payments or value equal to or greater than U.S.$10,000,000
(or the foreign currency equivalent thereof), the Issuer shall have delivered
an Officers' Certificate to the Trustee certifying that such transaction or
series of transactions complies with the preceding clause (a) and, if
applicable, certifying that the opinion referred to in the preceding clause (b)
has been delivered and that such transaction or series of transactions have
been approved by a majority of the disinterested members of Board of Directors
of the Issuer; provided, however, that the provisions of this Section 4.13 will
not restrict the Issuer from (i) paying dividends in respect of its Capital
Stock permitted under Section 4.09, (ii) paying reasonable and customary fees
to directors of the Issuer who are not employees of the Issuer, (iii) making
loans or advances to officers or employees of the Issuer and its Subsidiaries
or Significant Joint Ventures (including travel and moving expenses) in the
ordinary course of business for bona fide business purposes of the Issuer or
such Subsidiary or Significant Joint Venture not in excess of U.S.$5,000,000
(or the foreign currency equivalent thereof), in the aggregate at any one time
outstanding, (iv) engaging in any transaction involving the provision of
telecommunications services or related activities between or among the Issuer,
any Subsidiary or any Significant Joint Venture and, provided that such
transaction is in the ordinary course of business and consistent with
commercially reasonable practice, any Joint Venture of the Issuer that is not a
Significant Joint Venture or between any of them or (v) any agreement as in
effect as of the Issue Date or any amendment thereto or any transaction
contemplated thereby, as listed in Schedule I hereto (including pursuant to any
amendment thereto so long as any such amendment in the judgment of the Board of
Directors voting to approve the amendment does not have a material adverse
effect on the Holders).
Section 4.14. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries and Significant Joint Ventures.
The Issuer will not, and will not permit any of its Subsidiaries to,
and will to the fullest extent of the rights available to it under the relevant
contractual and organizational documents not permit its Significant Joint
Ventures to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
such Subsidiary or Significant Joint Venture to (a) pay dividends, in cash or
otherwise, or make any other distributions on or in respect of its Capital
Stock or any other interest or participation in, or measured by, its profits to
the Issuer or any Subsidiary or any Significant Joint Venture, (b) pay any
Indebtedness owed to the Issuer or any other Subsidiary or Significant Joint
Venture, (c) make loans or advances to, or any Investment in, the Issuer or any
other Subsidiary or Significant Joint Venture, (d) transfer any of its
properties or assets to the Issuer or any other Subsidiary or Significant Joint
Venture or (e) guarantee any Indebtedness of the Issuer or any Subsidiary or
Significant Joint Venture, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) customary
non-assignment provisions of any contract or any lease governing a leasehold
interest of the Issuer or any Subsidiary or Significant Joint Venture, (iii)
customary restrictions on transfers of property subject to a Lien permitted
under this Indenture which could not materially adversely affect the Issuer's
ability to satisfy its obligations under this Indenture and the Bonds, (iv) any
agreement or other instrument of a person acquired by the Issuer or any
Subsidiary or Significant Joint Venture (or a Subsidiary of such person) in
existence at the time of such acquisition (but not created in contemplation
thereof), which encumbrance or restriction is not applicable to any person, or
the properties or assets of any person, other than the person, or the property
or assets of the person, so acquired, (v) provisions contained in agreements or
instruments relating to Indebtedness which prohibit the transfer of all or
substantially all of the assets of the obligor thereunder unless the transferee
shall assume the obligations of the obligor under such agreement or instrument,
(vi) encumbrances and restrictions under Indebtedness in effect on the Issue
Date and encumbrances and restrictions in permitted refinancings or
replacements thereof which are no less favorable to the Holders of the Bonds
than those contained in the Indebtedness so refinanced or replaced, (vii) any
agreement in existence at the Issue Date or (viii) encumbrances and
restrictions in connection with Subsidiaries acquired after the Issue Date and
Significant Joint Ventures entered into after the Issue Date, including with
respect to any financing thereof, that are no more adverse to the Issuer than
those referred to in (vii) above), (ix) in the case of
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clause (d) of this Section 4.14 above, arising or agreed to in the ordinary
course of business, not relating to any Indebtedness and that do not
individually, or together with all such encumbrances or restrictions, detract
from the value of the property or assets of the Issuer or any Subsidiary or any
Significant Joint Venture in any manner material to the Issuer or any
Subsidiary or any Significant Joint Venture, (x) contained in the terms of any
Indebtedness incurred by Hermes or any agreement pursuant to which such
Indebtedness was issued if the encumbrance or restriction is not materially
more disadvantageous to the Holders than is customary in comparable financings
(as determined by the Issuer) and the Issuer determines that any such
encumbrance or restriction will not materially affect the Issuer's ability to
make principal payments on the Bonds, (xi) contained in any stockholders or
similar agreement, so long as such encumbrance or restriction is not more
disadvantageous to the Holders than the encumbrances and restrictions contained
in comparable agreements entered into in the past by the Issuer, any of its
Subsidiaries or Significant Joint Ventures, or (xii) contained in any agreement
entered into after the Issue Date, so long as such encumbrance or restriction
is not materially more disadvantageous to the Holders than the encumbrances and
restrictions contained in agreements in existence on the Issue Date.
Section 4.15. Limitations on Sale-Leaseback Transactions.
The Issuer will not, and will not permit any of its Subsidiaries to,
and will to the fullest extent of the rights available to it under the relevant
contractual and organizational documents not permit its Significant Joint
Ventures to, enter into any Sale-Leaseback Transaction with respect to any
property of the Issuer or any of its Subsidiaries or Significant Joint Ventures
other than a Sale-Leaseback Transaction between the Issuer, a Subsidiary or a
Significant Joint Venture or between any of them. Notwithstanding the
foregoing, the Issuer and its Subsidiaries or Significant Joint Ventures may
enter into Sale-Leaseback Transactions involving Telecommunications Assets;
provided that (i) the Issuer, or such Subsidiary or Significant Joint Venture,
as the case may be, would be entitled to create or incur a Lien to secure
Indebtedness pursuant to the provisions of Section 4.10 hereof equal in amount
to the Attributable Value of the Sale-Leaseback Transaction without equally and
ratably securing the Bonds and (h) the Sale-Leaseback Transaction is treated as
an Asset Sale and the provisions Section 4.12 hereof are satisfied with respect
to such Sale-Leaseback Transaction.
Section 4.16. When Issuer May Merge, etc.
(a) The Issuer will not, in any transaction or series of transactions,
merge or consolidate with or into, or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets as
an entirety to, any person or persons, and the Issuer will not permit any of
its Subsidiaries to, and will to the fullest extent of the rights available to
it under the relevant contractual and organizational documents not permit its
Significant Joint Ventures to, enter into any such transaction or series of
transactions if such transaction or series of transactions, in the aggregate,
would result in a sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of the respective properties and assets
of the Issuer and its Subsidiaries and Significant Joint Ventures on a combined
basis, to any other person or persons, unless at the time of and after giving
effect thereto (a) either (i) if the transaction or series of transactions is a
merger or consolidation, the Issuer shall be the surviving person of such
merger or consolidation, or (ii) the person formed by such consolidation or
into which the Issuer or such Subsidiary or Significant Joint Venture is merged
or to which the properties and assets of the Issuer and its Subsidiaries and
Significant Joint Ventures, are transferred (any such surviving person or
transferee person being the "Surviving Entity") shall be a corporation
organized and existing under the laws of the United States of America, any
state thereof or the District of Columbia or the United Kingdom, the Federal
Republic of Germany, France or Italy and shall expressly assume by a
supplemental indenture executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all the obligations of the Issuer under
the Bonds and this Indenture and, in each case, this Indenture shall remain in
full force and effect; (b) immediately before and immediately after giving
effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction or series of
transactions), no Default or Event of Default shall have occurred and be
continuing and the Issuer, or the Surviving Entity, as the case may be, after
giving effect to such transaction or series of transactions on a pro forma
basis (including, without limitation, any Indebtedness incurred or anticipated
to be incurred in connection with or in
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respect of such transaction or series of transactions), could incur $ 1.00 of
additional Indebtedness under Section 4.08(a) (assuming a market rate of
interest with respect to such additional Indebtedness); (c) immediately after
giving effect to such transaction or series of transactions on a pro forma
basis (including, without limitation, any Indebtedness incurred or anticipated
to be incurred in connection with or in respect of such transaction or series
of transactions), the Consolidated Net Worth of the Issuer or the Surviving
Entity, as the case may be, is at least equal to the Consolidated Net Worth of
the Issuer immediately before such transaction or series of transactions; (d)
such consolidation, merger, conveyance, transfer, lease or other disposition
does not adversely affect the validity or enforceability of the Bonds; and (e)
if the Surviving Entity is organized in a jurisdiction other than the United
States of America, any state thereof or the District of Columbia, such entity
appoints CT Corporation System, Inc., New York, New York, as its agent for
service of process in any suit, action or proceeding with respect to the
Indenture or the Bonds issued thereunder and for actions brought under federal
or state securities laws brought in any federal or state court located in the
Borough of Manhattan in The City of New York and submits to such jurisdiction,
waives forum non conveniens, waives or is not subject to immunity from suit and
any judgments brought against such entity in respect of the Indenture and the
Bonds may be recognized and enforced in such jurisdiction of its organization.
In connection with any consolidation, merger, transfer, lease,
assignment or other disposition contemplated hereby, the Issuer shall deliver,
or cause to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an officer's certificate and an Opinion of
Counsel, each stating that, such consolidation, merger, transfer, lease,
assignment or other disposition and the supplemental indenture in respect
thereof comply with the foregoing requirements; provided, however, that solely
for purposes of computing amounts described in subclause (C) of Section
4.09(a), any such successor person shall only be deemed to have succeeded to
and be substituted for the Issuer with respect to periods subsequent to the
effective time of such merger, consolidation or transfer of assets.
Section 4.17. Successor Substituted.
(a) Upon any consolidation or merger, or any sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
assets of the Issuer in accordance with Section 4.16 hereof, the successor
person or persons formed by such consolidation or into which the Issuer is
merged or the successor person to which such sale, assignment, conveyance,
transfer, lease or other disposition is made, shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture and the Bonds with the same effect as if such successor had been
named as the Issuer herein; provided, however, that solely for purposes of
computing amounts described in subclause (C) of Section 4.09(a), any such
successor person shall only be deemed to have succeeded to and be substituted
for the Issuer with respect to periods subsequent to the effective time of such
merger, consolidation or transfer of assets.
(b) Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Issuer in accordance with the foregoing,
in which the Issuer is not the continuing corporation, the successor
corporation formed by such a consolidation or into which the Issuer is merged
or to which such transfer is made shall succeed to, and be substituted for, and
may exercise every right and power of, the Issuer under the Indenture with the
same effect as if such successor corporation had been named as the Issuer
therein.
Section 4. 18. Limitation on Guarantees by Subsidiaries.
The Issuer will not permit any Subsidiary to, and will, to the fullest
extent of the rights available to it under the relevant contractual and
organizational documents, not permit its Significant Joint Ventures to,
directly or indirectly, assume, guarantee or in any manner become liable with
respect to any Indebtedness of the Issuer which is Subordinated Indebtedness or
Pari Passu Indebtedness unless such Subsidiary or Significant Joint Venture, as
the case may be, simultaneously executes and delivers a supplemental indenture
to this Indenture, pursuant to provisions in form and substance satisfactory to
the Trustee, providing for a guarantee of payment of the Bonds by such
Subsidiary or Significant Joint Venture and (A) if any such assumption,
guarantee or other
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liability is subordinated, the guarantee under such supplemental indenture
shall be subordinated to the same extent as the Bonds are subordinated to
Senior Indebtedness of the Issuer under this Indenture and (B) any such
assumption, guarantee or other liability of such Subsidiary or Significant
Joint Venture with respect to Subordinated Indebtedness shall be subordinated
to such Subsidiary's or Significant Joint Venture's, as applicable, assumption,
guarantee or other liability with respect to the Bonds to the same extent as
such Subordinated Indebtedness is subordinated or junior to the Bonds under
this Indenture.
Section 4.19. Waiver of Stay, Extension or Usury Laws.
The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law which would prohibit or forgive the Issuer from paying
all or any portion of the principal of, premium, if any, or interest on the
Bonds as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) the Issuer hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 4.20. [Reserved).
Section 4.21. Listing on the Luxembourg Stock Exchange.
The Issuer shall use its best efforts to cause and maintain the
listing of all the Bonds on the Luxembourg Stock Exchange for so long as any of
the Bonds are outstanding.
Section 4.22. Reservation of GTS Shares.
The Issuer shall at all times reserve and keep available out of its
authorized common stock, solely for the purpose of issuance or delivery upon
conversion of the Bonds, the number of GTS Shares that it reasonably believes
will be required to be delivered in connection with such conversion pursuant to
the terms of this Indenture.
Section 4.23. [Reserved].
Section 4.24. Limitation on Other Subordinated Indebtedness.
The Issuer will not create, incur, assume, guarantee or in any other
manner become liable with respect to any Indebtedness that is subordinate in
right of payment to any Senior Indebtedness unless such Indebtedness is also
pari passu with, or subordinate in right of payment to, the Bonds.
Section 4.25. Effectiveness of Certain Covenants.
So long as any Bond remains outstanding or any amount remains unpaid
with respect to any of the Bonds, the Issuer shall comply with each and every
one of the covenants contained in this Article Four; provided, however, that
the effectiveness of Section 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15,
4.16, 4.17 and 4.18 shall terminate upon the occurrence of a Complying Public
Equity Offering and for so long as a Covenant Defeasance pursuant to Section
8.02 is in effect.
ARTICLE FIVE
MEETINGS OF HOLDERS
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Section 5.01 Purpose for Which Meetings May Be Called
A meeting of the Holders may be called at any time and from time to
time pursuant to this Article Five to make, give, or take any request, demand,
authorization, notice, consent, election, waiver or other action permitted by
this Indenture.
Section 5.02 Call, Notice and Place of Meetings.
The Issuer or the Trustee, upon the request of Holders having at
least 5 per cent. in aggregate principal amount of the outstanding Bonds, or
the Issuer, at its discretion, may call a meeting of the Holders for any
purpose specified in Section 5.01. Any such meeting will be held in New York
City. Notice of every meeting of Holders, setting forth, in general, the time
and the place of, and the agenda for, such meeting, shall be given not less
than 10 days nor more than 30 days prior to the date fixed for the meeting, in
the manner provided under Section 12.01 and publication thereof shall be for
three (3) consecutive Business Days in each place of publication. In the
absence of quorum within 45 minutes of the time appointed for any such meeting,
a second call meeting (the "second call meeting") may be called to take place.
Section 5.03 Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders, a person shall be
(1) a Holder of one or more outstanding Bonds, or (2) a person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more
outstanding Bonds by such Holder or Holders. The only persons who shall be
entitled to be present or to speak at any meeting of Holders shall be persons
entitled to vote at such meeting and their counsel, and representatives of the
Trustee and its counsel and any representatives of the Issuer and its counsel.
Section 5.04 Quorum; Action.
(a) Persons holding or representing a majority of the aggregate
principal amount of the Bonds at the time outstanding, or in the case of any
second all meeting, the Holders present or represented at such meeting, shall
constitute a quorum for any meeting of Holders. Notice of the second call
meeting shall be given as provided in Section 5.02, except that such notice
need be given not less than five days prior to the date on which the second
call meeting is scheduled. Notice of the second call meeting shall expressly
state the percentage of the outstanding Bonds which shall constitute a quorum.
Any Holder who has executed an instrument in writing appointing a person as
proxy shall be deemed to be present for the purposes of determining a quorum
and be deemed to have voted; provided, that such Holder shall be considered as
present and voting only in respect to the matters covered by such instrument in
writing (which may include authorization to vote on any other matters as may
come before the meeting).
(b) Any modifications, amendments or waivers to this Indenture shall
require the lesser of (i) the written consent of the Holders of a majority in
principal amount of the outstanding Bonds or (ii) the approval of persons
entitled to vote a majority of the principal amount of such Bonds represented
and voting at a meeting of the Holders duly called in accordance with the
provisions hereof and at which a quorum is present; provided, however, that the
unanimous affirmative vote of the Holders will be required to adopt any action
or resolution of such action or resolution to be taken relates to the matters
set forth in clauses (i) through (ix) of Section 9.02(a).
(c) Except as provided above, any modifications, amendments, or
waivers to the terms and conditions of the Bonds will be conclusive and binding
on all Holders, whether or not they have given such consent or were present at
any meeting of Holders, and whether or not notation of such modifications,
amendments or waivers is made upon the Bonds.
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Section 5.05. Determination of Voting Rights, Conduct and Adjournment
of Meeting.
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders in regard to proof of the holding of Bonds and to the
appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate. Except as otherwise
permitted or required by any such regulations, the holding of Bonds shall be
proved in Section 12.01 and the appointment of any proxy shall be proved in the
manner specified in Section 12.01 or by having the signature of the person
executing the proxy witnessed or guaranteed by a trust company, bank or banker
to certify the holding of Bonds. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid
and genuine without the proof specified in Section 12.01 or other proof.
(b) The Issuer or the Holders calling the meeting, as the case may be,
shall appoint a temporary chairman of the meeting. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the persons
entitled to vote a majority in principal amount of the outstanding Bonds
represented at the meeting.
(c) At any meeting each Holder of a Bond or proxy shall be entitled to
one vote for each U.S. $10,000 principal amount of Bonds held or represented
by him; provided, however, that no vote shall be cast or counted at any meeting
in respect of any Bond challenged as not outstanding and ruled by the chairman
of the meeting to be not outstanding. The chairman of the meeting shall have no
right to vote, except as a Holder of a Bond or proxy.
(d) Any meeting of Holders duly called pursuant to Section 5.02 at
which a quorum is present may be adjourned from time to time by persons
entitled to vote a majority in principal amount of the outstanding Bonds
represented at the meeting; and the meeting may be held as so adjourned without
further notice.
Section 5.06. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders shall
be by written ballots on which shall be subscribed the signatures of the
Holders or their representatives by proxy and the principal amounts and serial
numbers of the outstanding Bonds held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports, in
duplicate, of the proceedings of each meeting. A record, at least in duplicate,
of the proceedings of each meeting of the Holders shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote or ballot taken thereat
and affidavits by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
given as provided in Section 5.04. Each copy shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one
such copy shall be delivered to the Issuer and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE SIX
EVENTS OF DEFAULT: REMEDIES
Section 6.01. Events of Default.
An "Event of Default" means any of the following events:
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(a) the Issuer fails to pay the principal of or any premium
(if any) or interest (including Additional Amounts) on any of the
Bonds when due (upon Maturity, acceleration, redemption, required
purchase or otherwise and whether or not prohibited by Article Ten)
and, in the case of interest only, such failure continues for a period
of 30 days; or
(b) the Issuer does not perform or comply with any one or more
of its other obligations in the Bonds or this Indenture (other than a
default under (a) above) for a period of 60 days after written notice
of such default shall have been given to the Issuer by the Trustee or
to the Issuer and the Trustee by Holders of at least 25 per cent. in
aggregate principal amount of Bonds then outstanding; or
(c) (i) one or more defaults in the payment of principal of or
premium, if any, on Indebtedness of the Issuer or any Material
Subsidiary or any Significant Joint Venture aggregating U.S.$10
million (or the foreign currency equivalent thereof) or more, when the
same becomes due and payable at the Maturity thereof, and such default
or defaults shall have continued after any applicable grace period and
shall not have been cured or waived or (ii) Indebtedness of the Issuer
or any Material Subsidiary or any Significant Joint Venture
aggregating U.S.$10 million (or the foreign currency equivalent
thereof) or more shall have been accelerated or otherwise declared due
and payable, or required to be prepaid or repurchased (other than by
regularly scheduled required prepayment) prior to the Maturity
thereof; or
(d) any holder or holders of Indebtedness aggregating U.S.$10
million (or the foreign currency equivalent thereof) or more of the
Issuer or any Material Subsidiary or any Significant Joint Venture
shall notify the Issuer or the Trustee of the intended sale or
disposition of any assets of the Issuer or any such Material
Subsidiary or Significant Joint Venture that have been pledged to or
for the benefit of such person to secure such Indebtedness, or shall
commence proceedings, or take action (including by way of set-off) to
retain in satisfaction of any such Indebtedness, or to collect on,
seize, dispose of or apply, any such assets of the Issuer or any
Material Subsidiary or any Significant Joint Venture pursuant to the
terms of any agreement or instrument evidencing any such Indebtedness
or in accordance with applicable law; or
(e) one or more final judgements (or judgements which can no
longer be appealed) or orders or similar judicial or administrative
action shall be rendered against the Issuer or any Material Subsidiary
or Significant Joint Venture for the payment of money, either
individually or in an aggregate amount, in excess of U.S.$10 million
(or the foreign currency equivalent thereof) and which shall not have
been discharged and either (i) an enforcement proceeding shall have
been commenced by any creditor upon such judgement or order or similar
judicial or administrative action or (ii) there shall have been a
period of 60 consecutive days during which a stay of enforcement of
such judgement or order, by reason of a pending appeal or otherwise,
was not in effect;
(f) the Issuer or any Material Subsidiary or Material Joint
Venture, pursuant to or under or within any applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or like law; (i)
commences a voluntary case or proceeding; (ii) consents to the entry
of an order for relief against it in an involuntary case or
proceeding; (iii) makes a general assignment for the benefit of its
creditors; (iv) or shall generally not pay its debts when such debts
become due or shall admit in writing its inability to pay its debts
generally, (v) or a court of competent jurisdiction (or like entity)
shall enter an order or decree under any applicable law described
above that is for relief against the Issuer or any Material Subsidiary
or Material Joint Venture, as applicable, in an involuntary case or
proceeding, appoints a custodian for the Issuer or such other entity
for all or substantially all its properties or orders the liquidation
of the Issuer or such other entity, as applicable, and in each such
case in this clause (v), the order or decree remains unstayed and in
effect for 60 days; (vi) or the Issuer or such other entity shall take
any corporate action regarding any of the foregoing; or
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(g) excluding the events referred to in paragraph (f) above,
any seizure, compulsory acquisition, expropriation or nationalization
of any assets of the Issuer, any Subsidiary or Significant Joint
Venture for which there is not paid Fair Market Value and where the
seizure, compulsory acquisition, expropriation nationalization
(whether by an outright taking or by confiscatory tax or other
policies), individually or in the aggregate, could reasonably be
expected to result in a material adverse effect on the business
(including, without limitation, the ability to generate cash flow over
the life of the Bonds), the condition (financial or other), the
properties or the results of operations of the Issuer, its
Subsidiaries, and Significant Joint Ventures on a combined basis (a
"Material Adverse Effect").
Subject to the provisions of Sections 7.01 and 7.02, the Trustee shall
not be charged with knowledge of any Default or Event of Default unless written
notice thereof shall have been given to a Trust Officer at the Corporate Trust
Office of the Trustee by the Issuer, any Paying Agent, Transfer Agent or
Conversion Agent, any Holder, any holder of Senior Indebtedness or any of their
respective agents.
Section 6.02. Acceleration.
(a) If an Event of Default (other than as specified in subparagraph
(f) above) shall occur and be continuing, the Trustee, by notice to the Issuer,
or the Holders of at least 25 per cent. in aggregate principal amount of the
Bonds then outstanding by notice to the Trustee and the Issuer, may declare the
principal of, premium, if any, and accrued and unpaid interest on all of the
outstanding Bonds due and payable immediately upon which declaration, all
amounts payable in respect of the outstanding Bonds shall be due and payable
immediately. If an Event of Default specified in subparagraph (f) above occurs
and is continuing, then the principal of, premium, if any, and accrued and
unpaid interest, on all of the outstanding Bonds shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders of Bonds.
(b) After a declaration of acceleration under this Indenture, but
before a judgment or decree for payment of the money due has been obtained by
the Trustee, the Holders at least of a majority in aggregate principal amount
of the outstanding Bonds, by written notice to the Issuer and the Trustee, may
rescind such declaration if (i) the Issuer has paid or deposited with the
Trustee a sum sufficient to pay (1) all sums paid or advanced by the Trustee
under this Indenture and the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, (2) all overdue interest
on all Bonds, (3) the unpaid principal of and premium, if any, on any
outstanding Bonds which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Bonds, and (4) to
the extent that payment of such interest is lawful, interest upon overdue
interest and overdue principal at the rate borne by the Bonds which has become
due otherwise than by such declaration of acceleration; (ii) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction; and (iii) all Events of Defaults, other than the non-payment of
principal of, premium, if any, and interest on the Bonds that have become due
solely by such declaration of acceleration, have been cured or waived. No such
rescission shall affect any subsequent Default or Event of Default or impair
any right subsequent thereto.
Section 6.03. Other Remedies.
(a) If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, premium, if any, or interest on the Bonds or to
enforce the performance of any provision of the Bonds or this Indenture.
(b) All rights of action and claims under this Indenture or the Bonds
may be enforced by the Trustee even if it does not possess any of the Bonds or
does not produce any of them in the proceeding. A delay or omission by the
Trustee or any Holder in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
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Section 6.04. Waiver of Past Defaults.
Subject to the provisions of Section 6.02, 6.07 and 9.02, the
Holders of not less than a majority in aggregate principal amount of the
outstanding Bonds by notice to the Trustee may, on behalf of the Holders of all
the Bonds, waive any existing Default or Event of Default and its consequences,
except a Default or Event of Default specified in Section 6.01(a) or in
respect of any provision hereof which cannot be modified or amended without the
consent of the Holder so affected pursuant to Section 9.02. When a Default or
Event of Default is so waived, it shall be deemed cured and shall cease to
exist.
Section 6.05. Control by Majority.
(a) The Holders of not less than a majority in aggregate
principal amount of the outstanding Bonds shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee,
provided, however, that the Trustee may refuse to follow any direction (i) that
conflicts with any rule of law or this Indenture, (ii) that the Trustee
determines may be unduly prejudicial to the rights of another Holder, or (iii)
that may expose the Trustee to personal liability unless the Trustee has been
provided reasonable indemnity against any loss or expense caused by its
following such direction; and provided, further, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction.
(b) During the existence of an Event of Default, the Trustee
is required to exercise such rights and powers vested in it under this
Indenture and use the same degree of care and skill in its exercise thereof as
a prudent person would exercise under the circumstances in the conduct of such
person's own affairs. Subject to the provisions of this Indenture relating to
the duties of the Trustee, whether or not an Event of Default shall occur and
be continuing, the Trustee under this Indenture is not under any obligation to
exercise any of its rights or powers hereunder at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity. Subject to certain provisions concerning the
rights of the Trustee, the Holders of not less than a majority in aggregate
principal amount of the outstanding Bonds have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee under this
Indenture.
Section 6.06. Limitation on Suits.
(a) No Holder of any Bonds shall have any right to institute
any proceeding or pursue any remedy with respect to this Indenture or the Bonds
unless:
(i) the Holder gives written notice to the Trustee of a
continuing Event of Default;
(ii) the Holders of at least 25 per cent. in aggregate
principal amount of the outstanding Bonds make a written request to
the Trustee to pursue the proceeding or remedy;
(iii) such Holder or Holders offer and, if requested, provide
to the Trustee reasonable indemnity against any loss, liability or
expense;
(iv) the Trustee does not comply with the request within 30
days after receipt of the request and the offer and, if requested,
provision of indemnity; and
(v) during such 30-day period the Holders of at least a
majority in aggregate principal amount of the outstanding Bonds do not
give the Trustee a direction which is inconsistent with the request.
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(b) The limitations of Section 6.06(a) shall not apply to a
suit instituted by a Holder for the enforcement of the payment of principal of,
premium, if any, or accrued interest on, any Bond on or after the respective
due dates set forth in such Bond.
(c) A Holder may not use this Indenture to prejudice the
rights of any other Holders or to obtain priority or preference over such other
Holders.
Section 6.07. Right of Holders To Receive Payment.
Notwithstanding any other provision in this Indenture, the
right of any Holder of a Bond to receive payment of the principal of, premium,
if any, and interest on such Bond, on or after the respective Maturities
expressed in such Bond, or to bring suit for the enforcement of any such
payment on or after the respective Maturities, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in clause (a) of Section 6.01
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Issuer, or any other obligor on the
Bonds for the whole amount of principal of, premium, if any, and accrued
interest remaining unpaid, together with interest on overdue principal and, to
the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum then borne by the
Bonds and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claims.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Issuer or the
Subsidiaries or Joint Ventures of the Issuer (or any other obligor upon the
Bonds), their creditors or their property and shall be entitled and empowered
to collect and receive any monies or other property payable or deliverable on
any such claims and to distribute the same, and any Custodian in any such
judicial proceedings is hereby authorized by each Holder to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 7.07. Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Bonds
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
(a) If the Trustee collects any money pursuant to this Article
Six, it shall pay out such money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: subject to Article Ten, to Holders for interest (and
any Additional Amounts) accrued on the Bonds, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Bonds for interest;
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Third: subject to Article Ten, to Holders for principal
amounts (including any premium) owing under the Bonds, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Bonds for principal (including any premium);
and
Fourth: the balance, if any, to the Issuer.
(b) The Trustee, upon prior written notice to the Issuer, may
fix a record date and payment date for any payment to Holders pursuant to this
Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court may in its discretion 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, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to any suit by the Trustee, any suit
by a Holder pursuant to Section 6.06, or a suit by Holders of more than 10 per
cent. in aggregate principal amount of the outstanding Bonds.
Section 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Bond and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Issuer, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 6.13. Notice to Holders of Event of Default.
If a Default or an Event of Default occurs and is continuing
and is known to the Trustee, the Trustee shall mail to each Holder of the Bonds
and to the Luxembourg Stock Exchange, for so long as the Bonds are listed
thereon, notice of the Default or Event of Default within 30 days after
obtaining knowledge thereof. Except in the case of a Default or an Event of
Default in payment of principal or premium, if any, or interest on any Bonds,
the Trustee may withhold the notice to the Holders of such Bonds if a committee
of its Trust Officers in good faith determines that withholding the notice is
in the interest of the Holders of the Bonds.
ARTICLE SEVEN
THE TRUSTEE
Section 7.01. Duties.
(a) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of 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,
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(i) the Trustee need perform 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
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but 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.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(ii) 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;
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05;
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
7.01.
Section 7.02. Rights of Trustee.
Subject to Section 7.01 hereof
(a) The Trustee may rely on any document reasonably believed
by it to be genuine and to have been signed or presented by the proper person
and need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel of its selection and may require an Officers' Certificate
or an Opinion of Counsel, which shall conform to Sections 12.04 and 12.05. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and 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 taken or
omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this Indenture
other than any liabilities arising out of its own negligence.
(e) The Trustee may consult with counsel of its own choosing
and the advice or opinion of such counsel as to matters of law shall be full
and complete authorization and protection in respect of any
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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 bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit.
(g) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
Section 7.03. Individual Rights of Trustee.
The Trustee, any Paying Agent, Registrar or any other agent of
the Issuer, in its individual or any other capacity, may become the owner or
pledgee of Bonds and, subject to Section 7.10, may otherwise deal with the
Issuer and its Subsidiaries and Joint Ventures with the same rights it would
have if it were not the Trustee or any Agent.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Bonds, it shall not be accountable for
the Issuer's use or application of the proceeds from the Bonds, it shall not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee and it shall not be responsible for any statement
in the Bonds other than the Trustee's certificate of authentication.
Section 7.05. [Reserved].
Section 7.06. Money Held in Trust.
All moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required herein or by law. The Trustee shall not be under any liability for
interest on any moneys received by it hereunder, except as the Trustee may
agree with the Issuer.
Section 7.07. Compensation and Indemnity.
(a) The Issuer covenants and agrees to pay the Trustee from
time to time such compensation for its services as the parties shall agree from
time to time. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
(b) The Issuer shall indemnify the Trustee for, and hold it
harmless against, any loss or liability incurred by it arising out of or in
connection with the administration of this trust and its rights or duties
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Trustee shall notify the Issuer promptly of any
claim asserted against the Trustee for which it may seek indemnity. The Issuer
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Issuer shall pay the reasonable fees
and expenses of such counsel. The Issuer need not pay for any settlement made
without its prior written consent.
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The Issuer need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.
(c) To secure the Issuer's payment obligations in this Section
7.07, the Trustee shall have a Lien prior to the Bonds on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal of, premium, if any, or interest on particular Bonds.
