GST NETWORK FUNDING, INC.
GST USA, INC.
GST TELECOMMUNICATIONS, INC.
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
Indenture
Dated as of May 4, 1998
10 1/2% Senior Secured Discount Notes due 2008
CROSS-REFERENCE TABLE
TIA SECTIONS INDENTURE SECTIONS
Section 310(a)(1)............................................ 7.10
(a)(2)............................................ 7.10
(b)............................................... 7.08
Section 313(c)............................................... 7.06; 12.02
Section 314(a)............................................... 4.20; 12.02
(a)(4)............................................ 4.19; 12.02
(c)(1)............................................ 12.03
(c)(2)............................................ 12.03
(e)............................................... 12.04
Section 315(b)............................................... 7.05; 12.02
Section 316(a)(1)(A)......................................... 6.05
(a)(1)(B)......................................... 6.04
(b)............................................... 6.07
Section 317(a)(1)............................................ 6.08
(a)(2)............................................ 6.09
Section 318(a)............................................... 12.01
(c)............................................... 12.01
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Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY.......................................................1
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions....................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.............23
SECTION 1.03. Rules of Construction.........................................23
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating...............................................24
SECTION 2.02. Restrictive Legends...........................................25
SECTION 2.03. Execution, Authentication and Denominations...................28
SECTION 2.04. Registrar and Paying Agent....................................29
SECTION 2.05. Paying Agent to Hold Money in Trust...........................30
SECTION 2.06. Transfer and Exchange.........................................30
SECTION 2.07. Book-Entry Provisions for Global Securities...................31
SECTION 2.08. Special Transfer Provisions...................................33
SECTION 2.09. Replacement Securities........................................37
SECTION 2.10. Outstanding Securities........................................37
SECTION 2.11. Temporary Securities..........................................38
SECTION 2.12. Cancellation..................................................38
SECTION 2.13. XXXXX, CINS and ISIN Numbers..................................38
SECTION 2.14. Defaulted Interest............................................39
SECTION 2.15. Issuance of Additional Securities.............................39
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption...........................................39
SECTION 3.02. Mandatory Redemption..........................................40
SECTION 3.03. Notices to Trustee............................................40
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Note: The Table of Contents shall not for any purposes be deemed to be a part
of the Indenture.
SECTION 3.04. Selection of Securities to Be Redeemed........................40
SECTION 3.05. Notice of Redemption..........................................41
SECTION 3.06. Effect of Notice of Redemption................................42
SECTION 3.07. Deposit of Redemption Price...................................42
SECTION 3.08. Payment of Securities Called for Redemption...................42
SECTION 3.09. Securities Redeemed in Part...................................42
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.........................................43
SECTION 4.02. Maintenance of Office or Agency...............................43
SECTION 4.03. Limitation on Indebtedness....................................44
SECTION 4.04. Limitation on Restricted Payments.............................46
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.............................49
SECTION 4.06. Limitation on the Issuance and Sale of Capital
Stock of Restricted Subsidiaries..............................51
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted
Subsidiaries..................................................51
SECTION 4.08. Limitation on Transactions with Shareholders and Affiliates...52
SECTION 4.09. Limitation on Liens...........................................53
SECTION 4.10. Limitation on Sale-Leaseback Transactions.....................54
SECTION 4.11. Limitation on Investments.....................................55
SECTION 4.12. Limitation on Asset Sales.....................................55
SECTION 4.13. Impairment of Security Interest or Ability to
Assume the Securities. .......................................56
SECTION 4.14. Repurchase of Securities upon a Change of Control.............56
SECTION 4.15. Existence.....................................................57
SECTION 4.16. Payment of Taxes and Other Claims.............................57
SECTION 4.17. Maintenance of Properties and Insurance.......................57
SECTION 4.18. Notice of Defaults............................................58
SECTION 4.19. Compliance Certificates.......................................58
SECTION 4.20. Commission Reports and Reports to Holders.....................59
SECTION 4.21. Waiver of Stay, Extension or Usury Laws.......................59
SECTION 4.22. Additional Amounts............................................59
SECTION 4.23. Assumption of Securities by GST USA...........................60
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Note: The Table of Contents shall not for any purposes be deemed to be a part
of the Indenture.
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ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Consolidation, Merger and Sale of Assets......................61
SECTION 5.02. Successor Substituted.........................................62
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.............................................63
SECTION 6.02. Acceleration..................................................65
SECTION 6.03. Other Remedies................................................65
SECTION 6.04. Waiver of Past Defaults.......................................65
SECTION 6.05. Control by Majority...........................................66
SECTION 6.06. Limitation on Suits...........................................66
SECTION 6.07. Rights of Holders to Receive Payment..........................67
SECTION 6.08. Collection Suit by Trustee....................................67
SECTION 6.09. Trustee May File Proofs of Claim..............................67
SECTION 6.10. Priorities....................................................67
SECTION 6.11. Undertaking for Costs.........................................68
SECTION 6.12. Restoration of Rights and Remedies............................68
SECTION 6.13. Rights and Remedies Cumulative................................68
SECTION 6.14. Delay or Omission Not Waiver..................................68
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General.......................................................69
SECTION 7.02. Certain Rights of Trustee.....................................69
SECTION 7.03. Individual Rights of Trustee..................................70
SECTION 7.04. Trustee's Disclaimer..........................................70
SECTION 7.05. Notice of Default.............................................70
SECTION 7.06. Reports by Trustee to Holders.................................71
SECTION 7.07. Compensation and Indemnity....................................71
SECTION 7.08. Replacement of Trustee........................................71
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Note: The Table of Contents shall not for any purposes be deemed to be a part
of the Indenture.
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SECTION 7.09. Successor Trustee by Xxxxxx, Etc..............................72
SECTION 7.10. Eligibility...................................................73
SECTION 7.11. Money Held in Trust...........................................73
SECTION 7.12. Withholding Taxes.............................................73
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations..........................73
SECTION 8.02. Defeasance and Discharge of Indenture.........................74
SECTION 8.03. Defeasance of Certain Obligations.............................77
SECTION 8.04. Application of Trust Money....................................79
SECTION 8.05. Repayment to Issuer...........................................79
SECTION 8.06. Reinstatement.................................................79
SECTION 8.07. Insiders......................................................79
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders....................................80
SECTION 9.02. With Consent of Holders.......................................80
SECTION 9.03. Revocation and Effect of Consent..............................81
SECTION 9.04. Notation on or Exchange of Securities.........................82
SECTION 9.05. Trustee to Sign Amendments, Etc...............................82
SECTION 9.06. Conformity with Trust Indenture Act...........................83
ARTICLE TEN
MEETINGS OF HOLDERS
SECTION 10.01. Purposes for Which Meetings May Be Called. .................83
SECTION 10.02. Manner of Calling Meetings. ................................83
SECTION 10.03. Call of Meetings by Issuer or Holders. .....................84
SECTION 10.04. Who May Attend and Vote at Meetings. .......................84
SECTION 10.05. Quorum; Action...............................................84
SECTION 10.06. Regulations May Be Made by Trustee; Conduct of the Meeting;
Voting Rights; Adjournment. ................................85
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Note: The Table of Contents shall not for any purposes be deemed to be a part
of the Indenture.
