REIMBURSEMENT AND COMMITMENT FEE AGREEMENT
REIMBURSEMENT AND COMMITMENT FEE AGREEMENT dated May 4, 1998 among GST
TELECOMMUNICATIONS, INC., a federally chartered Canadian corporation ("GST"),
GST USA, INC., a Delaware corporation ("GST USA"), and GST NETWORK FUNDING,
INC., a Delaware corporation ("GST Funding"). Capitalized terms used and not
defined in this Agreement have the meanings set forth or referred to in the
Indenture (as defined below).
WHEREAS, GST Funding shall issue on the date hereof $500,000,000
principal amount at maturity of its 10 1/2% Senior Secured Discount Notes due
2008 (the "Notes") pursuant to the terms of an Indenture (the "Indenture") dated
the date hereof among GST, GST Funding, GST USA, and United States Trust Company
of New York (the "Trustee");
WHEREAS, the net proceeds to GST Funding from the sale of the Notes
(the "Offering") must be used to purchase U.S. Government Securities (the
"Pledged Securities") and the Pledged Securities must be pledged by GST Funding
to the Trustee for the benefit of the holders of the Notes;
WHEREAS, upon written request from GST Funding to the Trustee, the
Pledged Securities will be released from the Pledge Account in order to finance
the cost of Acquired Equipment;
WHEREAS, immediately upon the acquisition of any Acquired Equipment,
(i) GST Funding must grant a first priority security interest in such Acquired
Equipment to the Trustee for the benefit of the holders of the Notes, (ii) GST
USA must purchase the Acquired Equipment from GST Funding for an amount equal to
the Acquired Equipment Cost and (iii) GST USA must issue a senior secured
promissory note guaranteed by GST in an amount equal to the Acquired Equipment
Cost payable to GST Funding (each, an "Intercompany Note").
WHEREAS, the Notes will be secured by a first priority security
interest in the Pledged Securities, the Pledge Account, the Intercompany Notes,
the Fee Notes (as defined below) and this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
GST Funding to offer the Notes in the Offering, GST and GST USA hereby agree
with GST Funding as follows:
1. GST and GST USA hereby jointly and severally agree to (i) reimburse
GST Funding for all expenses incurred by GST Funding in connection with the
Offering and the purchase of Acquired Equipment and the transactions
contemplated by the Indenture and the Pledge Agreement and (ii) pay to GST
Funding a commitment fee (the "Commitment Fee") in an amount equal to 4.5% per
annum of the amount by which the aggregate principal amount at
maturity of the Notes exceeds the aggregate principal amount of all the
Intercompany Notes then held as security for the Notes.
2. The Commitment Fee shall be paid semi-annually, in arrears, on each
May 1 and November 1, commencing November 1, 1998 and shall be paid by GST USA
issuing to GST Funding unsubordinated promissory notes (each a "Fee Note")
guaranteed by GST on a senior basis; PROVIDED that the aggregate principal
amount of the Fee Notes shall be reduced to the extent such principal amount
exceeds the aggregate principal amount of the Notes less (x) the aggregate
principal amount of Pledged Securities and cash then held in the Pledge Account,
together with accrued interest thereon and (y) the aggregate principal amount of
all Intercompany Notes then held as security for the Notes plus the amount of
interest that will accrue on such Intercompany Notes by May 1, 2003. The Fee
Notes will mature on May 1, 2003 and there will not be any payment of interest
prior to maturity.
3. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. None of GST Funding, GST USA or GST
has entered into, and on or after the date of this Agreement will enter into,
any agreement that conflicts with the provisions hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented in a manner that adversely affects the rights of GST Funding, and
waivers or consents to departures from the provisions hereof may not be given
unless GST Funding, GST USA and GST have obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding Notes.
(c) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(d) DESIGNATION OF PROCESS AGENT; SUBMISSION TO JURISDICTION. Each
of GST Funding, GST USA and GST hereby (i) acknowledges that it has irrevocably
designated and appointed Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxx, Esq. (together with
any successor, the "Process Agent"), as its authorized agent upon which process
may be served in any suit, action or proceeding arising out of or relating to
this Agreement or the transactions contemplated herein that may be instituted in
any federal or state court in the State of New York, or brought under federal or
state securities laws, and acknowledges that the Process Agent has accepted such
designation, (ii) agrees that service of process upon the Process Agent and
written notice of
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such service to GST Funding, GST USA or GST, as the case may be (mailed or
delivered to GST's Chief Executive Officer at its principal office at 0000 Xxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 98663), shall be deemed in every respect effective
service of process upon GST Funding, GST USA or GST, as the case may be, in any
such suit, action or proceeding and (iii) agrees to take any and all action,
including the execution and filing of any and all such documents and instruments
as may be necessary to continue such designation and appointment of the Process
Agent in full force and effect so long as any of the Notes shall be outstanding.
Each of GST Funding, GST USA and GST hereby agrees to submit to the nonexclusive
jurisdiction of any federal or state court in the State of New York in any such
suit, action or proceeding arising out of or relating to this Agreement or the
transactions contemplated herein.
(e) WAIVER OF IMMUNITY. To the extent that GST has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service of notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations under this Agreement, to the extent permitted by law.
(f) GOVERNING LAW. This Agreement shall be governed by the laws of
the State of New York.
(g) 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.
(h) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder among GST Funding, GST USA and
GST, and each Holder shall have the right to enforce such agreements directly to
the extent it deems such enforcement necessary or advisable to protect its
rights or the rights of Holders hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
GST TELECOMMUNICATIONS, INC.
By /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Vice Chairman and Secretary
GST USA, INC.
By /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Senior Vice President
GST NETWORK FUNDING, INC.
By /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Senior Vice President
