EXHIBIT 4.4
SUPPLEMENTAL INDENTURE
Supplemental Indenture, dated as of June 25, 1999 (the "Supplemental
Indenture"), to the Indenture, dated as of May 18, 1998 (the "Indenture"), among
Global Crossing Holdings Ltd., as Issuer, the Guarantors named therein and
United States Trust Company of New York, as Trustee.
WHEREAS, the Issuer desires to make certain amendments to the Indenture as
hereinafter provided; and
WHEREAS, the Holders of at least a majority in principal amount of the then
outstanding Notes voting as a single class (as defined below) have consented
thereto.
NOW, THEREFORE, for good and valuable consideration and intending to be
legally bound, the parties to the Indenture agree as follows:
1. Capitalized terms used but not otherwise defined herein shall have their
respective meanings set forth in the Indenture.
2. Sections 1, 4 and 6 of the Indenture are hereby amended by adding each of
the following provisions in place of the current provisions corresponding
thereto:
Section 1.01. Definitions
"Consolidated Capital Ratio" means, with respect to the Company or any
of its Restricted Subsidiaries, as of the date of any incurrence of
Indebtedness or issuance of Disqualified Stock, the ratio of (i) the
aggregate consolidated principal amount of Indebtedness outstanding and the
liquidation preference of Disqualified Stock as of the most recent
quarterly or annual balance sheet date, after giving pro forma effect to
the incurrence of such Indebtedness or the issuance of such Disqualified
Stock and any other Indebtedness incurred and Disqualified Stock issued
since such balance sheet date, and the receipt and application of the
proceeds therefrom to (ii) Consolidated Net Worth as of such balance sheet
date after giving pro forma effect to the issuance of Equity Interests
(other than Disqualified Stock) issued since the balance sheet date and the
receipt and application of the proceeds therefrom.
"Consolidated Cash Flow" means, with respect to the Company for any
period, the Consolidated Net Income of the Company and its Restricted
Subsidiaries for such period plus, to the extent that any of the following
items were deducted or added (without duplication) in computing such
Consolidated Net Income, (i) an amount equal to any extraordinary loss
(less any gain) plus any net loss (less any gain) realized in connection
with any Asset Sale, plus (ii) provision for taxes based on income or
profits of the Company and its Restricted Subsidiaries for such period,
plus (iii) Consolidated Interest Expense of the Company and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized, plus (iv) depreciation, amortization (including amortization
of goodwill and other intangibles and the amount of capacity available for
sale charged to cost of sales), but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents an
accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of
the Company and its Restricted Subsidiaries for such period, minus (v) non-
cash items increasing such Consolidated Net Income for such period (other
than items that were accrued in the ordinary course of business), plus (vi)
any change in Deferred Revenue, in each case, on a consolidated basis and
determined in accordance with GAAP. Notwithstanding the foregoing, the
provision for taxes on the income or profits of, and the depreciation and
amortization and other non-cash expenses of, a Restricted Subsidiary of the
Company shall be added to Consolidated Net Income to compute Consolidated
Cash Flow of the Company only to the extent that a corresponding amount
would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior governmental approval
(that has not been obtained), and without direct or indirect restriction
pursuant to the terms of its charter and all agreements
2
(excluding agreements evidencing Indebtedness incurred in accordance with
clause (k) of Section 4.09 hereof, to which this provision shall not
apply), instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
shareholders.
"Consolidated Interest Expense" for any Person means for any period
the consolidated interest expense included in a consolidated income
statement (without deduction of interest income) of such Person and its
Consolidated Subsidiaries for such period, including without limitation or
duplication (or, to the extent not so included, with the addition of), (i)
amortization of debt issuance costs and original issue discount, (ii) non-
cash interest payments, (iii) the interest component of any deferred
payment obligations, (iv) the interest component of all payments associated
with Capital Lease Obligations, (v) commissions, discounts and other fees
and charges incurred in respect of Letter of Credit or bankers' acceptance
financings and (vi) net payments (if any) pursuant to Hedging Obligations.
