1
EXHIBIT 4.3
FIRST SUPPLEMENTAL INDENTURE,
AMENDMENT AGREEMENT, CONSENT AND WAIVER
FIRST SUPPLEMENTAL INDENTURE, AMENDMENT AGREEMENT, CONSENT AND WAIVER,
dated as of March 20, 1998, among (i) PLD TELEKOM INC. (formerly known as
Petersburg Long Distance Inc.), a Delaware corporation (formerly an Ontario
company, that became a Delaware corporate pursuant to Section 388 of the General
Corporation Law of the State of Delaware pursuant to a Certificate of
Domestication filed in Delaware on February 28, 1997) (the "Company"), as
issuer, (ii) NWE CAPITAL (CYPRUS) LIMITED, a Cypriot corporation ("NWE Cyprus"),
PLD ASSET LEASING LIMITED, a Cypriot corporation ("PLD Leasing"), PLD CAPITAL
LIMITED, a Cypriot corporation ("PLD Capital"), WIRELESS TECHNOLOGY CORPORATIONS
LIMITED, a British Virgin Islands corporation ("WTC"), and BALTIC COMMUNICATIONS
LIMITED, a Russian joint stock company of the closed type ("BCL"), as
Guarantors, (iii) XXXXXXX XXXXX, shareholder of NWE Cyprus as nominee of the
Company, and APROPOS INVESTMENTS LTD., shareholder of PLD Leasing and PLD
Capital as nominee of the Company, and (iv) THE BANK OF NEW YORK, a New York
banking corporation ("BONY"), as trustee under the Indentures (as defined
below), as collateral agent under the Company Senior Note Security Agreement,
the PLD Leasing Security Agreement and the PLD Capital Security Agreement (as
each term is defined below), as escrow agent under the PLD Leasing Escrow
Account Agreement and the PLD Capital Escrow Account Agreement (as each term is
defined below) and as collateral agent or escrow agent under the Other
Collateral Documents (as defined below).
RECITALS
WHEREAS, the Company, NWE Cyprus, PLD Leasing, PLD Capital, WTC, BCL
and BONY, as trustee thereunder (the "Senior Note Trustee"), have entered into
the Indenture (the "Senior Note Indenture"), dated as of May 31, 1996, pursuant
to which the Company issued $123,000,000 in principal amount at Stated Maturity
of its 14% Senior Discount Notes due 2004 (the "Senior Notes"; capitalized terms
used herein without definition have the respective meanings defined in the
Senior Note Indenture as in effect on the date hereof);
WHEREAS, the Company, NWE Cyprus, PLD Leasing, PLD Capital, WTC, BCL
and BONY, as trustee thereunder (the "Convertible Note Trustee"), have entered
into the Indenture (the "Convertible Note Indenture"; together with the Senior
Note Indenture, collectively the "Indentures"), dated as of May 31, 1996,
pursuant to which the Company issued $26,500,000 in principal amount at Stated
Maturity of its 9% Convertible Subordinated Notes due 2006 (the "Convertible
Notes");
WHEREAS, the Company and BONY in its capacities as Senior Note Trustee
and Convertible Note Trustee and as collateral agent thereunder (the "Senior
Note Collateral Agent")
2
have entered into the Company Senior Note Security and Pledge Agreement (the
"Company Senior Note Security Agreement"), dated as of May 31, 1996;
WHEREAS, PLD Leasing and BONY in its capacities as Senior Note Trustee
and Convertible Note Trustee and as collateral agent thereunder (the "PLD
Leasing Collateral Agent") have entered into the Leasing Company Security and
Pledge Agreement (PLD Leasing Limited) (the "PLD Leasing Security Agreement"),
dated as of May 31, 1996;
WHEREAS, PLD Capital and BONY in its capacities as Senior Note Trustee
and Convertible Note Trustee and as collateral agent thereunder (the "PLD
Capital Collateral Agent") have entered into the Leasing Company Security and
Pledge Agreement (PLD Capital Limited) (the "PLD Capital Security Agreement"),
dated as of May 31, 1996;
WHEREAS, PLD Leasing and BONY in its capacities as Senior Note Trustee
and Convertible Note Trustee and as escrow agent thereunder (the "PLD Leasing
Escrow Agent") have entered into the Leasing Company Escrow Account Agreement
(PLD Asset Leasing Limited) (the "PLD Leasing Escrow Account Agreement"), dated
as of May 31, 1996;
WHEREAS, PLD Capital and BONY in its capacities as Senior Note Trustee
and Convertible Note Trustee and as escrow agent thereunder (the "PLD Capital
Escrow Agent") have entered into the Leasing Company Escrow Account Agreement
(PLD Capital Limited) (the "PLD Capital Escrow Account Agreement"), dated as of
May 31, 1996 (collectively, the Indentures, the Company Senior Note Security
Agreement, the PLD Leasing Security Agreement, the PLD Capital Security
Agreement, the PLD Leasing Escrow Account Agreement and the PLD Capital Escrow
Account Agreement are referred to herein as the "Amended Documents");
WHEREAS, BONY in its capacities as Senior Note Trustee and Convertible
Note Trustee and as collateral agent or escrow agent thereunder has entered into
the NWE Cyprus Senior Note Security Agreement, the Company Senior Note Escrow
Account Agreement, the Company Convertible Note Security Agreement (as defined
in the Convertible Note Indenture) and the Company Convertible Note Escrow
Account Agreement (as defined in the Convertible Note Indenture; the agreements
referred to in this paragraph being herein collectively called the "Other
Collateral Documents");
WHEREAS, the parties desire to amend each of the Amended Documents,
among other things, (i) to broaden the range of transactions by which the
Company may cause Telecommunications Assets to be imported into Russia and
Kazakstan, (ii) to permit funds retained in the Company Senior Note Escrow
Account to be used (a) to collateralize letters of credit required in connection
with the purchase of Telecommunications Assets, (b) to pay certain installation
and other costs associated with the purchase of Telecommunications Assets and
(c) to pay for certain purchases of Telecommunications Assets by Technocom,
(iii) to make certain modifications to the Amended Documents that are
appropriate as a result of the Company having
-2-
3
ceased to be an Ontario company and its continuance as a Delaware corporation,
(iv) to permit (a) Leasing Companies to be formed under the laws of one of the
United States of America and (b) the transfer of certain assets of PLD Leasing
to a Leasing Company thus formed and (v) to modify certain provisions of the
Senior Note Indenture relating to Indebtedness;
WHEREAS, Section 9.2 of the Senior Note Indenture provides that the
parties thereto may amend or supplement the Senior Note Indenture with the
written consent of the holder or holders of at least the requisite percentage in
aggregate principal amount at Stated Maturity of the outstanding Senior Notes;
WHEREAS, Section 9.2 of the Convertible Note Indenture provides that
the parties thereto may amend or supplement the Convertible Note Indenture with
the written consent of the holder or holders of at least the requisite
percentage in aggregate principal amount at Stated Maturity of the outstanding
Convertible Notes;
WHEREAS, the Amended Documents other than the Indentures provide that
any amendment thereof shall be effective only if made in compliance with all of
the terms and provisions of the Indentures;
WHEREAS, all acts and things prescribed by the Indentures, by law and
by the Certificate of Incorporation and the Bylaws of the Company, of the
Guarantors and of BONY necessary to make this First Supplemental Indenture,
Amendment Agreement, Consent and Waiver a valid instrument legally binding on
the Company, the Guarantors and BONY in the several capacities in which it is a
party hereto, in accordance with its terms, have been duly done and performed;
WHEREAS, the written consents to the amendments, supplements and
waivers to the Amended Documents have been obtained from the holders of not less
than the requisite percentage in aggregate principal amount of each of the
outstanding Senior Notes and Convertible Notes; and
WHEREAS, all conditions precedent to amend or supplement the Indentures
have been met;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Effect of this First Supplemental Indenture, Amendment
Agreement, Consent and Waiver. This First Supplemental Indenture, Amendment
Agreement, Consent and Waiver is supplemental to the Amended Documents and does
and shall be deemed to form a part of, and shall be construed in connection with
and as part of, the respective Amended Documents for any and all purposes.