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SECTION 10.07. Voting at the Meeting and Record to Be Kept. ...............86
SECTION 10.08. Exercise of Rights of Trustee or Holders May
Not Be Hindered or Delayed by Call of Meeting. .............86
SECTION 10.09. Procedures Not Exclusive. ..................................86
ARTICLE ELEVEN
SECURITY
SECTION 11.01. Security.....................................................86
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act of 1939..................................89
SECTION 12.02. Notices......................................................89
SECTION 12.03. Certificate and Opinion as to Conditions Precedent...........90
SECTION 12.04. Statements Required in Certificate or Opinion................90
SECTION 12.05. Rules by Trustee, Paying Agent or Registrar..................91
SECTION 12.06. Payment Date Other Than a Business Day.......................91
SECTION 12.07. Governing Law; Consent to Jurisdiction and Service...........91
SECTION 12.08. No Adverse Interpretation of Other Agreements................91
SECTION 12.09. No Recourse Against Others...................................92
SECTION 12.10. Successors...................................................92
SECTION 12.11. Duplicate Originals..........................................92
SECTION 12.12. Separability.................................................92
SECTION 12.13. Table of Contents, Headings, Etc.............................92
EXHIBIT A Form of Security................................................A-1
EXHIBIT B Form of Certificate.............................................B-1
EXHIBIT C Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S............................C-1
EXHIBIT D Form of Certificate to be Delivered in Connection with
Transfers to Non-QIB Accredited Investors.....................D-1
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Note: The Table of Contents shall not for any purposes be deemed to be a part
of the Indenture.
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INDENTURE, dated as of May 4, 1998, among GST NETWORK FUNDING, INC., a
Delaware corporation (the "COMPANY"), GST USA, INC., a Delaware corporation
("GST USA"), GST TELECOMMUNICATIONS, INC., a federally chartered Canadian
corporation ("GST"), and UNITED STATES TRUST COMPANY OF NEW YORK (the
"TRUSTEE").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance initially of up to $500,000,000 principal
amount at maturity of the Company's 10 1/2% Senior Secured Discount Notes due
2008 (the "SECURITIES") issuable as provided in this Indenture.
All things necessary to make this Indenture a valid agreement of the
Company, GST USA and GST, in accordance with its terms, have been done, and the
Company, GST USA and GST have done all things necessary to make the Securities,
when executed by the Company and authenticated and delivered by the Trustee
hereunder and duly issued by the Company, the valid obligations of the Company
as hereinafter provided.
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be a part
of and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders, as follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACCRETED VALUE" means, for any Specified Date, the amount calculated
pursuant to (i), (ii), (iii) or (iv) below for each $1,000 of principal amount
at maturity of the Securities:
(i) if the Specified Date occurs on one or more of the following
dates (each a "SEMI-ANNUAL ACCRUAL DATE"), the Accreted Value will
equal the amount set forth below for such Semi-Annual Accrual Date:
SEMI-ANNUAL ACCRETED
ACCRUAL DATE VALUE
November 1, 1998............................... $ 630.95
May 1, 1999.................................... 664.08
November 1, 1999............................... 698.94
May 1, 2000.................................... 735.64
November 1, 2000............................... 774.26
May 1, 2001.................................... 814.91
November 1, 2001............................... 857.69
May 1, 2002.................................... 902.72
November 1, 2002............................... 950.11
May 1, 2003.................................... $1,000.00
(ii) if the Specified Date occurs before the first Semi-Annual
Accrual Date, the Accreted Value will equal the sum of (a) $599.99 and
(b) an amount equal to the product of (1) the Accreted Value for the
first Semi-Annual Accrual Date less $599.99 MULTIPLIED by (2) a
fraction, the numerator of which is the number of days from the Closing
Date to the Specified Date, using a 360-day year of twelve 30-day
months, and the denominator of which is the number of days elapsed from
the Closing Date to the first Semi-Annual Accrual Date, using a 360-day
year of twelve 30-day months;
(iii) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the Accreted Value will equal the sum of (a) the Accreted Value
for the Semi-Annual Accrual Date immediately preceding such Specified
Date and (b) an amount equal to the product of (1) the Accreted Value
for the immediately following Semi-Annual Accrual Date less the
Accreted Value for the immediately preceding Semi-Annual Accrual Date
multiplied by (2) a fraction, the numerator of which is the number of
days from the immediately preceding Semi-Annual Accrual Date to the
Specified Date, using a 360-day year of twelve 30-day months, and the
denominator of which is 180; or
(iv) if the Specified Date occurs after the last Semi-Annual
Accrual Date, the Accreted Value will equal $1,000.
"ACCRUAL NOTES" means the 12 3/4% Senior Subordinated Accrual Notes due
2007 of GST issued pursuant to the Accrual Notes Indenture.
2
"ACCRUAL NOTES INDENTURE" means the indenture dated as of November 19,
1997 between GST and United States Trust Company of New York.
"ACQUIRED EQUIPMENT" has the meaning provided in Section 11.01.
"ACQUIRED EQUIPMENT COST" has the meaning specified in Section 11.01.
"ADDITIONAL AMOUNTS" has the meaning provided in Section 4.22.
"ADJUSTED CONSOLIDATED NET INCOME" means, for any period, the aggregate
net income (or loss) of GST and its Restricted Subsidiaries for such period
determined in conformity with GAAP; PROVIDED that the following items shall be
excluded in computing Adjusted Consolidated Net Income (without duplication):
(i) the net income of any Person (other than net income attributable to a
Restricted Subsidiary) in which any Person (other than GST or any of its
Restricted Subsidiaries) has an interest and the net income of any Unrestricted
Subsidiary, except to the extent of the amount of dividends or other
distributions actually paid to GST or any of its Restricted Subsidiaries by such
other Person, or such Unrestricted Subsidiary, during such period; (ii) solely
for the purposes of calculating the amount of Restricted Payments that may be
made pursuant to clause (C) of the first paragraph of Section 4.04 (and in such
case, except to the extent includable pursuant to clause (i) above), the net
income (or loss) of any Person accrued prior to the date it becomes a Restricted
Subsidiary or is merged into or consolidated with GST or any of its Restricted
Subsidiaries or all or substantially all of the property and assets of such
Person are acquired by GST or any of its Restricted Subsidiaries; (iii) the net
income of any Restricted Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Restricted Subsidiary of
such net income is not at the time permitted by the operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to such Restricted Subsidiary; (iv) any
gains or losses (on an after-tax basis) attributable to Asset Sales; (v) except
for purposes of calculating the amount of Restricted Payments that may be made
pursuant to clause (C) of the first paragraph of Section 4.04, any amount paid
or accrued as dividends on Preferred Stock of GST or any Restricted Subsidiary
owned by Persons other than GST and any of its Restricted Subsidiaries; and (vi)
all extraordinary gains and extraordinary losses.
"ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of
assets of GST and its Restricted Subsidiaries (less applicable depreciation,
amortization and other valuation reserves), except to the extent resulting from
write-ups of capital assets (excluding write-ups in connection with accounting
for acquisitions in conformity with GAAP), after deducting therefrom (i) all
current liabilities of GST and its Restricted Subsidiaries (excluding
intercompany items) and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the quarterly or annual consolidated balance sheet of GST
3
and its Restricted Subsidiaries, prepared in conformity with GAAP and most
recently filed with the Commission pursuant to Section 4.20.
"AFFILIATE" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGENT" means any Registrar, Paying Agent, authenticating agent or
co-Registrar.
"AGENT MEMBERS" has the meaning provided in Section 2.07(a).