(d) When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 6.01(f), the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
(e) The Issuer's obligations under this Section 7.07 and any
Lien arising hereunder shall survive the resignation or removal of any trustee,
the discharge of the Issuer's obligations pursuant to Article Eight and/or the
termination of this Indenture.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(a) The Trustee may resign by so notifying the Issuer in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Bonds may remove
the Trustee by so notifying the Issuer and the Trustee and may appoint a
successor trustee with the Issuer's prior written consent. The Issuer may
remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(iii) a receiver or other public officer takes charge of the
Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
(b) If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Issuer shall notify each
Holder of such event and shall promptly appoint a successor Trustee. The
Trustee shall be entitled to payment of its fees and reimbursement of its
expenses while acting as Trustee, and to the extent such amounts remain unpaid,
the Trustee that has resigned or has been removed shall retain the Lien
afforded by Section 7.07. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the outstanding Bonds
may, with the Issuer's prior written consent, appoint a successor Trustee to
replace the successor Trustee appointed by the Issuer.
(c) A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Issuer. Immediately after
that, the retiring Trustee shall transfer all property held by it as Trustee to
the successor Trustee, subject to the Lien provided in Section 7.07, 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. A successor Trustee shall mail notice of its succession
to each Holder.
(d) If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuer or the Holders of at least 10 per cent. in principal amount of
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the outstanding Bonds may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 7.10, any
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) Notwithstanding replacement of the Trustee pursuant to
this Section 7.08, the Issuer's obligations under Section 7.07 shall continue
for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or national banking association, the resulting, surviving or
transferee corporation or national banking association without any further act
shall, if such resulting, surviving or transferee corporation or national
banking association is otherwise eligible hereunder, be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall
have a combined capital and surplus of at least U.S.$50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01. Termination of the Issuer's Obligations.
The Issuer may terminate its obligations under the Bonds and
this Indenture, except those obligations referred to in the penultimate
paragraph of this Section 8.01 and rights to registration of transfer or
exchange of the Bonds, if all Bonds previously authenticated and delivered
(other than destroyed, lost or stolen Bonds which have been replaced or paid or
Bonds for whose payment money has theretofore been deposited with the Trustee
or any Paying Agent in trust or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer, as provided in Section 8.04) have been
delivered to the Trustee for cancellation and the Issuer has paid all other
sums payable by it hereunder, or if:
(1) either (i) pursuant to Article Three, the Issuer shall
have given notice to the Trustee and mailed a notice of redemption to
each Holder of the redemption of all of the Bonds under arrangements
satisfactory to the Trustee for the giving of such notice or (ii) all
Bonds have otherwise become due and payable hereunder;
(2) all Bonds not theretofore delivered to the Trustee for
cancellation (except lost, stolen or destroyed Bonds which have been
replaced or paid) have been called for redemption pursuant to the
terms of the Bonds or have otherwise become due and payable and the
Issuer has irrevocably deposited or caused to be deposited with the
Trustee funds in an amount sufficient to pay and discharge the entire
Indebtedness on the Bonds not theretofore delivered to the Trustee for
cancellation, for principal of,
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premium, if any, and interest on the Bonds to the date of deposit
together with irrevocable instructions from the Issuer directing the
Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be;
(3) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee or a trustee reasonably satisfactory to
the Trustee, under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Trustee, as trust funds in trust
solely for the benefit of the Holders for that purpose, money in such
amount as is sufficient without consideration of reinvestment of such
interest, to pay principal of, premium, if any, and interest on the
outstanding Bonds to Maturity or redemption, as certified in a
certificate of a nationally recognized firm of independent public
accountants; provided that the Trustee shall have been irrevocably
instructed to apply such money to the payment of said principal,
premium, if any, and interest with respect to the Bonds and, provided,
further, that from and after the time of deposit, the money deposited
shall not be subject to the rights of holders of Senior Indebtedness
pursuant to the provisions of Article Ten;
(4) no Default or Event of Default with respect to this
Indenture or the Bonds shall have occurred and be continuing on the
date of such deposit or shall occur as a result of such deposit and
such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Issuer
is a party or by which it is bound;
(5) the Issuer shall have paid all other sums payable by it
hereunder; and
(6) the Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent providing for the termination of the Issuer's
obligation under the Bonds and this Indenture have been complied with.
Notwithstanding the foregoing paragraph, the Issuer's
obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09 4.01, 4.02, 7.07, 8.03,
8.04, and 8.05 shall survive until the Bonds are no longer outstanding pursuant
to Section 3.08. After the Bonds are no longer outstanding, the Issuer's
obligations in Sections 7.07, 8.03, 8.04 and 8.05 shall survive.
After such delivery or irrevocable deposit the Trustee upon
request shall acknowledge in writing the discharge of the Issuer's obligations
under the Bonds and this Indenture except for those surviving obligations
specified above.
Section 8.02. Covenant Defeasance.
(a) The Issuer may, at its option by Board Resolution of the
Board of Directors of the Issuer, at any time, with respect to the Bonds, elect
to have paragraph (b) below be applied to the outstanding Bonds upon compliance
with the conditions set forth in paragraphs (c) and (d).
(b) Upon the Issuer's exercise under paragraph (a) of the
option applicable to this paragraph (b), the Issuer shall be released and
discharged from its obligations under any covenant contained in Article Ten and
in Sections 4.08 through 4.18 with respect to the outstanding Bonds on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Bonds shall thereafter be deemed to be not
"outstanding" for the purpose of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder and Holders of the Bonds and any amounts deposited under paragraph
(c) below shall cease to be subject to any obligations to, or the rights of,
any holder of Senior Indebtedness under Article Ten or otherwise. For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Bonds, the Issuer may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant
listed above, whether directly or indirectly, by reason of
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any reference elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.01(c), but, except as specified above, the remainder
of this Indenture and such Bonds shall be unaffected thereby.
(c) The following shall constitute a "Covenant Defeasance"
pursuant to paragraph (b) above with respect to the Bonds:
(i) the 123rd day after the Issuer has irrevocably deposited
with the Trustee, in trust, for the benefit of the Holder, cash in
U.S. dollars, non-callable U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public
accountants selected by the Issuer, to pay the principal of and
premium, if any, on the outstanding Bonds at their Maturity or on the
applicable optional redemption date, as the case may be, of such
principal or installment of principal of, or premium, if any, on the
outstanding Bonds;
(ii) the Issuer must have delivered to the Trustee an Opinion
of Counsel in the United States reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Bonds 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;
(iii) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit or insofar as Events of
Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 91st day after the date of deposit;
(iv) such Covenant Defeasance will not result in a breach or
violation of, or constitute a default under any material agreement or
instrument (other than this Indenture) to which the Issuer or any of
its Subsidiaries or Significant Joint Ventures is a party or by which
the Issuer of any of its Subsidiaries or Significant Joint Ventures is
bound;
(v) the Issuer must have delivered to the Trustee an Opinion
of Counsel to the effect that after the 123rd day (or such other
applicable date) following the deposit of the instruments referred to
in (i), the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and the creation of the
defeasance trust does not violate the Investment Company Act of 1940,
as amended;
(vi) the Issuer must have delivered to the Trustee an
Officers' Certificate of the Issuer stating that the deposit was not
made by the Issuer with the intent of preferring the Holders over the
other creditors of the Issuer with the intent of defeating, hindering,
delaying or defrauding creditors of the Issuer or others; and
(vii) the Issuer must have delivered to the Trustee an
Officers' Certificate of the Issuer and an Opinion of Counsel in the
United States acceptable to the Trustee, each stating that all
conditions precedent provided for relating to the Covenant Defeasance
have been complied with.
(d) All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this paragraph (d), the "Trustee") pursuant to
paragraph (c) above in respect of the outstanding Bonds shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Bonds and
this Indenture, to the payment, either directly or through any Paying Agent as
the Trustee may determine, to the Holders of such Bonds of all sums due and to
become due thereon in respect of principal, premium and interest, but such
money need not be segregated from other funds except to the extent required by
law. The Issuer shall pay and indemnify the Trustee against any tax, fee or
other
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charge imposed on or assessed against the U.S. Government Obligations deposited
pursuant to paragraph (c) above or the principal, premium, if any, and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the outstanding Bonds.
(e) Anything in this Section 8.02 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Issuer from time to
time upon the request, in writing, by the Issuer any money or U.S. Government
Obligations held by it as provided in paragraph (c) above which, in the opinion
of a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent Covenant Defeasance.
Section 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Sections 8.01 and 8.02, and shall
apply the deposited money and the money from U.S. Government Obligations in
accordance with this Indenture to the payment of principal of, premium, if any,
and interest on the Bonds.
Section 8.04. Repayment to Issuer.
Subject to Sections 7.07, 8.01 and 8.02, the Trustee shall
promptly pay to the Issuer, upon receipt by the Trustee of an Officers'
Certificate, any excess money, determined in accordance with Section 8.02, held
by it at any time. The Trustee and any Paying Agent shall pay to the Issuer,
upon receipt by the Trustee or such Paying Agent, as the case may be, of an
Officers' Certificate, any money held by it for the payment of principal,
premium, if any, or interest that remains unclaimed for two years after payment
to the Holders is required; provided, however, that the Trustee and any Paying
Agent before being required to make any payment may, but need not, at the
expense of the Issuer cause to be published once in a newspaper of general
circulation in The City of New York and in the Luxemburger Wort for so long as
the Bonds are listed on the Luxembourg Stock Exchange or mail to each Holder
entitled to such money notice that such money remains unclaimed and that after
a date specified therein, which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining will
be repaid to the Issuer. After payment to the Issuer, Holders entitled to money
must look solely to the Issuer for payment as general creditors unless an
applicable abandoned property law designates another person, and all liability
of the Trustee or Paying Agent with respect to such money shall thereupon
cease.
Section 8.05. Reinstatement.
If the Trustee or any Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with this Indenture 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, then and only then the Issuer's obligations under
this Indenture and the Bonds shall be revived and reinstated as though no
deposit had been made pursuant to this Indenture until such time as the Trustee
is permitted to apply all such money or U.S. Government Obligations in
accordance with this Indenture; provided, however, that if the Issuer has made
any payment of principal of, premium, if any, or interest on any Bonds because
of the reinstatement of its obligations, the Issuer shall be subrogated to the
rights of the Holders of such Bonds to receive such payment from the money or
U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders.
Subject to Section 6.04, the Issuer, when authorized by a
Board Resolution and the Trustee may amend, waive or supplement this Indenture
or the Bonds without the consent of the Holders of any Bonds then outstanding
for the purpose of (i) curing ambiguities, defects or inconsistencies, (ii)
qualifying, or maintaining the qualification of, this Indenture under the Trust
Indenture Act of 1939, (iii) evidencing the succession of another Person to the
Issuer or any other obligor on the Bonds, and the assumption by any such
successor of the covenants of the Issuer or such obligor in the Indenture and
in the Bonds in accordance with Section 4.16; (iv) adding to the covenants of
the Issuer or any other obligor upon the Bonds for the benefit of the holders
of the Bonds or surrendering any right or power conferred upon the Issuer or
any other obligor upon the Bonds, as applicable, or in the Indenture or in the
Bonds; (v) evidencing the replacement of the Trustee by a trustee that is
appointed to so act pursuant to the terms of this Indenture; and (vi)
evidencing or making any other change that does not adversely affect the rights
of any holder of Bonds; provided, however, that no change may be made pursuant
to this Section 9.01 that adversely affects the rights of any Holder and the
Issuer shall deliver to the Trustee an Opinion of Counsel to such effect.
Section 9.02. With Consent of Holders.
(a) With the written consent of the Holders of a majority in
principal amount of the Bonds the Issuer, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating or waiving any of the provisions of this Indenture or
of modifying in any manner the rights of Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
written consent of each Holder affected:
(i) reduce the principal amount of, extend the fixed maturity
of or alter the redemption provisions of, the Bonds,
(ii) change the currency in which any Bonds or any premium or
the interest thereon is payable or make the principal of, premium, if
any, or interest on any Bond payable in money other than that stated
in the Bond,
(iii) reduce the percentage in principal amount of outstanding
Bonds that must consent to an amendment, supplement or waiver or
consent to take any action under this Indenture or the Bonds,
(iv) impair the right to institute suit for the enforcement of
any payment on or with respect to the Bonds,
(v) waive a default in payment with respect to the Bonds,
(vi) amend, change or modify the obligations of the Issuer to
make and consummate a Change of Control Offer in the event of a Change
of Control or make and consummate the offer with respect to any Asset
Sale or modify any of the provisions or definitions with respect
thereto,
(vii) reduce or change the rate or time for payment of
interest on the Bonds,
(viii) modify or change any provisions of this Indenture
affecting the subordination or ranking of the Bonds in a manner
adverse to the Holders of the Bonds, or
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(ix) take any other action otherwise prohibited by this
Indenture to be taken without the consent of each Holder affected
thereby.
(b) It shall not be necessary for the consent of the Holders
under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
(c) After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Issuer shall mail to the Holder of each
Bond affected thereby, with a copy to the Trustee, a notice briefly describing
the amendment, supplement or waiver. Any failure of the Issuer to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any amendment, supplement or waiver.
Section 9.03. Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture under this Article Nine, this Indenture
shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and every Holder of Bonds
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
Section 9.04. Revocation and Effect of Consents.
(a) Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder is a continuing consent by such Holder
and every subsequent Holder of that Bond or portion of that Bond that evidences
the same debt as the consenting Holder's Bond (and such consenting Holder shall
procure that such consent is a continuing consent by such subsequent Holder),
even if notation of the consent is not made on any Bond. However, any such
Holder or subsequent Holder may revoke the consent as to his Bond or portion of
a Bond prior to such amendment, supplement or waiver becoming effective. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective.
(b) The Issuer may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to consent to
any amendment, supplement or waiver. If a record date is fixed, then
notwithstanding the second and third sentences of the immediately preceding
paragraph, those persons who were Holders at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders after such record date. Such
consent shall be effective only for actions taken within 90 days after such
record date.
(c) After an amendment, supplement or waiver becomes
effective, it shall bind every Holder; unless it makes a change described in
any of clauses (i) through (ix) of Section 9.02(a); if it makes such a change,
the amendment, supplement or waiver shall bind every subsequent Holder of a
Bond or portion of a Bond that evidences the same debt as the consenting
Holder's Bond (and such consenting Holder shall procure that such subsequent
Holder is so bound).
Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Bond, the Trustee shall (in accordance with the specific direction of the
Issuer) request the Holder of the Bond to deliver it to the Trustee. The
Trustee shall (in accordance with the specific direction of the Issuer) place
an appropriate notation on the Bond about the changed terms and return it to
the Holder. Alternatively, if the Issuer or the Trustee so determines, the
Issuer in exchange for the Bond shall issue and the Trustee shall authenticate
a new Bond that reflects the changed terms. Failure to make the appropriate
notation or issue a new Bond shall not affect the validity and effect of such
amendment, supplement or waiver.
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Section 9.06. Trustee May Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article Nine if the amendment, supplement or waiver
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 or
refusing to sign such amendment, supplement or waiver, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver is authorized or permitted by this Indenture,
that it is not inconsistent herewith and that it will be valid and binding upon
the Issuer in accordance with its terms.
ARTICLE TEN
SUBORDINATION OF BONDS
Section 10.01. Bonds Subordinate to Senior Indebtedness.
The Issuer covenants and agrees, and each Holder of a Bond, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article Ten, the Indebtedness
represented by the Bonds is hereby expressly made subordinate and subject in
right of payment as provided in this Article to the prior payment in full in
cash or Cash Equivalents or, as acceptable to the holders of Senior
Indebtedness, in any other manner, of all amounts payable under all existing
and future Senior Indebtedness.
Section 10.02. Payment Over of Proceeds upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relating to the Issuer or to its
assets, or (b) any liquidation, dissolution or other winding-up of the Issuer,
whether voluntary or involuntary or (c) any assignment for the benefit of
creditors or any other marshalling of assets or liabilities of the Issuer,
then:
(i) the holders of Senior Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents or, as acceptable
to the holders of Senior Indebtedness, in any other manner, of all
Senior Indebtedness (including, in the case of Designated Senior
Indebtedness, any interest accruing subsequent to the filing of a
petition for bankruptcy at the rate provided for in the documentation
governing such Designated Senior Indebtedness, to the extent that such
interest is an allowed claim under applicable law), or provision shall
be made for such payment, before the Holders of the Bonds are entitled
to receive any payment or distribution of any kind or character
(excluding securities of the Issuer or any other person that are
equity securities or are subordinated in right of payment to all
Senior Indebtedness that may at the time be outstanding, to
substantially the same extent as, or to a greater extent than, the
Bonds as provided in this Article; such securities are hereinafter
collectively referred to as "Permitted Junior Securities") on account
of principal of (including upon redemption), premium, if any, or
interest on the Bonds or Additional Amounts; and
(ii) any payment or distribution of assets of the Issuer of
any kind or character, whether in cash, property or securities
(excluding Permitted Junior Securities), by set-off or otherwise, to
which the Holders or the Trustee would be entitled but for the
provisions of this Article shall be paid by the liquidating trustee or
agent or other person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of Senior Indebtedness or their representative
or representatives or to the trustee or trustees under any indenture
under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the
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aggregate amounts remaining unpaid on account of the Senior
Indebtedness held or represented by each, to the extent necessary to
make payment in full in cash or Cash Equivalents or, as acceptable to
the holders of Senior Indebtedness, in any other manner, of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness;
and
(iii) in the event that, notwithstanding the foregoing
provisions of this Section 10.02, the Trustee or the Holder of any
Bond shall have received any payment or distribution of assets of the
Issuer of any kind or character, whether in cash, property or
securities, in respect of principal of, premium, if any, or interest
on the Bonds before all Senior Indebtedness is paid in full in cash or
Cash Equivalents or, as acceptable to the holders of Senior
Indebtedness, in any other manner, or payment thereof provided for,
then and in such event such payment or distribution (excluding
Permitted Junior Securities) shall be paid over or delivered forthwith
to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or
distribution of assets of the Issuer for application to the payment of
all Senior Indebtedness remaining unpaid, to the extent necessary to
pay all Senior Indebtedness in full in cash or Cash Equivalents or, as
acceptable to the holders of Senior Indebtedness, in any other manner,
after giving effect to any concurrent payment or distribution to or
for the holders of Senior Indebtedness.
The consolidation of the Issuer with, or the merger of the
Issuer with or into, another person or the liquidation or dissolution of the
Issuer following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another person upon the terms and conditions
set forth in Section 4.16 hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Issuer for the purposes of this
Article Ten if the person formed by such consolidation or the surviving entity
of such merger or the person which acquires by conveyance, transfer or lease
such properties and assets substantially as an entirety, as the case may be,
shall, as a part of such consolidation, merger, conveyance, transfer or lease,
comply with the conditions set forth in such Section 4.16.
Section 10.03. Suspension of Payment When Senior Indebtedness
in Default.
(a) Unless Section 10.02 shall be applicable, upon the
occurrence of a Payment Default, and after receipt by the Trustee and the
Issuer from a Senior Representative of written notice of such default no
payment or distribution of any assets of the Issuer of any kind or character
(excluding Permitted Junior Securities) shall be made by or on behalf of the
Issuer on account of principal of, premium, if any, or interest on the Bonds or
on account of the purchase, redemption or other acquisition of any Bonds (other
than payments previously made pursuant to Article Eight) unless and until such
Payment Default shall have been cured or waived or shall have ceased to exist
or such Designated Senior Indebtedness as to which such Payment Default relates
shall have been discharged or paid in full in cash or Cash Equivalents, after
which, subject to Section 10.02 (if applicable), the Issuer shall resume making
any and all required payments in respect of the Bonds, including any missed
payments.
(b) Unless Section 10.02 shall be applicable, upon the
occurrence of a Non-payment Default and upon the receipt by the Trustee from a
Senior Representative of written notice of such occurrence stating that such
notice is a Payment Blockage Notice pursuant to Section 10.03(b) of this
Indenture, no payment or distribution of any assets of the Issuer of any kind
or character (excluding Permitted Junior Securities and other than payments
previously made pursuant to Article Eight) shall be made by or on behalf of the
Issuer on account of principal of, premium, if any, or interest on the Bonds or
on account of the purchase, redemption or other acquisition of Bonds for a
period ("Payment Blockage Period") commencing on the receipt by the Trustee of
such Payment Blockage Notice above, as the case may be, until the earliest to
occur of the following events: (i) 179 days shall have elapsed since receipt of
such Payment Blockage Notice by the Trustee (provided such Designated Senior
Indebtedness shall not theretofore have been accelerated), (ii) such
Non-payment Default shall have been cured or waived or shall have ceased to
exist, (iii) such Designated Senior Indebtedness shall have been discharged or
paid in full in cash or Cash Equivalents or (iv) such Payment Blockage Period
shall have been terminated by written notice to the Issuer or the Trustee from
the Senior Representative initiating such Payment Blockage Period, after which,
in each case, the Issuer shall resume making any and all required payments in
respect of the Bonds,
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including any missed payments. Notwithstanding any other provision of this
Indenture, only one Payment Blockage Period may be commenced within any
consecutive 365-day period. No Non-payment Default with respect to Designated
Senior Indebtedness which existed or was continuing on the date of the
commencement of any Payment Blockage Period shall be, or be made, the basis for
the commencement of a second Payment Blockage Period, whether or not within a
period of 365 consecutive days, unless such default shall have been cured for a
period of not less than 90 consecutive days. In no event shall a Payment
Blockage Period extend beyond 179 days from the receipt by the Trustee of the
Payment Blockage Notice and there must be a 186 consecutive day period in any
365 consecutive day period during which no Payment Blockage Period is in
effect. Notwithstanding the foregoing, no further notice may be given in
respect of any Non-payment Default unless and until all scheduled payments of
principal, premium, if any, and interest not paid on the Bonds during any such
Payment Blockage Period as a result of any Payment Blockage Notice shall have
been paid in full in cash or Cash Equivalents.
(c) In the event that, notwithstanding the foregoing, the
Trustee or the Holder of any Bond shall have received any payment prohibited by
the foregoing provisions of this Section 10.03, then and in such event such
payment shall be paid over and delivered forthwith to the Senior
Representatives or as a court of competent jurisdiction shall direct for
application to the payment of any due and unpaid Senior Indebtedness, to the
extent necessary to pay all such due and unpaid Senior Indebtedness in cash or
Cash Equivalents, after giving effect to any concurrent payment to or for the
holders of Senior Indebtedness.
Section 10.04. Trustee's Relation to Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Ten, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and
the Trustee shall not be liable to any holder of Senior Indebtedness if it
shall mistakenly pay over or deliver to Holders, the Issuer or any other person
moneys or assets to which any holder of Senior Indebtedness shall be entitled
by virtue of this Article Ten or otherwise.
Section 10.05. Subrogation to Rights of Holders of Senior
Indebtedness.
(a) Upon the payment in full of all Senior Indebtedness, the
Holders of the Bonds shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any, and interest on the Bonds shall be paid in full in cash or
Cash Equivalents. For purposes of such subrogation, no payments or
distributions to the holders of Senior Indebtedness of any cash, property or
securities to which the Holders of the Bonds or the Trustee would be entitled
except for the provisions of this Article, and no payments over pursuant to the
provisions of this Article Ten to the holders of Senior Indebtedness by Holders
of the Bonds or the Trustee shall, as among the Issuer, its creditors other
than holders of Senior Indebtedness, and the Holders of the Bonds, be deemed to
be a payment or distribution by the Issuer to or on account of the Senior
Indebtedness.
(b) If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article Ten shall
have been applied, pursuant to the provisions of this Article Ten, to the
payment of all amounts payable under the Senior Indebtedness of the Issuer,
then and in such case the Holders shall be entitled to receive from the holders
of such Senior Indebtedness at the time outstanding any payments or
distributions received by such holders of such Senior Indebtedness in excess of
the amount sufficient to pay all amounts payable under or in respect of such
Senior Indebtedness in full.
Section 10.06. Provisions Solely To Define Relative Rights.
(a) The provisions of this Article Ten are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Bonds on the one hand and the holders of Senior Indebtedness on the other
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hand. Nothing contained in this Article Ten or elsewhere in this Indenture or
in the Bonds is intended to or shall (i) impair, as among the Issuer, its
creditors other than holders of Senior Indebtedness and the Holders of the
Bonds, the obligation of the Issuer, which is absolute and unconditional, to
pay to the Holders of the Bonds the principal of, premium, if any, and interest
on the Bonds as and when the same shall become due and payable in accordance
with their terms; or (ii) affect the relative rights against the Issuer of the
Holders of the Bonds and creditors of the Issuer other than the holders of
Senior Indebtedness; or (iii) prevent the Trustee or the Holder of any Bond
from exercising all remedies otherwise permitted by applicable law upon a
Default or an Event of Default under this Indenture, subject to the rights, if
any, under this Article Ten of the holders of Senior Indebtedness (1) in any
case, proceeding, dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshalling of assets and liabilities of the
Issuer referred to in Section 10.02, to receive, pursuant to and in accordance
with such Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder, or (2) under the conditions
specified in Section 10.03, to prevent any payment prohibited by such Section
or enforce their rights pursuant to Section 10.03(c).
(b) The failure to make a payment on account of principal of,
premium, if any, or interest on the Bonds by reason of any provision of this
Article Ten shall not be construed as preventing the occurrence of a Default or
an Event of Default hereunder. The Issuer shall promptly notify holders of
Senior Indebtedness if payment on the Bonds is accelerated because of an Event
of Default.
Section 10.07. Trustee To Effectuate Subordination.
Each Holder of a Bond by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Ten and appoints the Trustee his attorney-in-fact for any and all
such purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Issuer whether in bankruptcy, insolvency,
receivership proceedings, or otherwise, the timely filing of a claim for the
unpaid balance of the Indebtedness of the Issuer owing to such Holder in the
form required in such proceedings and the causing of such claim to be approved.
If the Trustee does not file such a claim prior to 30 days before the
expiration of the time to file such a claim, the holders of Senior
Indebtedness, or any Senior Representative, may file such a claim on behalf of
Holders of the Bonds.
Section 10.08. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Issuer or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Issuer with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
(b) Without limiting the generality of Section 10.08(a), the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Bonds, without
incurring responsibility to the Holders of the Bonds and without impairing or
releasing the subordination provided in this Article Ten or the obligations
hereunder of the Holders of the Bonds to the holders of Senior Indebtedness, do
any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any person liable in any manner for the collection
or payment of Senior Indebtedness; and (iv) exercise or refrain from exercising
any rights against the Issuer and any other person; provided, however, that in
no event shall any such actions limit the right of the Holders of the Bonds to
take any action to accelerate the maturity of the Bonds pursuant to Article Six
hereof or to pursue any rights or remedies hereunder or under applicable laws
if the taking of such action does not otherwise violate the terms of this
Indenture.
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Section 10.09. Notice to Trustee.
(a) The Issuer shall give prompt written notice to the Trustee
of any fact known to the Issuer which would prohibit the making of any payment
to or by the Trustee in respect of the Bonds. Notwithstanding the provisions of
this Article Ten or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee in respect of the
Bonds, unless and until the Trustee shall have received written notice thereof
from the Issuer or a holder of Senior Indebtedness or from any trustee,
fiduciary or agent therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of this Section 10.09, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 10.09 at least three Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose under this Indenture
(including, without limitation, the payment of the principal of, premium, if
any, or interest on any Bond), then, anything herein contained to the contrary
notwithstanding but without limiting the rights and remedies of the holders of
Senior Indebtedness or any trustee, fiduciary or agent thereof, the Trustee
shall have full power and authority to receive such money and to apply the same
to the purpose for which such money was received and shall not be affected by
any notice to the contrary which may be received by it within three Business
Days prior to such date; nor shall the Trustee be charged with knowledge of the
curing of any such default or the elimination of the act or condition
preventing any such payment unless and until the Trustee shall have received an
Officers' Certificate to such effect.
(b) Subject to the provisions of Section 7.01, the Trustee
shall be entitled to rely on the delivery to it of a written notice to the
Trustee and the Issuer by a person representing himself to be a holder of
Senior Indebtedness (or a trustee, fiduciary or agent therefor) to establish
that such notice has been given by a holder of Senior Indebtedness (or a
trustee, fiduciary or agent therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of
any person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article Ten, the Trustee may request such person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such person, the extent to which such
person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such person under this Article Ten, and if
such evidence is not furnished, the Trustee may defer any payment to such
person pending judicial determination as to the right of such person to receive
such payment.
Section 10.10. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Issuer
referred to in this Article Ten, the Trustee, subject to the provisions of
Section 7.01, and the Holders shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other Indebtedness of the Issuer, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article.
Section 10.11. Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article Ten with respect to any Senior
Indebtedness which may at any time be held by it, to the same extent as any
other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder. Nothing in this
Article Ten shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.07.
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Section 10.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Issuer and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article Ten in addition to or in place of the
Trustee.
Section 10.13. No Suspension of Remedies.
Nothing contained in this Article Ten shall limit the right of
the Trustee or the Holders of Bonds to take any action to accelerate the
maturity of the Bonds pursuant to Article Six or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any,
under this Article Ten of the holders, from time to time, of Senior
Indebtedness.
ARTICLE ELEVEN
CONVERSION OF BONDS
Section 11.01 Conversion Right.
(a) Subject to and upon compliance with the provisions of this
Indenture, the Holder of any Bond shall have the right (the "Conversion
Right"), at its option, at any time on or after the occurrence of a Complying
Public Equity Offering and under the other circumstances specified in Section
11.02 and prior to the close of business on June 30, 2000, to convert the
principal amount of any such Bond, or any portion of such principal amount
(subject to Section 2.01 concerning minimum denominations of the Bonds), into
that number of fully paid and non-assessable GTS Shares (as such shares shall
then be constituted) obtained by dividing the principal amount of the Bond or
portion thereof surrendered for conversion by the Conversion Price in effect at
such time, by surrender of the Bond so to be converted in whole or in part in
the manner provided in Section 11.02. A Holder of Bonds is not entitled to any
rights of a holder of GTS Shares until such holder has converted its Bonds to
GTS Shares, and only to the extent such Bonds are deemed to have been converted
to GTS Shares under this Article Eleven.
Section 11.02 Exercise of Conversion Right; Issuance of GTS
Shares on Conversion.
(a) Holders have a Conversion Right which is exercisable in
whole or in part at any time and from time to time (i) in the case of
subparagraph (b) of this Section 11.02, subsequent to the Conversion Date but
not later than the Maturity of the Bond (as such Maturity may be extended
pursuant to the other provisions of this Section), (ii) if a notice of
redemption of the Bonds pursuant to this Indenture has been given, after the
date of such notice and prior to the date of redemption specified in such
notice, (iii) if the Bonds are subject to acceleration as a result of an Event
of Default, following the date notice thereof is given to Holders until the
Bonds are paid in full upon such acceleration; or (iv) if any Non-Complying
Equity Offering occurs, within the 60 day period prior to the Maturity of the
Bonds (provided, however, that such Conversion Right may be exercised prior to
the 60th day prior to Maturity of the Bonds if a Change of Control shall have
occurred, upon delivery of a Conversion Notice by the Bondholder pursuant to
this subparagraph at any time on or after the time the Change of Control Offer
is made pursuant to Section 4.11, until the Maturity of the Bonds). In order to
exercise its Conversion Right, a Holder shall complete a notice in the then
current form obtainable from the Trustee or a specified office of a Conversion
Agent (a "Conversion Notice") (which may be accompanied by a share transfer
form, or other instrument which may be required, signed by the Holder or may
include an authorization signed by the Holder, authorizing the Holder's nominee
to become the registered transferee and to execute any requisite transfer form
or other instrument which may be required, on behalf of the Holder) and deliver
such Conversion Notice and where appropriate, an executed
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share transfer form, or other instrument which may be required, to the Trustee
or a specified office of any Conversion Agent (together with the relevant Bond
or Bonds if in definitive form) and any payment required by Section 11.06. Once
given, a Conversion Notice shall be irrevocable and may not be withdrawn
without the consent in writing of the Issuer.
(b) If a Complying Public Equity Offering occurs prior to the
Maturity of the Bonds, then the Issuer shall, no earlier than twenty Business
Days and not later than fifteen Business Days prior to the anticipated
completion of such offering, cause notice to be given to the Trustee, the
Holders and the Luxembourg Stock Exchange to the effect that a Complying Public
Equity Offering is expected to occur on a specified date (the Conversion Date)
and that on and after the Conversion Date the Holders may from time to time
until Maturity of the Bonds by delivery of a notice pursuant to paragraph (a)
above, elect to exercise their Conversion Right, in whole or in part. Following
the completion of such Complying Public Equity Offering, the Issuer shall
promptly cause notice to be given to the Trustee, the Holders and the
Luxembourg Stock Exchange stating that the Complying Public Equity Offering has
been completed and confirming the Conversion Date. The Issuer shall also
provide in the Notice of Offering all information concerning the Complying
Public Equity Offering and all prior offerings since the Issue Date that may be
relevant to a Conversion Price determination or requested by the Trustee in
relation thereto.