"Consolidated Leverage Ratio" means, with respect to the Company or
any of its Restricted Subsidiaries, as of the date of any incurrence of
Indebtedness or issuance of Disqualified Stock, the ratio of (i) the
aggregate consolidated principal amount of Indebtedness outstanding and the
liquidation preference of Disqualified Stock as of the most recent
quarterly or annual balance sheet date, after giving pro forma effect to
the incurrence of such Indebtedness or the issuance of such Disqualified
Stock and any other Indebtedness incurred and Disqualified Stock issued
since such balance sheet date, and the receipt and application of the
proceeds therefrom to (ii) Consolidated Cash Flow for the four full fiscal
quarters ending on or prior to the date of incurrence of such Indebtedness
or issuance of such Disqualified Stock for which consolidated financial
statements are available.
"Consolidated Net Income" means, with respect to the Company for any
period, the aggregate of the net income of the Company and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP, plus, to the extent that any of the following items
were deducted in computing such Consolidated Net Income, (a) non-recurring,
non-cash charges (other than charges arising from write-downs of assets)
and (b) non-cash compensation charges arising from stock options or other
similar employee benefit or compensation plans; provided that (i) the net
income (but not loss) of any Restricted Subsidiary that is accounted for by
the equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to the Company or a
Wholly Owned Restricted Subsidiary thereof by such Restricted Subsidiary,
(ii) the net income (or loss) of any Person that is not a Restricted
Subsidiary shall be included only to the extent of the amount of dividends
or other distributions actually paid to the Company or a Restricted
Subsidiary by such Person during such period, (iii) for purposes of clause
(c) of Section 4.07 hereof, the net income of any Restricted Subsidiary
shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that
net income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
(excluding any such restrictions relating to AC-1 to which this clause
(iii) shall not apply), instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
shareholders, except that the Company's equity in the net income of any
such Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash that could have
been distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend, (iv) the net income
of any Person acquired in a pooling of interests transaction for any period
prior to the date of such acquisition shall be excluded, (v) the equity of
the Company or any Restricted Subsidiary in the net income of any
Unrestricted Subsidiary shall be included in such Consolidated Net Income
up to the aggregate amount of cash actually distributed by such
Unrestricted Subsidiary during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (but not in excess of the
amount of the net income of such Unrestricted Subsidiary for such period)
and (vi) the cumulative effect of a change in accounting principles shall
be excluded.
3
"Consolidated Net Worth" means, with respect to the Company as of any
date, the sum of (i) the consolidated equity of the common shareholders of
the Company and its consolidated Restricted Subsidiaries as of such date
plus (ii) the respective amounts reported on the Company's balance sheet as
of such date with respect to any series of preferred stock (other than
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only
to the extent of any cash received by the Company upon issuance of such
preferred stock, less (x) all write-ups (other than write-ups resulting
from foreign currency translations and write-ups of tangible assets of a
going concern business made within 12 months after the acquisition of such
business and other than write-ups attributable to the warrants issued
pursuant to the Warrant Agreement, dated as of January 21, 1998, as
amended) subsequent to the date of the Indenture in the book value of any
asset owned by the Company or a consolidated Restricted Subsidiary of the
Company, (y) all investments as of such date in unconsolidated Restricted
Subsidiaries and in Persons that are not Restricted Subsidiaries (except,
in each case, Permitted Investments), and (z) all unamortized debt discount
and expense and unamortized deferred charges as of such date, all of the
foregoing determined in accordance with GAAP.
"Debt Securities" means any bonds, notes, debentures or other similar
instruments (excluding, in any event, (i) any Capital Lease Obligations and
(ii) any notes, bankers' acceptances or other instruments evidencing
commercial loans or equipment financing made by, and bills of exchange
drawn on, banks, other financial lending institutions or equipment vendors)
issued by the Company or by any Restricted Subsidiary (including by means
of any Guarantee of the Company or of any Restricted Subsidiary of
securities of another Person), whether in a public offering or private
placement; provided, however, that in no event shall "Debt Securities" mean
Indebtedness in the form of a bank credit facility.
"Deferred Revenue" means amounts appearing as a liability on the
financial statements of the Company as prepared according to GAAP
classified as deferred revenue to the extent of cash received in connection
therewith.
"Disqualified Stock" means any Capital Stock (other than the Company's
10 1/2% Senior Exchangeable Preferred Stock due 2008) that, by its terms
(or by the terms of any security into which it is convertible, or for which
it is exchangeable, in each case at the option of the holder thereof), or
upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the
option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature; provided,
however, that any Capital Stock which would not constitute Disqualified
Stock but for provisions thereof giving holders thereof the right to
require the Company to repurchase or redeem such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale occurring prior to the
final Stated Maturity of the Notes shall not constitute Disqualified Stock
if the change of control and asset sale provisions applicable to such
Capital Stock are no more favorable to the holders of such Capital Stock
than the provisions applicable to the Notes contained in Sections 4.15 and
4.10 hereof, respectively, and such Capital Stock specifically provides
that the Company will not repurchase or redeem any such stock pursuant to
such provisions prior to the Company's repurchase of such Notes as are
required to be repurchased pursuant to Sections 4.15 and 4.10 hereof,
respectively.