Except as specifically modified herein, the Amended Documents, the Other
Collateral Documents, the Senior Notes and the Convertible Notes are in all
respects ratified and confirmed and shall remain in full force and effect in
accordance with their terms.
-3-
4
SECTION 2. Amendments to the Amended Documents. Each of the Amended
Documents (including any schedules thereto) are hereby amended by deleting the
words "Telecommunications Asset Lease" and "Telecommunications Asset Leases"
wherever such words appear and substituting in their place, respectively, the
words "Telecommunications Asset
Agreement" and "Telecommunications Asset Agreements".
SECTION 3. Additional Amendments to Both Indentures.
(A) The definitions of the terms "Aggregate Unused Proceeds" and "Five
Year Date" in Article I of both Indentures are hereby deleted.
(B) The definition of the term "Asset Sale" in Article I of both
Indentures is hereby amended by deleting the word "and" immediately preceding
clause (vi) thereof and inserting a comma in its place and adding new clause
(vii) reading as follows:
and (vii) a Disposition by PLD Leasing pursuant to Section 8 of the
First Supplemental Indenture of all of its assets to a newly-formed
Leasing Company formed under the laws of one of the United States of
America.
(C) The first sentence of the definition of the term "Leasing Company"
in Article I of both Indentures is hereby amended in its entirety to read as
follows:
"Leasing Company" means a special purpose corporation formed
under the laws of Cyprus or of one of the United States of America
which is a Guarantor and a Wholly-Owned Restricted Subsidiary organized
for the limited purpose of (i) acquiring Telecommunications Assets and
leasing or selling them pursuant to Telecommunications Asset Agreements
to Restricted Subsidiaries in transactions in which the monetary
consideration for such Telecommunications Assets is paid immediately or
is payable over time by such Restricted Subsidiaries and/or (ii) making
Qualified Investments permitted by this Indenture.
(D) The definition of "Permitted Liens" in Article I of both Indentures
is hereby amended by revising clauses (xvi) and (xvii), each in its entirety, to
read as follows:
(xvi) Liens in favor of a Restricted Subsidiary which is a lessor or
seller of Telecommunications Assets under a Telecommunications Asset
Agreement securing a sublease or re-sale of such Telecommunications
Assets to another Restricted Subsidiary; (xvii) Liens securing
reimbursement obligations with respect to bona fide letters of credit
that encumber documents and other Property (including, without
limitation, the proceeds of funds withdrawn from the Company Senior
Note Escrow Account) relating to such letters of credit and the
products and proceeds thereof, provided that such reimbursement
obligations secured by funds withdrawn from the Company Senior Note
Escrow
-4-
5
Agreement shall not be otherwise secured with Property of the Company
or any Restricted Subsidiary;
by deleting the word "and" at the end of clause (xvii) thereto, deleting the
period and inserting a semicolon at the end of clause (xviii) thereto and adding
a new clause (xix) thereto reading as follows:
and (xix) Liens securing the Indebtedness referred to in clause (xiv)
of Section 4.9(b) hereto.
(E) Article I of both Indentures is hereby amended by adding new
definitions in alphabetical order reading as follows:
"First Supplemental Indenture" means the First Supplemental
Indenture, Amendment Agreement, Consent and Waiver, dated as of March
20, 1998, among the Company, the Guarantors, Xxxxxxx Xxxxx, Apropos
Investments Ltd. and The Bank of New York, as Senior Note Trustee,
Convertible Note Trustee and collateral agent or escrow agent under
certain Collateral Documents.
"Teleport" means Teleport-TP, a Russian joint stock company of
the closed type.
(F) Section 2.7 of both Indentures is amended by deleting "either" and
"made prior to the day following the Five Year Date or is" in the proviso to the
third paragraph thereof.
(G) Subsection (b) of Section 2.13 of both Indentures is hereby
deleted, and subsection (c) thereof is hereby amended by changing the letter
"(c)" at the beginning thereof to "(b)".
(H) Section 4.8(b)(iii) of both Indentures is hereby amended by adding
the words "or sold in a transaction in which the monetary consideration therefor
is paid immediately or is payable over time" after the word "leased" appearing
in the fifth line thereof.
(I) Sections 4.23(a) of the Senior Note Indenture and 4.15(a) of the
Convertible Note Indenture, respectively, each is hereby amended to read as
follows:
(a) Each Leasing Company shall at all times remain a special
purpose corporation formed under the laws of Cyprus or of one of the
United States of America which is a Guarantor and a Wholly-Owned
Restricted Subsidiary with corporate organizational documents
containing the provisions set forth in Schedule 1.1(b) attached hereto.
Any newly-formed Leasing Company formed under the laws of one of the
United States of America to which assets owned by PLD Leasing are
transferred pursuant to Section 8 of the First Supplemental Indenture
shall become a party to this Indenture as a Guarantor and shall execute
a security agreement substantially in the form of a Leasing
-5-
6
Company Security Agreement and an escrow agreement substantially in the
form of a Leasing Company Escrow Account Agreement, which shall create
Liens on all Collateral subject thereto having the same perfection and
priority as the Liens created, respectively, by the Leasing Company
Security Agreement and the Leasing Company Escrow Account Agreement to
which PLD Leasing is a party, and the Company shall comply with the
provisions of this Indenture and Section 8 of the First Supplemental
Indenture relating to the Capital Stock of such newly-formed Leasing
Company and any Intercompany Notes issued by it. Following such
transfer, PLD Leasing shall be wound up as promptly as practicable
under applicable law.
(J) Section 11.1 of both Indentures is hereby amended by adding a new
sentence immediately after the fourth sentence thereof reading as follows:
Without limiting the generality of the foregoing, in the event that
Telecommunications Assets that constitute Collateral and are owned by
an Operating Company become immovable property (within the meaning of
the Russian Civil Code), the Company and each Guarantor will cause the
ownership of such Telecommunications Assets by such Operating Company
and the security interest therein held by the relevant Leasing Company
to be registered with the relevant City Bureau for the Registration of
Transactions with Immovable Property and Ownership Title of Immovable
Property (or any governmental agency succeeding to its functions).