(c) If any Non-Complying Equity Offering occurs prior to the
Maturity of the Bonds on June 30, 2000, then the Issuer shall no later than ten
Business Days after the completion of such offering cause a Notice of Offering
to be given to the Trustee, the Holders and the Luxembourg Stock Exchange of
such fact and that at any time and from time to time, in whole or in part (but
not earlier than the 60th day prior to the Maturity of the Bonds, subject to
the provisions of paragraph (i)(d) above) the Holders may by delivery of notice
pursuant to subparagraph (a) of this Section elect to exercise their Conversion
Right. The Issuer shall also provide in the Notice of Offering all information
concerning all offerings since the Issue Date that may be relevant to a
Conversion Price determination or requested by the Trustee in relation thereto.
(d) If a Complying Public Equity Offering or a Non-Complying
Equity Offering occurs within the 60 day period prior to and ending at the
original Maturity of the Bonds, then for purposes of exercise of the Conversion
Right by Holders, the Maturity for all Bonds shall be postponed to the 60th day
following the date of the Notice of Offering and the Bonds will continue to
accrue interest to the date the Bonds are converted, provided that, in no event
will interest accrue for a period longer than 60 days from June 30, 2000.
(e) The Conversion Right of any Holder in respect of a Bond
becoming redeemable pursuant to this Indenture and in respect of which the
conditions required for conversion have not been satisfied by the relevant
Holder by the end of the second Business Day prior to any date for redemption
thereof shall, except as provided below, thereupon terminate. Notwithstanding
the foregoing, if there is a default in making full payment when due of the
redemption monies in respect of any Bond, the Conversion Right in respect
thereof shall extend up to and including the date on which payment has been
received by a Paying Agent or the Trustee. The Conversion Right of a Holder in
respect of a Bond becoming due and payable as a result of the acceleration of
the Maturity thereof following an Event of Default shall terminate on the date
that payment with respect to such Bonds has been received by a Paying Agent or
the Trustee.
(e) In the event where Holders have elected to convert their
Bonds pursuant to this Article Eleven by giving notice thereof to the Issuer in
accordance with the terms of this Indenture, then any subsequent redemption of
the Bonds shall not affect the right of the Holders of such Bonds to receive
GTS Shares and such Bonds shall not be so redeemed. No earlier than 60 days and
no later than 30 days prior to the Maturity of the Bonds, the Issuer shall
deliver a notice to the Trustee, the Holders and the Luxembourg Stock Exchange
of the status of the Conversion Rights, if any, of the Holders.
(f) In order to exercise the Conversion Right with respect to
any Bond in certificated form, the Holder of any such Bond to be converted in
whole or in part shall surrender such Bond, duly endorsed, at an office or
agency maintained by the Issuer and shall give written notice of conversion in
the form provided on the
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Bonds (or such other notice which is acceptable to the Issuer) to the office or
agency that the Holder elects to convert such Bond or such portion thereof
specified in said notice. Such notice shall also state the name or names (with
address) in which the certificate or certificates for GTS Shares which shall be
issuable on such conversion shall be issued, and shall be accompanied by
transfer taxes, if required pursuant to Section 11.07. Each such Bond
surrendered for conversion shall, unless the GTS Shares issuable on conversion
are to be issued in the same name as the registration of such Bond, be duly
endorsed by, or be accompanied by instruments of transfer in form satisfactory
to the Issuer duly executed by, the Holder or its duly authorized attorney.
(g) In order to exercise the Conversion Right with respect to
any interest in a Bond in global form, the beneficial holder must complete the
appropriate instruction form for conversion pursuant to the Depository's
book-entry conversion program, deliver by book-entry delivery an interest in
such Bond in global form, furnish appropriate endorsements and transfer
documents if required by the Issuer or the Trustee or Conversion Agent, and pay
any transfer taxes, if required pursuant to Section 11.07.
(h) As promptly as practicable after satisfaction of the
requirements for conversion set forth above, subject to compliance with any
restrictions on transfer if GTS Shares issuable on conversion are to be issued
in a name other than that of the Holder (as if such transfer were a transfer of
the Bond or Bonds (or portion thereof) so converted), the Issuer shall issue
and shall deliver to such Holder at the office or agency maintained by the
Issuer for such purpose, a certificate or certificates for the number of full
GTS Shares issuable upon the conversion of such Bond or portion thereof in
accordance with the provisions of this Article and a check or cash in respect
of any fractional interest in respect of a share of GTS Common Stock arising
upon such conversion, as provided in Section 11.03. In case any Bond of a
denomination greater than U.S.$10,000 shall be surrendered for partial
conversion, and subject to Section 2.01, the Issuer shall execute and the
Trustee shall authenticate and deliver to the Holder of the Bond so
surrendered, without charge to such Holder, a new Bond or Bonds in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Bond.
(i) Each conversion shall be deemed to have been effected as
to any such Bond (or portion thereof) within three Business Days of the date on
which the Bond requirements set forth above in this Section 11.02 have been
satisfied as to such Bond (or portion thereof), and the person in whose name
any certificate or certificates for GTS Shares shall be issuable upon such
conversion shall become the holder of record of the shares represented thereby
on such conversion date; provided, however, that any such surrender on any date
when the stock transfer books of the Issuer shall be closed shall constitute
the person in whose name the certificates are to be issued as the record holder
thereof for all purposes on the next succeeding day on which such stock
transfer books are open, but such conversion shall be at the Conversion Price
in effect on the date upon which such Bond shall be surrendered.
(j) Interest on the principal amount of any Bond or portion
thereof surrendered for conversion shall cease to accrue from and after the
effective date of such conversion.
(k) Upon the conversion of an interest in a Bond in global
form, the Trustee, or the Custodian at the direction of the Trustee, shall make
a notation on such Bond in global form as to the reduction in the principal
amount represented thereby.
Section 11.03 Cash Payments in Lieu of Fractional Shares.
No fractional shares of GTS Common Stock or scrip representing
fractional shares shall be issued upon conversion of Bonds. If more than one
Bond shall be surrendered for conversion at one time by the same Holder, the
number of full shares which shall be issuable upon conversion shall be computed
on the basis of the aggregate principal amount of the Bonds (or specified
portions thereof to the extent permitted hereby) so surrendered for conversion.
If any fractional share of stock otherwise would be issuable upon the
conversion of any Bond or Bonds, the Issuer shall make an adjustment therefor
in cash at the current market value thereof to the
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Holder of such Bonds. Upon exercise of its Conversion Right a Holder shall,
when delivering the relevant Conversion Notice or no later than 21 days
following the relevant Conversion Date, give directions to a Conversion Agent
for payment of any cash sum (rounded up to the nearest $0.01) which such
Holder is entitled to receive pursuant to this Section 11.03 and which shall
be paid by way of U.S. dollar check drawn on a bank in the City of New York or,
by wire transfer to a U.S. dollar account maintained by the Holder with a bank
in the City of New York.
Section 11.04 Conversion Price.
(a) The applicable Conversion Price of the Bonds
shall be determined as follows:
(i) where a Complying Public Equity Offering has not been
preceded, since the Issue Date, by a Non-Complying Equity Offering, the
Conversion Price shall be equal to the per share price to the public in
the Complying Public Equity Offering multiplied by (A) 100 per cent. if
the Complying Public Equity Offering occurs on or before June 30, 1998,
(B) 93 per cent. if the Complying Public Equity Offering occurs on or
before June 30, 1999 and after June 30, 1998, or (C) 85 per cent. if the
Complying Public Equity Offering occurs after June 30, 1999;
(ii) where a Complying Public Equity Offering has been
preceded by one or more Non-Complying Equity Offerings since the Issue
Date, the Conversion Price shall be equal to the lower of (1) the
dollar-weighted average conversion price for all of such Non-Complying
Equity Offerings and the Complying Public Equity Offering (as calculated
for each such offering by multiplying the gross per share offering price
for the applicable offering by (A) 100 per cent. if the closing date of
such offering occurs on or before June 30, 1998, (B) 93 per cent. if the
closing date of such offering occurs on or before June 30, 1999 and after
June 30, 1998, or (C) 85 per cent. if the closing date of such offering
occurs after June 30, 1999) and (2) the conversion price for the
Complying Public Equity Offering alone (as calculated in clause (i)
above);
(iii) where a Non-Complying Public Equity Offering has an
offering size of at least $50,000,000 and (A) no Complying Public Equity
Offering has occurred since the issuance of the Bonds, and (B) there has
been one or more Non-Complying Equity Offerings, the Conversion Price
shall be equal to lower of (1) the dollar-weighted average conversion
price for all of such Non-Complying Equity Offerings and the
Non-Complying Public Equity Offering (as calculated for each
Non-Complying Equity Offering by multiplying the per share offering price
by (A) 100 per cent. if the closing date of such offering occurs on or
before June 30, 1998, (B) 93 per cent. if the closing date of such
offering occurs on or before June 30, 1999 and after June 30, 1998, or
(C) 85 per cent. if the closing date of such offering occurs after June
30, 1999) and (2) the conversion price for the Non-Complying Public
Equity Offering (as calculated in (1) above); or
(iv) in the case of any other Non-Complying Equity Offering
not provided for in clause (iii) above, where no Complying Public Equity
Offering has occurred since the Issue Date, the applicable Conversion
Price shall be equal to the lowest conversion price calculated for each
Non-Complying Equity Offering that has occurred since the Issue Date,
where each such conversion price will be determined by multiplying the
gross per share offering price for each such offering by (A) 100 per
cent. if the closing date of such offering occurs on or before June 30,
1998, (B) 93 per cent. if the closing date of such offering occurs on or
before June 30, 1999 and after June 30, 1998, or (C) 85 per cent. if the
closing date of such offering occurs after June 30, 1999.
(b) There shall be excluded from the calculation of the
applicable Conversion Price any Private Equity Offerings aggregating no more
than $100 million in gross proceeds if such offering or offerings are
consummated on or prior to December 31, 1997 and any Strategic Equity Offering
that occurs from the Issue Date so long as there shall have occurred a Complying
Public Equity Offering or a Non-Complying Equity Offering.
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(c) Upon receipt of a Conversion Notice from a Holder, the
Issuer shall promptly file with the Trustee and any Conversion Agent other
than the Trustee an Officers' Certificate setting forth the applicable
Conversion Price and setting forth all the information relevant to a
determination of such Conversion Price.
(d) The Issuer will publish the Conversion Price and the
specified procedures regarding the manner in which Holders will receive GTS
Shares upon conversion of the Bonds in the Luxemburger Wort and will notify the
Luxembourg Stock Exchange of the Conversion Price when determined for so long
as the Bonds are listed on the Luxembourg Stock Exchange.
Section 11.05 [Reserved].
Section 11.06 Stamp and Other Duties and Exchange Costs.
Payment of all stamp, transfer and registration duties (if any) and any
brokers' commission and stock exchange transaction charges and any other tax
thereon arising on exercise of Conversion Rights and/or on the transfer or
delivery of GTS Shares by the Issuer (or the Trustee pursuant to this
Indenture) to or to the order of the Trustee or the relevant Holder in
connection therewith, payable in or imposed by the United States, any state or
other political sub-division thereof and any other jurisdiction in which the
register in the respect of any securities is located will be made or procured
by the Issuer. If the Issuer shall fail to pay any such duties or costs, the
relevant Holder shall be entitled to tender and pay the same. The Issuer shall
promptly reimburse each Holder in respect of the payment of such duties or
costs and any penalties paid in respect thereof. A Holder exercising
Conversion Rights must pay to the relevant Conversion Agent any such duties or
costs arising in any other circumstances.
Section 11.07 Reservation of Shares; Shares to Be
Fully Paid; Listing of GTS Shares.
(a) The Issuer shall provide, free from preemptive rights,
out of its authorized but unissued Common Stock held in treasury, sufficient
shares to provide for the conversion of the Bonds from time to time as such
Bonds are presented for conversion.
(b) The Issuer covenants that all shares of GTS Common Stock
issued upon conversion of Bonds will be fully paid and non-assessable and free
from all taxes, liens and charges with respect to the issue thereof.
(c) The Issuer further covenants that promptly after the GTS
Common Stock shall have been listed on the New York Stock Exchange, the
American Stock Exchange, the London Stock Exchange, the Nasdaq National Market
or any other national securities exchange or automated quotation system the
Issuer will, to the extent permitted by the rules of such exchange or automated
quotation system, list and keep listed, so long as the GTS Common Stock shall
be so listed on such exchange or automated quotation system, all GTS Common
Stock issuable upon conversion of the Bonds.
Section 11.08 Responsibility of Trustee. The Trustee and any
other Conversion Agent shall not be accountable with respect to the validity or
value (or the kind or amount) of any shares of GTS Common Stock, or of any
securities or property, which may at any time be issued or delivered upon the
conversion of any Bond; and the Trustee and any other Conversion Agent make no
representations with respect thereto, and are entitled to rely conclusively on
the Issuer therefor. Subject to the other provisions of this Indenture,
neither the Trustee nor any Conversion Agent shall be responsible for any
failure of the Issuer to issue, transfer or deliver any shares of GTS Common
Stock or stock certificates or other securities or property or cash upon the
surrender of any Bond for the purpose of conversion or to comply with any of
the duties, responsibilities or covenants of the Issuer contained in this
Article. Without limiting the generality of the foregoing, neither the Trustee
nor any Conversion Agent shall be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture entered
into pursuant to Section 11.05 relating either to the kind or amount of shares
of stock or securities or property (including cash) receivable by Holders upon
the conversion of their Bonds after any event referred to in such Section 11.05
or to any adjustment to be made with respect thereto, but, subject to the other
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provisions of this Indenture may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, the
Officers' Certificate (which the Issuer shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
Section 11.09 Notice to Holders Prior to Certain
Actions. In case:
(a) of any reclassification of the Common Stock of the Issuer
(other than a subdivision or combination of its outstanding Common Stock, or
a change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the Issuer is
a party and for which approval of any stockholders of the Issuer is required,
or of the sale or transfer of all or substantially all of the assets of the
Issuer; or
(b) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Issuer;
the Issuer shall cause to be filed with the Trustee and to be mailed to each
holder of Bonds at its address appearing on the Register, as promptly as
possible but in any event at least fifteen days prior to the applicable date
hereinafter specified, a notice stating the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective or occur, and the
date as of which it is expected that holders of GTS Common Stock of record
shall be entitled to exchange their GTS Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up.
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ARTICLE TWELVE
MISCELLANEOUS
Section 12.01. Acts of Holders, Record Dates.
(l) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by Holders may be embodied in and evidenced by (i) one or
more instruments of substantially similar tenor signed by such Holders in
person or by agent or proxy duly appointed in writing or (ii) the record of
Holders voting in favor thereof, either in person or by proxies duly appointed
in writing, at any meeting of Holders duly called and held in accordance with
the provisions of Article Five. Such action shall become effective when such
instrument or instruments or record is delivered to the Trustee and, where it
is hereby expressly required, to the Issuer. The Trustee shall promptly
deliver to the Issuer copies of all such instruments and records delivered to
the Trustee. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments or so voting at such meeting.
Proof of execution of any such instrument or of a writing appointing any such
agent or proxy shall be sufficient of any purpose of this Indenture and
(subject to Section 7.01) conclusive in favor of the Trustee and the
Company, if made in the manner provided in the Section. The record of any
meeting of Holder shall be proved in the manner provided in Section 5.06.
(2) The fact and date of the execution by any person
of any such instrument or writing may be proved by the affidavit of a witness
of such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than
his individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The and date of the execution of any such
instrument or writing, or the authority of the person the same, may also be
proved in any other manner which the Trustee deems sufficient.
(3) The ownership of Bonds shall be proved by the
Register.
(4) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Bond shall bind every
future Holder of the same Bond and the Holder of every Bond issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Bond.
(5) Without limiting the foregoing, a Holder
entitled hereunder to give or take any action hereunder with regard to any
particular Bond may do so with regard to all or any part of the principal
amount of such Bond or by one or more duly appointed agent or proxy each of
which may do so pursuant to such appointment with regard to all or any
different part of such principal amount.
(6) The provisions of this Section 12.01 are subject
to the provision of Section 5.05(a).
Section 12.02. Notices.
Any notice or communication shall be sufficiently given if
in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
If to the Issuer to:
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Global TeleSystems Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx 00xx Xxxxx
XxXxxx, XX 00000
Attention: Chief Financial Officer
If to the Trustee to:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
The parties hereto by notice to the other parties may
designate additional or different addresses for subsequent notices or
communications.
Notices to Holders shall be validly given if (i) mailed to
them at their respective addresses in the Register and (ii) published in an
English Language newspaper of general circulation in Europe approved by the
Trustee, currently expected to be the Financial Times, and, so long as the
Bonds are listed on the Luxembourg Stock Exchange, published in a daily
newspaper of general circulation in Luxembourg approved by the Trustee,
currently expected to be the Luxemburger Wort. Any such notice shall be deemed
to have been given on the first date on which both conditions have been met.
Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other
Holders. Except for a notice to the Trustee, which is deemed given only when
received, if a notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.
Section 12.03. Communication by Holders with Other
Holders.
Holders may communicate with other Holders with respect to
their rights under this Indenture or the Bonds.
Section 12.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Issuer to the
Trustee to take any action under this Indenture, such obligor shall furnish to
the Trustee:
(i) an Officers' Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for
in this Indenture relating to the proposed action have been
complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied
with.
Section 12.05. Statements Required in Certificate or
Opinion.
Each certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture shall include:
(i) a statement that the person making such certificate
or opinion has read such covenant or condition;
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(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or
opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of such person, he
has made such examination or investigation as is necessary to
enable him to express an opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an
Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials.
Section 12.06. Rules by Trustee, Transfer Agents,
Conversion Agents, Paying Agents, Registrar.
The Trustee may make reasonable rules for action by or at
a meeting of Holders. The Transfer Agents, Conversion Agents, Paying Agents or
Registrar may make reasonable rules for its functions.
Section 12.07. Governing Law.
The internal laws of the State of New York shall govern
this Indenture and the Bonds. The Trustee, the Issuer and the Holders agree to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Indenture or the Bonds.
Section 12.08. No Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Issuer, any Subsidiary or Significant
Joint Venture. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 12.09. No Recourse Against Others.
A director, officer, employee, stockholder or Affiliate, as
such, of the Issuer shall not have any liability for any obligations of the
Issuer under the Bonds or this Indenture or for any claim based on, in respect
of or by reason of, such obligations or their creation. Each Holder by
accepting a Bond waives and releases all such liability.
Section 12.10. Successors.
All agreements of the Issuer in this Indenture and the
Bonds shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.
Section 12.11. Duplicate Originals.
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all such executed copies
together represent the same agreement.
Section 12.12. Separability.
In case any provision in this Indenture or the Bonds shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby, and a Holder shall have no claim therefor against any party hereto.
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Section 12.13. Table of Contents, Headings, etc.
The Table of Contents and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof
Section 12.14. Benefits of Indenture.
Except as provided in Article Ten, nothing in this
Indenture or in the Bonds, express or implied, shall give to any person, other
than the parties hereto and their successors hereunder, and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
GLOBAL TELESYSTEMS GROUP, INC.
By: [ILLEGIBLE]
--------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Vice President
82
EXHIBIT A-1
FORM OF SECURITY
This instrument was issued with "original issue discount" and the
following information is supplied for purposes of Sections 1273 and 1275 of the
Internal Revenue Code:
Issue Date: July 14, 1997 Original issue discount under Section
1273 of the Internal Revenue Code (for
each $1,000 principal amount): $10
Yield to maturity for period Issue Price for each $1,000 principal
from Issue Date to June 30, amount): $1,000
2000: 9.07% compounded
semiannually.
(The yield to maturity and the amount of original issue discount have been
computed without giving effect to (i) the additional interest that will accrue
in the event the Issuer fails to file a registration statement or cause such a
statement to remain effective as required by the Registration Rights Agreement,
(ii) the increase in the rate of interest in the event the Issuer fails to
consummate a Complying Equity Offering on or before June 30, 1999 and (iii) a
redemption premium equal to 21% of the principal amount of the instrument
payable in the event the Issuer fails to consummate a complying Public Equity
Offering prior to June 30, 2000; each as described on the reverse hereof. In
the event that any of the foregoing contingencies occur, or in the event that a
Complying Public Equity Offering occurs on or before June 30, 1998, the yield
to maturity and the amount of original issue discount will change.)
GLOBAL TELESYSTEMS GROUP, INC.
SENIOR SUBORDINATED CONVERTIBLE BOND DUE 2000
CUSIP NO. ____
ISIN NO. ____
NO. _____ $_______
[APPROPRIATE FORM OF LEGEND SET FORTH IN EXHIBIT A-2 TO BE INSERTED HERE.]
Global TeleSystems Group, Inc., a corporation incorporated under the
laws of the State of Delaware (herein called the "Issuer", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co. or registered assigns, the
principal sum of _________ Dollars on June 30, 2000, at the office or agency of
the Issuer referred to below, and to pay interest thereon on January 15 and
July 15, in each year, commencing on January 15, 1998, accruing from the most
recent Interest Payment Date to which interest has been paid or duly provided
for or, if no interest has been paid, from the original date of issuance. The
Bonds bear interest payable at the rate of 8.75 per cent. per annum from and
including the date of their issuance to but excluding June 30, 1998, which rate
will increase to 9.25 per cent. per annum from and including June 30, 1998 to
but excluding June 30, 1999 and which rate will increase to 9.75 per cent. per
annum from and including June 30, 1999 until Maturity. However, in the event
of a Complying Public Equity Offering, the interest rate will remain at the
interest rate prevailing on the day immediately preceding such Complying Public
Equity Offering until Maturity of the Bonds. Interest on each Bond will
cease to accrue from the Redemption Date or Conversion Date thereof unless,
upon due presentation of such Bond, payment of principal is improperly
withheld or refused or conversion is not consummated, as the case may be. In
such event, interest will continue to accrue on such Bond up to and including
(a) the date on which payment in full of the principal thereof (plus accrued
interest) is made or (if earlier) the date on which the funds for the payment
in full of the principal thereof (plus accrued interest) have been received in
New York City by the Trustee
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or (b) the Bonds are converted to GTS Shares. Interest shall be computed on the
basis of a 360 day year consisting of twelve (12) months of 30 days each and, in
the case of an incomplete month, the number of days elapsed.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture referred to on the
reverse hereof, be paid to the person in whose name this Bond (or one or more
Predecessor Bonds) is registered at the close of business on the Regular Record
Date for such interest, which shall be June 30 or December 31 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date
(each a "Regular Record Date"). Any such interest not so punctually paid, or
duly provided for, and interest on such defaulted interest at the rate borne by
the Bonds, to the extent lawful, shall forthwith cease to be payable to the
Holder on such Regular Record Date, and may be paid to the person in whose name
this Bond (or one or more Predecessor Bonds) is registered at the close of
business on a special record date for the payment of such defaulted interest
to be fixed by the Trustee, notice of which shall be given to Holders of bonds
not less than 10 days prior to such special record date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Bonds may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this Bond
will be made at the office or agency of the Issuer maintained for that purpose
in the Borough of Manhattan in The City of New York, or at such other office or
agency of the Issuer as may be maintained for such purpose, in such coin or
currency of the United states of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Issuer by check mailed to
the address of the person entitled thereto as such address shall appear on the
security register maintained by the Registrar.
Reference is hereby made to the further provisions of this Bond set
forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, and a
seal has been affixed hereon, this Bond shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed.
Dated: GLOBAL TELESYSTEMS GROUP, INC.
By:
---------------------------------
Name:
Title:
Attest:
----------------------------------
Authorized Signature
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds of Global TeleSystems Group, Inc. referred to
in the within-mentioned Indenture.
Dated: THE BANK OF NEW YORK, as Trustee
By:
-------------------------------
Authorized Signatory
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(Reverse of Bond)
1. General
The Senior Subordinated Convertible Bonds due 2000
(the "Bonds") of Global TeleSystems Group, Inc. (the "Issuer") are issued under
an indenture dated as of July 14, 1997 (the "Indenture") between the Issuer,
The Bank of New York, as trustee (the "Trustee"), registrar (the "Registrar")
and paying, conversion and transfer agent (the "Principal Paying Agent"). The
issue of the Bonds was authorized by a resolution of the Board of Directors of
the Issuer on July 8, 1997. Certain statements herein are summaries of, and are
subject to, the detailed provisions of the Indenture, which contains the forms
of Bonds. Copies of the Indenture are available for inspection at the
registered office of the Trustee, being at the date hereof at Xxx Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 and at the specified offices of each of the Paying
Agents. The Bondholders are entitled to the benefit of, are bound by, and are
deemed to have notice of all the provisions of the Indenture. The Bonds mature
on June 30, 2000. In the event the provisions of this Bond differ from the
provisions contained in the Indenture, the provisions contained in the
Indenture shall control.
2. Status, Form, Denomination and Title
(A) Status
The Bonds are direct, unsecured, senior subordinated
obligations of the Issuer and will rank pari passu with each other and with all
other present and future unsecured, senior subordinated indebtedness of the
Issuer.
(B) Form and Denomination
The Bonds are issued in registered form in the
minimum denomination of U.S. $10,000 and integral multiples of $1,000 in excess
thereof.
(C) Title
Title to the Bonds passes only by registration in the
register of Bondholders (the "Register") maintained by the Registrar. The
registered holder of any Bond will (except as otherwise required by law) be
treated as its absolute owner for all purposes (whether or not such bond is
overdue and regardless of any notice of ownership, trust or any interest in it
or any writing on, or the theft or loss of, the certificate issued in respect
of it) and no person will be liable for so treating the holder. As used herein,
"Bondholder" and (in relation to a Bond) "holder", mean the person in whose
name a Bond is registered.
3. Interest
The Bonds bear interest payable at the rate of 8.75
per cent. per annum from and including the date of their issuance to but
excluding June 30, 1998, which rate will increase to 9.25 per cent. per annum
from and including June 30, 1998 to but excluding June 30, 1999 and which rate
will increase to 9.75 per cent. per annum from and including June 30, 1999
until Maturity. However, in the event of a Complying Public Equity Offering,
the interest rate will remain at the interest rate prevailing on the day
immediately preceding such Complying Public Equity Offering until Maturity of
the Bonds. Interest on each Bond will cease to accrue from the Redemption Date
or Conversion Date thereof unless, upon due presentation of such Bond, payment
of principal is improperly withheld or refused or conversion is not
consummated, as the case may be. In such event, interest will continue to
accrue on such Bond up to and including: (a) the date on which payment in full
of the principal thereof (plus accrued interest) is made or (if earlier) the
date on which the funds for the payment in full of the principal thereof (plus
accrued interest) have been received in New York City by the Trustee or (b) the
Bonds are converted to GTS Shares. Interest shall be computed on the basis of a
360 day year consisting of twelve (12) months of 30 days each and, in the case
of an incomplete month, the number of days elapsed.
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Interest is payable semiannually in arrears on July 15 and January
15 of each year commencing January 15, 1998 (each, an "Interest Payment Date"),
to the person in whose name a Bond (or any predecessor Bond) is registered at
the close of business on the preceding June 30 or December 31, as the case may
be. Each Bond will carry a right to interest in respect of all periods from the
date of issue thereof, or the date from which interest has been paid to,
whichever is later, up to but excluding the relevant Redemption Date or
Conversion Date.
The Luxembourg Stock Exchange will be informed of each change in the
interest rate of the Bonds on the date of such change.
4. Transfers of Bonds; Issue of Certificates
(A) Transfers
A Bond may be transferred by depositing the certificate issued in
respect of that Bond, with the form of transfer on the back duly completed and
signed, at the specified office of the Registrar or any of the Transfer Agents.
(B) Definitive Bonds
Bonds represented by interests in Global Certificates are
exchangeable for certificated physical Bonds in registered form only if (i) DTC
is at any time unwilling or unable to continue as a depositary and a successor
depositary is not appointed by the Issuer within 90 days of notice of such
fact, or (ii) the Trustee has instituted or been directed to institute any
judicial proceeding in a court to enforce the rights of the Bondholders under
the Bonds and has been advised by counsel that it is necessary or appropriate
to obtain possession of certificated physical Bonds.
(C) Replacement of Bonds
In case any certificate representing a Bond shall become mutilated,
defaced, destroyed, lost or stolen, the Issuer will execute and, upon the
Issuer's request, the Trustee will authenticate and deliver a new certificate
of like tenor (including the same date of issuance) and equal principal amount,
registered in the same manner, dated the date of its authentication and bearing
interest from the date to which interest has been paid on such Bond, in
exchange and substitution for such certificate (upon surrender and cancellation
thereof in the case of mutilated or defaced certificates) or in lieu of and
substitution for such certificate. In case such certificate is destroyed, lost
or stolen, the applicant for a substitute certificate shall furnish to the
Issuer satisfactory evidence of the destruction, loss or theft of such
certificate and of the ownership thereof. Upon the issuance of any substituted
certificate, the Issuer may require the payment by the registered holder
thereof of a sum sufficient to cover fees and expenses connected therewith,
together with such indemnity as the Issuer and Trustee shall require.
(D) Formalities free of charge
Registration of transfer of Bonds will be effected without charge but
only upon payment (or the giving of such indemnity as the Issuer, the Trustee
or any of the Paying Agents may require) in respect of any tax or other
governmental charges which may be imposed in relation to it.
(E) Closed periods
No Bondholder may require the transfer of a Bond to be registered
during the period of 15 days ending on the due date for any payment of
principal of or interest on or Additional Amounts, if any, on that Bond or
after a Conversion Notice (as defined below) has been delivered with respect
thereto.
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(F) Regulations
All transfers of Bonds and entries on the Register
will be made subject to the detailed regulations concerning transfer of Bonds
set forth in the Indenture. The regulations may be changed by the Issuer, with
the prior written approval of the Trustee. A copy of the current regulations
will be mailed (at the Issuer's expense) by the Trustee to any Bondholder who
asks for one.
(G) Payments
The principal of, and premium, if any, on the Bonds
will be paid against surrender thereof at the main office of the Paying Agent
in New York City or, subject to applicable laws and regulations, at the office
of the paying agent in Luxembourg by U.S. dollar check drawn on a bank in the
City of New York, or by a wire transfer to a U.S. dollar account maintained by
the payee with a bank in the City of New York. The Issuer will at all times
maintain a Principal Paying Agent and Conversion Agent in New York City, and,
so long as the Bonds are listed on the Luxembourg Stock Exchange and the rules
of the Luxembourg Stock Exchange so require, a Paying Agent, Conversion Agent
and Transfer Agent in Luxembourg.
Payment in respect of interest on any Interest
Payment Date with respect to any Bond will be made to the person in whose name
such Bond is registered at the close of business on the June 30 or December 31,
as the case may be, preceding such Interest Payment Date by U.S. dollar
check drawn on a bank in the City of New York mailed to such person at the
address specified in the Register on such day or, under certain circumstances,
by wire transfer to a U.S. dollar account maintained by the payee with a bank
in the City of New York, provided that a written request from such holder to
such effect designating such account is received by the relevant Paying Agent
no later than fifteen days before the relevant Interest Payment Date. Unless
such designation is revoked, any such designation made by such person with
respect to such Bond will remain in effect with respect to any future payments
with respect to such Bond payable to such person.
If any payment on a Bond is due on a day that is, at
any place of payment, a day on which banking institutions are authorized or
obligated by law or executive order to close, then, at each place of payment,
such payment need not be made on such day but may be made on the next
succeeding day that is not, at such place of payment, a day on which banking
institutions are authorized or obligated by law or executive order to close (a
"Business Day"), with the same force and effect as if made on the originally
scheduled date of such payment, and no interest will accrue for the period from
and after such date.