"Pari Passu Debt Securities" means any Debt Securities of the Company
or of any Guarantor which ranks pari passu in right of payment with the
Notes and any Subsidiary Guarantees, as applicable.
"Permitted Investments" means (a) any Investment in the Company or in
Restricted Subsidiaries of the Company that are engaged in a Permitted
Business; (b) any Investment in Cash Equivalents; (c) any Investment by the
Company or any of its Restricted Subsidiaries in a Person, if as a result
of such Investment (i) such Person becomes a Restricted Subsidiary of the
Company that is engaged in a Permitted Business or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the
4
Company that is engaged in a Permitted Business; (d) any Investment made as
a result of the receipt of non-cash consideration from an Asset Sale that
was made pursuant to and in compliance with Section 4.10 hereof; (e) any
acquisition of assets solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company; (f) other
Investments having an aggregate fair market value (measured on the date
each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made
pursuant to this clause (f) that are at the time outstanding, not to exceed
$25.0 million; (g) any Investment made in a Receivables Entity in a
Qualified Receivables Transaction; and (h) any investment by the Company or
a Restricted Subsidiary in any Person engaged in a Permitted Business with
the Company or such Restricted Subsidiary, provided that such investment is
necessary or integral to the Company's or such Restricted Subsidiary's
Permitted Business and provided, further that any such investment is the
minimum amount reasonably necessary for such Permitted Business and to
comply with local law.
"Permitted Liens" means (i) Liens to secure Indebtedness (other than
Pari Passu Debt Securities or Subordinated Indebtedness) permitted to be
incurred under this Indenture; (ii) Liens in favor of the Company or any
Restricted Subsidiary; (iii) Liens on property of a Person existing at the
time such Person is merged with or into or consolidated with the Company or
any of its Restricted Subsidiaries; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation and do
not extend to any assets other than those of the Person merged into or
consolidated with the Company or such Restricted Subsidiary; (iv) Liens on
property existing at the time of acquisition thereof by the Company or any
of its Restricted Subsidiaries, provided that such Liens were in existence
prior to the contemplation of such acquisition; (v) Liens to secure the
performance of statutory obligations, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course
of business; (vi) Liens existing on the date of this Indenture; (vii) Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as shall be required in conformity
with GAAP shall have been made therefor; (viii) Liens incurred in the
ordinary course of business of the Company or any of its Restricted
Subsidiaries with respect to obligations that do not exceed $5.0 million at
any one time outstanding and that (a) are not incurred in connection with
the borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business) and (b) do not in the
aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Company or such
Restricted Subsidiary; (ix) Liens with respect to assets of a Restricted
Subsidiary granted by such Restricted Subsidiary to the Company or a
Restricted Subsidiary to secure Indebtedness owing to the Company or such
Restricted Subsidiary; (x) Liens, pledges and deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of statutory obligations; (xi) Liens, pledges or
deposits made to secure the performance of tenders, bids, leases, public or
statutory obligations, sureties, stays appeals, indemnities, performance or
other similar bonds and other obligations of like nature incurred in the
ordinary course of business (exclusive of obligations for the payment of
borrowed money); (xii) zoning restrictions, servitudes, easements, rights-
of-way, restrictions and other similar charges or encumbrances incurred in
the ordinary course of business which, in the aggregate, do not materially
detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Company or its
Restricted Subsidiaries; (xiii) Liens arising out of judgments or awards
against or other court proceedings concerning the Company or any Restricted
Subsidiary with respect to which the Company or such Restricted Subsidiary
is prosecuting an appeal or proceeding for review and the Company or such
Restricted Subsidiary is maintaining adequate reserves in accordance with
generally accepted accounting principles; and (xiv) any interest or title
of a lessor in the property subject to any lease other than a capital
lease.