"ASSET ACQUISITION" means (i) an investment by GST or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary of GST or shall be merged into or consolidated
with GST or any of its Restricted Subsidiaries; PROVIDED that such Person's
primary business is related, ancillary or complementary to the businesses of GST
and its Restricted Subsidiaries on the date of such investment or (ii) an
acquisition by GST or any of its Restricted Subsidiaries of the property and
assets of any Person other than GST or any of its Restricted Subsidiaries that
constitute substantially all of a division or line of business of such Person;
PROVIDED that the property and assets acquired are related, ancillary or
complementary to the businesses of GST and its Restricted Subsidiaries on the
date of such acquisition.
"ASSET SALE" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale-leaseback transactions) in one
transaction or a series of related transactions by GST or any of its Restricted
Subsidiaries to any Person other than GST or any of its Restricted Subsidiaries
of (i) all or any of the Capital Stock of any Restricted Subsidiary, (ii) all or
substantially all of the property and assets of an operating unit or business of
GST or any of its Restricted Subsidiaries or (iii) any other property or assets
of GST or any of its Restricted Subsidiaries outside the ordinary course of
business of GST or such Restricted Subsidiary and, in each case, that is not
governed by the provisions of Article Five; PROVIDED that "Asset Sale" shall not
include (A) sales or other dispositions of inventory, receivables and other
current assets; or (B) sales or other dispositions of assets with a fair market
value (as certified in an Officers' Certificate) not in excess of $1 million; or
(C) sales of Acquired Equipment by the Company to GST USA in accordance with the
terms of this Indenture; or (D) sales or other dispositions of assets to the
extent GST or a Restricted Subsidiary receives consideration at least equal to
the fair market value of the assets sold or disposed of, PROVIDED that the
consideration received consists of property or assets (other than current
assets) of a nature or type or that are used in a business
4
(or a company having property or assets of a nature or type, or engaged in a
business) similar or related to the nature or type of the property and assets
of, or business of, GST and its Restricted Subsidiaries existing on the date of
such sale or other disposition.
"ASSUMPTION DATE" means the date on which GST USA and GST execute and
deliver the supplemental indenture required by Section 4.23(a).
"AVERAGE LIFE" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"BOARD OF DIRECTORS" means, with respect to any Person, the Board of
Directors of such Person or any committee of such Board of Directors duly
authorized to act with respect to this Indenture.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution, certified by the Secretary or Assistant Secretary of such Person to
have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether now outstanding or
issued after the date of this Indenture, including, without limitation, all
Common Stock and Preferred Stock.
"CAPITALIZED LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person; and "Capitalized
Lease Obligations" means the discounted present value of the rental obligations
under such lease.
"CHANGE OF CONTROL" means such time as (i) a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes
the ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of Voting Stock representing more than 30% of the total voting power of the
Voting Stock of GST on a fully diluted basis; (ii)
5
individuals who on the Closing Date constitute the Board of Directors of GST
(together with any new directors whose election by the Board of Directors of GST
or whose nomination for election by GST's shareholders was approved by a vote of
at least two-thirds of the members of the Board of Directors then in office who
either were members of the Board of Directors of GST on the Closing Date or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the members of the Board of Directors of
GST then in office; or (iii) all of the Common Stock of GST USA or the Company
is not beneficially owned by GST.
"CLOSING DATE" means the date on which the Securities are originally
issued under this Indenture.
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"COMMON SHARES" means the common shares of GST.
"COMMON STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Indenture, including, without limitation, all
series and classes of such common stock.
"COMPANY" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"COMPANY ORDER" means a written request or order signed in the name of
the Issuer (i) by its Chairman, a Vice Chairman, its President or a Vice
President and (ii) by its Chief Financial Officer, Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee;
PROVIDED, HOWEVER, that such written request or order may be signed by any two
of the officers or directors listed in clause (i) above in lieu of being signed
by one of such officers or directors listed in such clause (i) and one of the
officers listed in clause (ii) above.
"CONSOLIDATED EBITDA" means, for any period, the sum of the amounts for
such period of (i) Adjusted Consolidated Net Income, (ii) Consolidated Interest
Expense, to the extent such amount was deducted in calculating Adjusted
Consolidated Net Income, (iii) income taxes, to the extent such amount was
deducted in calculating Adjusted Consolidated Net Income (other than income
taxes (either positive or negative) attributable to either extraordinary and
non-recurring gains or losses or sales of assets), (iv) depreciation expense, to
the extent such amount
6
was deducted in calculating Adjusted Consolidated Net Income, (v) amortization
expense, to the extent such amount was deducted in calculating Adjusted
Consolidated Net Income, and (vi) all other non-cash items reducing Adjusted
Consolidated Net Income (other than items that will require cash payments and
for which an accrual or reserve is, or is required by GAAP to be, made), less
all non-cash items increasing Adjusted Consolidated Net Income, all as
determined on a consolidated basis for GST and its Restricted Subsidiaries in
conformity with GAAP; PROVIDED that, if any Restricted Subsidiary is not a
Wholly Owned Restricted Subsidiary, Consolidated EBITDA shall be reduced (to the
extent not otherwise reduced in accordance with GAAP) by an amount equal to (A)
the amount of the Adjusted Consolidated Net Income attributable to such
Restricted Subsidiary multiplied by (B) the quotient of (1) the number of shares
of outstanding Common Stock of such Restricted Subsidiary not owned on the last
day of such period by GST or any of its Restricted Subsidiaries divided by (2)
the total number of shares of outstanding Common Stock of such Restricted
Subsidiary on the last day of such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including amortization of
original issue discount on any Indebtedness and the interest portion of any
deferred payment obligation, calculated in accordance with the effective
interest method of accounting; all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed or secured by GST or any of its Restricted
Subsidiaries) and all but the principal component of rentals in respect of
Capitalized Lease Obligations paid, accrued or scheduled to be paid or to be
accrued by GST and its Restricted Subsidiaries during such period; excluding,
however, (i) any amount of such interest of any Restricted Subsidiary if the net
income of such Restricted Subsidiary is excluded in the calculation of Adjusted
Consolidated Net Income pursuant to clause (iii) of the definition thereof (but
only in the same proportion as the net income of such Restricted Subsidiary is
excluded from the calculation of Adjusted Consolidated Net Income pursuant to
clause (iii) of the definition thereof) and (ii) any premiums, fees and expenses
(and any amortization thereof) payable in connection with the offering of the
Securities, all as determined on a consolidated basis (without taking into
account Unrestricted Subsidiaries) in conformity with GAAP.
"CONSOLIDATED NET WORTH" means, at any date of determination,
shareholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of GST and its Restricted Subsidiaries (which
shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Redeemable Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of
Capital Stock of GST or any of its Restricted Subsidiaries, each item to be
determined in conformity with GAAP (excluding the effects of foreign currency
exchange adjustments under Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 52).
7
"CONVERTIBLE NOTES" means the 137/8% Convertible Senior Subordinated
Discount Notes due 2005 of GST issued pursuant to the Convertible Notes
Indenture.
"CONVERTIBLE NOTES INDENTURE" means the convertible notes indenture
dated December 19, 1995 among GST, as issuer, GST USA, as guarantor, and United
States Trust Company of New York, as trustee.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000- 0000.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect GST or
any of its Restricted Subsidiaries against fluctuations in currency values to or
under which GST or any of its Restricted Subsidiaries is a party or a
beneficiary on the date of this Indenture or becomes a party or a beneficiary
thereafter.