(K) Clauses (ii) and (iii) of Section 11.4(c) of the Senior Note
Indenture and Section 11.8(c) of the Convertible Note Indenture, respectively,
each is hereby amended in its entirety to read as follows:
(ii) the applicable Leasing Company utilizes such funds
(except for funds to be utilized for Qualified Investments to the
extent permitted by this Indenture) to purchase, or to collateralize a
bona fide letter of credit in favor of the supplier thereof in
connection with the purchase of, Telecommunications Assets and in
connection therewith to pay associated freight, insurance, export and
import license, customs, value added tax, installation and software
license (provided such license relates to software required to operate
such Telecommunications Assets) costs required to be paid under, or in
order to implement the contract(s) for the purchase of, such
Telecommunications Assets ("Associated Soft Costs") contemporaneously
with such purchase of Capital Stock or intercompany loan, as
applicable, from a supplier located in the United States, Canada,
Western Europe (including Scandinavia), Israel, Japan, Taiwan and South
Korea, provided that the amount of such funds utilized to pay for
Associated Soft Costs shall not be greater than 15% of the purchase
price of the related Telecommunications Assets, and provided, further,
that any funds utilized to collateralize such a letter of credit and
not used to reimburse the issuer thereof shall, upon release of such
funds, promptly be deposited in the Company Senior Note Escrow Account;
-6-
7
(iii) the applicable Leasing Company contemporaneously enters
into a Telecommunications Asset Agreement covering such
Telecommunications Assets with a Restricted Subsidiary or a Qualified
Joint Venture requiring such Restricted Subsidiary or Qualified Joint
Venture to pay for such Telecommunications Assets and Associated Soft
Costs;
(L) Subsections (c)(v) and (e)(x)(v) in Section 11.4 of the Senior Note
Indenture and Section 11.8 of the Convertible Note Indenture, respectively, are
each hereby amended by adding the words "or buyer in a transaction in which the
monetary consideration therefor is paid immediately or is payable over time"
after the word "lessee" appearing in the second lines thereof.
(M) Section 11.4(c) of the Senior Note Indenture and Section 11.8(c) of
the Convertible Note Indenture, respectively, each is hereby amended by adding
to clause (x) of the penultimate sentence thereof, after the word "above" and
before the words "in form", the following:
and, in the case of a Telecommunications Asset Agreement that is an
installment sale agreement, to the effect that the Restricted
Subsidiary or Qualified Joint Venture that is a party thereto has no
provisions in its charter restricting its corporate power and authority
and has obtained all necessary corporate approvals to enter into and
perform such Telecommunications Asset Agreement,
, by adding a parenthetical clause after the word "Trustee" at the end of such
clause (x) reading as follows:
(and where the opinion involves a Qualified Joint Venture, counsel
providing the Opinion of Counsel may rely, where necessary, on a legal
opinion of counsel of the Qualified Joint Venture)
and by adding a new sentence at the end thereof reading as follows:
In the event that a license from the Central Bank of the Russian
Federation is or becomes required by law or interpretation thereof
having the force of law in respect of any such Telecommunications Asset
Agreement, the Company promptly shall obtain such license or cause such
license to be obtained.
(N) Section 11.4(g) of the Senior Note Indenture and Section 11.8(g) of
the Convertible Note Indenture, respectively, are each hereby amended by adding
the words "or buyer in a transaction in which the monetary consideration
therefor is paid immediately or is payable over time" after the word "lessee"
appearing in the third, sixth and eleventh lines thereof and by deleting the
word "Leases" in the fourth line thereof and inserting in its place the word
"Agreements".
-7-
8
(O) Sections 1, 2, 4 and 5 of Schedule 1.1(b) to both Indentures (as
hereby renumbered) are each hereby amended by inserting "or Certificate of
Incorporation" after "Memorandum of Association" and "or bylaws" after "Articles
of Association" in the first sentence thereof.
(P) Clause (a) of Section 1 of Schedule 1.1(b) to both Indentures is
hereby amended by adding "or selling in a transaction in which the monetary
consideration therefor is paid immediately or is payable over time" after the
word "leasing" in the third line thereof.
(Q) The second of the two sections of Schedule 1.1(b) to both
Indentures numbered "4" is hereby renumbered "5", and the definition of the term
"Telecommunications Asset Lease" appearing in Section 5 of both such Schedules
1.1(b) (as hereby renumbered) is hereby amended in its entirety to read as
follows:
"Telecommunications Asset Agreement" means a lease or
installment sale agreement where title is transferred to the buyer
pursuant to which Telecommunications Assets that consist of equipment
and rights acquired in connection with the lease or sale thereof
(including, without limitation, software licenses) are leased or sold
in a transaction in which the monetary consideration for such
Telecommunications Assets is paid immediately or is payable over time
by the company to a Restricted Subsidiary or Qualified Joint Venture in
the Russian Federation and Kazakstan, provided that if the lessor or
seller does not retain title to such Telecommunications Assets until
payment of the full amount of the lease payments or purchase price due
from the lessee or buyer, such Telecommunications Assets are subject to
all necessary pledges, assignments, mortgages, trusts, liens or other
security interests which are valid and perfected so as to create a
first priority security interest under Russian or Kazak law, as
applicable.
SECTION 4. Additional Amendments to the Senior Note Indenture.
(A) The definition of "Technocom" in Article I of the Senior Note
Indenture is hereby amended in its entirety to read as follows:
"Technocom" means Technocom Limited, an Irish company and a
Restricted Subsidiary, provided that, in the event of any Disposition
of all of Technocom's assets and liabilities as contemplated in clause
(iv) of the definition of "Asset Sale" set forth in this Article I,
"Technocom" shall mean the transferee in such Disposition.
(B) The definition of the term "Telecommunications Asset Lease" in the
Senior Note Indenture is hereby amended in its entirety to read as follows:
"Telecommunications Asset Agreement" means a lease or
installment sale agreement where title is transferred to the buyer
pursuant to which a Leasing Company
-8-
9
leases or sells, in a transaction in which the monetary consideration
therefor is paid immediately or is payable over time,
Telecommunications Assets that consist of equipment and rights acquired
in connection with the lease or sale thereof (including, without
limitation, software licenses) to a Restricted Subsidiary or Qualified
Joint Venture in the Russian Federation and Kazakstan, which lease or
installment sale agreement will be Collateral, provided that if the
lessor or seller does not retain title to such Telecommunications
Assets until payment of the full amount of the lease payments or
purchase price due from the lessee or buyer, such Telecommunications
Assets are subject to all necessary pledges, assignments, mortgages,
trusts, liens or other security interests which are valid and perfected
so as to create a first priority security interest under Russian or
Kazak law, as applicable.
(C) The definition of the term "Permitted Investment" in the Senior
Note Indenture is hereby amended by revising clause (viii) thereof in its
entirety to read as follows:
(viii) Investments by Restricted Subsidiaries which are lessees or
buyers of Telecommunications Assets under Telecommunications Assets
Agreements in transactions in which the monetary consideration for such
Telecommunications Assets is paid immediately or is payable over time,
provided that such Investments shall be made as a sublease or
installment sale of the Telecommunications Assets subject to the
Telecommunications Asset Agreement to which such Restricted Subsidiary
is party as lessee or buyer,
(D) The definition of the term "Revolving Credit Facilities" in the
Senior Note Indenture is hereby amended in its entirety to read as follows:
"Revolving Credit Facilities" means credit facilities pursuant
to which the borrower can increase or decrease at its option its
borrowings under such facilities up to a specified maximum by making
drawdowns and repayments and further drawdowns from time to time during
the term of the facilities and for which the only liens are Liens on
Receivables and Inventories to secure Indebtedness permitted to be
incurred under clause (i) of Section 4.9(b) hereof; provided that a
credit facility shall not be a Revolving Credit Facility for the
purposes hereof where the purpose to which the borrowings are applied
is limited directly or indirectly by the terms of such facility.