"Purchase Money Indebtedness" means Indebtedness (including Acquired
Debt and Capital Lease Obligations, mortgage financings and purchase money
obligations) incurred for the purpose of financing all or any part of the
cost of construction, financing, installation, acquisition, lease,
development, design, engineering, financing, testing, start-up, upgrade,
completion or improvement of any assets used or useful
5
in a Permitted Business, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as the same may be amended, supplemented, modified or restated
from time to time.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary and, with respect to
Pacific Crossing Ltd. and all of its direct and indirect Subsidiaries (the
"PC-1 Companies"), upon designation thereof by the Board of Directors as
"Restricted Subsidiaries," whether or not the PC-1 Companies meet the 50%
test specified in the definition of "Subsidiary"; provided, however, that
the Company at its election may also designate New GCL or any Subsidiary of
New GCL as a Restricted Subsidiary hereunder.
Section 4.07. Restricted Payments
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any other payment or distribution on account of the Company's or any
of its Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation
involving the Company or any of its Restricted Subsidiaries) or to the
direct or indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company
or to the Company or a Restricted Subsidiary of the Company); (ii)
purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company (other than any such Equity Interests owned
by the Company or any Wholly Owned Restricted Subsidiary of the Company);
(iii) make any payment on or with respect to, or purchase, redeem, defease
or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes, except a payment of interest or principal at
Stated Maturity; or (iv) make any Restricted Investment (all such payments
and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), unless:
(a) at the time of and after giving effect to such Restricted
Payment, no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) in the case of clauses (i), (ii) and (iii) above, and, in the
case of any Restricted Investment that is not an Investment in a
Permitted Business, the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to either clause (i) or (ii) of the
first paragraph of Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate amount
of all other Restricted Payments made by the Company and its
Restricted Subsidiaries and any Permitted Investments made pursuant to
clause (h) of the definition of Permitted Investments after the date
of this Indenture (excluding Restricted Payments permitted by clauses
(ii), (iii), (iv), (vi), (vii), (viii) and (ix) (but, in the case of
clause (ix), only to the extent that such Restricted Payments are
reflected as an expense on the income statements of GCL or New GCL, as
applicable) of the next succeeding paragraph), is less than the sum,
without duplication, of (i) the remainder of (x) 100% of the
cumulative Consolidated Cash Flow (or, in the case Consolidated Cash
Flow shall be negative, less 100% of such deficit) for the period
(taken as one accounting period) beginning on the last day of the
fiscal quarter immediately preceding the date of this Indenture and
ending on the last day of the last full fiscal quarter immediately
preceding the date of such Restricted Payment minus (y) the product of
1.5 times the cumulative Consolidated Interest Expense from the Issue
Date through the last day of the last full fiscal quarter immediately
preceding the date of such Restricted Payment, plus (ii) 100% of the
aggregate net cash proceeds and the fair market
6
value (as determined in good faith by the Board of Directors) of
property or assets received by the Company since the date of this
Indenture as a contribution to its common equity capital or from the
issue or sale of Equity Interests of the Company (other than
Disqualified Stock) or from the issue or sale of Disqualified Stock or
debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or Disqualified Stock
or convertible debt securities) sold to a Subsidiary of the Company),
plus the amount of cash or the fair market value (as determined above)
of property or assets received by the Company or any Restricted
Subsidiary upon such conversion or exchange, plus (iii) the aggregate
amount equal to the net reduction in Investments in Unrestricted
Subsidiaries resulting from (x) dividends, distributions, interest
payments, return of capital, repayments of Investments or other
transfers of assets to the Company or any Restricted Subsidiary from
any Unrestricted Subsidiary, (y) proceeds realized by the Company or
any Restricted Subsidiary upon the sale of such Investment to a Person
other than GCL or New GCL, the Company or any Subsidiary of the
Company, or (z) the redesignation of any Unrestricted Subsidiary as a
Restricted Subsidiary, not to exceed in the case of any of the
immediately preceding clauses (x), (y) or (z) the aggregate amount of
Restricted Investments made by the Company or any Restricted
Subsidiary in such Unrestricted Subsidiary after the date of this
Indenture, plus (iv) to the extent that any Restricted Investment that
was made after the date of this Indenture is sold for cash or
otherwise liquidated or repaid for cash, the amount of proceeds (net
of any cost of disposition) equal to the initial amount of such
Restricted Investment.