"DEFAULT" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"DEPOSITARY" means The Depository Trust Company, its nominees, and
their respective successors.
"DEVELOPMENT COMPANY" means a Restricted Subsidiary whose primary
business is the development, ownership and operation of alternative access
telecommunications networks.
"EVENT OF DEFAULT" has the meaning provided in Section 6.01.
"EXCESS PROCEEDS" has the meaning provided in Section 4.12.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE SECURITIES" means any securities of the Issuer containing
terms identical to the Securities (except that such Exchange Securities (i)
shall be registered under the Securities Act, (ii) will not provide for an
increase in the rate of interest (other than with respect to overdue amounts)
and (iii) will not contain terms with respect to transfer restrictions) that are
issued and exchanged for the Securities pursuant to the Registration Rights
Agreement and this Indenture.
"EXISTING INDENTURES" means, collectively the Convertible Notes
Indenture, the Senior Notes Indenture, the Secured Notes Indenture and the
Accrual Notes Indenture.
8
"FAIR MARKET VALUE" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors of GST (whose
determination shall be conclusive) and evidenced by a Board Resolution.
"FEE NOTES" means the intercompany notes due May 1, 2003 issued to GST
Network in payment of the commitment fees by GST USA and guaranteed by GST;
PROVIDED that the aggregate principal amount of such notes shall be reduced to
the extent the aggregate principal amount exceeds the principal amount at
maturity of the Securities less (x) the principal amount of Pledged Securities
and cash then held in the Pledge Account, together with accrued interest thereon
and (y) the principal amount of all Intercompany Notes then held as security for
the Securities plus the amount of interest that will accrue on such Intercompany
Notes by May 1, 2003.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations contained in this
Indenture shall be computed in conformity with GAAP applied on a consistent
basis, except that calculations made for purposes of determining compliance with
the terms of the covenants contained herein and with other provisions of this
Indenture shall be made without giving effect to (i) the amortization of any
expenses incurred in connection with the offering of the Securities and (ii)
except as otherwise provided, the amortization of any amounts required or
permitted by Accounting Principles Board Opinion Nos. 16 and 17.
"GLOBAL SECURITIES" has the meaning provided in Section 2.01.
"GST" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"GST FUNDING" means GST Equipment Funding, Inc., a Delaware
corporation.
"GST USA" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"GUARANTEE" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and, without
9
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); PROVIDED that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"GUARANTEED INDEBTEDNESS" has the meaning provided in Section 4.07.
"HOLDER" or "SECURITYHOLDER" means the then registered holder of any
Security.
"INCUR" means, with respect to any Indebtedness, to incur, create,
issue, assume, guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "incurrence" of Indebtedness by reason of a Person
becoming a Restricted Subsidiary; PROVIDED that neither the accrual of interest
nor the accretion of original issue discount shall be considered an Incurrence
of Indebtedness.
"INDEBTEDNESS" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), (iv) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
which purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion of
such services, except Trade Payables, (v) all obligations of such Person as
lessee under Capitalized Leases, (vi) all Indebtedness of other Persons secured
by a Lien on any asset of such Person, whether or not such Indebtedness is
assumed by such Person; PROVIDED that the amount of such Indebtedness shall be
the lesser of (A) the fair market value of such asset at such date of
determination and (B) the amount of such Indebtedness, (vii) all Indebtedness of
other Persons Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person and (viii) to the extent not otherwise included in
this definition, obligations under Currency Agreements and Interest Rate
Agreements. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation, PROVIDED (A)
that the amount outstanding at any time of any Indebtedness issued with original
issue discount is the face amount of such Indebtedness
10
less the unamortized portion of the original issue discount of such Indebtedness
at the time of its issuance as determined in conformity with GAAP, (B) money
borrowed and set aside at the time of the Incurrence of any Indebtedness in
order to pre-fund the payment of interest as such Indebtedness shall be deemed
not to be "Indebtedness" and (C) that Indebtedness shall not include any
liability for federal, state, local or other taxes.
"INDEBTEDNESS TO EBITDA RATIO" means, as at any date of determination,
the ratio of (i) the aggregate amount of Indebtedness of GST and its Restricted
Subsidiaries on a consolidated basis as at the date of determination (the
"TRANSACTION DATE") to (ii) the Consolidated EBITDA of GST for the then most
recent four full fiscal quarters for which reports have been filed pursuant to
Section 4.20 (such four full fiscal quarter period being referred to herein as
the "FOUR QUARTER PERIOD"); PROVIDED that (x) pro forma effect shall be given to
any Indebtedness Incurred from the beginning of the Four Quarter Period through
the Transaction Date (including any Indebtedness Incurred on the Transaction
Date), to the extent outstanding on the Transaction Date, (y) if during the
period commencing on the first day of such Four Quarter Period through the
Transaction Date (the "REFERENCE PERIOD"), GST or any of its Restricted
Subsidiaries shall have engaged in any Asset Sale, Consolidated EBITDA for such
period shall be reduced by an amount equal to the EBITDA (if positive), or
increased by an amount equal to the EBITDA (if negative), directly attributable
to the assets which are the subject of such Asset Sale as if such Asset Sale had
occurred on the first day of such Reference Period or (z) if during such
Reference Period GST or any of the Restricted Subsidiaries shall have made any
Asset Acquisition, Consolidated EBITDA of GST shall be calculated on a pro forma
basis as if such Asset Acquisition and any Incurrence of Indebtedness to finance
such Asset Acquisition had taken place on the first day of such Reference
Period.
"INDENTURE" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supplemental
to this Indenture entered into pursuant to the applicable provisions of this
Indenture.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act.
"INTERCOMPANY NOTES" means the promissory notes due May 1, 2003 issued
to the Company by GST USA and guaranteed by GST.
"INTEREST PAYMENT DATE" means each semiannual interest payment date on
May 1 and November 1 of each year, commencing November 1, 2003.
"INTEREST RATE AGREEMENT" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate
11
cap agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement designed to protect GST or any of its
Restricted Subsidiaries against fluctuations in interest rates in respect of
Indebtedness to or under which GST or any of its Restricted Subsidiaries is a
party or a beneficiary on the date of this Indenture or becomes a party or a
beneficiary hereafter; PROVIDED that the notional principal amount thereof does
not exceed the principal amount of the Indebtedness of GST and its Restricted
Subsidiaries that bears interest at floating rates.
"INTERNATIONAL ASSET" has the meaning provided in Section 4.11.
"INTERNATIONAL BUSINESS" has the meaning provided in Section 4.11.
"INVESTMENT" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding advances to customers in the ordinary
course of business that are, in conformity with GAAP, recorded as accounts
receivable on the balance sheet of GST or its Restricted Subsidiaries) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, such Person and shall include
(i) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary and
(ii) the fair market value of the Capital Stock (or any other Investment) held
by GST and its Restricted Subsidiaries of any Person that has ceased to be a
Restricted Subsidiary by reason of any transaction permitted by clause (iii) of
Section 4.06. For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.04, (i) "Investment" shall include the fair market value of the assets
(net of liabilities to GST or any of its Restricted Subsidiaries) of any
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary and shall exclude the fair market value of the assets
(net of liabilities) of any Unrestricted Subsidiary at the time that such
Unrestricted Subsidiary is designated a Restricted Subsidiary and (ii) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined
by the Board of Directors of GST in good faith.