(E) Section 3.7 of the Senior Note Indenture is hereby amended by
deleting ", being the date following the Five Year Date" in the first sentence
thereof.
(F) Section 4.8(c) of the Senior Note Indenture is hereby amended (i)
by deleting (a) "Subject to the limitations set out in Section 4.8(d) below" at
the beginning thereof, (b) "Section 4.8(d) of" in the first proviso to the first
sentence, (c) "subject to the limitations of Section 4.8(d) below" at the end of
the penultimate sentence thereof and (d) "Subject to the limitations set out in
Section 4.8(d) below," at the beginning of the last sentence thereof, and (ii)
by capitalizing the
-9-
10
letters "I" and "T" in the words "if" and "the" immediately following the text
so deleted, respectively, from the beginning and from the last sentence of such
Section 4.8(c).
(G) Section 4.8(d) of the Senior Note Indenture is hereby deleted in
its entirety and in its place there is hereby inserted the following:
(d) [Intentionally not used]
(H) Section 4.8 (e) of the Senior Note Indenture is hereby amended by
deleting "Subject to the provisions of Section 4.8(d) above," at the beginning
thereof and by capitalizing the letter "W" in the word "within" immediately
following the text so deleted.
(I) Section 4.8(i) of the Senior Note Indenture is hereby amended by
deleting the last sentence thereof.
(J) Section 4.9(b) of the Senior Note Indenture is hereby amended by
revising clauses (i), (v) and (x) thereof, each in its entirety, to read,
respectively, as follows:
(i) the incurrence by the Company of Indebtedness under
Revolving Credit Facilities in an aggregate principal amount, together
with any Indebtedness then outstanding which was permitted to be
incurred pursuant to clauses (x) and (xiv) below, not to exceed
$25,000,000 at any one time outstanding, provided that such
Indebtedness of the Company shall not be secured by Liens other than
the Liens permitted by clause (vii) of the definition of "Permitted
Liens" set forth in Article I hereof;
and
(v) Indebtedness of a Restricted Subsidiary constituting a
sublease or installment sale to such Restricted Subsidiary from another
Restricted Subsidiary of Telecommunications Assets leased or sold to
such other Restricted Subsidiary pursuant to a Telecommunications Asset
Agreement;
and
(x) Indebtedness of Restricted Subsidiaries other than the
Leasing Companies or NWE Cyprus in an aggregate principal amount not to
exceed $15,000,000 at any one time outstanding, provided that the
aggregate principal amount of all such Indebtedness at any time
outstanding, together with Indebtedness then outstanding which was
permitted to be incurred pursuant to clause (i) above and clause (xiv)
below, shall not exceed $25,000,000;
by deleting the word "and" at the end of clause (xi) thereto, deleting the
period and inserting a semicolon at the end of clause (xii) thereof and by
adding new clauses (xiii), (xiv) and (xv) thereto reading as follows:
-10-
11
(xiii) the incurrence of Indebtedness representing
reimbursement obligations to issuers of bona fide letters of credit
permitted by Section 11.4(c)(ii) hereof;
(xiv) the incurrence by the Company of Indebtedness under the
Revolving Credit Note and Warrant Agreement, dated as of November 26,
1997, with The Travelers Insurance Company and The Travelers Indemnity
Company, including all guarantees given in connection therewith,
provided that such agreement is not changed or amended in any way
except to conform the covenants thereof (and the related definitions of
terms used therein) to the corresponding covenants (and related
definitions) of this Indenture and the Convertible Note Indenture; and
(xv) Indebtedness of the Company or any Restricted Subsidiary
constituting a guarantee of Indebtedness permitted to be incurred
pursuant to clause (x) or (xi) above, provided that (A) any such
guarantee by the Company shall not, for purposes only of clause (i)
above, constitute "Indebtedness", and (B) any such guarantee by a
Restricted Subsidiary (other than any guarantee referred to in clause
(xiv) above) shall constitute "Indebtedness", including for the
purposes of clause (i) above, and provided, further, that no such
guarantee of Indebtedness incurred pursuant to clause (x) or (xi) above
shall be secured by a Lien on Property of the Company or any Restricted
Subsidiary.
(K) Section 4.10 of the Senior Note Indenture is hereby amended by
deleting subsection (b) thereof in its entirety, deleting "(a)" at the beginning
of subsection (a) thereof, deleting all of the language following the word
"Company" in the third line thereof and inserting in place thereof the
following:
other than the Notes or the Convertible Notes or except as expressly
required by the Revolving Credit Note and Warrant Agreement referred to
in clause (xiv) of Section 4.9 hereof.
(L) Section 4.23 of the Senior Note Indenture is hereby amended by
adding a new subsection (c) thereto reading as follows:
(c) Following any Disposition contemplated by the foregoing
subsection (a) of this Section 4.23 and compliance by the Company with
the terms thereof, the Trustee will release from the Lien of the
Company Senior Note Security Agreement any Capital Stock or
Intercompany Note issued by PLD Leasing that is subject to such Lien.
(M) Section 10.1(a) of the Senior Note Indenture is hereby amended by
deleting the following from the first sentence thereof:
, together with each Restricted Subsidiary of the Company which in
accordance with Section 4.10 is required in the future to guarantee the
obligations of the Company and the
-11-
12
Guarantors under the Notes, the Guarantees, the Collateral Documents
and the Convertible Note Collateral Documents upon execution of a
supplemental indenture,
(N) Section 10.5(a) of the Senior Note Indenture is hereby amended by
deleting "is required pursuant to Section 4.10(a) hereof to become a Guarantor"
in the first sentence thereof and inserting in place thereof "that becomes a
Guarantor (as defined in Section 1.1 hereof)".
(O) Section 10.6(b) of the Senior Note Indenture is hereby amended by
inserting after the words "Section 4.10 hereof" in the first sentence thereof
"(prior to the amendment thereof by the First Supplemental Indenture)".
(P) Clause (iv) of Section 11.4(c) of the Senior Note Indenture is
hereby amended in its entirety to read as follows:
(iv) Liens on such Telecommunications Assets and
Telecommunications Asset Agreement have been or are contemporaneously
granted or assigned to the Trustee or a collateral agent for the
benefit of the Trustee and the equal and ratable benefit of the Holders
to secure the Notes, the Guarantees and the other obligations of the
Company and the Guarantors under this Indenture and the other
Collateral Documents and to secure any applicable Intercompany Note
and, so long as the Convertible Notes remain outstanding for the
benefit of the Convertible Note Trustee and the Holders of the
Convertible Notes, to secure the Convertible Notes and the guarantees
under the Convertible Note Indenture and the other obligations of the
Company or the Guarantors under the Convertible Note Indenture and the
Convertible Note Collateral Documents;
(Q) Section 11.4(i) of the Senior Note Indenture is hereby amended by
deleting the word "and" before clause (i) thereof and adding immediately before
the proviso at the end thereof a new clause (j) reading as follows:
and (j) upon the transfer of assets of PLD Leasing as contemplated by
Section 4.23(a) of this Indenture and Section 4.15(a) of the
Convertible Note Indenture;
SECTION 5. Additional Amendments to the Convertible Note Indenture.