The foregoing provisions will not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the foregoing
provisions; (ii) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness or Equity Interests of
the Company in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Subsidiary of the Company)
of, other Equity Interests of the Company (other than any Disqualified
Stock); provided that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from clause (c)(ii) of the preceding
paragraph; (iii) the defeasance, redemption, retirement, repurchase or
other acquisition of Indebtedness with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness; (iv) the payment of any
dividend by a Restricted Subsidiary of the Company to the holders of its
Equity Interests on a pro rata basis; (v) the repurchase, redemption or
other acquisition or retirement for value of any Equity Interests of the
Company or any of its Restricted Subsidiaries held by any member of the
Company's or such Restricted Subsidiary's management; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $10.0 million in any twelve-month
period (with unused amounts being carried over to succeeding twelve-month
periods, subject to a maximum of $15.0 million in any twelve-month period);
(vi) Investments in Project Subsidiaries made with a portion of the net
proceeds of the Offering in an aggregate amount not to exceed $315 million
made within one year of the date of this Indenture, or a reallocation of
any such Investments to the extent of any reduction of such Investment
during such one-year period resulting from an investment by any third party
(including, without limitation, pursuant to a Joint Venture) in the
formation of such Project Subsidiary, provided that such reallocation is
made within one year from the date of such third party Investment; (vii)
Investments made with the net cash proceeds received from an Equity
Offering made by the Company, GCL or New GCL (but only to the extent such
net cash proceeds received by GCL or New GCL were contributed to the
Company as common equity capital) (provided that the amount of any such net
cash proceeds that are utilized for any such Investment shall be excluded
from clause (c)(ii) of the preceding paragraph) plus 50% of the net gain
realized and not otherwise included in Consolidated Cash Flow from the sale
of Restricted Investments; (viii) Investments in GTH of amounts necessary
to effect the redemption of the outstanding GTH Preference Shares in
accordance with the terms thereof; (ix) the payment of any dividend or the
making of any distribution to GCL or New GCL by the Company or any
Restricted Subsidiary to pay or permit GCL or New GCL to pay any GCL
Expenses or any Related Taxes; and (x) other Restricted Payments in an
aggregate amount not to exceed $25.0 million.
7
The Board of Directors may not designate any Subsidiary of the Company
(other than a newly created Subsidiary in which no Investment has
previously been made (other than the amount required to capitalize such
Subsidiary in connection with its organization)) as an Unrestricted
Subsidiary (a "Designation") unless: (i) no Default or Event of Default
shall have occurred and be continuing at the time of or after giving effect
to such Designation; (ii) the Company would, immediately after giving
effect to such Designation, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to either clause (i) or (ii) of the first
paragraph of Section 4.09; and (iii) the Company would not be prohibited
under this Indenture from making an Investment at the time of such
Designation (assuming the effectiveness of such Designation for purposes of
clauses (a) and (b) of this Section 4.07) in an amount equal to the fair
market value of the net Investment of the Company or any other Restricted
Subsidiary in such Subsidiary on such date.
In the event of any such Designation, all outstanding Investments
owned by the Company and its Restricted Subsidiaries in the Subsidiary so
designated will be deemed to be an Investment made as of the time of such
Designation and will reduce the amount available for Restricted Payments
under the first paragraph of this Section 4.07 or Permitted Investments, as
applicable. All such outstanding Investments will be deemed to constitute
Restricted Payments in an amount equal to the fair market value of such
Investments at the time of such Designation.
A Designation may be revoked (a "Revocation") by a resolution of the
Board of Directors delivered to the Trustee, provided that the Company will
not make any Revocation unless: (i) no Default or Event of Default shall
have occurred and be continuing at the time of or after giving effect to
such Designation; and (ii) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Revocation would, if
incurred at such time, have been permitted to be incurred at such time for
all purposes under this Indenture.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company (or such
Restricted Subsidiary, as the case may be) pursuant to the Restricted
Payment. The fair market value of any asset(s) or securities that are
required to be valued by this covenant shall be determined in good faith by
the Board of Directors (such determination to be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing if such fair market value exceeds $15.0 million).
Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i)(a) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries
(1) on its Capital Stock or (2) with respect to any other interest or
participation in, or measured by, its profits, or (b) pay any indebtedness
owed to the Company or any of its Restricted Subsidiaries, (ii) make loans
or advances to the Company or any of its Restricted Subsidiaries or (iii)
transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries. However, the foregoing restrictions will not
apply to encumbrances or restrictions existing under or by reason of (a)
Existing Indebtedness as in effect on the date of this Indenture, (b)
agreements as in effect as of the date of this Indenture, (c) Indebtedness
incurred in accordance with clause (g), (h), (i), (k) or (n) of the second
paragraph of Section 4.09 hereof, provided that such encumbrances or
restrictions are customary with respect to such types of Indebtedness (as
determined in good faith by the Chief Financial Officer of the Company) and
provided further that the provisions of such Indebtedness do not prohibit
payments by the Company of principal, premium, interest and Additional
Amounts pursuant to the terms of the Notes and this Indenture, (e) this
Indenture, the Notes and the Exchange Notes, (f) applicable law, (g) any
instrument governing Indebtedness or Capital Stock of a Person acquired by
the Company or any of its Restricted Subsidiaries as in effect at the time
of such acquisition (except to the extent such
8
Indebtedness was incurred in connection with or in contemplation of such
acquisition), 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, provided, that in the
case of Indebtedness, such Indebtedness was permitted by the terms of this
Indenture to be incurred, (h) customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices, (i) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature
described in clause (iii) above on the property so acquired, (j) any
agreement for the sale or other disposition of a Restricted Subsidiary that
restricts distributions by that Restricted Subsidiary pending its sale or
other disposition, (k) Permitted Refinancing Indebtedness, provided that
the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced, (l) Liens securing Indebtedness otherwise permitted to be
incurred pursuant to the provisions of Section 4.12 hereof that limit the
right of the Company or any of its Restricted Subsidiaries to dispose of
the assets subject to such Lien, (m) provisions with respect to the
disposition or distribution of assets or property in joint venture
agreements and other similar agreements entered into in the ordinary course
of business and (n) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course of
business.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently
or otherwise, with respect to (collectively, "incur") any Indebtedness
(including Acquired Debt) and the Company will not issue any Disqualified
Stock and will not permit any of its Restricted Subsidiaries to issue any
shares of preferred stock; provided, however, that the Company may incur
Indebtedness (including Acquired Debt) or issue shares of Disqualified
Stock and its Restricted Subsidiaries may incur Indebtedness or issue
Disqualified Stock or preferred stock if either:
(i) the Consolidated Leverage Ratio is less than 5.5 to 1.0
(prior to May 15, 2001) or 5.0 to 1.0 (subsequent to May 15, 2001); or
(ii) the Consolidated Capital Ratio is less than 2.5 to 1.0.
Notwithstanding the foregoing, the provisions of the paragraph set
forth above will not apply to the incurrence of any of the following items
of Indebtedness (collectively, "Permitted Indebtedness"):
(a) The incurrence by the Company of Indebtedness represented by
the Notes and the Exchange Notes;
(b) The incurrence by the Company or any of its Restricted
Subsidiaries of Existing Indebtedness;
(c) The incurrence of Indebtedness by the Company to any
Restricted Subsidiary or Indebtedness of any Restricted Subsidiary to
the Company or any other Restricted Subsidiary (but only for so long
as such Indebtedness is held by the Company or such Restricted
Subsidiary);
(d) The incurrence by the Company or any of its Restricted
Subsidiaries of Capital Lease Obligations (other than leases of
backhaul services), mortgage financings or purchase money obligations,
in each case incurred for the purpose of financing all or any part of
the purchase price or cost of construction or improvement of property,
plant or equipment used in the business of the Company or such
Restricted Subsidiary, in an aggregate principal amount not to exceed
$25.0 million at any time outstanding;
9
(e) The incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness pursuant to acquisitions of capacity made
in the ordinary course of business;
(f) The incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose
of fixing or hedging interest or foreign currency exchange rate risk
with respect to any floating rate Indebtedness that is permitted by
the terms of this Indenture to be outstanding;
(g) The incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness of a Restricted Subsidiary incurred and
outstanding on the date on which such Restricted Subsidiary was
acquired by the Company; provided, however, that at the time such
Restricted Subsidiary is acquired by the Company (giving effect to
such acquisition), the Company would have been able to incur $1.00 of
additional Indebtedness pursuant to the immediately preceding
paragraph;
(h) The incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted
by this Indenture to be incurred pursuant to the immediately preceding
paragraph hereof or clauses (a), (b), (d), (e), (g), (h), (i), (j),
(k), (n) or (o) of this paragraph;
(i) The incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness not otherwise permitted to be
incurred pursuant to this paragraph in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including
all Permitted Refinancing Indebtedness incurred to refund, refinance
or replace any Indebtedness incurred pursuant to this clause (i), not
to exceed $50.0 million;
(j) The incurrence of Indebtedness by a Receivables Entity in a
Qualified Receivables Transaction, provided that the proceeds thereof
are applied in accordance with Section 4.10 hereof;
(k) The incurrence by the Company or any Restricted Subsidiary of
Purchase Money Indebtedness, provided that the amount of such Purchase
Money Indebtedness does not exceed 100% of the cost of construction,
installation, acquisition, lease, development, design, engineering,
financing, testing, start-up, upgrade, completion or improvement of
assets (together with related costs and expenses) used in the business
of the Company or such Restricted Subsidiary;
(l) Letters of Credit that are cash collateralized;
(m) Letters of Credit in an aggregate principal amount equal to
$200.0 million less the amount of outstanding Indebtedness under
clause (n) of this paragraph;
(n) The incurrence by the Company or any of its Restricted
Subsidiaries of revolving credit Indebtedness in an aggregate amount
not to exceed $200.0 million at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (n); and
(o) The guarantee by the Company or any Restricted Subsidiary of
Indebtedness of the Company or any Restricted Subsidiary of the
Company that was permitted to be incurred by another provision of this
Section 4.09.