"ISSUER" means the Company, until GST USA becomes the obligor on the
Securities on the Assumption Date, after which the term "Issuer" means GST USA.
"LIEN" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof, any sale with
recourse against the seller or any Affiliate of the seller, or any agreement to
give any security interest).
12
"NET CASH PROCEEDS" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to GST or any Restricted Subsidiary) and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of GST and its Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (A) is
secured by a Lien on the property or assets sold or (B) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by GST or
any Restricted Subsidiary as a reserve against any liabilities associated with
such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP and (b) with respect
to any issuance or sale of Capital Stock, the proceeds of such issuance or sale
in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal, but
not interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to GST or any Restricted Subsidiary) and proceeds from the conversion
of other property received when converted to cash or cash equivalents, net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"NON-U.S. PERSON" means a person who is not a U.S. person, as defined
in Regulation S.
"OFFER TO PURCHASE" means an offer to purchase Securities by the Issuer
from the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that all
Securities validly tendered will be accepted for payment on a pro rata basis;
(ii) the purchase price and the date of purchase (which shall be a Business Day
no earlier than 30 days nor later than 60 days from the date such notice is
mailed) (the "PAYMENT DATE"); (iii) that any Security not tendered will continue
to accrue interest (or original issue discount) pursuant to its terms; (iv)
that, unless the Issuer defaults in the payment of the purchase price, any
Security accepted for payment pursuant to the Offer to Purchase shall cease to
accrue interest (or original issue discount) on and after the Payment Date; (v)
that Holders electing to have a Security purchased pursuant to the Offer to
Purchase will be required to surrender such Security, together with the form
entitled "Option of the Holder to Elect Purchase"
13
on the reverse side thereof completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date; (vi) that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later than the close
of business on the third Business Day immediately preceding the Payment Date, a
telegram, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Securities delivered for purchase and a
statement that such Xxxxxx is withdrawing his election to have such Securities
purchased; and (vii) that Holders whose Securities are being purchased only in
part will be issued new Securities equal in principal amount to the unpurchased
portion thereof; PROVIDED that each Security purchased and each new Security
issued shall be in a principal amount at maturity of $1,000 or integral
multiples thereof. On the Payment Date, the Issuer shall (i) accept for payment
on a pro rata basis Securities or portions thereof tendered pursuant to an Offer
to Purchase; (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Securities or portions thereof so accepted; and (iii)
deliver, or cause to be delivered, to the Trustee all Securities or portions
thereof so accepted together with an Officers' Certificate specifying the
Securities or portions thereof accepted for payment by the Issuer. The Paying
Agent shall promptly mail to the Holders of Securities so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly authenticate
and mail to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered; PROVIDED that each Security
purchased and each new Security issued shall be in a principal amount at
maturity of $1,000 or integral multiples thereof. The Issuer will publicly
announce the results of an Offer to Purchase as soon as practicable after the
Payment Date. The Trustee shall act as the Paying Agent for an Offer to
Purchase. The Issuer will comply with Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable, in the event that the Issuer is required to
repurchase Securities pursuant to an Offer to Purchase.
"OFFICER" means, with respect to any Person, (i) the Chairman of the
Board, the Vice Chairman of the Board, the President, any Vice President, the
Chief Financial Officer, and (ii) the Treasurer or any Assistant Treasurer, or
the Secretary or any Assistant Secretary, in each case of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in clause
(ii) of the definition thereof; PROVIDED, HOWEVER, that any such certificate may
be signed by any two of the Officers listed in clause (i) of the definition
thereof in lieu of being signed by one Officer listed in clause (i) of the
definition thereof and one Officer listed in clause (ii) of the definition
thereof. Each Officers' Certificate (other than certificates provided pursuant
to TIA Section 314(a)(4)) shall include the statements provided for in TIA
Section 314(e).
"OFFSHORE GLOBAL SECURITY" has the meaning provided in Section 2.01.
14
"OFFSHORE PHYSICAL SECURITIES" has the meaning provided in Section
2.01.
"OPINION OF COUNSEL" means a written opinion signed by legal counsel
who may be an employee of or counsel to the Company, GST USA or GST. Each such
Opinion of Counsel shall include the statements provided for in TIA Section
314(e).
"PAYING AGENT" has the meaning provided in Section 2.04, except that,
for the purposes of Article Eight, the Paying Agent shall not be GST or a
Subsidiary of GST or an Affiliate of any of them. The term "Paying Agent"
includes any additional Paying Agent.
"PAYMENT DATE" has the meaning provided in the definition of "Offer to
Purchase."
"PERMITTED INVESTMENT" means (i) an Investment in a Restricted
Subsidiary or a Person which will, upon the making of such Investment, become a
Restricted Subsidiary or be merged or consolidated with or into or transfer or
convey all or substantially all its assets to, GST or a Restricted Subsidiary;
PROVIDED that such person's primary business is related, ancillary or
complementary to the businesses of GST and its Restricted Subsidiaries on the
date of such Investment; (ii) a Temporary Cash Investment; (iii) payroll, travel
and similar advances to cover matters that are expected at the time of such
advances ultimately to be treated as expenses in accordance with GAAP; (iv)
loans or advances to employees made in the ordinary course of business that do
not exceed $1 million in the aggregate at any time outstanding; and (v) stock,
obligations or securities received in satisfaction of judgments.
"PERMITTED LIENS" means (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (ii) statutory Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or other similar
Liens arising in the ordinary course of business and with respect to amounts not
yet delinquent or being contested in good faith by appropriate legal proceedings
promptly instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory or regulatory
obligations, bankers' acceptances, surety and appeal bonds, government
contracts, performance and return-of-money bonds and other obligations of a
similar nature incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money); (v) easements, rights-of-way,
municipal and zoning ordinances and similar charges, encumbrances, title defects
or other irregularities that do not materially interfere with the ordinary
course of business of GST or any of its Restricted Subsidiaries; (vi) Liens
(including extensions and renewals thereof) upon real or personal property
15
acquired after the Closing Date; PROVIDED that (a) such Lien is created solely
for the purpose of securing Indebtedness Incurred, in accordance with Section
4.03, (1) to finance the cost (including, without limitation, the cost of
design, development, construction, acquisition, installation or integration) of
the item of property or assets subject thereto and such Lien is created prior
to, at the time of or within six months after the later of the acquisition, the
completion of construction or the commencement of full operation of such
property or (2) to refinance any Indebtedness previously so secured, (b) the
principal amount of the Indebtedness secured by such Lien does not exceed 100%
of such cost and (c) any such Lien shall not extend to or cover any property or
assets other than such item of property or assets and any improvements on such
item; (vii) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of GST and its Restricted
Subsidiaries, taken as a whole; (viii) Liens encumbering property or assets
under construction arising from progress or partial payments by a customer of
GST or its Restricted Subsidiaries relating to such property or assets; (ix) any
interest or title of a lessor in the property subject to any Capitalized Lease
or operating lease; (x) Liens arising from filing Uniform Commercial Code
financing statements regarding leases; (xi) Liens on property of, or on shares
of stock or Indebtedness of, any corporation existing at the time such
corporation becomes, or becomes a part of, any Restricted Subsidiary; PROVIDED
that such Liens do not extend to or cover any property or assets of GST or any
Restricted Subsidiary other than the property or assets acquired; (xii) Liens in
favor of GST or any Restricted Subsidiary; (xiii) Liens arising from the
rendering of a final judgment or order against GST or any Restricted Subsidiary
that does not give rise to an Event of Default; (xiv) Liens securing
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the products
and proceeds thereof; (xv) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; (xvi) Liens encumbering customary initial
deposits and margin deposits, and other Liens that are either within the general
parameters customary in the industry and incurred in the ordinary course of
business, in each case, securing Indebtedness under Interest Rate Agreements and
Currency Agreements and forward contracts, options, future contracts, futures
options or similar agreements or arrangements designed to protect GST or any of
its Restricted Subsidiaries from fluctuations in interest rates or the price of
commodities; (xvii) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by GST or
any of its Restricted Subsidiaries in the ordinary course of business in
accordance with the past practices of GST and its Restricted Subsidiaries prior
to the Closing Date; and (xviii) Liens on or sales of receivables.