(A) The definition of "Technocom" in Article I of the Convertible Note
Indenture is hereby amended in its entirety to read as follows:
"Technocom" means Technocom Limited, an Irish company and a
Restricted Subsidiary, provided that, in the event of any Disposition
of all of Technocom's assets and liabilities as contemplated in clause
(iv) of the definition of "Asset Sale" set forth in this Article I,
"Technocom" shall mean the transferee in such Disposition.
-12-
13
(B) The definition of the term "Telecommunications Asset Lease" in
Article I of the Convertible Note Indenture is hereby amended in its entirety to
read as follows:
"Telecommunications Asset Agreement" means a lease or
installment sale agreement where title is transferred to the buyer
pursuant to which a Leasing Company leases or sells, in a transaction
in which the monetary consideration therefor is paid immediately or is
payable over time, Telecommunications Assets that consist of equipment
and rights acquired in connection with the lease or sale thereof
(including, without limitation, software licenses) to a Restricted
Subsidiary or Qualified Joint Venture in the Russian Federation and
Kazakstan, provided that if the lessor or seller does not retain title
to such Telecommunications Assets until payment of the full amount of
the lease payments or purchase price due from the lessee or buyer, such
Telecommunications Assets are subject to all necessary pledges,
assignments, trusts, liens or other security interests which are valid
and perfected so as to create a first priority security interest under
Russian or Kazak law, as applicable.
(C) The definition of the term "Revolving Credit Facilities" in Article
I of the Convertible Note Indenture is hereby deleted.
(D) Section 4.8(c) of the Convertible Note Indenture is hereby amended
by deleting (i) "Subject to the limitations set out in Section 4.8(d) below," at
the beginning thereof, (ii) "as is permitted to be so applied pursuant to
Section 4.8(d) of the Senior Note Indenture" in the first proviso to the first
sentence, (iii) "subject to the limitations of Section 4.8(d) below" at the end
of the penultimate sentence thereof and (iv) "and to the limitations set out in
Section 4.8(d) below," in the last sentence thereof, and by capitalizing the
letter "I" in the word "if" immediately following the first such deletion.
(E) Section 4.8(d) of the Convertible Note Indenture is hereby deleted
in its entirety and in its place there is hereby inserted the following:
(d) [Intentionally not used]
(F) Section 4.8 (e) of the Convertible Note Indenture is hereby amended
by deleting "Subject to the provisions of Section 4.8(d) above," at the
beginning thereof and by capitalizing the letter "W" in the word "within"
immediately following the text so deleted.
(G) Section 4.8(f) of the Convertible Note Indenture is hereby amended
by deleting ", under Section 4.8(d) hereof" in the second line thereof.
(H) Section 4.8(i) of the Convertible Note Indenture is hereby amended
by deleting the last sentence thereof.
-13-
14
(I) Section 4.9 of the Convertible Note Indenture is hereby amended by
deleting subsection (b) thereof in its entirety, deleting "(a)" at the beginning
of subsection (a) thereof, deleting all of the language following the word
"Company" in the third line thereof and inserting in place thereof the
following:
other than the Notes or the Convertible Notes or except as expressly
required by the Revolving Credit Note and Warrant Agreement, dated as
of November 26, 1997, between the Company and The Travelers Insurance
Company and The Travelers Indemnity Company.
(J) Section 4.14 of the Convertible Note Indenture is hereby amended by
deleting "commencing on the date following the Five Year Date" in subsection (a)
thereof and deleting "(unless such Termination of Trading occurs prior to the
Five Year Date, then on or before the 15th day after the Five Year Date)" in
subsection (b) thereof.
(K) Section 5.1 of the Convertible Note Indenture is hereby amended by
deleting the semicolon at the end of clause (d) of the first paragraph thereof
and inserting in its place a period and by deleting the following at the end of
the such paragraph:
provided that, notwithstanding any other provision of this Article V,
the Company shall not engage in any amalgamation, consolidation,
merger, sale or transfer on or prior to the Five Year Date which would
result in the Holder of a Note not being entitled to convert such Note
into any "Substituted Properties" as a result of the provision
contained in Section 13.12;
(L) Section 10.1(a) of the Convertible Note Indenture is hereby amended
by deleting the following from the first sentence thereof:
, together with each Restricted Subsidiary of the Company which in
accordance with Section 4.9 is required in the future to guarantee the
obligations of the Company and the Guarantors under the Notes, the
Indenture and the Collateral Documents and the Senior Note Collateral
Documents upon execution of a supplemental indenture,
(M) Section 10.5(a) of the Convertible Note Indenture is hereby amended
by deleting "is required pursuant to Section 4.9(a) hereof to become a
Guarantor" in the first sentence thereof and inserting in place thereof "that
becomes a Guarantor (as defined in Section 1.1 hereof)".
(N) Section 10.6(b) of the Convertible Note Indenture is hereby amended
by inserting after the words "Section 4.9 hereof" in the first sentence thereof
"(prior to the amendment thereof by the First Supplemental Indenture)".
(O) Clause (iv) of Section 11.8(c) of the Convertible Note Indenture is
hereby amended in its entirety to read as follows:
-14-
15
(iv) Liens on such Telecommunications Assets and such
Telecommunications Asset Agreement have been or are contemporaneously
granted or assigned to the Trustee or a collateral agent for the
benefit of the Trustee and the equal and ratable benefit of the Holders
to secure the Notes, the Guarantees and the other obligations of the
Company and the Guarantors under this Indenture and the other
Collateral Documents and to secure any applicable Intercompany Note,
(P) Section 13.12 of the Convertible Note Indenture is hereby deleted.
SECTION 6. Additional Amendments to the PLD Leasing Security Agreement
and the PLD Capital Security Agreement.
(A) Section 11 of each of the PLD Leasing Security Agreement, the PLD
Capital Security Agreement and the form of Leasing Company Security and Pledge
Agreement attached as Exhibit I to the Senior Note Indenture is hereby amended
by deleting the word "leased" appearing in the seventh line thereof.
(B) Section 12(a)(ii) of each of the PLD Leasing Security Agreement,
the PLD Capital Security Agreement and the form of Leasing Company Security and
Pledge Agreement attached as Exhibit I to the Senior Note Indenture is hereby
amended by adding the words "or buyer in a transaction in which the monetary
consideration therefor is paid immediately or is payable over time" after the
word "lessee" appearing in the fourth line thereof.