5. Additional Amounts
All payments of principal, premium, if any, and
interest with respect to the Bonds will be made without withholding or
deduction at source for, or on account of, any present or future taxes, fees,
duties, assessments or governmental charges of whatever nature imposed or
levied by the United States or any political subdivision or taxing authority
thereof or therein, unless such withholding or deduction is required by (i) the
laws (or any regulations or rulings promulgated thereunder) of the United
States or any political subdivision or taxing authority thereof or therein or
(ii) an official position regarding the application, administration,
interpretation or enforcement of any such laws, regulations or rulings
(including, without limitation, a holding by a court of competent jurisdiction
or by a taxing authority in the United States or any political subdivision
thereof). If a withholding or deduction at source is required, the Issuer will,
subject to certain limitations and exceptions (set forth below), pay to a
holder of Bonds who is a Non-U.S. Holder (as defined herein) such additional
amounts ("Additional Amounts") as may be necessary so that every net payment of
principal, premium, if any, or interest with respect to such Bonds after such
withholding or deduction, will not be less than the amount provided for the
Bonds. However, the Issuer shall not be required to make any payment of
Additional Amounts for or on account of:
(a) any tax, fee, duty, assessment or other
governmental charge which would not have been imposed but for (i) the
existence of any present or former connection between such Bondholder
(or between a fiduciary, settlor, beneficiary, member or shareholder
of, or possessor of a power over, such
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Bondholder, if such Bondholder is an estate, trust. partnership or
corporation) and the United States, including without limitation, such
Bondholder (or such fiduciary, settlor, beneficiary, member,
shareholder or possessor) being or having been a citizen or resident
thereof or being or having been present or engaged in trade or
business therein or having or having had a permanent establishment
therein, or (ii) the presentation of a Bond for payment on a date more
than 15 days after the date on which such payment became due and
payable or the date on which payment thereof is duly provided for,
whichever occurs later;
(b) any estate, inheritance, gift, sales,
transfer, personal property or similar tax, assessment or other
governmental charge;
(c) any tax, fee, duty, or future assessment or
other governmental charge imposed by reason of such Bondholder's past
or present status as a personal holding company, foreign personal
holding company, passive foreign investment company or controlled
foreign corporation with respect to the United States or as a
corporation which accumulates earnings to avoid United States federal
income tax;
(d) any tax, fee, duty, assessment or other
governmental charge which is payable otherwise than by withholding
from payments of principal or interest with respect to the Bonds;
(e) any tax, fee, duty, assessment or other
governmental charge imposed on any interest received (x) by a holder
or beneficial owner of Bonds that for U.S. federal income tax purposes
is treated as actually or constructively owning 10% or more of the
voting power of the Issuer's stock, (y) on an extension of credit made
pursuant to a loan agreement entered into in the ordinary course of
business by a holder or beneficial owner of Bonds that is a bank and
(z) by a holder or beneficial owner of Bonds that is a controlled
foreign corporation and with respect to which the Issuer is a related
person;
(f) any tax, fee, duty, assessment or other
governmental charge required to be withheld by any paying agent from
any payment of principal, premium, if any, or interest with respect to
any Bond, if such payment can be made without such withholding by any
other paying agent with respect to the Bonds;
(g) any tax, fee, duty, assessment or other
governmental charge which would not have been imposed but for the
failure to comply with certification, identification, documentation,
information or other reporting requirements concerning the
nationality, residence, identity or connection with the United States
of the Bondholder or of the beneficial owner of such Bond, if such
compliance is required by a present or future statute, treaty,
regulation, ruling or administrative practice as a precondition to a
reduction of or relief or exemption from such tax, assessment or other
governmental charge; or
(h) any combination of items (a), (b), (c), (d),
(e), (f) and (g);
nor shall Additional Amounts be paid to any holder of a Bond who is a fiduciary
or partnership or other than the sole beneficial owner of the Bond to the
extent a beneficiary or settlor with respect to such fiduciary or a member of
such partnership or a beneficial owner of the Bond would not have been entitled
to payment of the Additional Amounts had such beneficiary, settlor, member or
beneficial owner been the holder of the Bond.
The term "Non-U.S. Holder" means any corporation,
individual, fiduciary or partnership that for United States federal income tax
purposes is foreign corporation, nonresident alien individual, nonresident
alien fiduciary of a foreign estate or trust, or foreign partnership one or
more members of which is a foreign corporation, nonresident alien individual or
nonresident alien fiduciary of a foreign estate or trust.
6. Redemption for Tax Reasons
The Issuer may redeem any Bond in whole but not in
part at any time at a redemption price equal to the principal amount thereof
together, if appropriate, with accrued interest to but excluding the date fixed
for redemption, if the Issuer shall determine, based upon a written opinion of
independent counsel selected by the
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Issuer, that as a result of any change in or amendment to the laws (or any
regulations or rulings promulgated thereunder) of (i) the United States or any
political subdivision or taxing authority thereof affecting taxation or (ii)
the relevant taxing jurisdiction or any political subdivision or taxing
authority thereof or therein affecting taxation, or any change in application
or official interpretation of such laws, regulations or rulings, which
amendment or change is effective on or after the original Issue Date, the
Issuer would be required to pay Additional Amounts on the occasion of the next
payment due with respect to such Bond.
Notice of intention to redeem Bonds will be given not
less than 30 days nor more than 60 days prior to the date fixed for redemption,
provided that no such notice of redemption shall be given earlier than 90 days
prior to the effective date of such change or amendment and that at the time
notice of such redemption is given, such obligation to pay such Additional
Amounts remains in effect and cannot be avoided by the Issuer's taking
reasonable measures available to it. From and after any redemption date, if
monies for the redemption of Bonds shall have been made available for
redemption on such redemption date, such Bonds shall cease to bear interest and
the only right of the holders of such Bonds appertaining thereto shall be to
receive payment of the principal amount thereof, premium if any, and, if
appropriate, all unpaid interest accrued to such redemption date.
7. Subordination
The indebtedness evidenced by the Bonds will, to the
extent set forth in the Indenture, be subordinated in right of payment to the
prior payment in full in cash or Cash Equivalents of all existing and future
Senior Indebtedness. In the event of any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relating to the Issuer or its
assets, or any liquidation, dissolution or other winding-up of the Issuer,
whether voluntary or involuntary, or any assignment for the benefit of
creditors or other marshalling of assets or liabilities of the Issuer, all
Senior Indebtedness will be entitled to be paid in full before any payment or
distribution is made on account of the principal of (including upon
redemption), premium, if any, or interest on the Bonds or Additional Amounts.
Notwithstanding the foregoing, Bondholders may receive shares of stock and any
debt securities that are subordinated at least to the same extent as the Bonds
to Senior Indebtedness and any securities issued in exchange for Senior
Indebtedness.
During the continuance of any default in the payment
of principal, premium, if any, or interest on any Designated Senior
Indebtedness, when the same becomes due and such default is continuing beyond
any applicable grace periods, and after receipt by the Trustee and the Issuer
from the representative of holders of such Designated Senior Indebtedness of
written notice of such default, no direct or indirect payment by or on behalf
of the Issuer of any kind or character may be made on account of the principal
of (including redemption amount), premium, if any, or interest or Additional
Amounts on, or the purchase, redemption or other acquisition of, the Bonds
unless and until such default has been cured or waived or has ceased to exist
or such Designated Senior Indebtedness shall have been discharged or paid in
full.
In addition, upon the occurrence and during the
continuance of any other default with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated as a
result of such default (a "Non-payment Default") and upon receipt by the
Trustee and the Issuer from the representative of holders of such Designated
Senior Indebtedness of written notice of such Non-payment Default, no payment
of any kind or character may be made by the Issuer on account of the principal
of, premium, if any, or interest or Additional Amounts on, or the purchase,
redemption or other acquisition of, the Bonds for the period specified below
(the "Payment Blockage Period").
The Payment Blockage Period shall commence upon
receipt of written notice of a Non-payment Default by the Trustee from the
representatives of holders of Designated Senior Indebtedness and shall end on
the earliest to occur of the following events: (i) 179 days has elapsed since
the receipt of such notice (provided such Designated Senior Indebtedness shall
not theretofore have been accelerated), (ii) such default is cured or waived or
ceases to exist or such Designated Senior Indebtedness is discharged or paid in
full, or (iii) such Payment Blockage Period shall have been terminated by
written notice to the Issuer or the Trustee from the representative of holders
of Designated Senior Indebtedness initiating such Payment Blockage Period,
after which the Issuer shall promptly
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resume making any and all required payments in respect of the Bonds, including
any missed payments. Only one Payment Blockage Period with respect to the Bonds
may be commenced within any 365 consecutive day period. No Non-payment Default
that existed or was continuing on the date of the commencement of any Payment
Blockage Period will be, or can be, made the basis for the commencement of a
second Payment Blockage Period, whether or not within a period of 365
consecutive days, unless such default has been cured or waived for a period of
not less than 90 consecutive days. In no event will a Payment Blockage Period
extend beyond 179 days from the receipt by the Trustee of the notice initiating
such Payment Blockage Period and there must be a 186 consecutive day period in
any 365 day period during which no Payment Blockage Period is in effect.
Notwithstanding the foregoing, no further notice may be given in respect of any
Non-payment Default unless and until all scheduled payments of principal,
premium, if any, and interest not paid on the Bonds during any such Payment
Blockage Period as a result of any notice or acceleration shall have been paid
in full in cash.
If the Issuer fails to make any payment on the Bonds
when due after giving effect to any applicable grace period, whether or not on
account of the payment blockage provisions referred to above, such failure
would constitute an Event of Default under the Indenture and would enable the
holders of the Bonds to accelerate the maturity thereof. The Issuer will
promptly notify holders of Senior Indebtedness if payment of the Bonds is
accelerated because of an Event of Default. See "--Events of Default."
8. Undertakings
Subject to market conditions, it is the intention of
GTS to effect a Complying Public Equity Offering of its Common Stock before
June 30, 2000. The Issuer has agreed with the Managers that, if a Complying
Public Equity Offering has not occurred on or before June 30, 2000, the Issuer
will not effect any public equity offering for a period of six months
thereafter.
9. Conversion
(A) Conversion Right
Subject to and upon compliance with the provisions of
the Indenture, any Bondholder shall have the right (the "Conversion Right"), at
its option, at any time and from time to time on or after the occurrence of a
Complying Public Equity Offering and under the other circumstances specified in
paragraph (B)(i) below and prior to the close of business on June 30, 2000, to
convert the principal amount of any Bond, or any portion of such principal
amount (subject to minimum authorized denominations of the Bonds), into that
number of fully paid and non-assessable GTS Shares (as such shares shall then
be constituted) obtained by dividing the principal amount of the Bond or
portion thereof surrendered for conversion by the Conversion Price in effect at
such time, by surrender of the Bond so to be converted in whole or in part in
the manner provided in paragraph (B)(i) below. A Bondholder is not entitled to
any rights of a holder of GTS Shares until such Holder has converted its Bonds
(or any part thereof) to GTS Shares, and only to the extent such Bonds are
deemed to have been converted to GTS Shares under the Indenture.
(B) Exercise of Conversion Right; Issuance of GTS Shares on
Conversion
(i) Exercise of Conversion Right
Bondholders have a Conversion Right which is
exercisable in whole or in part at any time and from time to
time (a) in the case of subparagraph (ii) below, subsequent to
the Conversion Date but not later than the Maturity of the
Bond (as such Maturity may be extended pursuant to the other
provisions of this paragraph (B)(i), (b) if a notice of
redemption of the Bonds pursuant to the Indenture has been
given, after the date of such notice and prior to the date of
redemption specified in such notice, (c) if the Bonds are
subject to acceleration as a result of an Event of Default,
following the date notice thereof is given to Bondholders
until the Bonds are paid in full upon such acceleration, or
(d) if any Non-Complying Equity Offering occurs, within the 60
day period prior to the Maturity of the Bonds (provided,
however, that such Conversion Right may be exercised prior to
the 60th day prior to Maturity of the Bonds if a Change of
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Control shall have occurred, upon delivery of a Conversion
Notice by the Bondholder pursuant to this subparagraph at any
time on or after the time the Change of Control Offer is made
pursuant to the terms of the Indenture, until the Maturity of
the Bonds). In order to exercise its Conversion Right, a
Bondholder shall complete a notice in the then current form
obtainable from the Trustee or a specified office of a
Conversion Agent (a "Conversion Notice") (which may be
accompanied by a share transfer form, or other instrument
which may be required, signed by the Bondholder or may include
an authorization signed by the Bondholder, authorizing the
Bondholder's nominee to become the registered transferee and
to execute any requisite transfer form or other instrument
which may be required, on behalf of the Bondholder) and deliver
such Conversion Notice and where appropriate, an executed
share transfer form, or other instrument which may be
required, to the Trustee or a specified office of any
Conversion Agent (together with the relevant Bond or Bonds if
in definitive form) and any payment required by paragraph (D)
below. Once given, a Conversion Notice shall be irrevocable
and may not be withdrawn without the consent in writing of the
Issuer.
(ii) Complying Public Equity Offering
If a Complying Public Equity Offering occurs prior to
the Maturity of the Bonds on June 30, 2000, then the Issuer
shall, no earlier than twenty Business Days and no later than
fifteen Business Days prior to the anticipated completion of
such offering, cause notice to be given to the Trustee, the
Bondholders and the Luxembourg Stock Exchange to the effect
that a Complying Public Equity Offering is expected to occur
on a specified date and that on and after the Conversion Date
the Bondholders may from time to time until Maturity of the
Bonds by delivery of a notice pursuant to paragraph (B)(i)
above, elect to exercise their Conversion Right, in whole or
in part. Following the completion of such Complying Public
Equity Offering, the Issuer shall promptly cause a Notice of
Offering to be given to the Trustee, the Bondholders and the
Luxembourg Stock Exchange stating that the Complying Public
Equity Offering has been completed and confirming the
Conversion Date and the applicable Conversion Price. The
Issuer shall also provide in the Notice of Offering all
information concerning the Complying Public Equity Offering
and all prior offerings since the Issue Date that may be
relevant to a Conversion Price determination or requested by
the Trustee in relation thereto.
(iii) Non-Complying Equity Offering
If any Non-Complying Equity Offering occurs prior to
the Maturity of the Bonds on June 30, 2000, then the Issuer
shall no later than ten Business Days after the completion of
such offering cause a Notice of Offering to be given to the
Trustee, the Bondholders and the Luxembourg Stock Exchange of
such fact and the applicable Conversion Price and that at any
time and from time to time, in whole or in part (but no
earlier than the 60th day prior to the Maturity of the Bonds
subject to the provisions of paragraph (B)(i)(d) above) the
Bondholders may by delivery of a notice pursuant to paragraph
(B)(i) above elect to exercise their Conversion Right. The
Issuer shall also provide in the Notice of Offering all
information concerning all offerings since the Issue Date that
may be relevant to a Conversion Price determination or
requested by the Trustee in relation thereto.
(iv) Delayed Closing Date
If a Complying Public Equity Offering or a
Non-Complying Equity Offering occurs within the 60 day period
prior to and ending at the original Maturity of the Bonds,
then for purposes of exercise of the Conversion Right by
Bondholders, the Maturity for all Bonds shall be postponed to
the 60th day following the date of the Notice of Offering and
the Bonds will continue to accrue interest to the date the
Bonds are converted, provided that, in no event will interest
accrue for a period longer than 60 days from June 30, 2000.
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(v) Conversion Right Termination
The Conversion Right of any Bondholder in respect of
a Bond becoming redeemable pursuant to the Indenture and in
respect of which the conditions required for conversion have
not been satisfied by the relevant Bondholder by the end of
the second Business Day prior to any date for redemption
thereof shall, except as provided below, thereupon terminate.
Notwithstanding the foregoing, if there is a default in making
full payment when due of the redemption monies in respect of
any Bond, the Conversion Right in respect thereof shall extend
up to and including the date on which payment has been
received by a Paying Agent or the Trustee. The Conversion
Right of a Bondholder in respect of a Bond becoming due and
payable as a result of the acceleration of the Maturity
thereof following an Event of Default shall terminate on the
date that payment with respect to such Bonds has been received
by a Paying Agent or the Trustee.
(vi) General
In the event where Bondholders have elected to
convert their Bonds pursuant to paragraph (ii) or (iii) above
by giving notice thereof to the Issuer in accordance with the
terms of the Indenture, then any subsequent redemption of the
Bonds shall not affect the right of the holders of such Bonds
to receive GTS Shares and such Bonds shall not be so redeemed.
No earlier than 60 days and no later than 30 days prior to the
Maturity of the Bonds, the Issuer shall deliver a notice to
the Trustee, the Bondholders and the Luxembourg Stock Exchange
of the status of the Conversion Rights, if any, of the
Bondholders.
(C) Conversion Price
Each Bond will be converted into such number of GTS
Shares as is equal to the principal amount of such Bond divided by the
applicable Conversion Price.
The applicable Conversion Price of the Bonds shall be
determined as follows:
(i) where a Complying Public Equity Offering has
not been preceded, since the Issue Date, by a Non-Complying
Equity Offering, the Conversion Price shall be equal to the
gross per share price to the public in the Complying Public
Equity Offering multiplied by (A) 100 per cent. if the
Complying Public Equity Offering occurs on or before June 30,
1998, (B) 93 per cent. if the Complying Public Equity Offering
occurs on or before June 30, 1999 and after June 30, 1998, or
(C) 85 per cent. if the Complying Public Equity Offering
occurs after June 30, 1999;
(ii) where a Complying Public Equity Offering has
been preceded by one or more Non-Complying Equity Offerings
since the Issue Date, the Conversion Price shall be equal to
the lower of (a) the dollar-weighted average conversion price
for all of such Non-Complying Equity Offerings and the
Complying Public Equity Offering (as calculated for each such
offering by multiplying the gross per share offering price for
the applicable offering by (A) 100 per cent. if the closing
date of such offering occurs on or before June 30, 1998, (B)
93 per cent. if the closing date of such offering occurs on or
before June 30, 1999 and after June 30, 1998, or (C) 85 per
cent. if the closing date of such offering occurs after June
30, 1999) and (b) the conversion price for the Complying
Public Equity Offering alone (as calculated in clause (i)
above);
(iii) where a Non-Complying Public Equity Offering
has an offering size of at least $50,000,000 and (A) no
Complying Public Equity Offering has occurred since the
issuance of the Bonds, and (B) there has been one or more
Non-Complying Equity Offerings, the Conversion Price shall be
equal to the lower of (a) the dollar-weighted average
conversion price for all of such Non-Complying Equity
Offerings and the Non-Complying Public Equity Offering (as
calculated for each such offering by multiplying the gross per
share offering price by (A) 100 per cent. if the closing date
of such offering occurs on or before June 30, 1998, (B) 93 per
cent. if the closing date of such offering occurs on or before
June 30, 1999 and after June 30, 1998, or (C) 85 per cent. if
the closing date of such offering occurs after June 30, 1999)
and (b) the conversion price for the Non-Complying Public
Equity Offering (as calculated in (a) above); or
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(iv) in the case of any other Non-Complying Equity
Offering not provided for in clause (iii) above, where no
Complying Public Equity Offering has occurred since the Issue
Date, the applicable Conversion Price shall be equal to the
lowest conversion price calculated for each such offering that
has occurred since the Issue Date, where each such conversion
price will be determined by multiplying the gross per share
offering price for each such offering by (A) 100 per cent. if
the closing date of such offering occurs on or before June 30,
1998, (B) 93 per cent. if the closing date of such offering
occurs on or before June 30, 1999 and after June 30, 1998, or
(C) 85 per cent. if the closing date of such offering occurs
after June 30, 1999.
There shall be excluded from the calculation of the
applicable Conversion Price any Private Equity Offerings aggregating no more
than $100 million in gross proceeds if such offering or offerings (i) are
consummated on or prior to December 31, 1997 and (ii) any Strategic Equity
Offering that occurs from the Issue Date so long as there has occurred a
Complying Public Equity Offering or a Non-Complying Equity Offering.
The Issuer will publish the Conversion Price in the
Luxemburger Wort and will notify the Luxembourg Stock Exchange of the
Conversion Price when determined for so long as the Bonds are listed on the
Luxembourg Stock Exchange.
(D) Stamp and Other Duties and Exchange Costs
Payment of all stamp, transfer and registration
duties (if any) and any brokers' commission and stock exchange transaction
charges and any other tax thereon arising on exercise of Conversion Rights
and/or on the transfer or delivery of GTS Shares by the Issuer (or the Trustee
pursuant to the Indenture) to or to the order of the Trustee or the relevant
Bondholder in connection therewith, payable in or imposed by the United States,
any state or other political sub-division thereof and any other jurisdiction in
which the register in respect of any securities is located will be made or
procured by the Issuer. If the Issuer shall fail to pay any such duties or
costs, the relevant Bondholder shall be entitled to tender and pay the same.
The Issuer has in the Indenture covenanted to reimburse each such Bondholder in
respect of the payment of such duties or costs and any penalties paid in
respect thereof. A Bondholder exercising Conversion Rights must pay to the
relevant Conversion Agent any such duties or costs arising in any other
circumstances.
(E) Cash Payment Instructions
Upon the exercise of Conversion Rights, a Bondholder
shall, when delivering the relevant Conversion Notice, give directions to the
relevant Conversion Agent for payment of any cash sum which such Bondholder is
entitled to receive pursuant to the Indenture and which shall be paid by way of
U.S. dollar check drawn on a bank in the City of New York or by wire transfer
to a U.S. dollar account maintained by the payee with a bank in the City of New
York.
(F) Fractions arising on Conversion
No fraction of a GTS Share shall be delivered on
exercise of Conversion Rights but a cash payment shall be made by the Issuer to
the relevant Bondholder, pursuant to directions given to the relevant
Conversion Agent by the Bondholder as provided in (E) above, not later than 21
days after the Conversion Date, of an amount equal to the value of such
fraction (such amount to be rounded up to the nearest U.S. $0.01).
10. Redemption and Purchase
(A) Final Redemption at Maturity
Unless previously redeemed or converted or to be
converted or purchased and cancelled, on June 30, 2000 outstanding Bonds will
be redeemed by the Issuer at their principal amount plus accrued interest, if
any. However, in the event that a Complying Public Equity Offering has not
occurred prior to June 30, 2000,
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outstanding Bonds will be redeemed at Maturity at 121.0 per cent. of their
principal amount, plus accrued interest, if any.
(B) Acceleration following an Event of Default
If the Bonds are accelerated following the occurrence
of an Event of Default, the Bonds will be repaid at their principal amount
multiplied by 106.5 per cent. plus accrued interest to the date of
acceleration, if the date of acceleration occurs on or before June 30, 1998;
113.5 per cent. plus accrued interest to the date of acceleration if the date of
acceleration occurs after such date but on or before June 30, 1999; and 121.0
per cent. if the date of acceleration occurs thereafter; provided that
notwithstanding the foregoing, each Bondholder shall have the option to
exercise his Conversion Right, if any.
(C) Cancellation
All Bonds redeemed pursuant to the Indenture or
purchased by the Issuer in the open market will be forthwith cancelled and may
not be reissued or sold. The Issuer will not permit its Subsidiaries and will
to the fullest extent of the rights available to it under the relevant
contractual or organizational documents not permit its Significant Joint
Ventures to purchase any of the Bonds.
(D) Limited Optional Redemption
The Bonds are redeemable at the option of the Issuer,
in whole but not in part on or after the second anniversary of a Complying
Public Equity Offering, on not less than 90 nor more than 120 days' prior
notice (which notice shall provide the Trustee and the Bondholders information
concerning the right of Bondholders to convert prior to the Redemption Date and
information pertinent to the Conversion Price) at the principal amount thereof
plus accrued interest to the Redemption Date, provided that the GTS shares into
which Bonds are convertible would not be at the time of redemption "restricted
securities" in the hands of any Bondholder not affiliated with the Issuer,
within the meaning of the Securities Act, and provided, further, that the
average Closing Price of the GTS Shares for the 20 consecutive Trading Days
prior to the date of the Issuer's notice of redemption is greater than 130 per
cent. of the Conversion Price determined in conjunction with such Complying
Public Equity Offering.
11. Events of Default
The following are "Events of Default" under the
Indenture:
(a) the Issuer fails to pay the principal of or
any premium (if any) or interest (including Additional
Amounts) on any of the Bonds when due (upon Maturity,
acceleration, redemption, required purchase or otherwise and
whether or not prohibited by the subordination provisions)
and, in the case of interest only, such failure continues for
a period of 30 days; or
(b) the Issuer does not perform or comply with
any one or more of its other obligations in the Bonds or the
Indenture (other than a default under (a) above) for a period
of 60 days after written notice of such default shall have
been given to the Issuer by the Trustee or to the Issuer and
the Trustee by holders of at least 25 per cent. in aggregate
principal amount of Bonds then outstanding; or
(c) (i) one or more defaults in the payment of
principal of or premium, if any, on Indebtedness of the Issuer
or any Material Subsidiary or any Significant Joint Venture
aggregating U.S.$10 million (or the foreign currency
equivalent thereof) or more, when the same becomes due and
payable at the Maturity thereof, and such default or defaults
shall have continued after any applicable grace period and
shall not have been cured or waived or (ii) Indebtedness of
the Issuer or any Material Subsidiary or any Significant Joint
Venture aggregating U.S.$10 million (or the foreign currency
equivalent thereof) or more shall have been accelerated or
otherwise declared due and payable, or required to be prepaid
or repurchased (other than by regularly scheduled required
prepayment) prior to the Maturity thereof; or
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(x) any holder or holders of Indebtedness aggregating
U.S.$10 million (or the foreign currency equivalent thereof) or more
of the Issuer or any Material Subsidiary or any Significant Joint
Venture shall notify the Issuer or the Trustee of the intended sale or
disposition of any assets of the Issuer or any such Material Subsidiary
or Significant Joint Venture that have been pledged to or for the
benefit of such person to secure such Indebtedness, or shall commence
proceedings, or take action (including by way of set-off) to retain in
satisfaction of any such Indebtedness, or to collect on, seize,
dispose of or apply, any such assets of the Issuer or any Material
Subsidiary or any Significant Joint Venture pursuant to the terms of
any agreement or instrument evidencing any such Indebtedness or in
accordance with applicable law; or
(e) one or more final judgments (or judgments which can
no longer be appealed) or orders or similar judicial or administrative
action shall be rendered against the Issuer or any Material Subsidiary
or Significant Joint Venture for the payment of money, either
individually or in an aggregate amount, in excess of U.S.$10 million
(or the foreign currency equivalent thereof) and which shall not have
been discharged and either (i) an enforcement proceeding shall have
been commenced by any creditor upon such judgment or order or similar
judicial or administrative action or (ii) there shall have been a
period of 60 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise,
was not in effect; or
(f) the Issuer or any Material Subsidiary or Material
Joint Venture, pursuant to or under or within any applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or
like law; (i) commences a voluntary case or proceeding; (ii) consents
to the entry of an order for relief against it in an involuntary case
or proceeding; (iii) makes a general assignment for the benefit of its
creditors; (iv) or shall generally not pay its debts when such debts
become due or shall admit in writing its inability to pay its debts
generally; (v) or a court of competent jurisdiction (or like entity)
shall enter an order or decree under any applicable law described
above that is for relief against the Issuer or any Material Subsidiary
or Material Joint Venture, as applicable, in an involuntary case or
proceeding, appoints a custodian for the Issuer or such other entity
for all or substantially all its properties or orders the liquidation
of the Issuer or such other entity, as applicable, and in each such
case in this clause (v), the order or decree remains unstayed and in
effect for 60 days; (vi) or the Issuer or such other entity shall take
any corporate action regarding any of the foregoing; or
(g) excluding the events referred to in paragraph (f)
above, any seizure, compulsory acquisition, expropriation or
nationalization of any assets of the Issuer, any Subsidiary or
Significant Joint Venture for which there is not paid Fair Market
Value and where the seizure, compulsory acquisition, expropriation or
nationalization (whether by an outright taking or by confiscatory tax
or other policies), individually or in the aggregate, could reasonably
be expected to result in a material adverse effect on the business
(including without limitation the ability to generate cash flow over
the life of the Bonds) the condition (financial or other), the
properties or the results of operations of the Issuer, its
Subsidiaries, and Significant Joint Ventures on a combined basis (a
"Material Adverse Effect").
If an Event of Default (other than as specified in
subparagraph (f) above) shall occur and be continuing, the Trustee, by notice
to the Issuer, or the holders of at least 25 per cent. in aggregate principal
amount of the Bonds then outstanding by notice to the Trustee and the Issuer,
may declare the principal of, premium, if any, and accrued and unpaid interest
on all of the outstanding Bonds due and payable immediately upon which
declaration, all accounts payable in respect of the outstanding Bonds shall be
due and payable immediately. If an Event of Default specified in subparagraph
(f) above occurs and is continuing, then the principal of, premium if any, and
accrued and unpaid interest, on all of the outstanding Bonds shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any holders of Bonds.
After a declaration of acceleration under the Indenture, but
before a judgment or decree for payment of the money due has been obtained by
the Trustee, the holders of a majority in aggregate principal amount of the
outstanding Bonds, by written notice to the Issuer and the Trustee, may rescind
such declaration if (a) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay (i) all sums paid or advanced by the
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Trustee under the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, (ii) all
overdue interest on all Bonds, (iii) the unpaid principal of and premium, if
any, on any outstanding Bonds which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate borne by the
Bonds, and (iv) to the extent that payment of such interest is lawful, interest
upon overdue interest and overdue principal at the rate borne by the Bonds
which has become due otherwise that by such declaration of acceleration; (b)
the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; and (c) all Events of Default, other than the
non-payment of principal of, premium, if any, and interest on the Bonds that
have become due solely by such declaration of acceleration, have been cured or
waived. No such recission shall affect any subsequent Default or Event of
Default or impair any rights subsequent thereto.
Subject to certain provisions of the Indenture, the holders of
not less than a majority in aggregate principal amount of the outstanding Bonds
may on behalf of the holders of all the Bonds waive any past defects under the
Indenture, existing Default or Event of Default, except a Default or Event of
Default in the payment of the principal of, premium, if any, or interest on any
Bond, or in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the Holder of each Bond
outstanding.
No Holder of any of the Bonds has any right to institute any
proceeding with respect to the Indenture or the Bonds or pursue any remedy
thereunder, unless the holder gives written notice to the Trustee of a
continuing Event of Default and the holders of at least 25% in aggregate
principal amount of outstanding Bonds have made written requests, and offered
reasonable indemnity, to the Trustee to such proceeding or remedy as Trustee
under the Bonds and the Indenture, and the Trustee has failed to institute such
proceeding within 30 days after receipt of such notice and the Trustee, within
such 30-day period, has not received directions inconsistent with such written
request by holders of at least majority in aggregate principal amount of the
outstanding Bonds. Such limitations do not apply, however, to a suit instituted
by a holder of a Bond for the enforcement of the payment of the principal of,
premium, if any, or interest on such Bond on or after the respective due dates
expressed in such Bonds.
During the existence of an Event of Default, the Trustee is
required to exercise such rights and powers vested in it under the Indenture
and use the same degree of care and skill in its exercise thereof as a prudent
person would exercise under the circumstances in the conduct of such person's
own affairs. Subject to the provisions of the Indenture relating to the duties
of the Trustee, whether or not an Event of Default shall occur and be
continuing, the Trustee is not under any obligation to exercise any of its
rights or powers under the Indenture at the request or direction of any of the
holders unless such holders shall have offered to the Trustee reasonable
security or indemnity. Subject to certain provisions concerning the rights of
the Trustee, the holders of not less than a majority in aggregate principal
amount of the outstanding Bonds have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee under the Indenture.
If a Default or an Event of Default occurs and is continuing
and is known to the Trustee, the Trustee shall mail to each Holder of the
Bonds, and to the Luxembourg Stock Exchange for so long as the Bonds are listed
thereon, notice of the Default or Event of Default within 30 days after
obtaining knowledge thereof. Except in the case of a Default or an Event of
Default in payment of principal or premium, if any, or interest on any Bonds,
the Trustee may withhold the notice to the holders of such Bonds if a committee
of its trust officers in good faith determines that withholding the notice is
in the interest of the holders of the Bonds.
12. Reporting Requirements
For the fiscal quarters ended June 30, 1997 and September 30,
1997 and for the fiscal year ended December 31, 1997 the Issuer will (i)
transmit by mail to all Bondholders, as their names and addresses appear in the
Register, without cost to such Bondholders, and (ii) file with the Trustee
copies of the quarterly and audited annual financial reports of the Issuer
(including the condensed, combining financial data in the form and scope set
forth in the condensed, consolidated financial statements of the Issuer for the
first quarter of 1997 and for the fiscal
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year ending December 31, 1996, respectively) that are generally distributed to
its shareholders at the time such reports are so distributed.
Beginning with the financial statements of the Issuer for the
quarter ending March 31, 1998 and thereafter, whether or not the Issuer is
subject to Section 13(a) or 15(d) of the Exchange Act, or any successor
provision thereto, the Issuer shall prepare the annual and quarterly reports
which the Issuer would have been required to file with the Securities and
Exchange Commission pursuant to such Section 13(a) or 15(d) or any successor
provision thereto (including, until such time as the Company is required to
file reports with the Commission pursuant to Section 13(a) or 13(d) of the
Exchange Act, the condensed, combining financial data in the form and scope set
forth in the condensed, consolidated financial statements described above) on
or prior to the respective dates (the "Required Filing Dates") by which the
Issuer would have been required so to file such documents. The Issuer shall
also in any event within 15 days of each Required Filing Date (i) transmit by
mail to all Bondholders, as their names and addresses appear in the Register,
without cost to such Bondholders, and (ii) file with the Trustee, copies of
such annual and quarterly reports.