"PERSON" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"PHOENIX FIBER" means Phoenix Fiber Access, Inc., a subsidiary of GST
USA.
16
"PHYSICAL SECURITIES" has the meaning provided in Section 2.01.
"PLEDGE ACCOUNT" means the accounts established with the Trustee
pursuant to the terms of the Pledge Agreement for the deposit of the Pledged
Securities purchased by the Company with the net proceeds from the sale of the
Securities.
"PLEDGE AGREEMENT" means the Collateral Pledge and Security Agreement,
dated as of the Closing Date, made by the Company in favor of the Trustee, as
such agreement may be amended, restated, supplemented or otherwise modified from
time to time.
"PLEDGED SECURITIES" means the securities which shall consist of U.S.
Government Securities, purchased by the Company with the proceeds from the sale
of the Securities or the proceeds from such securities, to be held in the Pledge
Account, all in accordance with the terms of the Pledge Agreement.
"PREFERRED STOCK" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether now outstanding or issued after the date of this Indenture, including,
without limitation, all series and classes of such preferred or preference
stock.
"PRINCIPAL" of a debt security, including the Securities, means the
principal amount due on the Stated Maturity as shown on such debt security.
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on the
Securities in the form set forth in Section 2.02(a).
"PROTECTED PROPERTY" has the meaning provided in Section 4.09.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"REDEEMABLE PREFERRED SHARES" means the Series A Convertible Preference
Shares of GST outstanding on the Closing Date.
"REDEEMABLE STOCK" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Securities, (ii) redeemable at the option of the
holder of such class or series of Capital Stock at any time prior to the Stated
Maturity of the Securities or (iii) convertible into or exchangeable for Capital
Stock referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Securities; PROVIDED that any
Capital Stock that would not constitute Redeemable Stock but for provisions
thereof giving holders thereof the right to require
17
such Person to repurchase or redeem such Capital Stock upon the occurrence of an
"asset sale" or "change of control" occurring prior to the Stated Maturity of
the Securities shall not constitute Redeemable Stock if the "asset sale" or
"change of control" provisions applicable to such Capital Stock are no more
favorable to the holders of such Capital Stock than the provisions contained in
Section 4.12 and Section 4.14 and such Capital Stock specifically provides that
such Person will not repurchase or redeem any such stock pursuant to such
provision prior to the Issuer's repurchase of such Securities as are required to
be repurchased pursuant to Section 4.12 and Section 4.14.
"REDEMPTION DATE", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Security to be
redeemed, means the price at which such Security is to be redeemed pursuant to
this Indenture.
"REGISTRAR" has the meaning provided in Section 2.04.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated the date hereof, among the Company, GST USA, GST, Xxxxxx
Xxxxxxx & Co. Incorporated, Bear, Xxxxxxx & Co. Inc., Credit Suisse First Boston
Corporation and SBC Warburg Dillon Read Inc.
"REGISTRATION STATEMENT" means the Registration Statement as defined
and described in the Registration Rights Agreement.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date means the April 15 or October 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"REGULATION S" means Regulation S under the Securities Act.
"RESPONSIBLE OFFICER", when used with respect to the Trustee, means the
chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and in each case having direct
responsibility for the administration of this Indenture or the Pledge Agreement
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.
18
"RESTRICTED PAYMENTS" has the meaning provided in Section 4.04.
"RESTRICTED SUBSIDIARY" means any Subsidiary of GST other than an
Unrestricted Subsidiary.
"RULE 144A" means Rule 144A under the Securities Act.
"SECURED NOTES" means the 13 1/4 Senior Secured Notes due 2007 of GST
Funding issued pursuant to the Secured Notes Indenture.
"SECURED NOTES INDENTURE" means the Indenture dated as of May 13, 1997
among GST, GST USA, GST Funding and United States Trust Company of New York.
"SECURITIES" means any of the securities, as defined in the first
paragraph of the recitals hereof, that are authenticated and delivered under
this Indenture. For all purposes of this Indenture, the term "Securities" shall
include the Securities initially issued on the Closing Date, any Exchange
Securities to be issued and exchanged for any Securities pursuant to the
Registration Rights Agreement and this Indenture and any other Securities issued
after the Closing Date under this Indenture. For purposes of this Indenture, all
Securities shall vote together as one series of Securities under this Indenture.
"SECURITIES ACT" means the Securities Act of 1933.
"SECURITY GUARANTEE" means the full and unconditional Guarantee by GST
of (x) the Fee Notes and the Intercompany Notes prior to the Assumption Date and
(y) the Securities after the Assumption Date, as set forth in the supplemental
indenture to be delivered under Section 4.23.
"SECURITY REGISTER" has the meaning provided in Section 2.04.
"SENIOR NOTES" means the 137/8% Senior Discount Notes due 2005 of GST
USA issued pursuant to the Senior Notes Indenture.
"SENIOR NOTES INDENTURE" means the senior notes indenture dated
December 19, 1995 among GST USA, as issuer, GST, as guarantor, and United States
Trust Company of New York, as trustee.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement
as defined and described in the Registration Rights Agreement.
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"SIGNIFICANT SUBSIDIARY" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of GST, accounted for more than 10% of the consolidated
revenues of GST and its Restricted Subsidiaries or (ii) as of the end of such
fiscal year, was the owner of more than 10% of the consolidated assets of GST
and its Restricted Subsidiaries, all as set forth on the most recently available
consolidated financial statements of GST for such fiscal year.
"SPECIFIED DATE" means any Redemption Date, and Payment Date for an
Offer to Purchase or any date on which the Notes first become due and payable
after an Event of Default.
"STATED MATURITY" means, (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"SUBSIDIARY GUARANTEE" has the meaning provided in Section 4.07.
"SUBSIDIARY GUARANTOR" means a Restricted Subsidiary that executes and
delivers a Subsidiary Guarantee.
"TEMPORARY CASH INVESTMENT" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof, (ii) time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by
the United States, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50 million (or the foreign currency
equivalent thereof) and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker-dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above, (iv)
commercial paper, maturing not more than 90 days after the date of acquisition,
issued by a corporation (other than an Affiliate of the Issuer) organized and in
20
existence under the laws of the United States of America, any state thereof or
any foreign country recognized by the United States of America with a rating at
the time as of which any investment therein is made of "P-1" (or higher)
according to Xxxxx'x Investors Service, Inc. or "A-1" (or higher) according to
Standard & Poor's Ratings Services, and (v) securities with maturities of six
months or less from the date of acquisition issued or fully and unconditionally
guaranteed by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof, and rated
at least "A" by Standard & Poor's Ratings Services or Xxxxx'x Investors Service,
Inc.