SECTION 7. Use by Technocom of Escrowed Funds. The withdrawal of
$8,000,000 of the net proceeds of the Senior Notes retained in the Company
Senior Note Escrow Account to make a loan to Technocom evidenced by a promissory
note (the "Technocom Note") that (x) is in the form of Exhibit A to this First
Supplemental Indenture, Amendment Agreement, Consent and Waiver and (y) is
secured by the Lien described in clause (D) below, which shall constitute
Collateral, is hereby consented to if the following conditions are satisfied,
and the Senior Note Trustee shall have received an Officers' Certificate of the
Company and Technocom to such effect:
(A) no Default or Event of Default has occurred and is continuing;
(B) Technocom is utilizing such funds to make payments due under
existing contracts, or contracts (including amendments to or extensions of
existing contracts) to be entered into, for the purchase of Telecommunications
Assets;
(C) such Telecommunications Assets are leased or sold by Technocom to
Teleport pursuant to agreement under which the monetary consideration therefor
is paid immediately or is payable over time;
-15-
16
(D) first priority Liens on (i) the Technocom Note have been or are
contemporaneously granted to the Senior Note Trustee or a collateral agent for
the benefit of the Senior Note Trustee and the equal and ratable benefit of the
Holders to secure the Senior Notes, the Guarantees and the other obligations of
the Company and the Guarantors under the Senior Note Indenture and the other
Senior Note Collateral Documents and, so long as the Convertible Notes remain
outstanding, for the benefit of the Convertible Note Trustee and the Holders of
the Convertible Notes, to secure the Convertible Notes and the guarantees under
the Convertible Note Indenture and the other obligations of the Company or the
Guarantors under the Convertible Note Indenture and the Convertible Note
Collateral Documents and (ii) such Telecommunications Asset Agreement have been
or are contemporaneously granted to the Company to secure the Technocom Note;
(E) Teleport has all licenses, registrations and permits necessary to
operate the Telecommunications Assets subject to such Telecommunications Asset
Agreement and the Telecommunications Business for which such Telecommunications
Assets are intended to be utilized; and
(F) appropriate Collateral Documents have been executed and delivered
and properly recorded, registered and filed to the extent necessary to make
effective the first priority Lien intended to be created therein and have been
delivered to the Senior Note Trustee or the collateral agent.
The Company shall also deliver to the Senior Note Trustee (i) an Opinion of
Counsel covering clauses (D), (E) and (F) above and, to the knowledge of counsel
rendering such Opinion of Counsel without investigation, clause (A) above, in
form and substance reasonably satisfactory to the Senior Note Trustee (provided
that the opinion covering clause (A) above shall be given by Xxxxxx, Xxxxx &
Xxxxxxx LLP), and (ii) such other documents as may be required by the Collateral
Documents to be delivered to the Senior Note Trustee or a collateral agent by
the Company. If the foregoing conditions are satisfied, the funds representing
the net proceeds of the Notes in the Company Senior Note Escrow Account may be
withdrawn and utilized by Technocom to purchase the applicable
Telecommunications Assets.
SECTION 8. Transfer of Assets of PLD Leasing. The transfer of all of
the assets of PLD Leasing (the "Transferred Assets") is hereby consented to if
the following conditions are satisfied, and the Senior Note Trustee shall have
received an Officers' Certificate of the Company to such effect:
(A) no Default or Event of Default has occurred and is continuing;
(B) PLD Leasing and the company to which it is transferring the
Transferred Assets (the "Transferee") shall have entered into an assignment and
assumption agreement pursuant to which PLD Leasing shall assign and transfer to
the Transferee the Transferred Assets and the Transferee shall have assumed any
liabilities of PLD Leasing related to the Transferred Assets,
-16-
17
provided that such transfer shall not adversely affect the perfection or
priority of any Lien on the Transferred Assets in favor of the Trustee or a
collateral agent for the Trustee;
(C) the Transferee shall have entered into Collateral Documents
substantially in the form of the Collateral Documents to which PLD Leasing is a
party;
(D) first priority Liens on all capital stock of the Transferee, on all
Intercompany Notes issued by the Transferee in favor of the Company and on the
Transferred Assets, have been or are contemporaneously granted to the Senior
Note Trustee or a collateral agent for the benefit of the Senior Note Trustee
and the equal and ratable benefit of the Holders to secure the Senior Notes, the
Guarantees and the other obligations of the Company and the Guarantors under the
Senior Note Indenture and the other Senior Note Collateral Documents and, so
long as the Convertible Notes remain outstanding, for the benefit of the
Convertible Note Trustee and the Holders of the Convertible Notes, to secure the
Convertible Notes and the guarantees under the Convertible Note Indenture and
the other obligations of the Company or the Guarantors under the Convertible
Note Indenture and the Convertible Note Collateral Documents; and
(E) PeterStar has all licenses, registrations and permits necessary to
operate the Telecommunications Assets included in the Transferred Assets and the
Telecommunications Business for which such Telecommunications Assets are
intended to be utilized; and
(F) appropriate Collateral Documents have been executed and delivered
and properly recorded, registered and filed to the extent necessary to make
effective the first priority Lien intended to be created therein and have been
delivered to the Senior Note Trustee or the collateral agent.
The Company shall also deliver to the Senior Note Trustee (i) an Opinion of
Counsel covering clauses (D), (E) and (F) above and, to the knowledge of counsel
rendering such Opinion of Counsel without investigation, clause (A) above, in
form and substance reasonably satisfactory to the Senior Note Trustee (provided
that the opinion covering clause (A) above shall be given by Xxxxxx, Xxxxx &
Bockius LLP), and (ii) such other documents as may be required by the Collateral
Documents to be delivered to the Senior Note Trustee or a collateral agent by
the Company. The Company hereby undertakes that, promptly following the
completion of the transfer referred to above, the Company shall cause PLD
Leasing to be wound up.
SECTION 9. Preliminary Agreement with PeterStar. The termination of the
Preliminary Agreement dated October 7, 1996, between PeterStar and PLD Leasing
relating to certain Telecommunications Assets and the related Equipment Lease
dated as of October 1, 1996 between such parties (collectively, the "PeterStar
Agreements") and the simultaneous execution of an agreement converting the
PeterStar Agreements into a Telecommunications Asset Agreement in the form of an
installment sale agreement where title is transferred to PeterStar covering such
Telecommunications Assets, is hereby consented to if the following conditions
are
-17-
18
satisfied, and the Senior Note Trustee shall have received an Officers'
Certificate of the Company to such effect:
(A) no Default or Event of Default has occurred and is continuing;
(B) first priority Liens on such Telecommunications Asset Agreement
have been or are contemporaneously granted to the Senior Note Trustee or a
collateral agent for the benefit of the Senior Note Trustee and the equal and
ratable benefit of the Holders to secure the Senior Notes, the Guarantees and
the other obligations of the Company and the Guarantors under the Senior Note
Indenture and the other Senior Note Collateral Documents and, so long as the
Convertible Notes remain outstanding, for the benefit of the Convertible Note
Trustee and the Holders of the Convertible Notes, to secure the Convertible
Notes and the guarantees under the Convertible Note Indenture and the other
obligations of the Company or the Guarantors under the Convertible Note
Indenture and the Convertible Note Collateral Documents;
(C) PeterStar has or has applied for all licenses, registrations and
permits necessary to operate the Telecommunications Assets subject to such
Telecommunications Asset Agreement and the Telecommunications Business for which
such Telecommunications Assets are intended to be utilized; and
(D) appropriate Collateral Documents have been executed and delivered
and properly recorded, registered and filed to the extent necessary to make
effective the first priority Lien intended to be created therein and have been
delivered to the Senior Note Trustee or the collateral agent.
The Company shall also deliver to the Senior Note Trustee (i) an Opinion of
Counsel covering clauses (B), (C) and (D) above and, to the knowledge of counsel
rendering such Opinion of Counsel without investigation, clause (A) above, in
form and substance reasonably satisfactory to the Senior Note Trustee (provided
that the opinion covering clause (A) above shall be given by Xxxxxx, Xxxxx &
Xxxxxxx LLP), and (ii) such other documents as may be required by the Collateral
Documents to be delivered to the Senior Note Trustee or a collateral agent by
the Company.