The Issuer is required to furnish to the Trustee annual and
quarterly statements as to the performance by the Issuer of its obligations
under the Indenture. Default or Event of Default the Issuer is also required to
notify the Trustee within thirty (30) days after the Issuer becomes aware or
should reasonably have become aware of any event which is, or after notice or
lapse of time or both would become, an Event of Default.
13. Negative Pledge and Covenants
So long as any Bond remains outstanding or any amount remains
unpaid with respect to any of the Bonds or up to and including the date of (a)
the Complying Public Equity Offering or (b) a Covenant Defeasance, the Issuer,
its Subsidiaries and Significant Joint Ventures will be subject to the
following negative pledge and covenants:
(A) Negative Pledge
The Issuer will not, and will not permit any of its
Subsidiaries to, and will to the fullest extent of the rights available to it
under the relevant contractual and organizational documents not permit its
Significant Joint Ventures to, directly or indirectly create, incur, assume or
suffer to exist any Lien that secures obligations under any Pari Passu
Indebtedness or Subordinated Indebtedness on any asset or property of the
Issuer or such Subsidiary or such Significant Joint Venture, or any income or
profits therefrom, or assign or convey any right to receive income therefrom,
unless the Bonds are equally and ratably secured with the obligations so
secured (provided that any Lien securing Subordinated Indebtedness shall be
subordinate and junior to the Lien securing the Bonds with the same relative
priority as such Subordinated Indebtedness shall have with respect to the
Bonds) or until such time as such obligations are no longer secured by a Lien.
(B) Covenants
(a) Limitation on Indebtedness. The Issuer will not, and will not
permit any of its Subsidiaries to, and will to the fullest extent of the rights
available to it under the relevant contractual or organizational documents not
permit its Significant Joint Ventures to, directly or indirectly, create,
incur, issue, assume, guarantee or in any manner become directly or indirectly
liable, contingently or otherwise, for the payment of (in each case, to
"incur") any Indebtedness (including any Acquired Indebtedness); provided,
however, that the Issuer, any Subsidiary or any Significant Joint Venture will
be permitted to incur Indebtedness (including Acquired Indebtedness) if (a) at
the time of such incurrence, no Default or Event of Default under the Indenture
has occurred and is continuing, (b) at the time of such incurrence the Fixed
Charge Coverage Ratio for the four full fiscal quarters immediately preceding
the incurrence of such Indebtedness, taken as one period (and after giving pro
forma effect to (i) the incurrence of such Indebtedness and (if applicable) the
application of the net proceeds therefrom, including to refinance other
Indebtedness, as if such Indebtedness was incurred, and the application of such
proceeds occurred, on the first day of such four-quarter period, (ii) the
incurrence, repayment or retirement of any other Indebtedness by the Issuer,
its Subsidiaries and its Significant Joint Ventures since the first day of such
four-quarter period (except that, in making such computation, the amount of
Indebtedness under any revolving
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credit facility shall be computed based upon the average daily balance of such
Indebtedness during such four-quarter period) and (iii) the acquisition
(whether by purchase, merger or otherwise) or disposition (whether by sale,
merger or otherwise) of any company, entity or business acquired or disposed of
by the Issuer or its Subsidiaries or its Significant Joint Ventures, as the
case may be, since the first day of such four-quarter period), would have been
at least equal to 2:1 and (c) in the case of the incurrence of Subordinated
Indebtedness or Pari Passu Indebtedness, such Indebtedness has no scheduled
principal payment prior to the 91st day after the Maturity of the Bonds.
Notwithstanding the foregoing, the Issuer and its Subsidiaries and
Significant Joint Ventures may, to the extent specifically set forth below,
incur each and all of the following:
(a) Indebtedness of the Issuer evidenced by the Bonds;
(b) Indebtedness of the Issuer or its Subsidiaries or
Significant Joint Ventures outstanding on the Issue Date;
(c) Indebtedness of the Issuer, any Subsidiaries and any
Significant subsidiary in an aggregate principal amount at any one
time outstanding not to exceed U.S.$75,000,000 (or the foreign
currency equivalent thereof);
(d) (i) Interest Rate Protection Obligations of the
Issuer or any Subsidiary or any Significant Joint Venture covering
Indebtedness of the Issuer, such Subsidiary or such Significant Joint
Venture; provided, however, that, (x) any Indebtedness to which any
such Interest Rate Protection Obligations relate bears interest at
fluctuating interest rates and is otherwise permitted to be incurred
under this covenant and (y) the notional principal amount of any such
Interest Rate Protection Obligations does not exceed the principal
amount of the Indebtedness to which such Interest Rate Protection
Obligations relate;
(e) Indebtedness of a Subsidiary or Significant Joint
Venture owed to and held by the Issuer, another Subsidiary or
Significant Joint Venture, in each case which is not subordinated in
right of payment to any Indebtedness of such Subsidiary or Significant
Joint Venture, except that (i) any transfer of such Indebtedness by
the Issuer or a Subsidiary or Significant Joint Venture (other than to
the Issuer or to another Subsidiary or Significant Joint Venture) and
(ii) the sale, transfer or other disposition by the Issuer or any
Subsidiary or Significant Joint Venture of the Capital Stock of any
Subsidiary or ownership interest in any Significant Joint Venture
which is owed Indebtedness from another Subsidiary or Significant
Joint Venture such that the first such Subsidiary or Significant Joint
Venture ceases to be a Subsidiary or Significant Joint Venture shall,
in each case in (i) and (ii), be an incurrence of Indebtedness by the
second such Subsidiary or Significant Joint Venture, as the case may
be, subject to the other provisions of this covenant;
(f) Indebtedness of the Issuer owed to and held by any
Subsidiary or any Significant Joint Venture which is unsecured and
subordinated in right of payment to the payment and performance of the
Issuer's obligations under the Indenture and the Bonds, provided that
any subsequent issuance or transfer of Capital Stock or other
ownership interest or any other event which results in any such
Subsidiary or Significant Joint Venture ceasing to be a Subsidiary or
Significant Joint Venture, as the case may be, or any subsequent
transfer of any such Indebtedness (except to the Issuer or another
Subsidiary or another Significant Joint Venture) shall be deemed, in
each case, be an incurrence of Indebtedness by the Issuer, subject to
the other provisions of this covenant;
(g) Indebtedness under Currency Agreements; provided that
in the case of Currency Agreements which relate to Indebtedness, such
Currency Agreements do not increase the outstanding Indebtedness of
the Issuer or any Subsidiary or any Significant Joint Venture other
than as a result of fluctuations in foreign currency exchange rates or
by reason of fees, indemnities and compensation payable thereunder;
(h) Indebtedness of the Issuer or any of its Subsidiaries
or any of its Significant Joint Ventures in an aggregate amount on the
date of incurrence, not in excess of 80% of the average of the
outstanding accounts
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receivable balances of the Issuer, its Subsidiaries and Significant Joint
Venture on a combined basis at each of the three preceding quarterly
balance sheet dates;
(i) Indebtedness of Hermes as to which the Issuer or any other
Subsidiary or any Significant Joint Venture is not directly or indirectly
liable by virtue of being the primary obligor on, guarantor of or otherwise
liable with respect to, such Indebtedness;
(j) Indebtedness of the Issuer of any of its Subsidiaries or
Significant Joint Ventures represented by letters of credit for the account
of the Issuer of such Subsidiary of such Significant Joint Venture, as the
case may be, in order to provide security for workers' compensation claims,
payment obligations in connection with self-insurance or similar
requirements in the ordinary course of business;
(k) Indebtedness and Acquired Indebtedness incurred by the Issuer
or a Subsidiary of Significant Joint Venture issued to finance the
construction, acquisition, generation, installation or improvement of
Telecommunications Assets to be used in Europe and/or Asia (including
Russia and the CIS) by the Issuer, any Subsidiary or any Significant
Joint Venture;
(l) (i) Indebtedness of the Issuer the proceeds of which are used
solely to refinance (whether by amendment, renewal, extension or refunding)
Indebtedness of the Issuer or any Subsidiary or any Significant Joint
Venture and (ii) Indebtedness of any Subsidiary or Significant Joint
Venture, the proceedings of which are used solely to refinance (whether by
amendment, renewal, extension or refunding) Indebtedness of such Subsidiary
of such Significant Joint Venture, in each case other than the Indebtedness
incurred under the preceding clauses (c) through (g) and (i) through (k) of
this covenant; provided, however, that (x) the principal amount of
Indebtedness incurred pursuant to this clause (l) (or, if such Indebtedness
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof, the
original issue price of such Indebtedness) shall not exceed the sum of the
outstanding principal amount of Indebtedness so refinanced, plus the amount
of any premium required to be paid in connection with such refinancing
pursuant to the terms of such Indebtedness or the amount of any premium
reasonably determined by the Board of Directors of the Issuer as necessary
to accomplish such refinancing by means of a tender offer or privately
negotiated purchase, plus the amount of expenses in connection therewith,
(y) in the case of Indebtedness incurred by the Issuer pursuant to this
clause (l) to refinance Subordinated Indebtedness, such Indebtedness (A)
has no scheduled principal payment prior to the 91st day after the Maturity
of the Bonds, (B) has an Average Life to Stated Maturity greater than the
remaining Average Life to Stated Maturity of the Bonds and (C) is
subordinated to the Bonds in the same manner and to the same manner and to
the same extent that the Subordinated Indebtedness being refinanced is
subordinated to the Bonds and (z) in the case of Indebtedness incurred by
the Issuer pursuant to this clause (l) to refinance Pari Passu
Indebtedness, such Indebtedness (A) has no scheduled principal payment
prior to the 91st day after the Maturity of the Bonds, (B) has an Average
Life to Stated Maturity greater than the remaining Average Life to Stated
Maturity of the Bonds and (C) constitutes Pari Passu Indebtedness or
Subordinated Indebtedness.
(b) Limitation on Restricted Payments. The Issuer will not, and will
not permit any of its Subsidiaries to, and will to the fullest extent of the
rights available to it under the relevant contractual or organizational
documents not permit its Significant Joint Ventures to, directly or indirectly;
(i) declare or pay any dividend or make any other
distribution or payment on or in respect of Capital Stock of the Issuer or
any Subsidiary or any Significant Joint Venture or any payment to the
direct or indirect holders (in their capacities as such) of Capital Stock
of the Issuer or any Subsidiary or any Significant Joint Venture (other
than (x) dividends or distributions payable solely in Capital Stock of the
Issuer, such Subsidiary or such Significant Joint Venture (other than, in
each case, Redeemable Capital Stock) or in options, warrants or other
rights to purchase Capital Stock of the Issuer (other than, in each case,
Redeemable Capital Stock), (y) the declaration or payment of dividends or
other distributions to the extent declared or paid to the Issuer or any
Subsidiary or Significant Joint Venture and (z) the declaration or payment
of dividends or other distributions by any such entity to all holders of
equity or similar economic interest of such entity on a pro rata basis),
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(ii) purchase, redeem, defense or otherwise acquire or retire for
value any Capital Stock or other ownership interest of the Issuer or any
Subsidiary or any Significant Joint Venture (other than any such Capital
Stock or other ownership interest owned by a Wholly-Owned Subsidiary),
(iii) make any principal payment on, or purchase, defense,
repurchase, redeem or otherwise acquire or retire for value, prior to any
scheduled maturity, scheduled repayment, scheduled sinking fund payment or
other Maturity, and Subordinated Indebtedness (other than any such
Indebtedness owned by the Issuer or a Wholly-Owned Subsidiary), or
(iv) make any Investment (other than any Permitted Investment) in
any person
(such payments or Investments described in the preceding clauses (i), (ii),
(iii) and (iv) are collectively referred to as "Restricted Payments"), unless,
at the time of and after giving effect to the propose Restricted Payment (the
amount of any such Restricted Payment, if other than cash, shall be the Fair
Market Value on the date of such Restricted Payment of the asset(s) proposed to
be transferred by the Issuer or the relevant entity described above, as the
case may be, pursuant to such Restricted Payment), (A) no Default or Event of
Default under the Indenture shall have occurred and be continuing, (B)
immediately prior to and after giving effect to such Restricted Payment, the
Issuer would be able to incur $1.00 of additional Indebtedness pursuant to the
first paragraph of the covenant described under "--Limitation on Indebtedness"
above (assuming a market rate of interest with respect to such additional
Indebtedness) and (C) the aggregate amount of all Restricted Payments declared
or made from and after the Issue Date would not exceed the sum of (1) 50 per
cent. of the aggregate Pro rata Combined Adjusted Net Income accrued on a
cumulative basis during the period beginning on the first day of the fiscal
quarter of the Issuer during which the Issue Date occurs and ending on the last
day of the fiscal quarter of the Issuer immediately preceding the date of such
proposed Restricted Payment, which period shall be treated as a single
accounting period (or, if such aggregate cumulative Pro rata Combined Adjusted
Net Income for such period shall be a deficit, minus 100 per cent. of such
deficit) plus (2) the aggregate net cash proceeds received by the Issuer, such
Subsidiary or such Significant Joint Venture either (x) as capital contribution
after the Issue Date from any person (other than a Subsidiary or Significant
Joint Venture) or (y) from the issuance or sale of Capital Stock (excluding
Redeemable Capital Stock, but including Capital Stock issued upon the
conversion of convertible Indebtedness or from the exercise of options,
warrants or rights to purchase Capital Stock (other than Redeemable Capital
Stock)) of such entity to any person (other than to a Wholly-Owned Subsidiary)
after the Issue Date plus (3) in the case of the disposition or repayment of
any Investment constituting a Restricted Payment made after the Issue Date
(excluding any Investment described in clause (v) of the following paragraph),
an amount equal to the lesser of the return of capital with respect to such
Investment and the cost of such Investment, in either case, less the cost of
the disposition of such Investment. For purposes of the preceding clause
(C)(2), the value of the aggregate net proceeds received by the Issuer upon the
issuance of Capital Stock upon the conversion of convertible Indebtedness or
upon the exercise of options, warrants or rights will be the net cash proceeds
received upon the issuance of such Indebtedness, options, warrants or rights
plus the incremental cash amount received by the Issuer upon the conversion or
exercise thereof.
None of the foregoing provisions will prohibit (i) the payment of any
dividend within 60 days after the date of its declaration, if at the date of
declaration such payment would be permitted by the foregoing paragraph; (ii) the
redemption, repurchase or other acquisition or retirement of any shares of any
class of Capital Stock of the Issuer or any Subsidiary in exchange for, or out
of the net cash proceeds of, a substantially concurrent (x) capital
contribution to the Issuer from any person (other than a Subsidiary or Joint
Venture) or (y) issue and sale of other shares of Capital Stock (other than
Redeemable Capital Stock) of the Issuer to any person (other than to a
Subsidiary or Joint Venture); provided, however, that the amount of any such
net cash proceeds that are utilized from any such redemption, repurchase or
other acquisition or retirement shall be excluded from clause (C)(2) of the
preceding paragraph; (iii) any redemption, repurchase or other acquisition or
retirement of Subordinated Indebtedness by exchange for, or out of the net cash
proceeds of, a substantially concurrent (x) capital contribution to the Issuer
from any person (other than a Subsidiary or Joint Venture) or (y)(1) issue and
sale of Capital Stock (other than Redeemable Capital Stock) of the Issuer to
any person other than to a Subsidiary or Joint Venture ); provided, however,
that the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase or other acquisition or retirement shall be excluded
from clause (C)(2) of the preceding paragraph; or (2) Indebtedness of the
Issuer issued to any person (other than a Subsidiary or Joint Venture), so long
as such Indebtedness is Subordinated Indebtedness which (A) has no Maturity
earlier than the 91st day after the Maturity of
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the Bonds, (B) has an Average Life to Stated Maturity equal to or greater than
the remaining Average Life to Stated Maturity of the Bonds and (C) is
subordinated to the Bonds in the same manner and at least to the same extent as
the Subordinated Indebtedness so purchased, exchanged, redeemed, acquired or
retired; (iv) so long as no Default or Event of Default shall have occurred and
be continuing, any redemption, repurchase or other acquisition or retirement of
Pari Passu Indebtedness by exchange for, or out of the net cash proceeds of, a
substantially concurrent (x) capital contribution to the Issuer from any person
(other than a Subsidiary or Joint Venture) or (y)(1) issue and sale of Capital
Stock (other than Redeemable Capital Stock) of the Issuer to any person (other
than to a Subsidiary or Joint Venture); provided, however, that the amount of
any such net cash proceeds that are utilized for any such redemption,
repurchase or other acquisition or retirement is excluded from clause (C)(2) of
the preceding paragraph or (2) Indebtedness of the Issuer issued to any person
(other than a Subsidiary), so long as such Indebtedness is Subordinated
Indebtedness or Pari Passu Indebtedness which (A) has no Maturity earlier than
the 91st day after the Maturity of the Bonds and (B) has an Average Life to
Stated Maturity equal to or greater than the remaining Average Life to Stated
Maturity of the Bonds; (v) Investments constituting Restricted Payments made as
a result of the receipt of non-cash consideration from any Asset Sale made
pursuant to and in compliance with the covenant described under "--Disposition
of Proceeds of Asset Sales" below; (vi) payments or other actions described in
clauses (i) throughout (iv) in the next preceding paragraph above that would
otherwise be Restricted Payments in an aggregate amount not to exceed U.S.$10
million (or the foreign currency equivalent thereof): and (vii) so long as no
Default or Event of Default has occurred and is continuing, repurchases by the
Issuer of Common Stock of the Issuer from employees of the Issuer or any of its
Subsidiaries or their authorized representatives upon the death, disability or
termination of employment of such employees, in an aggregate amount not
exceeding U.S.$10 million (or the foreign currency equivalent thereof) in any
calendar year. In computing the amount of Restricted Payments previously made
for purposes of clause (C) of the preceding paragraph, Restricted Payments made
under the preceding clauses (vi) and (vii) shall be included and clauses (i),
(ii), (iii), (iv) and (v) shall not be so included.
(c) Change of Control. Upon the occurrence of a Change of Control, the
Issuer shall be obligated to make an offer to purchase (a "Change of Control
Offer") all of the outstanding Bonds at a purchase price (the "Change of
Control Purchase Price") equal to 106.5 per cent. (if the date of such purchase
occurs on or before June 30, 1998), 113.5 per cent. (if the date of purchase
occurs after June 30, 1998 but on or before June 30, 1999) or 121.0 per cent.
(if the date of purchase occurs after June 30, 1999), as applicable, of the
principal amount thereof plus accrued and unpaid interest, if any, to the
purchase date which shall be no earlier than 60 days and no later than 90 days
from the date the notice of Change of Control Offer is mailed to the Bondholders
and the Trustee (the "Change of Control Purchase Dates"). The Issuer shall be
required to purchase all Bonds properly tendered (or the portions thereof equal
to U.S. $10,000 or increments of U.S. $1,000 in excess thereof that are so
tendered by a Bondholder in the case of a partial tender) in the Change of
Control Offer and not withdrawn on the Change of Control Purchase Date. The
Change of Control Offer is required to remain open for at least 20 Business
Days and until the close of business on the Second Business Day preceding the
Change of Control Purchase Date.
In order to effect such Change of Control Offer, the Issuer shall, not
later than the 30th day prior to the occurrence of the Change of Control, give
to each holder of Bonds notice of the proposed Change of Control Offer, which
notice shall govern the terms of the Change of Control Offer and shall state,
among other things, the procedures that holders of Bonds must follow to accept
the Change of Control Offer.
(d) Disposition of Proceeds of Asset Sales. The Issuer will not, and will
not permit any of its Subsidiaries to, and will to the fullest extent of the
rights available to it under the relevant contractual or organizational
documents not permit its Significant Joint Ventures to, make any Asset Sale
unless (a) the Issuer or such entity, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the shares or assets sold or otherwise disposed of and (b) at least
75% of such consideration consists of cash or Cash Equivalents or the
assumption of Indebtedness of the Issuer or such Subsidiary or such Significant
Joint Venture or other obligations relating to such assets and release from all
liability on the Indebtedness or other obligations assumed, or such
consideration consists of (x) property or assets that will be owned by the
Issuer, or a Subsidiary or a Significant Joint Venture and are to be used in a
telecommunications business or in related activities or services that
thereafter will be conducted by the Issuer or such Subsidiary or such
Significant Joint Venture or (y) Capital Stock or other securities issued by a
party to the transaction or an Affiliate thereof, which Capital Stock or other
securities are freely tradable and which are sold for cash within 90 days of
the consummation of the Asset Sale in connection with which they were acquired.
To the extent the Net Cash Proceeds of any Asset Sale are not required to be
applied to repay, and permanently reduce the commitments under Senior
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Indebtedness or Indebtedness of a Subsidiary or Indebtedness of a Significant
Joint Venture or are not so applied, the Issuer or such entity, as the case may
be, within 360 days of such Asset Sale, will apply such Net Cash Proceeds to an
investment in properties and assets that replace the properties and assets that
were the subject of such Asset Sale or in properties and assets that will be
used in the business of the Issuer and such entities existing on the Issue Date
or in businesses reasonably related thereto ("Replacement Assets"). Any Net
Cash Proceeds from any Asset Sale that are neither used to repay, and
permanently reduce the commitments under Senior Indebtedness or Indebtedness of
a Subsidiary or Indebtedness of a Significant Joint Venture, nor invested in
Replacement Assets within the 360-day period described above constitute "Excess
Proceeds" subject to disposition as provided below.
When the aggregate amount of Excess Proceeds equals or exceeds U.S.
$10,000,000, the Issuer shall make an offer to purchase (an "Asset Sale
Offer"), from all holders of the Bonds, on a date not more than 40 Business Days
thereafter, an aggregate principal amount of Bonds equal to such Excess
Proceeds, at a price in cash equal to 100% of the outstanding principal amount
thereof plus accrued and unpaid interest, if any, to the purchase date. To the
extent that the aggregate principal amount of Bonds tendered pursuant to an
Asset Sale Offer is less than the Excess Proceeds, the Issuer may use such
excess for general corporate purposes. If the aggregate principal amount of
Bonds validly tendered and not withdrawn by holders thereof is greater than the
Excess Proceeds, Bonds to be purchased will be selected on a pro rata basis.
Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall
be reset to zero.
(e) Limitation on Transactions with Interested Persons. The Issuer will
not, and will not permit any of its Subsidiaries to, and will to the fullest
extent of the rights available to it under the relevant contractual or
organizational documents not permit its Significant Joint Ventures to, directly
or indirectly, enter into or suffer to exist any transaction or series of
related transactions (including, without limitation, the sale, transfer,
disposition, purchase, exchange or lease of assets, property or services) with,
or for the benefit of, any Affiliate of the Issuer, any Subsidiary or
Significant Joint Venture or any beneficial owner (determined in accordance
with the Indenture) of 5 percent or more of the Capital Stock or other
ownership interest of any of the foregoing entities at any time outstanding
(each of the foregoing being "Interested Persons"), unless (a) such transaction
or series of related transactions is on terms that are no less favorable to the
Issuer or such Subsidiary or Significant Joint Venture, as the case may be,
than those which could have been obtained in a comparable transaction at such
time from persons who are not Affiliates or the Issuer or Interested Persons,
(b) with respect to a transaction or series of transactions involving aggregate
payments or value equal to or greater than U.S.$20,000,000 (or the foreign
currency equivalent thereof), the Issuer has obtained a written opinion from an
Independent Financial Advisor stating that the terms of such transaction or
series of transactions are fair to the Issuer or such Subsidiary or such
Significant Joint Venture, as the case may be, from a financial point of view
and (c) with respect to a transaction or series of transactions involving
aggregate payments or value equal to or greater than U.S.$10,000,000 (or the
foreign currency equivalent thereof), the Issuer shall have delivered an
officer's certificate to the Trustee certifying that such transaction or series
of transactions complies with the preceding clause (a) and, if applicable,
certifying that the opinion referred to in the preceding clause (b) has been
delivered and that such transaction or series of transactions has been approved
by a majority of the disinterested members of the Board of Directors of the
Issuer, provided, however, that this covenant will not restrict the Issuer from
(i) paying dividends in respect of its Capital Stock permitted under the
covenant described under "--Limitation on Restricted Payments" above, (ii)
paying reasonable and customary fees to directors of the Issuer who are not
employees of the Issuer, (iii) making loans or advances to officers or
employees of the Issuer and its Subsidiaries or Significant Joint Ventures
(including travel and moving expenses) in the ordinary course of business for
bona fide business purposes of the Issuer or such Subsidiary or Significant
Joint Venture not in excess of U.S.$45,000,000 (or the foreign currency
equivalent thereof), in the aggregate at any one time outstanding; (iv)
engaging in any transaction involving the provision of telecommunications
services or related activities between or among the Issuer, any Subsidiary or
any Significant Joint Venture and, provided that such transaction is in the
ordinary course of business and consistent with commercially reasonable
practice, any Joint Venture of the Issuer that is not a Significant Joint
Venture or between any of them or (v) any agreement as in effect as of the
Issue Date or any amendment thereto or any transaction contemplated thereby, as
listed in a schedule to the Indenture (including pursuant to any amendment
thereto so long as any such amendment in the judgment of the Board of Directors
voting to approve the amendment does not have a material adverse effect on the
Bondholders).
(f) Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries and Significant Joint Ventures. The Issuer will not, and will not
permit any of its Subsidiaries to, and will to the fullest extent of the rights
available to it under the relevant contractual or organizational documents not
permit its Significant Joint Ventures to,
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directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any such Subsidiary
or Significant Joint Venture to (a) pay dividends, in cash or otherwise, or
make any other distributions on or in respect of its Capital Stock or any other
interest or participation in, or measured by, its profits to the Issuer or any
Subsidiary or any Significant Joint Venture, (b) pay any Indebtedness owed to
the Issuer or any other Subsidiary or Significant Joint Venture, (c) make loans
or advances to, or any investment in, the Issuer or any other Subsidiary or
Significant Joint Venture, (d) transfer any of its properties or assets to the
Issuer or any other Subsidiary or Significant Joint Venture or (e) guarantee
any Indebtedness of the Issuer or any Subsidiary or Significant Joint Venture,
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) customary non-assignment provisions of any contract or any
lease governing a leasehold interest of the Issuer or any Subsidiary or
Significant Joint Venture, (iii) customary restrictions on transfers of
property subject to a Lien permitted under the Indenture which could not
materially adversely affect the Issuer's ability to satisfy its obligations
under the Indenture and the Bonds, (iv) any agreement or other instrument of a
person acquired by the Issuer or any Subsidiary or Significant Joint Venture
(or a Subsidiary of such person) in existence at the time of such acquisition
(but not created in contemplation thereof), which encumbrance or restriction is
not applicable to any person, or the properties or assets of any person, other
than the person, or the properties or assets of the person, so acquired, (v)
provisions contained in agreements or instruments relating to Indebtedness
which prohibit the transfer of all or substantially all of the assets of the
obligor thereunder unless the transferee shall assume the obligations of the
obligor under such agreement or instrument, (vi) encumbrances and restrictions
under Indebtedness in effect on the Issue Date and encumbrances and
restrictions in permitted refinancings or replacements thereof which are no
less favorable to the holders of the Bonds than those contained in the
Indebtedness so refinanced or replaced, (vii) any agreement in existence at the
Issue Date, (viii) encumbrances and restrictions in connection with Subsidiaries
acquired after the Issue Date and Significant Joint Ventures entered into after
the Issue Date, including with respect to any financing thereof, that are no
more adverse to the Issuer than those referred to in (vii) above), (ix) in the
case of clause (d) of this covenant above, arising or agreed to in the ordinary
course of business, not relating to any Indebtedness and that do not
individually, or together with all such encumbrances or restrictions, detract
from the value of the property or assets of the Issuer or any Subsidiary or any
Significant Joint Venture in any manner material to the Issuer or any
Subsidiary or any Significant Joint Venture, (x) contained in the terms of any
Indebtedness incurred by Hermes or any agreement pursuant to which such
Indebtedness was issued if the encumbrance or restriction is not materially
more disadvantageous to the Bondholders than is customary in comparable
financings (as determined by the Company) and the Company determines that any
such encumbrance or restriction will not materially affect the Company's
ability to make principal payments on the Bonds, (xi) contained in any
stockholders or similar agreement, so long as such encumbrance or restriction
is not more disadvantageous to the Bondholders than the encumbrances and
restrictions contained in comparable agreements entered into in the past by the
Issuer, any of its Subsidiaries or Significant Joint Ventures, or (xii)
contained in any agreement entered into after the Issue Date, so long as such
encumbrance or restriction is not materially more disadvantageous to the
Bondholders than the encumbrances and restrictions contained in agreements in
existence on the Issue Date.
(g) Limitation on Sale-Leaseback Transactions. The Issuer will not,
and will not permit any of its Subsidiaries to, and will to the fullest extent
of the rights available to it under the relevant contractual or organizational
documents not permit its Significant Joint Ventures to, enter into any
Sale-Leaseback Transaction with respect to any property of the Issuer or any of
its Subsidiaries or Significant Joint Ventures other than a Sale-Leaseback
Transaction between the Issuer, a Subsidiary or Significant Joint Venture or
between any of them. Notwithstanding the foregoing, the Issuer and its
Subsidiaries or Significant Joint Ventures may enter into Sale-Leaseback
Transactions involving Telecommunications Assets; provided that (i) the Issuer,
or such Subsidiary or Significant Joint Venture, as the case may be, would be
entitled to create or incur a Lien to secure Indebtedness pursuant to the
provisions of the "Negative Pledge" covenant equal in amount to the
Attributable Value of the Sale-Leaseback Transaction without equally and
ratably securing the Bonds and (ii) the Sale-Leaseback Transaction is treated
as an Asset Sale and the provisions of the "Disposition of Proceeds of Asset
Sales" covenant are satisfied with respect to such Sale-Leaseback Transaction.
(h) Limitation on Guarantees by Subsidiaries. The Issuer will not
permit any Subsidiary to, and will to the fullest extent of the rights
available to it under the relevant contractual or organizational documents not
permit its Significant Joint Ventures to, directly or indirectly, assume,
guarantee or in any other manner become liable with respect to any Indebtedness
of the Issuer which is subordinated Indebtedness or Pari Passu Indebtedness
unless such Subsidiary or Significant Joint Venture, as the case may be,
simultaneously executes and delivers a supplemental indenture to the Indenture,
pursuant to provisions in form and substance satisfactory to the Trustee,
providing for a guarantee of payment
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of the Bonds by such Subsidiary or Significant Joint Venture and (A) if any
such assumption, guarantee or other liability is subordinated, the guarantee
under such supplemental indenture shall be subordinated to the same extent as
the Bonds are subordinated to Senior Indebtedness of the Issuer under the
Indenture and (B) any such assumption, guarantee or other liability of such
Subsidiary or Significant Joint Venture with respect to Subordinated
Indebtedness shall be subordinated to such Subsidiary's or Significant Joint
Venture's, as applicable assumption, guarantee or other liability with respect
to the Bonds to the same extent as such Subordinated Indebtedness is
subordinated or junior to the Bonds under the Indenture.