"TIA" or "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939,
as amended (15 U.S. Code xx.xx. 77aaa-77bbbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06.
"TOMEN" means Tomen Corporation or its Affiliates.
"TOMEN FACILITY" means, collectively, the Tomen Master Agreement
together with all other agreements (including credit agreements), instruments
and documents executed or delivered pursuant thereto or in connection therewith,
in each case as such agreements, instruments or documents may be amended,
supplemented, extended, renewed, replaced or otherwise modified from time to
time.
"TOMEN MASTER AGREEMENT" means the Master Agreement dated October 24,
1994, among Tomen America Inc., GST (formerly known as Greenstar
Telecommunications Inc.), GST Telecom Inc., Pacwest Network, Inc., Pacwest
Network L.L.C. and Pacific Lightwave, Inc.
"TRADE PAYABLES" means any accounts payable or any other indebtedness
or monetary obligations to trade creditors created, assumed or Guaranteed by GST
or any of its Restricted Subsidiaries arising in the ordinary course of business
in connection with the acquisition of goods or services by GST or its Restricted
Subsidiaries.
"TRANSACTION DATE" means, with respect to the Incurrence of any
Indebtedness by GST or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"TRUSTEE" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.
"UNITED STATES BANKRUPTCY CODE" means the Bankruptcy Reform Act of
1978, as amended and as codified in Title 11 of the United States Code, as
amended from time to time hereafter, or any successor federal bankruptcy law.
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"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of GST that at the
time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors of GST in the manner provided below and (ii) any Subsidiary
of an Unrestricted Subsidiary. The Board of Directors of GST may designate any
Restricted Subsidiary (including any newly acquired or newly formed Subsidiary),
other than GST USA or a Subsidiary Guarantor, to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, GST or any Restricted Subsidiary; PROVIDED that (A) any
Guarantee by GST or any Restricted Subsidiary of any Indebtedness of the
Subsidiary being so designated shall be deemed an Incurrence of such
Indebtedness and an Investment by GST or such Restricted Subsidiary at the time
of such designation; (B) either (I) the Subsidiary to be so designated has total
assets of $1,000 or less or (II) if such Subsidiary has assets greater than
$1,000, that such designation would be permitted under Section 4.04 and (C) if
applicable, the Incurrence of Indebtedness and the Investment referred to in
clause (A) above would be permitted under Section 4.03 and Section 4.04. The
Board of Directors of GST may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary of GST; PROVIDED that immediately after giving effect to
such designation (x) the Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation are permitted to be Incurred for
all purposes of this Indenture and (y) no Default or Event of Default shall have
occurred and be continuing. Any such designation by the Board of Directors of
GST shall be evidenced to the Trustee by promptly filing with the Trustee a copy
of the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. GLOBAL SECURITY" has the meaning provided in Section 2.01.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof at any time prior
to the Stated Maturity of the Securities, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depository receipt; PROVIDED that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation evidenced by such
depository receipt.
"U.S. GOVERNMENT SECURITIES" means the direct obligations of,
obligations fully guaranteed by, or participations in pools consisting solely of
obligations of or obligations
22
guaranteed by, the United States of America for the payment of which guarantees
or obligations the full faith and credit of the Unites States of America is
pledged and which are not callable or redeemable at the option of the issuer
thereof.
"U.S. PERSON" has the meaning ascribed thereto in Rule 902 under the
Securities Act.
"U.S. PHYSICAL SECURITIES" has the meaning provided in Section 2.01.
"VOTING STOCK" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"WHOLLY OWNED" means, with respect to any Subsidiary of any Person,
such Subsidiary if all of the outstanding Capital Stock in such Subsidiary
(other than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) is owned by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"INDENTURE SECURITIES" means the Securities;
"INDENTURE SECURITY HOLDER" means a Holder or a Securityholder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the indenture securities means the Company, and after the
Assumption Date, GST USA and GST or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
23
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the
plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other subdivision; and
(vii) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Securities and the Trustee's
certificate of authentication shall be substantially in the form annexed hereto
as Exhibit A with such appropriate insertions, substitutions and other
variations as are required or permitted under this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange
agreements to which the Issuer is subject or usage. The Issuer shall approve the
form of the Securities and any notation, legend or endorsement on the
Securities. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the form of the Securities
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. Each of the Company, GST USA, GST and the Trustee, by
its execution and delivery of this Indenture, expressly agrees to the terms and
provisions of the Securities applicable to it and to be bound thereby.
Securities offered and sold in reliance on Rule 144A shall be issued in
the form of permanent global Securities in registered form, substantially in the
form set forth in Exhibit A (the "U.S. GLOBAL SECURITY"), deposited with the
Trustee, as custodian for the Depositary, duly executed by the Issuer and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount at maturity of the U.S. Global Security may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.
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Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of one or more temporary global
Securities in registered form substantially in the form set forth in Exhibit A
(each a "TEMPORARY OFFSHORE GLOBAL SECURITY") deposited with the Trustee, as
custodian for the Depositary, duly executed by the Issuer and authenticated by
the Trustee as hereinafter provided. At any time following June 13, 1998 (the
"OFFSHORE SECURITIES EXCHANGE DATE"), upon receipt by the Trustee and the Issuer
of a certificate substantially in the form of Exhibit B hereto, one or more
permanent global Securities in registered form substantially in the form set
forth in Exhibit A (the "PERMANENT OFFSHORE GLOBAL SECURITY"; and together with
the Temporary Offshore Global Security, the "OFFSHORE GLOBAL SECURITIES") duly
executed by the Issuer and authenticated by the Trustee as hereinafter provided
shall be deposited with the Trustee, as custodian for the Depositary, and the
Registrar shall reflect on its books and records the date and a decrease in the
principal amount at maturity of the Temporary Offshore Global Security in an
amount equal to the principal amount at maturity of the beneficial interest in
the Temporary Offshore Global Security transferred.
Securities which are offered and sold to Institutional Accredited
Investors which are not QIBs (excluding Non-U.S. Persons) shall be issued in the
form of permanent certificated Securities in registered form in substantially
the form set forth in Exhibit A (the "U.S. PHYSICAL SECURITIES"). Securities
issued pursuant to Section 2.07 in exchange for interests in the Offshore Global
Security shall be in the form of permanent certificated Securities in registered
form substantially in the form set forth in Exhibit A (the "OFFSHORE PHYSICAL
SECURITIES").
The Offshore Physical Securities and U.S. Physical Securities are
sometimes collectively herein referred to as the "PHYSICAL SECURITIES". The U.S.
Global Security and the Offshore Global Security are sometimes referred to as
the "GLOBAL SECURITIES".
The definitive Securities shall be typed, printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
SECTION 2.02. RESTRICTIVE LEGENDS. (a) Unless and until a Security is
exchanged for an Exchange Security in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, (i) the U.S. Global
Security and each U.S. Physical Security shall bear the legend set forth below
on the face thereof and (ii) the Offshore Physical Securities and the Offshore
Global Security shall bear the legend set forth below on the face thereof until
at least 41 days after the Closing Date and receipt by the Company and the
Trustee of a certificate in the form of Exhibit B hereto:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
25
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2)
AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO
UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE
144(d) IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT
ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO GST FUNDING, GST OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE ACCRETED VALUE OF
NOTES AT THE TIME OF TRANSFER OF LESS THAN $100,000, AN
OPINION OF COUNSEL ACCEPTABLE TO GST FUNDING OR GST USA, AS
THE CASE MAY BE, THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX
SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS
26
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE AND GST FUNDING OR GST
USA, AS THE CASE MAY BE, SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
(b) Each Global Security, whether or not an Exchange Security, shall
also bear the following legend on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE &
CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.08 OF THE INDENTURE.