SECTION 10. Special Registration Payment. In addition to and not in
limitation of the Company's obligation to pay Special Interest in the
circumstances contemplated in the Registration Rights Amendment and the Notes,
in the event that (i) Amendment No. 1 on Form S-4 to the Registration Statement
on Form S-10 filed on August 9, 1996 with respect to the Senior Notes and
Amendment No. 1 on Form S-3 to the Registration Statement on Form F-10 filed on
August 9, 1996 are not both filed with the Commission on or prior to April 3,
1998 (hereinafter referred to as the "Filing Covenant"), or (ii) if both such
Registration Statements are not declared effective by the Commission on or
before May 15, 1998 (or, if the Commission shall have reviewed and commented on
any such Registration Statement, on or prior to a date which is 60 days
following the date on which the first such comments with respect to such
-18-
19
Registration Statement are received by the Company) (hereinafter referred to as
the "Effectiveness Covenant"), then the Company shall pay the holders of the
Senior Notes and the Convertible Notes their pro rata shares (based on the
unpaid accreted principal amount of the Senior Notes and the unpaid amount of
the Convertible Notes, collectively, the "Aggregate Unpaid Principal") on the
business day immediately following the Company's default with respect to either
the Filing Covenant or the Effectiveness Covenant and, so long as the Company
shall remain in default thereunder, on the corresponding date in each third
month thereafter, the sum of 1% of the then Aggregate Unpaid Principal (the
"Special Fee"); provided that, in the event that the Company shall be in default
simultaneously with respect to the Filing Covenant and the Effectiveness
Covenant, and/or with respect to both Registration Statements, the Company shall
only be obligated to pay one Special Fee in respect of all such defaults.
SECTION 11. Trustee. Except as otherwise expressly provided herein and
in the Indentures, no duties, responsibilities or liabilities are assumed, or
shall be construed to be assumed, by BONY in the several capacities in which it
is a party hereto by reason of this First Supplemental Indenture, Amendment
Agreement, Consent and Waiver. This First Supplemental Indenture, Amendment
Agreement, Consent and Waiver is executed and accepted by BONY in the several
capacities in which it is a party hereto subject to all the terms and conditions
set forth in the Amended Documents with the same force and effect as if those
terms and conditions were repeated at length herein and made applicable to BONY,
in such capacities, with respect hereto.
SECTION 12. APPLICABLE LAW. THIS FIRST SUPPLEMENTAL INDENTURE,
AMENDMENT AGREEMENT, CONSENT AND WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 13. Counterparts. The parties may sign any number of
counterparts or copies of this First Supplemental Indenture, Amendment
Agreement, Consent and Waiver. Each signed counterpart or copy shall be an
original, but all of such executed counterparts or copies together shall
represent the same agreement.
SECTION 14. Severability. In case one or more of the provisions in this
First Supplemental Indenture, Amendment Agreement, Consent and Waiver shall be
held invalid, illegal or unenforceable, in any respect for any reason, the
validity, illegality and enforceability of any such provision in every other
respect and of the remaining provisions shall not in any way be affected or
impaired thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent provided by law.
SECTION 15. Headings. The headings, the language preceding the text of
the amendments and the sections in this First Supplemental Indenture, Amendment
Agreement, Consent and Waiver have been inserted for convenience of reference
only, are not considered a part hereof and in no way modify or restrict any of
the terms or provisions hereof.
-19-
20
IN WITNESS WHEREOF, the parties hereby have caused this First
Supplemental Indenture, Amendment Agreement, Consent and Waiver to be duly
executed as of the date first written above.
PLD TELEKOM INC. (formerly known as
Petersburg Long Distance Inc.)
By: E. Xxxxx Xxxxxxxx
Senior Vice President
By: Xxxxxxx X. Xxxxx
V.P. -- Administration
NWE CAPITAL (CYPRUS) LIMITED
By: Xxxxxxx X. Xxxxx
Director
PLD ASSET LEASING LIMITED
By: E. Xxxxx Xxxxxxxx
Authorized Representative
PLD CAPITAL LIMITED
By: E. Xxxxx Xxxxxxxx
Authorized Representative
WIRELESS TECHNOLOGY CORPORATIONS
LIMITED
By: E. Xxxxx Xxxxxxxx
Authorized Representative
BALTIC COMMUNICATIONS LIMITED
By: E. Xxxxx Xxxxxxxx
Authorized Representative
-20-
21
XXXXXXX XXXXX
Signed by: Xxxxxxx X. Xxxxx
APROPOS INVESTMENTS LTD.
By: E. Xxxxx Xxxxxxxx
Authorized Representative
THE BANK OF NEW YORK, as Senior Note
Trustee, Convertible Note Trustee,
Senior Note Collateral Agent, PLD
Leasing Collateral Agent, PLD Capital
Collateral Agent, PLD Leasing Escrow
Agent, PLD Capital Escrow Agent and
collateral agent or escrow agent under
the Other Collateral Documents
By: Xxxxxx X. Xxxxx
Assistant Vice President
-21-
22
EXHIBIT A TO FIRST SUPPLEMENTAL INDENTURE,
AMENDMENT AGREEMENT, CONSENT AND WAIVER
TECHNOCOM NOTE
U.S.$8,000,000.00 ______________, 1998
FOR VALUE RECEIVED, and intending to be legally bound,
TECHNOCOM LIMITED, an Irish company having certificate number 183622 ("Payor"),
hereby promises to pay to the order of PLD TELEKOM INC., a Delaware corporation
("Payee"), at the office of Payee at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
X.X.X., or at such other place as the holder hereof shall from time to time
designate in writing, on _____________, 2001 (the "Maturity Date"), the
principal amount of EIGHT MILLION U.S. DOLLARS (U.S.$8,000,000.00), in lawful
money of the United States of America, together with interest on the outstanding
principal balance hereof, in like money, determined in the manner set forth
below.
Interest shall accrue on the outstanding principal balance
hereof, at a rate equal to fourteen percent (14%) per annum, and shall be
payable annually in arrears on the anniversary of the issue date set forth above
in each year until the principal amount hereof has been paid in full.
If any installment of interest or principal is not paid when
due, in addition to any other rights or remedies which Payee may have in respect
thereof, Payor shall be obligated to pay Payee on demand an amount equal to five
percent (5%) of the amount due.
In addition to any other amounts which may be payable
hereunder, Payor shall also pay to Payee on demand all costs and expenses
(including lawyers' fees and expenses) incurred in the enforcement of Payor's
obligations hereunder and/or the collection of the amounts due hereunder.
The amounts due hereunder may be prepaid in whole or in part
at any time and from time to time without premium or penalty. Any such
prepayment will be applied against the payment(s) due hereunder in the reverse
order in which they fall due.
All payments due hereunder shall be made net of any
withholding taxes or other similar taxes or charges that are applicable. In the
event that any payment hereunder is subject to
23
withholding taxes or other similar taxes or charges, Payor shall increase the
amount of such payment by such additional amount as is required, after taking
into account the payment of such taxes or charges (and any additional taxes
imposed on Payee as a result of receiving such additional amount), so as to
enable Payee to receive an amount equal to the amount it would have received as
payment from Payor had no such taxes or charges been required.
The obligations of Payor hereunder are secured by a security
interest in the interest of Payor in certain equipment supplied by
Scientific-Atlanta, Inc. and its rights under a certain lease of such equipment
to Teleport-TP.