(i) Merger Sale of Assets, Etc. The Issuer will not, in any
transaction or series of transactions, merger or consolidate with or into, or
sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets as an entirety to, any person or
persons, and the Issuer will not permit any of its Subsidiaries to, and will to
the fullest extent of the rights available to it under the relevant contractual
or organizational documents not permit its Significant Joint Ventures to, enter
into such any such transaction or series of transactions if such transaction or
series of transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or other disposition of all or substantially all of
the respective properties and assets of the Issuer and its Subsidiaries and
Significant Joint Ventures on a combined basis, to any other person or persons,
unless at the time of and after giving effect thereto (a) either (i) if the
transaction or series of transactions is a merger or consolidation, the Issuer
shall be the surviving person of such merger or consolidation, or (ii) the
person formed by such consolidation or into which the Issuer or such Subsidiary
or Significant Joint Venture is merged or to which the properties and assets of
the Issuer and its Subsidiaries and Significant Joint Ventures are transferred
(any such surviving person or transferee person being the "Surviving Entity")
shall be a corporation organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia or the United
Kingdom, the Federal Republic of Germany, France or Italy and shall expressly
assume by a supplemental indenture executed and delivered to the Trustee, in
form reasonably satisfactory to the Trustee, all the obligations of the Issuer
under the Bonds and the Indenture, and in each case, the Indenture shall remain
in full force and effect; (b) immediately before and immediately after giving
effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction or series of
transactions), no Default or Event of Default shall have occurred and be
continuing and the Issuer or the Surviving Entity, as the case may be, after
giving effect to such transaction or series of transactions on a pro forma
basis (including, without limitation, any Indebtedness incurred or anticipated
to be incurred in connection with or in respect of such transaction or series
of transactions), could incur $1.00 of additional Indebtedness pursuant to the
first paragraph of the covenant described under "--Limitation on Indebtedness"
above (assuming a market rate of interest with respect to such additional
Indebtedness); (c) immediately after giving effect to such transaction or
series of transactions on a pro form basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), the Consolidated Net
Worth of the Issuer or the Surviving Entity, as the case may be, is at least
equal to the Consolidated New Worth of the Issuer immediately before such
transaction or series of transactions; (d) such consolidation, merger,
conveyance, transfer, lease, or other disposition does not adversely affect the
validity or enforceability of the Bonds; and (e) if the Surviving Entity is
organized in a jurisdiction other than the United States of America, any state
thereof or the District of Columbia, such entity appoints CT Corporation
System, New York, New York, as its agent for service of process in any suit,
action or proceeding with respect to the Indenture or the Bonds issued
thereunder and for actions brought under federal or state securities laws
brought in federal or state court located in the Borough of Manhattan in The
City of New York and submits to such jurisdiction, waives forum non conveniens,
waives or is not subject to immunity from suit and any judgments brought
against such entity in respect to the Indenture and the Bonds may be recognized
and enforced in such jurisdiction of its organization.
In connection with any consolidation, merger, transfer, lease,
assignment or other disposition contemplated hereby, the Issuer shall deliver,
or cause to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an officer's certificate and an opinion of
counsel, each stating that such consolidation, merger, transfer, lease,
assignment or other disposition and the supplemental indenture in respect
thereof comply with the foregoing requirements; provided, however, that solely
for purposes of computing amounts described in subclause (C) of the covenant
described under "--Limitation on Restricted Payments" above, any such successor
person shall only be deemed to have succeeded to and be substituted for the
Issuer with respect to periods subsequent to the effective time of such merger,
consolidation or transfer of assets.
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Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Issuer in accordance with the foregoing,
in which the Issuer is not the continuing corporation, the successor
corporation formed by such a consolidation or into which the Issuer is merged
or to which such transfer is made shall succeed to, and be substituted for, and
may exercise every right and power of, the Issuer under the Indenture with the
same effect as if such successor corporation had been named as the Issuer
therein.
(j) Limitation on Other Subordinated Indebtedness. The Company
will not create, incur, assume, guarantee or in any other manner become liable
with respect to any Indebtedness that is subordinate in right of payment to any
Senior Indebtedness unless such Indebtedness is also pari passu with, or
subordinate in right of payment to, the Bonds.
14. Reservation of GTS Shares
The Issuer shall at all times reserve and keep
available out of its authorized common stock, solely for the purpose of
issuance or delivery upon conversion of the Bonds, the number of GTS Shares
that it reasonably believes will be required to be delivered in connection with
such conversion pursuant to the terms of the Indenture.
15. Governing Law
The Indenture and the Bonds will be governed by the
laws of the State of New York.
16. Guarantees
This Bond may after the date hereof be entitled to
certain senior subordinated guarantees made for the benefit of the Holders.
Reference is hereby made to Section 4.18 of the Indenture for the terms of any
guarantee.
17. Covenant Defeasance
The Indenture contains provisions (which provisions
apply to this Bond) for defeasance at any time of (a) the entire indebtedness
of the Issuer under this Bond and (b) certain restrictive covenants and related
Defaults and Events of Default, in each case upon compliance by the Issuer with
certain conditions set forth therein.
18. Enforcement
At any time after the Bonds shall have become due and
payable, the Trustee may, at its discretion and without further notice, take
such proceedings against the Issuer as it may think fit to enforce repayment of
the Bonds together with premium (if any) and accrued interest and to enforce
the provisions of the Indenture, but it shall not be bound to take any such
proceedings unless (a) it shall have been so directed in writing by the holders
of at least 25 per cent. in principal amount of the Bonds then outstanding, and
(b) it shall have been indemnified to its satisfaction. No Bondholder shall be
entitled to proceed directly against the Issuer unless the Trustee, having
become bound so to proceed, fails to do so within 30 days after the receipt of
the request and offer, such request has not been rescinded pursuant to the
terms of the Indenture and such failure shall be continuing.
19. Notices
Notices to Bondholders shall be validly given if (i)
mailed to them at their respective addresses in the register and (ii) published
in an English language daily newspaper of general circulation in Europe
approved by the Trustee, currently expected to be the Financial Times, and, so
long as the Bonds are listed on the Luxembourg Stock Exchange, published in a
daily newspaper of general circulation in Luxembourg approved by the Trustee,
currently expected to be the Luxemburger Wort. Any such notice shall be deemed
to have been given on the first date on which both conditions shall have been
met.
X-0/00
000
00. Meetings of Bondholders, Modification and Waiver
The Indenture contains provisions for convening
meetings of Bondholders to consider any matter affecting their interests,
including any modification of, or arrangement in respect of, the terms and
conditions of the Bonds or of the provisions of the Indenture. Certain special
quorum provisions apply for meetings of Bondholders convened for the purpose of
amending certain terms concerning, inter alia, the amounts payable on and the
currency of payment of the Bonds and the Conversion Rights. Any resolution duly
passed at any such meeting will be binding on all Bondholders, whether present
or not.
21. Satisfaction and Discharge
The Indenture will be discharged and will cease to be
of further effect (except as to surviving rights or registration of transfer or
exchange of the Bonds, as expressly provided for in the Indenture) as to all
outstanding Bonds when either (a) all the Bonds theretofore authenticated and
delivered (except lost, stolen or destroyed Bonds which have been replaced or
repaid and Bonds for whose payment money has theretofore been deposited with
the Trustee or any Paying Agent in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust) have
been delivered to the Trustee for cancellation and the Issuer has paid all
other sums payable by it under the Indenture or (b)(i) the Issuer has
distributed to the Trustee and each holder of Bonds notice of redemption or all
Bonds have otherwise become due and payable (ii) all Bonds not theretofore
delivered to the Trustee for cancellation (except lost, stolen or destroyed
Bonds which have been replaced or paid) have been called for redemption
pursuant to the terms of the Bonds or have otherwise become due and payable and
the Issuer has irrevocably deposited or caused to be deposited with the Trustee
funds in an amount sufficient to pay and discharge the entire Indebtedness on
the Bonds not theretofore delivered to the Trustee for cancellation, for
principal of, premium, if any, and interest on the Bonds to the date of deposit
together with irrevocable instructions from the Issuer directing the Trustee to
apply such funds to the payment thereof at maturity or redemption, as the case
may be; (iii) there exists no Default or Event of Default under the Indenture;
(iv) the Issuer shall have paid all other sums payable under the Indenture by
the Issuer and (v) the Issuer has delivered to the Trustee an officer's
certificate and an opinion of counsel stating that all conditions precedent
under the Indenture relating to the termination of the Issuer's obligations
under the Bonds and the Indenture have been complied with.
22. Amendments and Waivers
From time to time, the Issuer, when authorized by a
resolution of its Board of Directors, and the Trustee may, without the consent
of the holders of any outstanding Bonds, amend, waive or supplement the
Indenture or the Bonds for certain specified purposes, including, among other
things, (a) curing ambiguities, defects or inconsistencies, (b) qualifying, or
maintaining the qualification of, the Indenture under the Trust Indenture Act
of 1939, (c) evidencing the succession of another Person to the Issuer or any
other obligor on the Bonds, and the assumption by any such successor of the
covenants of the Issuer or such obligor in the Indenture and in the Bonds in
accordance with the "Merger, Sale of Assets, Etc." covenant; (d) adding to the
covenants of the Issuer or any other obligor upon the Bonds for the benefit of
the holders of the Bonds or surrendering any right or power conferred upon the
Issuer or any other obligor upon the Bonds, as applicable, in the Indenture or
in the Bonds; (e) evidencing the replacement of the Trustee by a trustee that
is appointed to so act pursuant to the terms of the Indenture; and (f)
evidencing or making any other change that does not adversely affect the rights
of any holder of Bonds; provided, however, that such change does not adversely
affect the rights of any holder of Bonds and the Issuer has delivered to the
Trustee an opinion of counsel to such effect.
Other amendments and modifications of the Indenture
or the Bonds may be made by the Issuer and the Trustee with the consent of the
holders of not less than a majority of the aggregate principal amount of the
outstanding Bonds; provided, however, that no such modification or amendment
may, without the consent of the holder of each outstanding Bond affected
thereby, (i) reduce the principal amount of, extend the fixed maturity of or
alter the redemption provisions of, the Bonds, (ii) change the currency in which
any Bonds or any premium or the interest thereon is payable or make the
principal of, premium, if any, or interest on any Bond payable in money other
than that stated in the Bond, (iii) reduce the percentage in principal amount
of outstanding Bonds that must
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consent to an amendment, supplement or waiver or consent to take any action
under the Indenture or the Bonds, (iv) impair the right to institute suit for
the enforcement of any payment on or with respect to the Bonds, (v) waive a
default in payment with respect to the Bonds, (vi) amend, change or modify the
obligations of the Issuer to make and consummate a Change of Control Offer in
the event of a Change of Control or make and consummate the offer with respect
to any Asset Sale or modify any of the provisions or definitions with respect
thereto, (vii) reduce or change the rate or time for payment of interest on the
Bonds, (viii) modify or change any provision of the Indenture affecting the
subordination or ranking of the Bonds in a manner adverse to the holders of the
Bonds, or (ix) take any other action otherwise prohibited by the Indenture to
be taken without the consent of each Bondholder affected thereby.
23. The Trustee
The Indenture provides that, except during the
continuance of an Event of Default, the Trustee thereunder will perform only
such duties as are specifically set forth in the Indenture. If an Event of
Default has occurred and is continuing, the Trustee will exercise such rights
and powers vested in it under the Indenture and use the same degree of care and
skill in its exercise as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs.
The Trustee may, without the consent of the Bondholders:
(i) agree to any modification of the
provisions of the Indenture or the Bonds which, in the opinion of
the Trustee, is of a formal, minor or technical nature, is made to
correct a manifest error or to comply with mandatory provisions of
law or is not materially prejudicial to the interests of the
Bondholders;
(ii) waive or authorize any breach or
proposed breach by the Issuer of the provisions of the Indenture or
the Bonds, or determine that the occurrence of any Event of Default
shall not be treated as such, which, in the opinion of the Trustee,
is not materially prejudicial to the interests of the Bondholders.
Any such modification, waiver or authorization shall be binding on the
Bondholders and, if the Trustee so requires, such modification shall be
notified by the Issuer to the Bondholders as soon as possible.
24. Indemnification of the Trustee
The Indenture contains provisions for the
indemnification of the Trustee and for its relief from responsibility,
including provisions relieving it from taking proceedings to enforce repayment
or taking steps to enforce the Conversion Rights unless indemnified to its
satisfaction. The Trustee is entitled to enter into business transactions with
the Issuer or any entity related to it without accounting for any profit.
25. Certain Definitions
"Acquired Indebtedness" means, with respect to any
specified person, (i) Indebtedness of any other person at the time such other
person merged with or into or became a Subsidiary or Significant Joint Venture
of any specified person, and (ii) Indebtedness encumbering any asset acquired
by any specified person.
"Affiliate" means, with respect to any specified
person, any other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person.
"Asset Sale" means any sale, issuance, conveyance,
transfer, lease or other disposition to any person other than the Issuer or a
Wholly-Owned Subsidiary of the Issuer, in one or a series of related
transactions, of (a) any Capital Stock of any Subsidiary or Significant Joint
Venture (other than in respect of director's qualifying shares or investments
by foreign nationals mandated by applicable law); (b) all or substantially all
of the properties and assets of any division or line of business of the Issuer
or any Subsidiary or Significant Joint Venture;
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or (c) any other properties or assets of the Issuer or any Subsidiary or
Significant Joint Venture other than in the ordinary course of business. For
the purposes of this definition, the term "Asset Sale" shall not include (i)
any sale, transfer or other disposition of equipment, tools or other assets
(including Capital Stock or other equity of any Subsidiary or Significant Joint
Venture) by the Issuer or any of its Subsidiaries or Significant Joint Ventures
in one or a series of related transactions in respect of which the Issuer or
such Subsidiary or Significant Joint Venture receives cash or property with an
aggregate Fair Market Value of U.S.$10,000,000 (or the foreign currency
equivalent thereof) or less; (ii) any sale, issuance, conveyance, transfer,
lease or other disposition of properties or assets that is governed by the
provisions described under "-- Merger, Sale of Assets, Etc." above and (iii)
any direct or indirect sale, transfer or other disposition of shares of Capital
Stock of Hermes so long as after such sale, transfer or other disposition the
Issuer owns or controls at least 51 per cent. of the Voting Stock of Hermes.
"Average Life to Stated Maturity" means, with
respect to any Indebtedness, as at any date of determination, the quotient
obtained by dividing (i) the sum of the products of (a) the number of years (or
any fraction thereof) from such date to the date or dates of each successive
scheduled principal payment (including, without limitation, any sinking fund
requirements) of such Indebtedness multiplied by (b) the amount of each such
principal payment by (ii) the sum of all such principal payments.
"Capital Research Notes" means the aggregate $30
million of notes issued pursuant to (i) the Senior Note Purchase Agreement,
dated as of February 2, 1996, as amended, between the Issuer and Emerging
Markets Growth Fund, Inc. and (ii) the Senior Note Purchase Agreement dated as
of February 2, 1996, as amended, between the Issuer and Capital International
Emerging Markets Funds.
"Capital Stock" means, with respect to any person,
any and all shares, interests, participations, rights in or other equivalents
(however designated) of such person's capital stock, and any rights (other than
debt securities convertible into capital stock), warrants or options
exchangeable for or convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation
under a lease of (or other agreement conveying the right to use) any property
(whether real, personal or mixed) that is required to be classified and
accounted for as a capital lease obligation under GAAP, and the amount of any
such obligation at any date shall be the capitalized amount thereof at such
date, determined in accordance with GAAP.
"Cash Equivalents" means, at any time, (a) any
evidence of Indebtedness with a maturity of 180 days or less issued or directly
and fully guaranteed or insured by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof); (b) certificates of
deposit or acceptances with a maturity of 180 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than U.S.$500,000,000;
(c) certificates of deposit with a maturity of 180 days or less of any
financial institution that is not organized under the laws of the United
States, any state thereof or the District of Columbia that are rated at least
A-1 by S&P or at least P-1 by Moodys or at least an equivalent rating category
of another nationally recognized securities rating agency; and (d) repurchase
agreements and reverse repurchase agreements relating to marketable direct
obligations issued or unconditionally guaranteed by the government of the
United States of America or issued by any agency thereof and backed by the full
faith and credit of the United States of America, in each case maturing within
180 days from the date of acquisition; provided that the terms of such
agreements comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions With Securities Dealers and Others, as
adopted by the Comptroller of the Currency on October 31, 1985.
"Change of Control" means the occurrence of any of
the following events: (a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than the Permitted
Holders, is or becomes the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time, upon the happening of an event or otherwise), directly or
indirectly, of more than 40 per cent. of the total Voting Stock of the Issuer
(50.1 per cent. in the case of a Strategic Investor); (b) the Issuer
consolidates with, or merges with or into, another
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person or sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any person, or any person
consolidates with, or merges with or into, the Issuer, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the Issuer
is converted into or exchanged for cash, securities or other property, other
than any such transaction where (i) the outstanding Voting Stock of the Issuer
is converted into or exchanged for (1) Voting Stock (other than Redeemable
Capital Stock) of the surviving or transferee corporation or (2) cash,
securities and other property in an amount which could then be paid by the
Issuer as a Restricted Payment under the Indenture, or a combination thereof,
and (ii) immediately after such transaction no "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding
Permitted Holders, is the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time, upon the happening of an event or otherwise), directly or
indirectly, of more than 50 per cent. of the total Voting Stock of the
surviving or transferee corporation; (c) at any time during any consecutive
two-year period, individuals who at the beginning of such period constituted
the Board of Directors of the Issuer (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
stockholders of the Issuer was approved by a vote of 66 2/3 per cent. of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Issuer then in office; or (d) the Issuer is liquidated or
dissolved or adopts a plan of liquidation.
"Chatterjee Notes" means the aggregate $40 million of
notes issued pursuant to (a) the Senior Note Purchase Agreement, dated as of
January 19, 1996, as amended, among the Issuer, The Open Society Institute and
Chatterjee Fund Management, L.P. and (b) the Senior Note Purchase Agreement,
dated as of June 6, 1996, as amended, among the Issuer, The Open Society
Institute, Winston Partners II LDC and Winston Partners II LLC.
"Closing Price" means the closing price of the GTS
Shares on a Qualifying Stock Exchange or if the GTS Shares are listed on more
than one such exchange the average of such closing prices on all such
exchanges.
"Common Stock" means, with respect to any person, any
and all shares, interests or other participations in, and other equivalents
(however designated and whether voting or nonvoting) of, such person's common
stock, whether outstanding at the Issue Date or issued after the Issue Date,
and includes, without limitation, all series and classes of such common stock.
"Complying Public Equity Conditions" means all of the
following: (a) the Issuer has made public sales of GTS Shares with a cumulative
public offering price of at least U.S.$100,000,000 to an aggregate of not
less than 50 purchasers; (b) the GTS Shares have been listed or shall be listed
in connection with the offering on either the New York Stock Exchange, the
London Stock Exchange, the American Stock Exchange or the Nasdaq National
Market; and (c) the Issuer shall have registered additional GTS Shares from
Private Equity Offerings with a market value of at least U.S.$100,000,000
calculated using the offering price in the Complying Public Equity Offering.
"Complying Public Equity Offering" means a public
offering of GTS Shares where, immediately following completion thereof, (a) the
Complying Public Equity Conditions have been met and (b) the aggregate number
of GTS Shares sold thereby, together with any GTS Shares sold in any prior
public offerings plus the number of GTS Shares into which the Bonds may be
converted (calculated as if such conversion were to be effected at the time of
such public offering) does not exceed 50 per cent. of the total GTS Shares
outstanding on a fully diluted basis.
"Consolidated Net Worth" means, with respect to any
person at any date, the consolidated stockholders' equity of such person less
the amount of such stockholders' equity attributable to Redeemable Capital
Stock of such person and its subsidiaries, as determined in accordance with
GAAP.
"Conversion Agent" means the office or agency where
Bonds may be presented for conversion.
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"Conversion Date" means the earliest date possible
after the listing of the GTS Shares on the New York Stock Exchange, London
Stock Exchange, the American Stock Exchange or the Nasdaq National Market that
the Issuer may deliver GTS Shares to converting Bondholders.
"Covenant Defeasance" means the 123rd day after (i)
the Issuer has irrevocably deposited with the Trustee, in trust, for the
benefit of the Holder, cash in U.S. dollars, non-callable U.S. Government
Obligations, or a combination thereof, in such amounts as will be sufficient,
in the opinion of a nationally recognized firm of independent public
accountants selected by the Issuer, to pay the principal of and premium, if
any, on the outstanding Bonds at their Maturity or on the applicable optional
redemption date, as the case may be, of such principal or installment of
principal of, or premium, if any, on the outstanding Bonds; (ii) the Issuer
must have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that the holders of the
outstanding Bonds 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;
(iii) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the 91st
day after the date of deposit; (iv) such Covenant of Defeasance will not result
in a breach or violation of, or constitute a default under any material
agreement or instrument (other than the Indenture) to which the Issuer or any
of its Subsidiaries or Significant Joint Ventures is a party or by which the
Issuer of any of its Subsidiaries or Significant Joint Ventures is bound; (v)
the Issuer must have delivered to the Trustee an opinion of counsel to the
effect that after the 123rd day (or such other applicable date) following the
deposit of the instruments referred to in (i), the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally and the creation of the
defeasance trust does not violate the Investment Company Act of 1940, as
amended; (vi) the Issuer must have delivered to the Trustee an Officers'
Certificate of the Issuer stating that the deposit was not made by the Issuer
with the intent of preferring the Bondholders over the other creditors of the
Issuer with the intent of defeating, hindering, delaying or defrauding
creditors of the Issuer or others; and (vii) the Issuer must have delivered to
the Trustee an Officers' Certificate of the Issuer and an opinion of counsel in
the United States acceptable to the Trustee, each stating that all conditions
precedent provided for relating to the Covenant Defeasance have been complied
with.
"Currency Agreement" means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect the Issuer or any Subsidiary or any Significant Joint
Venture against fluctuations in currency values.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Designated Senior Indebtedness" means Senior
Indebtedness permitted under the Indenture the principal amount of which is
$30,000,000 (or the foreign currency equivalent) or more and has been
designated by the Issuer as "Designated Senior Indebtedness" (which includes
the Chatterjee Notes and the Capital Research Notes).
"Eligible Joint Venture" means a Joint Venture (other
than a Subsidiary) (a) that is formed with respect to the construction,
development, acquisition, servicing, ownership, improvement, operation or
management of a telecommunications business, (b) in which the Issuer, directly
or indirectly, owns at least 25 per cent. of the Capital Stock or other
ownership interest therein and (c) in respect of which the Issuer, directly or
indirectly, either (i) controls, by voting power, membership on the board of
directors or management committee or other similar governing body, or through
the provisions of any applicable partnership, joint venture, shareholder or
other similar agreement or under an operating, maintenance or management
agreement or otherwise, the management and operation of the Joint Venture and
any telecommunications project of such Joint Venture or (ii) otherwise has the
right to control or veto material acts and decisions with respect to the
management or operation of the Joint Venture that, taken as a whole, are
substantially similar to the rights of the Issuer with respect to the Existing
Joint Ventures as of the Issue Date.
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"Event of Default" has the meaning set forth under
"Events of Default" herein.
"Existing Joint Venture" means each of PrymTelefon,
Bancomsvyaz, TeleCommunications of Moscow, Hermes Europe Railtel B.V.,
LvNet-Telport, GTS Monaco Access X.X.X., Sovam Teleport Kiev Division L.L.C.,
EDN Sovintel, all the entities in which SFMT-Rusnet, Inc. currently has an
interest, all the entities in which Vostok Mobile b.v. currently has an
interest and their respective successors.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Fair Market Value" means, with respect to any asset,
the price, as determined by the Board of Directors of the Issuer, acting in
good faith, which could be negotiated in an arm's-length free market
transaction, for cash, between a willing seller and a willing buyer, neither of
which is under pressure or compulsion to complete the transaction; provided,
however, that with respect to any transaction or related series of transactions
which involves an asset or assets in excess of U.S. $10,000,000 (or the foreign
currency equivalent thereof), in the aggregate, such determination shall be
evidenced by a resolution of the majority of disinterested members of the Board
of Directors of the Issuer delivered to the Trustee.
"Fixed Charge Coverage Ratio" of the Issuer means,
for any period, the ratio of (a) the sum of Pro rata Combined Adjusted Net
Income, Pro rata Combined Interest Expense, Pro rata Combined Income Tax
Expense and Pro rata Combined Non-cash Charges deducted in computing Pro rata
Combined Adjusted Net Income, in each case, for such period to (b) Pro rata
Combined Interest Expense for such period.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States of America, which are applicable
from time to time and are consistently applied.
"Indebtedness" means, with respect to any person,
without duplication, (a) all liabilities of such person for borrowed money or
for the deferred purchase price of property or services, excluding any (i)
trade account payables arising in the ordinary course of business and (ii)
other accrued current liabilities incurred in the ordinary course of business,
including, without limitation, all obligations, contingent or otherwise, of
such person in connection with any letters of credit, banker's acceptance or
other similar credit transaction; (b) all obligations of such person evidenced
by bonds, debentures or other similar instruments; (c) all indebtedness created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such person (even if the rights and remedies of
the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), but excluding trade accounts payable
arising in the ordinary course of business; (d) all Capitalized Lease
Obligations of such person; (e) all Indebtedness referred to in the preceding
clauses of other persons and all dividends of other persons, the payment of
which is secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon
property (including, without limitation, accounts and contract rights) owned by
such person, even though such person has not assumed or become liable for the
payment of such Indebtedness (the amount of such obligation being deemed to be
the lesser of the value of such property or asset or the amount of the
obligation so secured); (f) all guarantees of Indebtedness referred to in this
definition by such person; (g) all Redeemable Capital Stock of such person
valued at the greater of its voluntary or involuntary maximum fixed repurchase
price plus accrued dividends; (h) all obligations under or in respect of
Currency Agreements and Interest Rate Protection Obligations of such person;
(i) any Preferred Stock of such person that provides for payments of
liquidation value by way of a sinking fund, or by way of a mandatory
redemption, defeasance, retirement, repurchase or otherwise, or allows the
holder the option to redeem, in each case prior to the 91st day prior to the
Maturity of the Bonds (valued at the sum of (without duplication) (A) the
liquidation preference thereof, (B) any mandatory redemption payment
obligations in respect thereof and (C) accrued dividends thereon); and (j) any
amendment, supplement, modification, deferral, renewal, extension or refunding
of any liability of the types referred to in clauses (a) through (i) above. For
purposes hereof, the "maximum fixed repurchase price" of any Redeemable Capital
Stock which does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Redeemable Capital Stock as if such
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Redeemable Capital Stock were purchased on any date on which Indebtedness shall
be required to be determined pursuant to the Indenture, and if such price is
based upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the board of
directors of the issuer of such Redeemable Capital Stock.
"Independent Financial Advisor" means a firm (i)
which does not, and whose directors, officers and employees or Affiliates do
not, have a material direct or indirect financial interest in the Issuer, any
Subsidiary or Significant Joint Venture and (ii) which, in the judgment of the
Board of Directors of the Issuer, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Interest Rate Protection Agreement" means any
arrangement with any other person whereby, directly or indirectly, such person
is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include without limitation, interest rate swaps, caps, floors, collars
and similar agreements.
"Interest Rate Protection Obligations" means the
obligations of any person pursuant to an Interest Rate Protection Agreement.
"Investment" means, with respect to any person, any
direct or indirect loan or other extension of credit or capital contribution to
(by means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others), or any purchase or
acquisition by such person of any Capital Stock, bonds, debentures or other
securities or evidences of Indebtedness issued by, any other person.
"Investments" shall exclude extensions of trade credit in the ordinary course
of business in accordance with normal trade practices.
"Issue Date" means the closing date for the sale and
issuance of the Bonds under the Indenture.
"Joint Venture" means a joint venture, partnership or
other similar arrangement, whether corporation, partnership or other legal form
where the Issuer or one or more Subsidiaries has, directly or indirectly, less
than a majority of the Voting Stock or other ownership interest.
"Lien" means any mortgage, charge, pledge, lien
(statutory or other), security interest, hypothecation, assignment for
security, claim, or preference or priority or other encumbrance upon or with
respect to any property of any kind; provided that in no event shall an
operating lease be deemed to constitute a Lien. A person shall be deemed to own
subject to a Lien any property which such person has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement
"Material Joint Venture" means a Joint Venture that,
as of the end of the most recent four-quarter period, had (i) total assets
which exceeded 10 per cent. of the total combined assets of the Issuer at the
end of such period or (ii) total revenues which exceeded 15 per cent. of the
total combined revenues of the Issuer for such period.
"Material Subsidiary" means a Subsidiary that, as of
the end of the most recent four-quarter period, had (i) total assets which
exceeded 10 per cent. of the total combined assets of the Issuer at the end of
such period or (ii) total revenues which exceeded 15 per cent. of the total
combined revenues of the Issuer for such period.
"Maturity" means, (i) when used with respect to the
Bonds, June 30, 2000, unless otherwise extended and (ii) when used with respect
to any Indebtedness other than the Bonds, the date specified in the instrument
governing such Indebtedness as the fixed date on which the principal of such
Indebtedness, or any installment of interest thereon, is due and payable.
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"Moody's" means Xxxxx'x Investors Service, Inc. and
its successors.
"Net Cash Proceeds" means, with respect to any Asset
Sale, the proceeds thereof in the form of cash or Cash Equivalents including
payments in respect of deferred payment obligations when received in the form
of cash or Cash Equivalents (except to the extent that such obligations are
financed or sold with recourse) net of (i) brokerage commissions and other fees
and expenses (including, without limitation, fees and expenses of legal counsel
and investment bankers) related to such Asset Sale, (ii) provisions for all
taxes payable as a result of such Asset Sale, (iii) amounts required to be paid
to any person (other than the Issuer or any Subsidiary or Significant Joint
Venture) owning a beneficial interest in the assets subject to the Asset Sale
and (iv) appropriate amounts to be provided by the Issuer or any Subsidiary or
Significant Joint Venture, as the case may be, as a reserve required in
accordance with GAAP against any liabilities associated with such Asset Sale
and retained by the Issuer or any Subsidiary or Significant Joint Venture, as
the case may be, after such Asset Sale, including, without limitation, pension
and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as reflected in an Officers' Certificate
delivered to the Trustee.
"Non-Complying Equity Offering" means (i) a Private
Equity Offering of GTS Shares or (ii) a public offering of GTS Shares that is
not a Complying Public Equity Offering.
"Non-Complying Public Equity Offering" means a public
equity offering of GTS Shares that satisfies all the Complying Public Equity
Conditions, except that the cumulative public offering price is less than U.S.
$100,000,000.
"Notice of Offering" means a notice given to the
Trustee or the Bondholders and, if required by the Indenture, the Luxembourg
Stock Exchange, that a Complying Public Equity Offering or a Non-Complying
Public Equity Offering has occurred.
"Pari Passu Indebtedness" means Indebtedness of the
Issuer which ranks pari passu in right of payment with the Bonds.
"Paying Agent" means the office or agency where Bonds
may be presented for payment of principal, premium, if any, and interest.
"Permitted Holder" means (A) Xxxx X. Xxxxxx and any
entity controlled by him, (B) one or more of Xxxxxx Xxxxx, Xxxxx Fund
Management LLC, Xxxxxxxx Xxxxxxxxxx or Chatterjee Management Company or
affiliates of any of the foregoing, and any person or entity for which any such
person or entity acts as the investment advisor or investment manager and (C)
any person that acquires the Capital Stock of the Issuer in a Strategic Equity
Offering.
"Permitted Investments" means any of the following:
(i) Investments in any Subsidiary or Significant Joint Venture; (ii) Investments
in any person that is merged or consolidated with or into, or transfers or
conveys all or substantially all of its assets to, the Issuer or any Subsidiary
or Significant Joint Venture at the time such Investment is made; (iii)
Investments in cash or Cash Equivalents; (iv) Investments in deposits with
respect to leases or utilities provided to third parties in the ordinary course
of business; (v) Investments in the Bonds; (vi) Investments in Currency
Agreements on commercially reasonable terms entered into by the Issuer or any
of its Subsidiaries or Significant Joint Ventures in the ordinary course of
business in connection with the operations of the business of the Issuer or its
Subsidiaries or Significant Joint Ventures to hedge against fluctuations in
foreign exchange rates; (vii) loans or advances to officers or employees of the
Issuer and its Subsidiaries or Significant Joint Ventures in the ordinary
course of business for bona fide business purposes of the Issuer, and its
Subsidiaries or Significant Joint Ventures (including travel and moving
expenses) not in excess of U.S. $5,000,000 (or the foreign currency equivalent)
in the aggregate at any one time outstanding; (viii) Investments in evidences
of Indebtedness, securities or other property received from another person by
the Issuer or any of its Subsidiaries or Significant Joint Ventures in
connection with any bankruptcy proceeding or by reason of a composition or
readjustment of debt or a reorganization of such person or as a result of
foreclosure, perfection or enforcement of
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any Lien in exchange for evidences of Indebtedness, securities or other
property of such person held by the Issuer or any of its Subsidiaries or
Significant Joint Ventures, or for other liabilities or obligations of such
other person to the Issuer or any of its Subsidiaries or Significant Joint
Ventures that were created, in accordance with the terms of the Indenture; (ix)
Investments in Interest Rate Protection Agreements on commercially reasonable
terms entered into by the Issuer or any of its Subsidiaries or Significant
Joint Ventures in the ordinary course of business in connection with the
operations of the business of the Issuer or its Subsidiaries or Significant
Joint Ventures to hedge against fluctuations in interest rates; and (x)
Investments in entities that are not Subsidiaries or Significant Joint
Ventures, to finance the construction, installation, improvement, acquisition
or operation of Telecommunication Assets, provided that such Investments do not
exceed in the aggregate, the greater of U.S. $25,000,000 (or the foreign
currency equivalent) or 10 per cent. of the pro rata combined assets of the
Issuer or, individually, the greater of U.S. $5,000,000 (or the foreign currency
equivalent) or 2 per cent. of the pro rata combined assets of the Issuer.