10
The Company will not, and will not permit any of its Restricted
Subsidiaries to, incur any Indebtedness (including Permitted Indebtedness)
that is contractually subordinated in right of payment to any other
Indebtedness of the Company or such Restricted Subsidiary unless such
Indebtedness is also contractually subordinated in right of payment to the
Notes on substantially identical terms; provided, however, that no
Indebtedness of the Company shall be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Company
solely by virtue of being unsecured.
11
Section 4.11. Transactions with Affiliates
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that are
not materially less favorable to the Company or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary with an unrelated
Person and (ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess
of $25.0 million, the Company delivers to the Trustee a resolution of the
Board of Directors set forth in an Officers' Certificate certifying that
such Affiliate Transaction complies with clause (i) above and that such
Affiliate Transaction is approved by a majority of the disinterested
members of the Board of Directors and an opinion as to the fairness to the
Holders of such Affiliate Transaction from a financial point of view is
obtained from an accounting, appraisal or investment banking firm of
national standing. Notwithstanding the foregoing, the following items
shall not be deemed to be Affiliate Transactions: (i) (a) the entering
into, maintaining or performance of any employment contract, collective
bargaining agreement, benefit plan, program or arrangement, related trust
agreement or any other similar arrangement for or with any employee,
officer or director heretofore or hereafter entered into in the ordinary
course of business, including vacation, health, insurance, deferred
compensation, retirement, savings or other similar plans, (b) the payment
of compensation, performance of indemnification or contribution
obligations, or an issuance, grant or award of stock, options, or other
equity-related interests or other securities to employees, officers or
directors in the ordinary course of business, (c) any transaction with an
officer or director in the ordinary course of business not involving more
than $250,000 in any one case, or (d) Management Advances and payments in
respect thereof, (ii) transactions between or among the Company and/or its
Restricted Subsidiaries or any Receivables Entity, (iii) payment of
reasonable directors fees, (iv) any sale or other issuance of Equity
Interests (other than Disqualified Stock) of the Company, (v) Affiliate
Transactions in effect or approved by the Board of Directors on the date of
this Indenture, including any amendments thereto (provided that the terms
of such amendments are not materially less favorable to the Company or the
relevant Restricted Subsidiary than the terms of such agreement prior to
such amendment), (vi) transactions with respect to capacity or dark fiber
between the Company or any Restricted Subsidiary and any Unrestricted
Subsidiary or other Affiliate and joint sales and marketing pursuant to an
agreement or agreements between the Company or any Restricted Subsidiary
and any Unrestricted Subsidiary or other Affiliate (provided that in the
case of this clause (vi), such agreements are on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those
that could have been obtained at the time of such transaction in an arm's-
length transaction with an unrelated third party or, in the case of a
transaction with an Unrestricted Subsidiary, are either (x) entered into in
connection with a transaction involving the selection by a customer of
cable system capacity entered into in the ordinary course of business or
(y) involve the provision by the Company or a Restricted Subsidiary to an
Unrestricted Subsidiary of sales and marketing services, operations,
administration and maintenance services or development services for which
the Company or such Restricted Subsidiary receives a fair rate of return
(as determined by the Board of Directors and set forth in an Officers'
Certificate delivered to the Trustee) above its expenses of providing such
services; (vii) any transaction entered into in the ordinary course of
business between the Company or any Restricted Subsidiary and any
Unrestricted Subsidiary or any Affiliate (provided that in the case of this
clause (vii), such agreements are on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that could
have been obtained at the time of such transaction in an arm's-length
transaction with an unrelated third party) and (viii) Restricted Payments
that are permitted by Section 4.07 hereof.