Payor hereby covenants and agrees with the holder hereof that,
until such time as its obligations hereunder are discharged in full, it will
not, without the prior written consent of Payee:
1. transfer, convey, sell, lease or otherwise dispose of, in one
transaction or a series of related transactions, (i) any shares of any
subsidiary of Payor, or (ii) any assets of Payor or any subsidiary whose fair
market value exceeds U.S.$1,000,000, other than in either case to Payee or
another subsidiary of Payee (hereinafter referred to as a "Permitted
Subsidiary");
2. incur any indebtedness for borrowed money other than (i) to Payee or
any Permitted Subsidiary, (ii) in connection with the lease or purchase of
property or assets to be used in the business of Payor, or (iii) in connection
with the refinancing of indebtedness outstanding on the date hereof or of
indebtedness permitted hereby and incurred after the date hereof;
3. guarantee the indebtedness of any other party other than Payee or any
Permitted Subsidiary;
4. create, assume or permit to exist any pledges over or other liens on
any of its assets other than to secure any indebtedness or guarantee which is
permitted under paragraphs 2 or 3 above;
5. enter into any sale and leaseback transaction;
6. issue any preferred shares other than to Payee or any Permitted
Subsidiary;
7. except as set forth in 9. below, restrict its ability to pay dividends
on its shares;
8. enter into any transaction of any kind with any of its directors,
officers or employees, or any other person who has the power to direct the
management or policies of Payor, or any party (other than Payee or any Permitted
Subsidiary) which owns 10% or more of its shares, other than normal employment
arrangements; or
-2-
24
9. make any distribution on its shares (other than pro rata to all
holders), purchase or redeem any of its shares, prepay any indebtedness, or make
any form of investment (other than in equipment or other property in the
ordinary course of business); or
10. engage directly or indirectly in any business other than the
telecommunications business.
Payor shall be in default hereunder upon the occurrence of any
of the following events (each, an "Event of Default"):
(a) Payor fails to pay principal or interest (or any
installment thereof), or any other amount due hereunder, on the due date
thereof, and (other than in respect of any payment due on the Maturity Date)
such default continues for a period of fifteen (15) days;
(b) Payor defaults with respect to any other covenant or
agreement contained herein and fails to correct such default within ten (10)
days after written notice from Payor, specifying the nature of the default;
(c) Payor defaults with respect to the payment of any other
indebtedness, or payment of such indebtedness is accelerated by the holders
thereof, and in either case the unpaid principal amount of such indebtedness
exceeds U.S.$1,000,000;
(d) the entry by a court of competent jurisdiction of one or
more final judgements against Payor or any subsidiary of Payor in an uninsured
or unindemnified amount in excess of U.S.$1,000,000 which is not discharged,
stayed or satisfied within sixty (60) days;
(e) the commencement by or against Payor or any subsidiary of
any proceeding under any bankruptcy, insolvency or other law for the
liquidation, winding up, reorganization, or rehabilitation of such entity , or
for a composition with its creditors;
(f) the appointment of a custodian, receiver, liquidator,
trustee or similar official for Payor or any subsidiary, or any substantial part
of the assets of Payor or any subsidiary; and
(g) the nationalization or expropriation by any governmental
authority, whether or not pursuant to applicable law, for a period likely to
exceed thirty (30) days, of all or a substantial part of the assets of Payor or
any subsidiary.
Upon the occurrence of an Event of Default, Payee may by
written notice to Payor declare all amounts due under this Note to be
immediately due and payable and, upon such declaration, all amounts due
hereunder shall become and be immediately due and payable. In addition, Payee
shall be entitled to exercise all other rights and remedies which it may have in
respect of such Event of Default, whether pursuant to this Note, applicable law
or otherwise,
-3-
25
including in respect of any collateral upon which the obligations of Payor
hereunder may be secured.
The terms and conditions contained herein shall bind Payor and
its successors and assigns, and the benefits hereof shall inure to Payee and the
successors and assigns of Payee.
Payee shall be permitted at any time to assign any or all of
its rights, powers, privileges and benefits hereunder to any other party,
whether absolutely or by way of collateral.
Payor waives presentment for payment, demand, notice of
nonpayment, notice of protest, protest, and notice of dishonor of this Note, and
all other notices in connection with the delivery, acceptance, performance,
default or enforcement of the payment of this Note.
If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due from the Payor hereunder in U.S. Dollars into
another currency, the Payor agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Payee could purchase U.S. Dollars
with such other currency at Citibank N.A., New York, New York, U.S.A., on the
New York business day preceding that on which final judgment is given. Any
amount received or recovered in a currency other than U.S. Dollars (whether as a
result of a judgment or order of a court of any jurisdiction, or the enforcement
thereof, in the winding-up or dissolution of the Payor or otherwise) by the
Payee in respect of any sum expressed to be due to it from the Payor shall only
constitute discharge of the Payor to the extent of the U.S. Dollar amount which
the Payee is able to purchase with the amount so received or recovered in such
other currency on the date of such receipt or recovery; provided that if it is
not practicable to make such purchase on such date, such purchase shall be made
on the first date on which is practicable to do so. If the amount of U.S.
Dollars so purchased is less than the U.S. Dollar amount expressed to be due to
the Payee hereunder, to the extent permitted by applicable law the Payor shall
indemnify the Payee against any loss sustained by it as a result and, in any
event, the Payor shall indemnify the Payee against the cost of making any such
purchase. For the purposes of this paragraph, it shall be sufficient for the
Payee to certify that it would have suffered a loss had an actual purchase of
U.S. Dollars been made with the amount so received in such other currency on the
date of receipt or recovery (or, if a purchase of U.S. Dollars on such date had
not been practicable, on the first date on which it would have been
practicable). To the extent permitted by applicable law, the indemnities granted
by this paragraph constitute a separate and independent obligation from the
other obligations of the Payor hereunder and shall give rise to a separate and
independent cause of action in favor of the Payee.
THIS NOTE AND ALL OF THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, U.S.A. PAYOR HEREBY CONSENTS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, U.S.A. IN ANY ACTION OR
PROCEEDING WHICH
-4-
26
MAY BE BROUGHT AGAINST IT UNDER OR IN CONNECTION WITH THIS NOTE OR TO ENFORCE
ANY COVENANT OR AGREEMENT CONTAINED HEREIN OR ANY LIABILITY OR OBLIGATION
HEREUNDER, AND IN THE EVENT ANY SUCH ACTION OR PROCEEDING SHALL BE BROUGHT,
PAYOR AGREES NOT TO RAISE ANY OBJECTION TO SUCH JURISDICTION. PAYOR FURTHER
APPOINTS CT CORPORATION SYSTEM, 0000 XXXXXXXX, XXX XXXX, XX 00000, U.S.A., AS
ITS AGENT FOR SERVICE OF PROCESS AND OTHER PLEADINGS IN ANY SUCH ACTION OR
PROCEEDING. AT THE OPTION OF THE PAYEE, EXERCISABLE BY NOTICE TO THE PAYOR, ANY
CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS NOTE, OR THE BREACH
HEREOF, SHALL BE SETTLED BY ARBITRATION ADMINISTERED BY THE AMERICAN ARBITRATION
ASSOCIATION IN NEW YORK CITY UNDER ITS COMMERCIAL ARBITRATION RULES, AND
JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION THEREOF.
IN WITNESS WHEREOF, Payor has duly executed this Note as of
the date set forth at the commencement hereof.
TECHNOCOM LIMITED
By:_________________________________
Name:
Title:
-5-