"person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock
company, trust, charitable foundation, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"PORTAL" means the Private Offerings, Resales and
Trading through Automated Linkages market operated by the National Association
of Securities Dealers, Inc. or any successor thereto.
"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.
"Private Equity Offering" means a private offering of
GTS Shares pursuant to an exemption from registration under the Securities Act.
"Pro rata Combined Adjusted Net Income" means, for
any period, the pro rata combined net income (or loss) of the Issuer and its
Subsidiaries and Significant Joint Ventures for such period, adjusted by
excluding, without duplication, (a) any net after-tax extraordinary gains or
losses (less all fees and expenses relating thereto), (b) any net after-tax
gains or losses (less all fees and expenses relating thereto) attributable to
asset dispositions other than in the ordinary course of business, and (c) the
portion of net income (or loss) of any person (other than the Issuer or a
Subsidiary or a Significant Joint Venture), in which the Issuer or any such
Subsidiary or Significant Joint Venture has an ownership interest, except to
the extent of the amount of dividends or other distributions actually paid to
the Issuer or any Subsidiary or any Significant Joint Venture in cash dividends
or distributions during such period.
"Pro rata Combined Interest Expense" means, for any
period, without duplication, the sum of (a) the pro rata combined interest
expense of the Issuer and its Subsidiaries and its Significant Joint Ventures
for such period, including, without limitation, (i) amortization of debt
discount, (ii) the net cost of Interest Rate Protection Agreements (including
amortization of discounts), (iii) the interest portion of any deferred payment
obligation and (iv) amortization of debt issuance costs, plus (b) the pro rata
combined interest component of Capitalized Lease Obligations of the Issuer, its
Subsidiaries and Significant Joint Ventures during such period, less (c) pro
rata interest income of the Issuer, its Subsidiaries and Significant Joint
Ventures; provided that (x) the Pro rata Combined Interest Expense attributable
to interest on any Indebtedness computed on a pro forma basis and (A) bearing a
floating interest rate shall be computed as if the rate in effect on the date
of computation had been the applicable rate for the entire period and (B) which
was not outstanding during the period for which the computation is being made
but which bears, at the option of the Issuer, a Subsidiary or Significant Joint
Venture, as the case may be, a fixed or floating rate of interest, shall be
computed by applying at the option of the Issuer, either the fixed or floating
rate, and (y) in making such computation, the Pro rata Combined Interest
Expense attributable to interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period; provided
further that, notwithstanding the foregoing, the interest rate with respect to
any Indebtedness covered by any Interest Rate
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Protection Agreement shall be deemed to be the effective interest rate with
respect to such Indebtedness after taking into account such Interest Rate
Protection Agreement.
"Pro rata Combined Income Tax Expense" means, for any
period the provision for federal, state, local and foreign income taxes of the
Issuer, its Subsidiaries and Significant Joint Ventures for such period as
determined on a pro rata combined basis.
"Pro rata Combined Non-cash Charges" means, for any
period, the aggregate depreciation, amortization and other non-cash expenses of
the Issuer and its Subsidiaries and Significant Joint Ventures reducing Pro
rata Combined Adjusted Net Income for such period, determined on a pro rata
combined basis (excluding any such non-cash charge that requires an accrual of
or reserve for cash charges for any future period).
"Qualifying Stock Exchange" means the New York Stock
Exchange, the American Stock Exchange, the London Stock Exchange or the Nasdaq
National Market.
"Redeemable Capital Stock" means any shares of any
class or series of Capital Stock that, either by the terms thereof, by the
terms of any security into which it is convertible or exchangeable or by
contract or otherwise, is or upon the happening of an event or passage of time
would be, required to be redeemed prior to the Maturity with respect to the
principal of the Bonds or is redeemable at the option of the holder thereof at
any time prior to any such Maturity, or is convertible into or exchangeable for
debt securities at any time prior to any such Maturity.
"Redemption Date" means, with respect to any Bonds
hereunder to be redeemed, the date fixed by the Issuer for such redemption
pursuant to the Indenture and the Bonds.
"Sale-Leaseback Transaction" of any person means an
arrangement with any lender or investor or to which such lender or investor is
a party providing for the leasing by such person of any property or asset of
such person which has been or is being sold or transferred by such person after
the acquisition thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any person to whom funds
have been or are to be advanced by such lender or investor on the security of
such property or asset. The stated maturity of such arrangement shall be the
date of the last payment of rent or any other amount due under such arrangement
prior to the first date on which such arrangement may be terminated by the
lessee without payment of a penalty
"Senior Indebtedness" means the principal of,
premium, if any, interest, and other amounts payable on or in respect of any
Indebtedness of the Issuer, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Bonds. Notwithstanding the foregoing,
"Senior Indebtedness" shall not include (a) Indebtedness evidenced by the
Bonds, (b) Indebtedness that is pursuant to the instrument creating such
Indebtedness expressly subordinate or junior in right of payment to any
Indebtedness of the Issuer, (c) Indebtedness which, when incurred and without
respect to any election under Section 1111 (b) of Title II of the United States
Code, is without recourse to the Issuer, (d) Indebtedness which is represented
by Redeemable Capital Stock, (e) Indebtedness for goods, materials or services
purchased in the ordinary course of business or Indebtedness consisting of
trade account payables or other current liabilities incurred in the ordinary
course of business, (f) Indebtedness of or amounts owed by the Issuer for
compensation to employees or for services rendered to the Issuer, (g) any
liability for federal, state, local or other taxes owed or owing by the Issuer,
(h) other than the Chatterjee Notes and the Capital Research Notes,
Indebtedness of the Issuer to a Wholly-Owned Subsidiary or any other Affiliate
of the Issuer or any of such Affiliate's Wholly-Owned Subsidiaries, (i) that
portion of any Indebtedness which is incurred by the Issuer in violation of the
Indenture and 0) amounts owing under leases (other than Capitalized Lease
Obligations).
"Significant Joint Venture" means any Existing Joint
Venture or any Eligible Joint Venture.
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"S&P" means Standard & Poor's Ratings Group, and its
successors.
"Strategic Equity Offering" means a private sale of
more than 10 per cent. and less than 30 per cent. (calculated on a fully-diluted
basis after giving effect to such offering) of GTS Shares to a Strategic
Investor.
"Strategic Investor" means an entity that has a total
market capitalization of at least $3,000,000,000 or a rating of at least BBB-
from S&P and/or a rating of Baa3 from Xxxxx'x, and is engaged in the business
of providing telecommunications services or in the manufacture and sale of
telecommunications equipment, or any subsidiary of such person.
"Subordinated Indebtedness" means Indebtedness of the
Issuer which is by its terms subordinated in right of payment to the Bonds.
"Subsidiary" means, with respect to the Issuer, (i) a
corporation a majority of whose Voting Stock is at the time, directly or
indirectly, owned by the Issuer, by one or more Subsidiaries of the Issuer or
by the Issuer and one or more Subsidiaries and (ii) any other person (other
than a corporation), including, without limitation, a joint venture, in which
the Issuer, one or more Subsidiaries or the Issuer and one or more
Subsidiaries, directly or indirectly, at the date of determination thereof, has
at least majority ownership interest entitled to vote in the election of
directors, managers or trustees thereof (or other person performing similar
functions). For purposes of this definition, any directors' qualifying shares
or investments by foreign nationals mandated by applicable law shall be
disregarded in determining the ownership of a Subsidiary.
"Telecommunications Assets" means, with respect to
any person, any tangible or intangible asset (including the capital stock of
another person) that is utilized by such person, directly or indirectly, for
the design, development, installation, integration, management or provision of
telecommunications systems and/or services, including, without limitation, any
business or services in which the Issuer, or any Subsidiary or any Significant
Joint Venture of the Issuer is engaged at the Issue Date.
"Trading Days" means, with respect to a securities
exchange or automated quotation system, a day on which such exchange or system
is open for a full day of trading.
"Transfer Agent" means the office or agency where
Bonds may be presented for registration of transfer or for exchange.
"U.S. Government Obligations" means securities that
are (a) direct obligations of the United States of America for the timely
payment of which its full faith and credit is pledged or (b) obligations of a
person controlled or supervised by and acting as an agency or instrumentality
of the United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with
respect to any such U.S. Government Obligations or a specific payment of
principal of or interest on any such U.S. Government Obligations held by such
custodian for the account of the holder of such depository receipt; provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of principal of or interest on the U.S.
Government Obligations evidenced by such depository receipt.
"Voting Stock" means any class or classes of Capital
Stock pursuant to which the holders thereof under ordinary circumstances have
the power to vote in the election of the board of directors, managers or
trustees of any person (irrespective of whether or not, at the time, Capital
Stock of any other class or classes shall have, or might have, voting power by
reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means any Subsidiary of the
Issuer of which 100 per cent. of the outstanding Capital Stock is owned by the
Issuer or by one or more Wholly-Owned Subsidiaries of the Issuer or by
A-1/136
118
the Issuer and one or more Wholly-Owned Subsidiaries of the Issuer. For
purposes of this definition, any directors' qualifying shares or investments by
foreign nationals mandated by applicable law shall be disregarded in
determining the ownership of a Subsidiary.
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119
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder
hereby sell(s), assign(s) and transfer(s) unto
------------------------------------------
Insert Taxpayer Identification No.
------------------------------------------
Please print or typewrite name and address including zip code of assignee
------------------------------------------
the within Bond and all rights thereunder, hereby irrevocably constituting and
appointing
------------------------------------------
attorney to transfer said Bond on the books of the Issuer with full power of
substitution in the premises.
In connection with any transfer of this Bond
occurring prior to the date which is the earlier of (i) the date of an
effective registration statement under the U.S. Securities Act of 1933, as
amended (the "Securities Act") or (ii) two years after the later of the
original issuance of this Bond or the last date on which this Bond was held by
an Affiliate of the Issuer, the undersigned confirms, that without utilizing
any general solicitation or general advertising:
[Check One]
[ ](a) this Bond is being transferred in compliance with the exemption from
registration under the Securities Act provided by Rule 144A thereunder.
or
[ ](b) this Bond is being transferred other than in accordance with (a) above
and documents are being furnished which comply with the conditions of
transfer set forth in this Bond and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Bond in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
--------------------------------- ---------------------------------------
Date: Signature
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or any
change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is
purchasing this Bond 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 and is aware that the sale
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120
to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Issuer 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:
---------------------------- ---------------------------------------
Signature
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121
[FORM OF CONVERSION NOTICE]
The undersigned registered owner of this Bond hereby irrevocably
exercises the option to convert this Bond, or the portion hereof (which is
$1,000 or a multiple thereof) designated below, into shares of Common Stock in
accordance with the terms of the Indenture referred to in this Bond, and
directs that the shares issuable and deliverable upon the conversion, together
with any check in payment for a fractional share and any Bond representing any
unconverted principal amount hereof, be issued and delivered to the registered
owner hereof unless a different name has been provided below. If this Notice is
being delivered on a date after the close of business on a regular record date
and prior to the close of business on the related Interest Payment Date, this
Notice is accompanied by payment in New York Clearing House funds, or other
funds acceptable to the Issuer, of an amount equal to the interest payable on
such Interest Payment Date on the principal of this Bond to be converted. If
shares or any portion of this Bond not converted are to be issued in the name
of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto.
Dated:
---------------------------- ---------------------------------------
Signature
NOTICE: This signature must correspond
with the name as written upon the face
of the within-mentioned instrument
in every particular, without
alteration or any change whatsoever.
Fill in for registration of
shares of Common Stock if they
are to be delivered, or Bonds if
they are to be issued, other than
to and in the name of the
registered owner:
----------------------------------
(Name)
----------------------------------
(Street Address)
----------------------------------
(City, State and zip code)
(Please print name and address)
Register: Common Stock
--
Bonds
--
(Check appropriate line(s)).
Principal amount to be converted (if
not less than all):
$ , 000
---
------------------------------------
Social Bond or other Taxpayer
Identification Number of owner
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OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Bond purchased by the Issuer pursuant
to Section 4.11 of the Indenture, check the box: [ ]
If you wish to have a portion of this Bond purchased by the
Issuer pursuant to Section 4.11 of the Indenture, state the amount:
$ principal amount
----------
Date: Your Signature:
-------------------------------
---------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature Guarantee:
----------
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123
EXHIBIT A-2
FORM OF LEGENDS
[INCLUDE IF BOND IS A REGULATION S GLOBAL CERTIFICATE
THIS BOND IS A REGULATION S GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
INDENTURE REFERRED TO HEREINAFTER. EXCEPT IN THE CIRCUMSTANCES DESCRIBED IN
SECTION 2.18(b) OF THE INDENTURE, NO TRANSFER OR EXCHANGE OF AN INTEREST IN THIS
REGULATION S GLOBAL CERTIFICATE MAY BE MADE FOR AN INTEREST IN THE RESTRICTED
GLOBAL CERTIFICATE DURING THE RESTRICTED PERIOD. THIS LEGEND WELL BE REMOVED
AFTER THE EXPIRATION OF 365 DAYS FROM THE ORIGINAL ISSUANCE OF THE SENIOR
SUBORDINATED CONVERTIBLE BONDS DUE 2000 OF GLOBAL TELESYSTEMS GROUP, INC. IN
ADDITION, THE BONDS MAY NOT BE CONVERTED INTO GTS SHARES EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.]
[INCLUDE IF BOND IS A GLOBAL CERTIFICATE --
"UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, CONVERSION, EXCHANGE OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN. TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED
TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.18 OF THE
INDENTURE."
[INCLUDE ON ALL CERTIFICATES --
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY
SECURITIES REGULATORY AUTHORITY OF ANY JURISDICTION. THE HOLDER
HEREOF, BY PURCHASING THIS SECURITY, AGREES THAT THIS SECURITY MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A)(I) TO
GLOBAL TELESYSTEMS GROUP, INC., (2) PROVIDED THIS SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) IN ACCORDANCE WITH RULE
144A, (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR
904 OF REGULATION S UNDER THE SECURITIES ACT OR (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), OR (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, AND IN EACH CASE IN ACCORDANCE
WITH ANY AND ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES THAT IT WILL NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT (OTHER THAN A TRANSFER PURSUANT TO (B) ABOVE) OF THE
RESALE RESTRICTIONS REFERRED TO ABOVE. THIS LEGEND WILL BE REMOVED
AFTER THE EXPIRATION OF TWO YEARS FROM THE LATER OF THE ORIGINAL
ISSUANCE OF THE SENIOR SUBORDINATED CONVERTIBLE BONDS DUE
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124
2000 OF GLOBAL TELESYSTEMS GROUP, INC. OR IF THIS SECURITY HAS BEEN
ACQUIRED BY SUCH ISSUER OR AN AFFILIATE OF SUCH ISSUER, THE DATE ON
WHICH IT IS SUBSEQUENTLY TRANSFERRED TO A NON-AFFILIATE OF THE ISSUER,
OR UPON THE EARLIER SATISFACTION OF THE ISSUER HEREOF OR ITS TRANSFER
AGENT OR REGISTRAR THAT THIS SECURITY HAS BEEN OR IS BEING SOLD IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT.]
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125
EXHIBIT B
FORM OF CERTIFICATE (DTC)
[TO BE ADDED]
B-1
126
EXHIBIT C-1
FORM OF CERTIFICATES TO BE DELIVERED IN
CONNECTION WITH TRANSFERS OF
SECURITIES PURSUANT TO RULE 144A
---------------------------------------------
PART I
Clearing System Certificate
Global TeleSystems Group, Inc. (the "Company")
Senior Subordinated Convertible Bonds due 2000 (the "Bonds")
To: THE BANK OF NEW YORK,
as Trustee and Registrar
This is to certify that, based solely on a certificate we have
received in writing, by tested telex or by electronic transmission from a
member organization appearing in our records as a person being entitled to the
principal amount set out below (our "Member Organization") substantially to the
effect set out in this certificate as of the date hereof, U.S. $
principal amount of the Bonds (i) has been sold by such Member Organization
pursuant to and in accordance with Rule 144A under the U.S. Securities Act of
1933, as amended, and (ii) is being transferred to a transferee which such
Member Organization reasonably believes is purchasing the Bonds for its own
account or an account with respect to which the transferee exercises sole
investment discretion and the transferee and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A and the transferee is
aware that the sale to it is being made in reliance on Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.
[We hereby request that you issue [insert details of the
relevant accounts at Euroclear/Cedel Bank and The Depository Trust Company to
be debited and credited.]
We understand that this certificate is required in connection
with certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceedings.
Yours, faithfully,
[XXXXXX GUARANTY TRUST COMPANY OF NEW
YORK, Brussels office, as
operator of the Euroclear
System] or [Cedel Bank,
societe anonyme]
By:
-----------------------------
Name:
Title:
Dated:(1)
--------------
----------------------------------------
(1) Not earlier that the certification event to which the certificate
relates.
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127
PART II
Member Organization Certification
Global TeleSystems Group, Inc. (the "Company")
Senior Subordinated Convertible Bonds due 2000 (the "Bonds")
-----------------------------
To: THE DEPOSITORY TRUST COMPANY
[XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
Brussels office, as operator of the Euroclear System
/Cedel Bank, societe anonyme]
This letter relates to U.S.$ _____ principal amount of Bonds
in registered form (the "Bonds"), which are held in [book-entry form with The
Depository Trust Company of New York] [the form of Definitive Bonds] by [name
of transferor] (the "Transferor") to [name of transferee].
The Transferor hereby requests the Trustee to register the
transfer of the Bonds.
In connection with such request, and in respect to such Bonds,
the Transferor does hereby certify as follows:
Such Bonds are being transferred in accordance with Rule 144A
under the Securities Act of 1933, as amended, to a transferee that the
Transferor reasonably believes is purchasing the Bonds for its own
account or an account with respect to which the transferee exercises
sole investment discretion and that the transferee and any such
account is a "qualified institutional buyer" within the meaning of
Rule 144A, and such transferee is aware that the sale to it is being
made in reliance on Rule 144A and the transferee is aware that the
sale to it is being made in reliance on Rule 144A, in a transaction
meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any
other jurisdiction.
Details of the relevant accounts at [Euroclear/Cedel Bank] and
The Depository Trust Company to be credited and debited respectively, as
follows: [Insert Details]
[Name of Transferor]
By:
-----------------------------
Name:
Title:
Dated: -------------
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128
EXHIBIT C-2
FORM OF REGULATION S TRANSFER CERTIFICATE
CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS OF NOTES PURSUANT TO REGULATION S
Global TeleSystems Group, Inc. (the "Company")
Senior Subordinated Convertible Bonds due 2000 (the "Securities")
-----------------------------
Euroclear/Cedel Bank # ------
DTC # ------
To: THE BANK OF NEW YORK
000 Xxxxxxx Xxxxxx, 00-X
Xxx Xxxx, Xxx Xxxx
Attention: Corporate Trust Administration
In connection with our sale of U.S.$[ ] principal
amount of Securities, we confirm that such sale has been effected pursuant to
and in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly we represent that:
(1) the offer of the Securities was made
in an offshore transaction within the meaning of Rule 902 of
Regulation S;
(2) no directed selling efforts have
been made in the United States within the meaning of Rule
903(b) or Rule 904(b) of Regulation S, as applicable;
(3) the transferor or Holder, as the
case may be, is not a dealer or a person receiving a selling
concession; and
(4) the transaction is not part of a
plan or scheme to evade the registration requirements of the
Securities Act.
In addition, (a) if such sale is made during the
restricted period applicable to the Securities (i) and the provisions of Rule
903(c)(2) or Rule 904(c)(1) of Regulation S are applicable thereto, we confirm
that such sale has been made in accordance with the applicable provisions of
Rule 903(c)(2) or Rule 904(c)(1), as the case may be and (ii) we confirm that,
upon completion of the transaction described herein the beneficial interest
transferred hereby will be held with DTC through Euroclear or Cedel Bank or
both, or (b) if the undersigned is an officer or director of the Company, or a
distributor or any Affiliate (as such term is defined under Rule 144 of the
Securities Act) of the Company, such sale is made in accordance with the
applicable provisions of Rule 904(c)(2) of Regulation S.
Details of the relevant account(s) at
[Euroclear/Cedel Bank] and the Depository Trust Company to be credited and
debited, respectively, are as follows:
[Insert Details].
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129
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company. Conditions used in this
certificate have the meanings set forth in Regulation S.
[Name of Transferor]
By:
------------------------------
Authorized Signature
Dated:
------------------
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130
EXHIBIT C-3
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RESTRICTED
GLOBAL BOND OR RESTRICTED DEFINITIVE BOND
TO PERMANENT REGULATION S GLOBAL CERTIFICATE
To: THE BANK OF NEW YORK
000 Xxxxxxx Xxxxxx, 00-X
Xxx Xxxx, Xxx Xxxx
Attention: Corporate Trust Administration
This letter relates to U.S.$ principal amount of Bonds
which are held as a beneficial interest in the (i) Restricted Global
Certificate with the Depositary in the name of [insert name of transferor]
(the "Transferor" or (ii) Restricted Definitive Bonds). The transferor or
Holder, as the case may be, has requested an exchange or transfer of such
beneficial interest in the Bonds for an interest in the Permanent Regulation
S Certificate.
In connection with such request, and in respect of such Bonds,
the transferor or Holder, as the case may be, does hereby certify that such
exchange or transfer has been effected in accordance with the transfer
restrictions set forth in the Bonds and with respect to transfers made in
reliance on Regulation S under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), the transferor or Holder, as the case may be, does
hereby certify that:
1. the offer of the Bonds was not made to a person in
the United States;
2. the transaction was executed in, on, or through the
facilities of a designated offshore securities market and neither the
transferor nor any person acting on our behalf knows that the transaction was
pre-arranged by a buyer in the United States;
3. no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) Regulation S, as
applicable;
4. The transferor or Holder, as the case may be, is not
a dealer or a person receiving a selling concession; and
5. the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act;
C-3/1
131
Accordingly, we request that you issue Bonds in respect of
this transfer which do not bear the Securities Act Legend.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Issuer.
[Insert name of transferor or Holder,
as the case may be]
By:
-----------------------------
Name:
Title:
Dated:
---------------
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132
EXHIBIT C-4
Form of Certificate to Be
Delivered in Connection with
Certain Transfers to Accredited Investors
------------------, -----------
The Bank of New York
000 Xxxxxxx Xxxxxx
00-X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Global TeleSystems Group, Inc. (the "Company")
Senior Subordinated Convertible Bonds
due 2000 (the "Securities")
Dear Sirs:
In connection with our proposed purchase of $
aggregate principal amount of the Securities, we confirm that:
1. We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions set forth in the
Indenture relating to the Securities (the "Indenture") and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the
Securities except in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the
Securities have not been registered under the Securities Act, and that the
Securities may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for with we
are acting as hereinafter stated, that if we should sell any Securities, we
will do so only (A) to the Company or any subsidiary thereof, (B) to the extent
available, in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and
to the Company a signed letter substantially in the form of this letter, and if
such transfer is in respect of a principal amount of Securities at the time of
such transfer of less than $250,000, an opinion of counsel acceptable to the
Company that such transfer is in compliance with the Securities Act, (D)
outside the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act, or (F) pursuant to an effective registration
statement under the Securities Act. We further agree to provide to any person
purchasing any of the Securities from us a notice advising such purchaser that
resales of the Securities are restricted as stated herein.
3. We understand that, in connection with any proposed
resale of any Securities, we will be required to furnish to you and the Company
such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Securities purchased
by us will bear a legend to the foregoing effect.
4. We are an "accredited investor" (as defined in Rule
501 of Regulation D under the Securities Act) and have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Securities, and we and any accounts
for which we are acting are each able to bear the economic risk of our or their
investment.
C-4/1
133
5. We are acquiring the Securities purchased by us for
our own account or for one or more accounts (each of which is an "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
--------------------------------
Authorized Signature
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134
EXHIBIT C-5
FORM OF REGULATION S TRANSFER RESTRICTION CERTIFICATE
The Bank of New York
0 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
GLOBAL TELESYSTEM GROUP, INC.
Dear Sirs:
This letter relates to U.S. $ principal amount at
maturity of Bonds represented by a certificate (the "Temporary Regulation S
Global Certificate") which bears a legend outlining restrictions upon transfer
of such legended certificate. Pursuant to section 2.02(b) of the Indenture (the
"Indenture") dated as of July 14, 1997 relating to the Bonds, we hereby certify
that we are (or we will hold such certificate on behalf of) (a) a person
outside the United States to whom the Bonds could be transferred in accordance
with Rule 904 of Regulation S promulgated under the Securities Act of 1933, as
amended ("Regulation S") or (b) a U.S. Person who purchased the Bonds pursuant
to an exemption from, or in a transaction not subject to, the Securities Act of
1933, as amended. Accordingly, you are hereby requested to exchange the
Temporary Regulation S Global Certificate for an unlegended permanent
Regulation S Global Certificate representing an identical principal amount at
maturity of Bonds, all in the manner provided for in the Indenture.
You and Global TeleSystems Group, Inc. are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal proceedings
or official inquiry with respect to the matters covered hereby. Terms used in
this certificate have the meanings set forth in Regulation S.
Very truly yours,
Name of Holder
-------------------------------
Authorized Signature
cc: Global TeleSystems Group, Inc.
C-5/1
135
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into this July 14, 1997 between GLOBAL TELESYSTEMS GROUP INC., a
Delaware corporation (the "Company"), UNION BANK OF SWITZERLAND (the "Lead
Manager") on behalf of all the Managers pursuant to the Subscription Agreement
dated July 9, 1997 between the Company and the Managers (the "Subscription
Agreement"), and THE BANK OF NEW YORK, as Trustee (the "Trustee") pursuant to
an Indenture (the "Indenture"), dated as of July 14, 1997, between the Company
and the Trustee on behalf of the Bondholders (as defined therein).
The Subscription Agreement provides for the sale by the
Company to the Managers named therein of Senior subordinated Convertible Bonds
due 2000 of the Company (the "Bonds") having an aggregate principal amount of
up to U.S. $155,250,000 (after giving effect to the over-allotment option) each
of which entitles the holder thereof to convert such Bond into shares of Common
Stock of the Company at the conversion price set forth in the Indenture. In
order to induce the Managers named therein to enter into the Subscription
Agreement and to induce the Trustee to enter into the Indenture, the Company
has agreed to provide for the benefit of the Managers and their direct and
indirect transferees and for the Trustee for the benefit of the Holders of
Bonds from time to time, the registration rights set forth in this Agreement.
The execution of this Agreement is a condition to the closing under the
Subscription Agreement and the Indenture.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, capitalized
terms shall have the meanings set forth below, or to the extent not set forth
below, capitalized terms shall have the meanings set forth in the Subscription
Agreement.
"Bonds" shall mean the Senior Subordinated Convertible Bonds
due 2000 of the Company.
"Business Day" shall mean any day other than a day on which
banking institutions are authorized or
136
obligated by law or executive order to close in London and New York.
"Common Stock " shall mean the Common Stock, par value $.0001
per share, of the Company.
"Company" shall have the meaning set forth in the preamble
and also includes the Company's successors.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"First Conversion Date" shall have the meaning set forth in
Section 2(a) of this Agreement.
"Holder" Shall mean the Managers, for so long as they own any
Bonds or Registrable Securities, and each of their successors, assigns
and direct and indirect transferees who become registered owners of
Bonds or Registrable Securities.
"Indenture" shall mean the Indenture relating to the Bonds,
dated as of July 14, 1997, between the Company and the Trustee, as the
same may be amended from time to time in accordance with the terms
thereof.
"Issuance Registration Statement" shall have the meaning set
forth in Section 2(a) of this Agreement.
"Lead Manager" shall have the meaning set forth in the preamble
to this Agreement.
"Liquidated Damages" shall have the meaning set forth in
Section 5(1) of this Agreement.
"Majority Holders" shall mean the Holders holding a majority
of the Bonds or Registrable Securities; provided that whenever the
consent or approval of a specified percentage of Holders is required
hereunder, Bonds or Registrable Securities held by the Company or any
of its affiliates (as such term is defined in Rule 405 under the
Securities Act, "Affiliates") (other than the Managers or subsequent
holders of Bonds or Registrable Securities, if such subsequent holders
are deemed to be such affiliates solely by reason of their holding
Bonds or Registrable Securities and other than affiliates that control
or are under common control with the Company) shall not be counted in
determining whether such consent or approval
2
137
was given by the Holders of such required percentage or amount.
"Managers" shall mean the Managers named in the Subscription
Agreement.
"NASDAQ" shall mean the National Association of Securities
Dealers Automated Quotation System.
"person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Shelf
Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus
supplement, and all other amendments and supplements to such
prospectus, including post-effective amendments, and in each case
including all material incorporated by reference therein.
"Registrable Securities" shall mean the Shares; provided,
however, that the Shares shall cease to be Registrable Securities when
(i) an issuance Registration Statement with respect to all the Shares
shall have been declared effective; (ii) a Shelf Registration
Statement with respect to the Shares shall have been declared
effective under the Securities Act and all such Shares shall have been
transferred or otherwise disposed of pursuant to such Shelf
Registration Statement; or (iii) the Shares may be distributed to the
public pursuant to Rule 144(k) (or any similar provision then in
force, but not Rule 144A) under the Securities Act in respect of all
beneficial holders of Shares that are not Affiliates of the company.
"Registration Default" shall have the meaning set forth in
Section 5(1) of this Agreement.
"Registration Expenses" shall mean (a) any and all fees and
expenses incurred incident to the Company's performance of or
compliance with this Agreement (whether or not any Shelf Registration
Statement is filed or becomes effective and whether or not any
securities are sold pursuant to any Shelf Registration Statement),
including, without limitation, (i) all SEC registration and filing
fees, all United States national stock
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exchange or NASDAQ listing fees and National Association Of Securities
Dealers, Inc. registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with U.S. state securities or
"blue sky" laws (including, without limitation and in addition to that
provided in clause (vii) below, fees and disbursements of counsel for
any Underwriters in connection with "blue sky" qualification of any of
the Registrable Securities under the laws of such jurisdictions as the
managing underwriter of the Underwritten Offering, if any, or the
Majority Holders, as the case may be, may designate), (iii) all
expenses of any persons retained by the Company in preparing or
assisting in preparing, word processing, printing and distributing the
Shelf Registration Statement or any Prospectus, or, in each case, any
amendments or supplements thereto, (iv) the fees and expenses incurred
by any Underwriter in connection with the preparation of any
underwriting agreements, securities sales agreements and other
documents relating to the performance of and compliance with this
Agreement, (v) the fees or any listing agent, (vi) the fees and
disbursements of the Trustee or any paying, conversion or transfer
agent retained by the Company, (vii) the reasonable fees and
disbursements of counsel (in addition to local Counsel) for the
Company and the fees and disbursements of counsel (in addition to
local counsel) for the Holders in connection with such Underwritten
Offering (which counsel shall be Xxxxxxxxxx & Xxxxx LLP unless and
until another counsel is selected by the Majority Holders (or, in the
case of an Underwritten Offering, a majority of the Holders
participating in such Underwritten offering) and which counsel also
may be counsel for the Lead Manager) (viii) the fees and disbursements
of the independent public accountants of the Company and any
partnership or joint venture in which the Company or any of its
subsidiaries has an ownership interest, including the expenses of any
special audits or "cold comfort" letters required by or incident to
such performance and compliance, (ix) fees and expenses of all other
persons retained by the Company, and (x) the Company's internal
expenses, but (b) excluding underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a Holder.
"SEC" shall mean the Securities and Exchange Commission.
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"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shares" means the shares of Common Stock issuable upon the
conversion of the Bonds.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of
Section 2(a) of this Agreement covering the resale of all of the
Registrable Securities by the holders thereof (but no other
securities, unless approved by the Majority Holders) on an appropriate
form in connection with an offering to be made on a continuous basis
pursuant to Rule 415 under the Securities Act, or any similar rule
that may be adopted by the SEC, and all amendments and supplements to
such registration statement, including post-effective amendments, and
in each case including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"Subscription Agreement" shall have the meaning set forth in
the first paragraph of this Agreement.
"Underwriter" shall have the meaning set forth in Section 2(c)
of this Agreement.
"Underwritten Offering" shall mean a registration in which
Registrable Securities are sold to an Underwriter for reoffering to
the public.