12
Events of Default
Section 6.01 Events of Default
"Events of Default" are:
(i) default for 30 days in the payment when due of interest on the
Notes;
(ii) default in the payment when due of the principal of, or premium,
if any, on, the Notes;
(iii) failure by the Company or any of its Restricted Subsidiaries to
comply with Sections 4.07, 4.09, 4.10 or 4.15;
(iv) failure by the Company or any of its Restricted Subsidiaries for
60 days after notice to comply with any of its other agreements in this
Indenture or the Notes;
(v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the Issue Date, which default results in the
acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness the maturity of which has
been so accelerated, aggregates $25.0 million or more;
(vi) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments not subject to appeal aggregating in excess of $25.0
million (net of applicable insurance coverage which is acknowledged in
writing by the insurer), which judgments are not paid, discharged or stayed
for a period of 60 days;
(vii) except as provided by this Indenture, any Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor, or
any Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Guarantee;
(viii) the Company or any of its Restricted Subsidiaries:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in an
involuntary case,
(c) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(d) makes a general assignment for the benefit of its creditors,
or
(e) generally is not paying its debts as they become due; and
(ix) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against the Company or any of its Restricted
Subsidiaries,
(b) appoints a custodian of the Company or any of its Restricted
Subsidiaries or for all or substantially all of the property of the
Company or any of its Restricted Subsidiaries; or
13
(c) orders the liquidation of the Company or any of its
Restricted Subsidiaries;
and the order or decree remains unstayed and in effect for 60
consecutive days.
3. Section 1.01 of the Indenture is hereby amended by deleting the definition
of "Guarantors" in its entirety and substituting in lieu thereof the
following definition:
"Guarantors" means New GCL and each other Person that from time to
time executes a guarantee in accordance with the provisions of the
Indenture.
4. Sections 4.17 and 4.18 of the Indenture are hereby amended by deleting such
sections in their entirety and substituting in lieu thereof the following
Sections 4.17 and 4.18:
"Section 4.17
[Reserved]"
"Section 4.18
[Reserved]"
5. Sections 4 of the Indenture is hereby amended by adding the following new
section 4.22:
"Section 4.22 Future Guarantees.
If any Restricted Subsidiary guarantees any Debt Securities issued by
the Company, then (i) the Company shall promptly notify the Trustee of such
guarantee, (ii) the Trustee shall, in turn, notify each Holder and (iii)
the Company shall cause this Indenture to be amended to make such
Restricted Subsidiary a Guarantor hereunder. Prior to the execution of
such amendment, each such Restricted Subsidiary required to become a
Guarantor pursuant to the provisions of this Section 4.22 shall be deemed a
Guarantor hereunder for purposes of determining the rights and obligations
hereunder."
6. This Supplemental Indenture and the rights and obligations of the parties
hereunder are governed by, and construed and interpreted in accordance
with, the laws of the State of New York.
7. The Indenture, together with this Supplemental Indenture, constitutes the
entire agreement of the parties. All terms and conditions of the Indenture
not expressly amended or modified herein are hereby ratified and confirmed.
8. The Trustee shall not be responsible in any manner whatsoever for the
validity or sufficiency of this Supplemental Indenture or the due execution
hereof by Global Crossing Ltd. and the Issuer or for or in respect of the
recitals or statements contained herein, all of which recitals and
statements are made solely by Global Crossing Ltd. and the Issuer.
IN WITNESS WHEREOF, this Supplemental Indenture has been executed and
delivered as of the date and year above written.
14
GLOBAL CROSSING HOLDINGS LTD.
By:/s/ Xxx XxXxxx
------------------------------
Name:
Title: Director
GLOBAL CROSSING LTD.
By: Xxxxx X. Xxxxxx
------------------------------
Name:
Title: General Counsel
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:/s/ Xxxxx X. Xxxxx
------------------------------
Name:
Title: Vice President