2. Registration Under the Securities Act.
(a) To the extent not prohibited by any applicable law or
interpretation of the Staff of the SEC, the Company shall use its best efforts
to cause to be filed a Registration statement (the "Issuance Registration
Statement") covering the issuance of the Shares upon conversion of the Bonds
prior to the first date upon which the Bonds become convertible (the "First
Conversion Date") and shall use its best efforts to cause such Issuance
Registration Statement to become effective by the First Conversion Date. The
Company shall use its best efforts to keep such Issuance Registration Statement
continuously effective until such time as all Bonds have been converted or
redeemed. The Company further agrees to supplement or amend the Issuance
Registration Statement if required by the rules, regulations or instructions
applicable to the
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registration form used by the Company for such Issuance Registration Statement
or by the Securities Act or by any other rules and regulations thereunder, and
to use its best efforts to cause any such amendment or supplement to become
effective and such Issuance Registration Statement to become usable as soon as
thereafter practicable.
(b) In the event that (i) the Company determines that,
notwithstanding its best efforts, the Issuance Registration Statement provided
for in Section 2(a) above is not available or would not be declared effective
by the SEC on or before the First Conversion Date because it would violate
applicable law or the applicable interpretations of the Staff of the SEC or
(ii) in the opinion of counsel for the Managers or the Holders, as applicable,
which shall be given reasonably promptly, a Shelf Registration Statement must
be filed and a Prospectus must be delivered by a Manager or a Holder in
connection with any offering or sale of Shares then the Company shall file and
shall use its best efforts to cause a Shelf Registration Statement pertaining
to the Shares to be declared effective by the SEC prior to the First Conversion
Date. The Company shall not permit any securities other than the Registrable
Securities to be included in the Shelf Registration Statement. In the event the
Company is required to file a Shelf Registration Statement solely as a result
of the matters referred to in clause (ii) of the first sentence of this Section
2(b), the Company shall file and have declared effective by the SEC both an
Issuance Registration Statement pursuant to Section 2(a) with respect to all
Shares and a Shelf Registration Statement (which may be a combined Shelf
Registration Statement with the Issuance Registration Statement) with respect
to offers and sales of Shares after the First Conversion Date. The Company
agrees to use its best efforts to keep the Shelf Registration Statement
continuously effective for so long as any of the Shares covered thereby
(without regard to whether such Shares actually have been issued) shall
constitute Registrable Securities. The Company further agrees to supplement or
amend the Shelf Registration Statement, if required by the rules, regulations
or instructions applicable to the registration form used by the Company for the
Shelf Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registration or if reasonably requested by a
Holder with respect to information relating to such Holder in order to
accurately reflect information regarding such Holder or such Holder's plan of
distribution as required by the Shelf Registration
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Statement, and to use its best efforts to cause any such amendment to become
effective and the Prospectus contained in such Shelf Registration Statement to
become usable as soon as thereafter practicable; provided, however that the
Company shall not be required to supplement or amend the Shelf Registration
Statement to update information relating to any new Holder on more than one
occasion in each calendar month in respect of a Holder or Holders who in the
aggregate hold $10,000,000 or more in value of Registrable Securities or on
more than one occasion in each calendar quarter in respect of a Holder or
Holders who hold in the aggregate less than such value of Registrable
Securities. The Company agrees to furnish to the Holders copies of any such
supplement or amendment promptly after its being made available for use or
filed with the SEC.
(c)(i) Subject to the proviso in Section 3(o), the Holders
whose Registrable Securities are covered by a Shelf Registration Statement who
desire to do so may sell Registrable Securities in an Underwritten Offering. In
any such Underwritten Offering, the investment banker or investment bankers and
manager or managers (the Underwriters") that will administer the offering will
be selected (subject to the Company's approval which shall not be unreasonably
withheld) by the Holders holding a majority of the Registrable Securities
(determined on an as-converted basis) included in such offering. Notwithstanding
anything to the contrary set forth herein, the Company may suspend a Holder's
use of a Prospectus which is part of the Shelf Registration Statement for up to
two periods not to exceed 45 consecutive days (but not more than 60 days in any
365-day period) if the Company in its reasonable judgment believes it possesses
material non-public information the disclosure of which would have an adverse
effect on the company, or any of its Subsidiaries or any Significant Joint
Venture (each as defined in the Indenture).
(ii) Each Holder whose Registrable Securities are covered by
the Shelf Registration Statement and are of the same class or type as any
Registrable Securities being sold in an Underwritten Offering agrees, upon the
request of the Underwriter(s) in any Underwritten Offering permitted pursuant
to this Agreement, not to effect any public sale or distribution of securities
of the Company of the same class or type as the Registrable Securities included
in such Shelf Registration Statement (except as part of such Underwritten
Offering), including a sale pursuant to Rule 144 under the Securities Act,
during the 10-day period prior to, and during
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the 90-day period beginning on, the closing date of any such Underwritten
Offering made pursuant to such Shelf Registration Statement, provided that the
Company or such Underwriter(s) shall have given such Holder timely notice in
writing of such closing date.
The foregoing provision shall not apply to any Holder if such
Holder is prevented by applicable statute or regulation from entering into any
such agreement; provided, however, that any such Holder shall undertake, in its
request to participate in any such Underwritten Offering, not to effect any
public sale or distribution of any of its Registrable Securities not sold in
such Underwritten Offering, commencing on the date of sale of Registrable
Securities pursuant to such Underwritten offering and ending on the date that
is 90 days after the closing date of such Underwritten Offering, unless it has
provided 45 days' prior written notice of such sale or distribution to the
Underwriter(s).
(iii) Unless otherwise agreed to by the Underwriter(s), the
Company agrees not to effect any public or private offer, sale or distribution
of securities of the same class and type as the Registrable Securities being
sold in the Underwritten Offering, including a sale pursuant to Regulation D
under the Securities Act, during the 10-day period prior to, and during the
90-day period beginning on, the closing date of each Underwritten Offering
permitted pursuant to Section 3(o) hereof made pursuant to the Shelf
Registration Statement, provided that the Underwriter(s) shall have given the
Company timely notice in writing of such closing date. Notwithstanding the
foregoing, the Company may effect a private offer, sale or distribution of
securities of the same class or type as the Registrable Securities being sold in
the Underwritten offering to the extent that, at the time that the price of such
securities is determined, the price of such securities is in excess of the
market price of the Registrable Securities; provided that the limitation on
private offers, sales and distributions set forth in this sentence shall apply
only to the extent so requested by the Underwriter(s) in the Underwritten
Offering within three Business Days following notice of such proposed offer,
sale or distribution by the Company (which notice shall be provided by the
Company at least seven Business Days prior to any such proposed offer, sale or
distribution).
(d) The Company shall promptly pay upon incurrence all
Registration Expenses in connection with any registration pursuant to Section
2. Each Holder shall pay all underwriting
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discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to the Shelf
Registration Statement.
(e) Upon the occurrence or failure to occur of certain events
described in this Agreement, Liquidated Damages will accrue on the Bonds as
provided in this Agreement.
(f) Without limiting the remedies available to the Managers
and Holders, the Company acknowledges that any failure by the Company to comply
with its obligations under Section 2 hereof may result in material irreparable
injury to the Managers and/or Holders for which there is no adequate remedy at
law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Managers or any
Holder may obtain such relief as may be required to specifically enforce the
Company's obligations under Section 2 hereof.
(g) If after the Shelf Registration Statement is declared
effective by the SEC, the offering of Registrable Securities pursuant thereto
is interfered with by any stop order, injunction or other order or requirement
of the SEC or any other governmental agency or court, such Shelf Registration
Statement will be deemed not to have become effective during the period of such
interference until the offering of Registrable Securities pursuant to such
Shelf Registration Statement may legally resume.
3. Registration Procedures. In connection with the obligations
of the Company with respect to Section 2(a) hereof, the Company shall, to the
extent required by Section 2, as expeditiously as practicable:
(a) prepare and file with the SEC a Shelf Registration
Statement on the appropriate form under the Securities Act, which form
shall, (x) be selected by the Company and (y) comply as to form in all
material respects with the requirements of the applicable form
(including, without limitation, the requirement pursuant Item 7 of
Form S-3 and Item 507 of Regulation S-K under the Securities Act that
the Prospectus identify and describe Holders that sell Registrable
Securities under the Shelf Registration Statement as selling security
holders) and include all financial statements required by the SEC to
be filed therewith, and use its best efforts to cause such Shelf
Registration Statement to become
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effective and remain effective for the applicable period in accordance with
Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to the Shelf Registration Statement as may
be necessary to (x) keep such Shelf Registration Statement effective
for the applicable period in accordance with Section 2 hereof, and (y)
cause each Prospectus to be supplemented by any required prospectus
supplement and, as so supplemented, to be filed pursuant to Rule 424
under the Securities Act and (z) keep each Prospectus current during
the period described under Section 4(3) and Rule 174 under the
Securities Act that is applicable to transactions by brokers or
dealers with respect to the securities covered by such Prospectus;
(c) furnish to each Holder of securities registered
thereunder, to counsel for such Holders, to counsel for the Managers,
to each Underwriter, if any, and to counsel for each such Underwriter,
without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and
such other documents as such Holder or Underwriter may reasonably
request, in order to facilitate the public sale or other disposition
of the Registrable Securities; the Company consents to the use of such
Prospectus and any amendment or supplement thereto in accordance with
applicable law by each of the Holders selling Registrable Securities
and any such Underwriters in connection with the offering and sale of
the Registrable Securities covered by and in the manner described in
such Prospectus or any amendment or supplement thereto in accordance
with applicable law;
(d) use its best efforts to register or qualify the
Registrable Securities under all applicable U.S. state securities or
"blue sky" laws of such U.S. jurisdictions as any Holder with
Registrable Securities covered by the Shelf Registration Statement
shall reasonably request in writing by the time the Shelf Registration
Statement is declared effective by the SEC, to cooperate with such
Holders in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. and to do any and all
other acts and things which may be necessary or advisable to enable
such Holder to consummate the disposition in each such jurisdiction of
such Registrable Securities; provided, however, that the
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Company shall not be required, as a result of compliance herewith, to
(i) qualify as a foreign entity or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 3(d), (ii) file any general consent to service of
process or (iii) subject itself to taxation in any jurisdiction if it
is not so subject;
(e) notify each Holder, counsel for the Holders and counsel
for the Managers promptly upon the Company's obtaining actual
knowledge thereof and, if requested by any such Holder or the
Managers, confirm such advice in writing, (i) when the Shelf
Registration Statement has become effective and when any
post-effective amendments and supplements thereto have been filed and
become effective, (ii) of any request by the SEC or any state
securities authority for amendments and supplements to the Shelf
Registration Statement and related Prospectus or for additional
information after the Shelf Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of the Shelf
Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of the Shelf Registration
Statement and the closing of any sale of Registrable Securities
covered thereby, the representations and warranties of the Company
contained in any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to such offering cease to be
true and correct in all material respects or if the Company receives
any notification with respect to the suspension of the qualification
of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, (v) of the happening of
any event which makes any statement made in the Shelf Registration
Statement or the related Prospectus untrue in any material respect or
which requires the making of any changes in the Shelf Registration
Statement or the Prospectus in order to make the statements therein
not misleading and (vi) of any determination by the Company that a
post-effective amendment to the Shelf Registration Statement would be
appropriate (in which event the Company shall forthwith prepare and
have declared effective such post-effective amendment and make the
Prospectus therein available to selling Holders);
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(f) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of the Shelf Registration Statement at
the earliest practicable moment and provide prompt notice to each
Holder and the Managers of the withdrawal of any such order;
(g) furnish to each Holder and the Managers, without charge,
at least one conformed copy of the Shelf Registration statement and
any post-effective amendment thereto, together with any documents
incorporated therein by reference (in each case, without exhibits
thereto, unless requested);
(h) cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing such Registrable Securities not bearing any
restrictive legends and to enable such certificates to be in such
amounts and registered in such names as such Holders may reasonably
request at least two business days prior to the closing of any sale of
Registrable Securities;
(i) upon the occurrence of any event contemplated by Section 3
(e) (v) hereof, use its best efforts to prepare a supplement or
post-effective amendment to the Shelf Registration Statement or the
related Prospectus or any document incorporated therein by reference
or file any other required document so that, as thereafter delivered
to the purchasers of Registrable Securities, such Prospectus will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; the
Company agrees to notify each Holder and the Managers and Underwriters
to suspend use of the Prospectus included in a Shelf Registration
Statement as promptly as practicable after the Company becomes aware
of the occurrence of such an event and each Holder hereby agrees to
suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission;
(j) within a reasonable time prior to the filing of the Shelf
Registration statement, the Prospectus to be included therein, or
amendment or supplement to either of the foregoing, provide copies of
such document to the Managers and their counsel, and the Holders and
Underwriters and their counsel, and make
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such of the representatives of the Company as shall be reasonably
requested by the Managers or their counsel and the Holders and
Underwriters or their counsel available for discussion of such
document, and shall not at any time file or make any amendment or
supplement to any such document of which the Managers and their
counsel and the Holders and their counsel, shall not have previously
been advised and furnished a copy or in a form to which the Managers
or their counsel and the Majority Holders or their counsel shall
reasonably object; provided, however, that any document incorporated
by reference in any such Prospectus by any amendment or supplement
shall be provided to the Managers and their counsel and to the Holders
and Underwriters and their counsel at the time that such amendment or
supplement is filed with the SEC;
(k) obtain a CUSIP number for the Registrable Securities
covered by the Shelf Registration Statement not later than the
effective date thereof;
(l) make available for inspection by a representative of all
of the Holders, any Underwriter participating in any disposition
pursuant to the Shelf Registration Statement and attorneys and
accountants designated by the Holders or any Underwriter, at
reasonable times and in a reasonable manner, all financial and other
records, documents and properties of the Company, and cause the
respective officers, directors and employees of the Company to supply
all information reasonably requested by any such representative,
Underwriter, attorney or accountant in connection with the Shelf
Registration Statement; provided, however, that such Underwriters,
representatives, attorneys or accountants agree to keep confidential
any records, information or documents that are designated by the
Company in writing as confidential and to use such information
obtained pursuant to this provision only in connection with the
transaction for which such information was obtained, and not for any
other purpose, unless (i) such records, information or documents (x)
are available to the public, (y) were already in such Underwriters',
representatives', attorneys' or accountants' possession prior to their
receipt from the Company and they do not otherwise have any obligation
to keep such records, information or documents confidential or (z) are
obtained by such Underwriters, representatives, attorneys or
accountants from a third
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person who, insofar as is known to such Underwriters, representatives,
attorneys or accountants, is not prohibited from transmitting the
information to such Underwriters, representatives, attorneys or
accountants by a contractual, legal or fiduciary obligation to the
Company or a third party, or (ii) disclosure of such records,
information or documents is required by (A) any regulatory agency or
(B) any court or administrative order, in the case of (A) or (B), after
the exhaustion of appeals therefrom;
(m) list all Registrable Securities covered by the Shelf
Registration Statement on all securities exchanges or quotation
systems on which the Common Stock is then listed, or if not so listed,
cause such Registrable Securities to be quoted on the NASDAQ National
Market System at the time of resale or issuance, as applicable;
(n) if reasonably requested by any Holder of Registrable
Securities covered by the Shelf Registration Statement in order to
accurately reflect information regarding such Holder or such Holder's
plan of distribution as required by such Shelf Registration Statement,
(i) promptly incorporate in a Prospectus supplement or post-effective
amendment such information with respect to such Holder as such Holder
reasonably requests to be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment
as soon as the Company has received satisfactory notification of the
matters to be incorporated in such filing; provided, however, that the
Company shall not be required to supplement or amend the Shelf
Registration Statement to update information relating to any new
Holder on more than one occasion in each calendar month in respect of
a Holder or Holders who in the aggregate hold $10,000,000 or more in
value of Registrable Securities and more than one occasion in each
calendar quarter in respect of a Holder or Holders who hold in the
aggregate less than such value of Registrable Securities; and
(o) use its best efforts to enter into such customary
agreements and take all such other reasonable actions in connection
therewith (including those requested by the Holders holding a majority
of the Registrable Securities (determined on an as-converted basis)
being sold) in order to expedite or facilitate the disposition of such
Registrable Securities including, but
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not limited to, one Underwritten Offering and in connection with such
Underwritten Offering, (i) to the extent possible, make such
representations and warranties to the Holders and any Underwriters of
such Registrable Securities with respect to the business of the
Company and its Subsidiaries and its or its subsidiaries' Joint
Ventures, the Shelf Registration Statement, the Prospectus and
documents incorporated by reference or deemed incorporated by
reference, if any, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings
and confirm the same if and when reasonably requested, (ii) use its
best efforts to obtain opinions of counsel to the Company (which
counsel and opinions, in form, scope and substance, shall be
reasonably satisfactory to the Holders of a majority of the
Registrable Securities to be sold in such Underwritten Offering
(determined on an as-converted basis) and their counsel and any
Underwriters and their counsel) addressed to each selling Holder and
any Underwriter of Registrable Securities, covering the matters
customarily covered in opinions requested in underwritten offerings,
(iii) obtain "cold comfort" letters from the independent certified
public accountants of the Company (and, if necessary, any other
certified public accountant of any Subsidiary of the Company or any
Significant Joint Venture of the Company (each as defined in the
Indenture) or of any business acquired by the Company for which
financial statements and financial data are or are required to be
included in the Shelf Registration Statement) addressed to each
selling holder and any Underwriter of Registrable Securities, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings, and (iv) deliver such documents and
certificates as may be reasonably requested by the Holders of a
majority of the Registrable Securities being sold by any Underwriter,
and which are customarily delivered in underwritten offerings, to
evidence the continued validity of the representations and warranties
of the Company made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in an underwriting
agreement; provided that the Company shall be required to use its best
efforts to facilitate an Underwritten Offering only upon the request
of Holders of at least 25% of the Registrable Securities outstanding
(determined on an as-converted basis) at the time such request is
delivered to the Company (determined
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on an as-converted basis after giving effect to any stock splits,
combinations or reclassifications). In the case of any Underwritten
Offering, the Company shall (x) provide written notice of such
Underwritten Offering to the Managers and each of the Holders at least
30 days prior to the filing of a prospectus supplement for such
Underwritten Offering, (y) specify a date, which shall be no earlier
than 10 days following the date of such notice, by which each such
Holder must inform the Company of its intent to participate in such
Underwritten Offering and (z) include the instructions such Holder
must follow in order to participate in such Underwritten Offering.
Each Holder shall, as a pre-condition to the exercise of its
right to sell Registrable Securities pursuant to the Shelf Registration
Statement, furnish to the Company such information regarding the Holder and the
proposed distribution by such Holder of Registrable Securities pursuant to the
Shelf Registration Statement as shall be required by the Staff of the SEC or
the rules and regulations under the Securities Act. Each such Holder shall
provide the Company with any such information within five business days after
such information is requested by the Company and shall provide to the Company,
within five Business Days after such Holder receives a draft of the Shelf
Registration Statement or amendment thereto in which such information is
included, comments on such Shelf Registration Statement or amendment thereto;
provided, that no Holder shall be required to comment on any information not
provided to the Company by such Holder.
Each Holder, as pre-condition to the exercise of its right to
sell Registrable Securities pursuant to the Shelf Registration Statement,
agrees to notify the Company no later than three Business Days prior to any
proposed sale by such Holder of Registrable Securities pursuant to the Shelf
Registration Statement, which notice shall be effective for five Business Days.
In addition, each Holder shall, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3 (e)(iii), (v) or
(vi) hereof, forthwith discontinue disposition of Registrable Securities
pursuant to the Shelf Registration Statement until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 3(i)
hereof.
4. Indemnification and Contribution. (a) The Company shall
indemnify and hold harmless the Managers, each Holder, each person, if any, who
controls the Managers or any
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Holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act or is under common control with or is controlled by the
Managers or any Holder and any investment advisor otherwise affiliated with any
Holder and each of their respective directors and officers (each a "Non-Company
Indemnitee") and each of their respective counsel from and against any and all
losses, claims, damages, liabilities and expenses (including, without
limitation, any legal or other expenses reasonably incurred by the Non-Company
Indemnitee in connection with defending or investigating any such action or
claim) arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Shelf Registration Statement (or
any amendment or supplement thereto), including all documents incorporated
therein by reference, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (as amended or supplemented, if the Company shall
have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact necessary to make
the statements therein in light of the circumstances under which they were made
not misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with information relating to the
Managers or any Holder furnished to the Company in writing by the Managers or
any selling Holder expressly for use therein; provided, however, that the
indemnification provided for in this paragraph (a) shall not inure to the
benefit of any Non-Company Indemnitee with respect to any sale or disposition of
Registrable Securities by such Holder in violation of the provisions of the
last paragraph of Section 3 hereof. In connection with any Underwritten
Offering contemplated by Section 3(o), the Company also shall indemnify the
Underwriters, if any, selling brokers, dealers and similar securities industry
professionals participating in the distribution, their officers and directors
and each person who controls such persons (within the meaning of the Securities
Act and the Exchange Act) to the same extent as provided above with respect to
the indemnification of the Holders, if requested in connection with the Shelf
Registration Statement. The indemnification obligation of the Company set forth
in this paragraph (a) shall be in addition to any liability which
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the Company may otherwise have, including, without limitation, for any breach
of any covenant contained in this Agreement.
(b) Each Holder shall, severally and not jointly, to indemnify
and hold harmless the Company, the Managers, the other selling Holders, each of
their respective directors and officers, each person, if any, who controls the
Company, the Managers, or any other selling Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act or is under
common control with or is controlled by the Company, the Managers or any other
selling Holder and any investment advisor affiliated with any of the foregoing
to the same extent as the foregoing indemnity from the Company to the Managers
and the Holders, but only with reference to information relating to such Holder
furnished to the Company in writing by such Holder expressly for use in the
Shelf Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto).
(c) If any action, suit or proceeding shall be instituted
involving any person in respect of which such person is entitled to indemnity
pursuant to either paragraph (a) or (b) above, such person (the "indemnified
party") shall promptly notify the parties against whom indemnification is being
sought (each an "indemnifying party") and such indemnifying parties shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such indemnified party, shall have the right to counsel,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying parties have agreed in writing to
pay such fees and expenses, (ii) the indemnifying parties shall have failed to
assume the defense and employ counsel or (iii) the named parties to any such
action, suit, or proceeding (including any impleaded parties) include both such
indemnifying parties and such indemnified party and such indemnified party
shall have been advised by its counsel that representation of such indemnified
party and any indemnifying party by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed due to actual or potential
differing interests between them (in which case the indemnifying parties shall
not have the right to assume the defense of such action, suit or proceeding on
behalf of the indemnified party)). It is understood, however, that the
indemnifying parties shall, in connection with any one such action, suit or
proceeding, or substantially similar action, suit or proceeding or related
actions, suits or proceedings in
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the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
the Managers and all persons, if any, who control the Managers within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act or is under common control with or is controlled by the Managers,
any investment advisor affiliated with any of the foregoing and each of their
respective directors and officers, and the reasonable fees and expenses of only
one separate firm of attorneys (in addition to any local counsel) at any time
for all other Holders and all persons, if any, who control any such Holders
within the meaning of either such Section, or are under common control with or
are controlled by such Holders, any investment advisor affiliated with any of
the foregoing and each of their respective directors and officers. In such case
involving the Managers, persons who control, are controlled by or under common
control with the Managers, or their respective directors or officers, such firm
shall be designated in writing by the Managers. In such case involving other
Holders and such persons who control, are controlled by or under common control
with such Holders, any investment advisor affiliated with any of the foregoing
or their respective directors or officers, such firm shall be designated in
writing by such Holders holding a majority of the Registrable Securities sold
under the Shelf Registration Statement by all such Holders. The indemnifying
parties shall not be liable for any settlement of any action, suit or
proceeding effected without their written consent, but if settled with such
written consent or if there be a final judgment for the plaintiff, the
indemnifying parties agree to indemnify and hold harmless the indemnified party
from and against any loss, action, damage, liability or expense by reason of
such settlement or judgment.
(d) if the indemnification provided for in this Section 4 is
unavailable to an indemnified party under paragraphs (a) or (b) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party or parties, on the one hand, and of the indemnified party or parties, on
the other hand, in connection with such statements or omissions that resulted
in such losses, claims, damages,
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liabilities or expenses as well as any other relevant equitable consideration.
The relative fault of the Company, on the one hand, and any Holder, on the
other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company, on the one hand, or by such Holder, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders' respective
obligations to contribute pursuant to this Section 4(d) are several in
proportion to the respective number of Registrable Securities of such Holders
that were registered pursuant to the Shelf Registration Statement.
(e) The Company, the Managers and each Holder agree that it
would not be just or equitable if contribution pursuant to this Section 4 were
determined by a pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 4, no Holder shall
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such Holder exceeds the
amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 4 are not exclusive and shall not limit
any rights or remedies that may otherwise be available to any indemnified party
at law or in equity.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 4 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained
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in this Section 4 shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf any indemnified party,
(ii) any sale of Registrable Securities by an indemnified party and (iii) any
termination of this Agreement. A successor to any indemnified party shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 4.
(g) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
5. Miscellaneous. (a) No Inconsistent Agreements. The
Company has not entered into, and on or after the date of this Agreement will
not enter into, any agreement that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not in any way conflict
with and are not inconsistent with the rights currently granted to the holders
of the Company's other issued and outstanding securities under any such
agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of the
Majority Holders affected by such amendment, modification, supplement, waiver
or departure; provided, however, that no amendment, modification, supplement,
waiver or consent to the departure with respect to the provisions of Section 4
hereof shall be effective as against any person unless consented to in writing
by such person.
(c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder
to the Company by means of a notice given in accordance with the provisions of
this Section 5(c), which address initially is, with respect to the Managers,
the address set
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forth in the Subscription Agreement; and (ii) if to the Company, initially at
the Company's address set forth in the Subscription Agreement, and, thereafter,
at such other address, notice of which is given in accordance with the
provisions of this Section 5(c).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next business day, if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the person giving the same to the Trustee,
at the address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Subscription Agreement. The Company
shall not assign its rights or obligations hereunder without the prior written
consent of each Holder other than by operation of law pursuant to a merger or
consolidation to which the Company is a party. If any transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by operation of
law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement and by taking and holding such Registrable
Securities, such transferee shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this Agreement and,
as a result, such person shall be entitled to receive the benefits hereof. The
Managers shall have no liability or obligation to the Company with respect to
any failure by any other Holder to comply with, or any breach by any other
Holder of, any of the obligations of such other Holder under this Agreement. In
the event the Bonds become convertible into common stock of another person
pursuant to the Indenture, the Company shall cause such person to assume the
Company's obligations hereunder.
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(e) Purchases and Sale of Bonds. The Company shall not, and
shall use its best efforts to cause its Affiliates not to, purchase and then
resell or otherwise transfer any Bonds.
(f) Third Party Beneficiary. The Holders shall be
third party beneficiaries to the agreements made hereunder between the Company,
on the one hand, and the Managers, on the other hand, and the Managers and the
Holders shall have the right to enforce such agreements directly to the extent
they deem such enforcement necessary or advisable to protect the rights of the
Managers or the Holders hereunder.
(g) Counterparts. This Agreement may be signed in various
counterparts which constitute one and the same instrument. If signed in
counterparts, this Agreement shall not become effective unless at least one
counterpart hereof shall have been executed and delivered on behalf of each
party hereto.
(h) Headings. The headings of the Sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to contracts made and to be performed in the State of New York.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Submission to Jurisdiction. The Company irrevocably
submits to the jurisdiction of any United States or State court located in the
State of New York in any suit or proceeding based on or arising under this
Agreement and irrevocably agrees that all claims in respect of such suit or
proceeding may be determined in any such court. The Company irrevocably waives
the defense of an inconvenient forum to the maintenance of such suit or
proceeding. The Company hereby agrees to designate and appoint The United
States Corporation Company as an agent upon whom process may be served in any
suit or proceeding based on or arising under this Agreement. The Company
further agrees that service of process upon the
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Company, or upon an agent appointed pursuant to the preceding sentence
accompanied with written notice of said service to the Company, as the case may
be, mailed by first class mail shall be deemed in every respect effective
service of process upon the Company in any such suit or proceeding. Nothing
herein shall affect the Managers' or any Holder's right to serve process in any
other manner permitted by law. The Company agrees that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.
(1) Liquidated Damages. If a Shelf Registration Statement has
not been filed and does not remain in effect with the SEC as required by
Section 2 of this Agreement or the prospectus therein is not available for use
by a Holder entitled to such use in accordance with the terms of this Agreement
(a "Registration Default"), additional interest ("Liquidated Damages") will
accrue on the Bonds from and including the day following the Registration
Default to but excluding the day on which the Registration Default has been
cured. Liquidated Damages will be paid semi-annually in arrears, with the first
semi-annual payment due on the first date on which interest is payable under
the Indenture following the date on which such Liquidated Damages begin to
accrue. Liquidated Damages will accrue at a rate per annum of one quarter of
one per cent. (.25%) of the principal amount, to and including the 90th day
following such Registration Default and at a rate per annum of one half of one
per cent. (.5%) of the principal amount, from and after the 91st day following
the Registration Default. In no event will the Liquidated Damages accrue at a
rate per annum exceeding one half of one per cent. (.5%).
(m) No Adverse Action. The Company will not take any action
with respect to the Registrable Securities which would adversely affect the
ability of any Holder to include such Registrable Securities in a registration
undertaken pursuant to this Agreement.
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IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
GLOBAL TELESYSTEMS GROUP, INC.
By:
--------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written:
UBS Securities LLC, on behalf
of the Managers
By:
--------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee under the
Indenture
By:
--------------------------
Name:
Title:
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Schedule I
1. Senior Note Purchase Agreement, dated as of January 19, 1996, among
Global TeleSystems Group, Inc., The Open Society Institute and
Chatterjee Fund Management, L.P.
2. Registration Rights Letter Agreement, dated as of January 19, 1996,
among Global TeleSystems Group, Inc., The Open Society Institute and
Chatterjee Fund Management, L.P.
3. Warrant Agreement, dated as of January 19, 1996, among Global
TeleSystems Group, Inc., The Open Society Institute and Chatterjee
Fund Management, L.P.
4. Joint Venture Letter Agreement, dated January 19, 1996, among Global
TeleSystems Group, Inc., The Open Society Institute and Chatterjee
Fund Management, L.P.
5. Senior Note Purchase Agreement, dated as of June 6, 1996, among the
Global TeleSystems Group, Inc., The Open Society Institute, Winston
Partners II LDC and Winston Partners II LLC.
6. Registration Rights Letter Agreement, dated June 6, 1996, among the
Global TeleSystems Group, Inc., The Open Society Institute, Winston
Partners II LDC and Winston Partners II LLC.
7. Warrant Agreement, dated as of June 6, 1996, between Global TeleSystems
Group, Inc., The Open Society Institute, Winston Partners II LDC and
Winston Partners II LLC.
8. Limited Liability Company Agreement of GTS-China Investments, L.L.C.
among Global TeleSystems Group, Inc., Winston Partners II LDC and
Winston Partners II LLC, dated as of August 27, 1996.
161
Schedule I
1. Senior Note Purchase Agreement, dated as of January 19, 1996, among
Global TeleSystems Group, Inc., The Open Society Institute and
Chatterjee Fund Management, L.P.
2. Registration Rights Letter Agreement, dated as of January 19, 1996,
among Global TeleSystems Group, Inc., The Open Society Institute and
Chatterjee Fund Management, L.P.
3. Warrant Agreement, dated as of January 19, 1996, among Global
TeleSystems Group, Inc., The Open Society Institute and Chatterjee Fund
Management, L.P.
4. Joint Venture Letter Agreement, dated January 19, 1996, among Global
TeleSystems Group, Inc., The Open Society Institute and Chatterjee Fund
Management, L.P.
5. Senior Note Purchase Agreement, dated as of June 6, 1996, among the
Global TeleSystems Group, Inc., The Open Society Institute, Winston
Partners II LDC and Winston Partners II LLC.
6. Registration Rights Letter Agreement, dated June 6, 1996, among the
Global TeleSystems Group, Inc., The Open Society Institute, Winston
Partners II LDC and Winston Partners II LLC.
7. Warrant Agreement, dated as of June 6, 1996, between Global TeleSystems
Group, Inc., The Open Society Institute, Winston Partners II LDC and
Winston Partners II LLC.
8. Limited Liability Company Agreement of GTS-China Investments, L.L.C.
among Global TeleSystems Group, Inc., Winston Partners II LDC and
Winston Partners II LLC, dated as of August 27, 1996.