27
SECTION 2.03. EXECUTION, AUTHENTICATION AND DENOMINATIONS. Subject to
Article Four, the aggregate principal amount at maturity of Securities that may
be authenticated and delivered under this Indenture is unlimited. Two Officers
shall execute the Securities for the Issuer by facsimile or manual signature in
the name and on behalf of the Issuer.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee or authenticating agent authenticates the
Security, the Security shall be valid nevertheless.
A Security shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall upon receipt of a
Company Order authenticate for original issue Securities in the aggregate
principal amount at maturity specified in such Company Order; PROVIDED that the
Trustee shall be entitled to receive an Officers' Certificate and an Opinion of
Counsel of the Company in connection with such authentication of Securities. The
Opinion of Counsel shall, if requested by the Trustee, be to the effect that:
(a) the form and terms of such Securities have been established
by or pursuant to a Board Resolution or, if applicable, an indenture
supplemental hereto in conformity with the provisions of this
Indenture;
(b) such supplemental indenture, if any, when executed and
delivered by the Company, GST USA, GST and the Trustee, will constitute
a valid and binding obligation of the Company, GST USA and GST;
(c) such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and binding obligations of the Company in accordance with their terms
and will be entitled to the benefits of this Indenture, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equitable principles; and
(d) the Company has been duly incorporated in, and is a validly
existing corporation in good standing under the laws of, the State of
Delaware.
28
Such Company Order shall specify the amount of Securities to be authenticated
and the date on which the original issue of Securities is to be authenticated
and in case of an issuance of Securities pursuant to Section 2.15, shall certify
that such issuance is in compliance with Article Four.
The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such authenticating agent. An authenticating
agent has the same rights as an Agent to deal with the Issuer or an Affiliate of
the Issuer.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 in principal amount at maturity and
any integral multiple of $1,000 in excess thereof.
SECTION 2.04. REGISTRAR AND PAYING AGENT. The Issuer shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "REGISTRAR"), an office or agency where Securities may be
presented for payment (the "PAYING AGENT") and an office or agency where notices
and demands to or upon the Issuer in respect of the Securities and this
Indenture may be served, which shall be in the Borough of Manhattan, The City of
New York. The Issuer shall cause the Registrar to keep a register of the
Securities and of their transfer and exchange (the "SECURITY REGISTER"). The
Issuer may have one or more co- Registrars and one or more additional Paying
Agents.
The Issuer shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Issuer shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Issuer fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands for so long as such failure shall continue and shall be
entitled to compensation therefor pursuant to Section 7.07. The Issuer may
remove any Agent upon written notice to such Agent and the Trustee; PROVIDED
that no such removal shall become effective until (i) the acceptance of an
appointment by a successor Agent to such Agent as evidenced by an appropriate
agency agreement entered into by the Issuer and such successor Agent and
delivered to the Trustee or (ii) notification to the Trustee that the Trustee
shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Issuer, any Subsidiary of the
Issuer, or any Affiliate of any of them may act as Paying Agent, Registrar or
co-Registrar, and/or agent for service of notice and demands; PROVIDED, HOWEVER,
that neither the Issuer, a Subsidiary of the Issuer nor an Affiliate of any of
them shall act as Paying Agent in connection with the defeasance of the
Securities or the discharge of this Indenture under Article Eight.
29
The Company initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. The Trustee
shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders and shall otherwise
comply with TIA ss.312(a). If, at any time, the Trustee is not the Registrar,
the Registrar shall make available to the Trustee before each Interest Payment
Date and at such other times as the Trustee may reasonably request, the names
and addresses of the Holders as they appear in the Security Register.
SECTION 2.05. PAYING AGENT TO HOLD MONEY IN TRUST. Not later than 11:00
a.m. New York City time on each due date of the principal, premium, if any, and
interest on any Securities, the Issuer shall deposit, or cause to be deposited,
with the Paying Agent money in immediately available funds sufficient to pay
such principal, premium, if any, and interest so becoming due. The Issuer shall
require each Paying Agent, if any, other than the Trustee to agree in writing
that such Paying Agent shall hold in trust for the benefit of the Holders or the
Trustee all money held by the Paying Agent for the payment of principal of,
premium, if any, and interest on the Securities (whether such money has been
paid to it by the Issuer or any other obligor on the Securities), and that such
Paying Agent shall promptly notify the Trustee in writing of any default by the
Issuer (or any other obligor on the Securities) in making any such payment. The
Issuer at any time may require a Paying Agent to pay all money held by it to the
Trustee and account for any funds disbursed, and the Trustee may at any time
during the continuance of any payment default, upon written request to a Paying
Agent, require such Paying Agent to pay all money held by it to the Trustee and
to account for any funds disbursed. Upon doing so, the Paying Agent shall have
no further liability for the money so paid over to the Trustee. If the Issuer or
any Subsidiary of the Issuer or any Affiliate of any of them acts as Paying
Agent, it will, on or before each due date of any principal of, premium, if any,
or interest on the Securities, segregate and hold in a separate trust fund for
the benefit of the Holders a sum of money sufficient to pay such principal,
premium, if any, or interest so becoming due until such sum of money shall be
paid to such Holders or otherwise disposed of as provided in this Indenture, and
will promptly notify the Trustee in writing of its action or failure to act as
required by this Section 2.05.
SECTION 2.06. TRANSFER AND EXCHANGE. The Securities are issuable only
in registered form. A Holder may transfer a Security by written application to
the Registrar stating the name of the proposed transferee and otherwise
complying with the terms of this Indenture. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon
registration of the transfer by the Registrar in the Security Register. Prior to
the registration of any transfer by a Holder as provided herein, the Company
and, after the Assumption Date, GST USA and GST, the Trustee, and any agent of
the Issuer shall treat the person in whose name the Security is registered as
the owner thereof for all purposes whether or not the Security shall be overdue,
and neither the Company and, after the Assumption Date, GST USA and GST, the
Trustee, nor any such agent shall be affected by notice to the contrary.
Furthermore, any Holder of or beneficial owner of an interest in a Global
Security shall, by
30
acceptance of such Global Security, be deemed to have agreed that transfers of
beneficial interests in such Global Security may be effected only through a
book-entry system maintained by the Depositary (or its agent), and that
ownership of a beneficial interest in the Security shall be required to be
reflected in a book entry. When Securities are presented to the Registrar or a
co- Registrar with a request to register the transfer or to exchange them for an
equal principal amount at maturity of Securities of other authorized
denominations (including on exchange of Securities for Exchange Securities), the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met (including that such Securities are
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and Registrar duly executed by the Holder thereof or
by an attorney who is authorized in writing to act on behalf of the Holder);
PROVIDED that no exchanges of Securities for Exchange Securities shall occur
until a Registration Statement shall have been declared effective by the
Commission and that any Securities that are exchanged for Exchange Securities
shall be cancelled by the Trustee. To permit registrations of transfers and
exchanges in accordance with the terms, conditions and restrictions hereof, the
Issuer shall execute and the Trustee shall authenticate Securities at the
Registrar's request. No service charge shall be made to any Holder for any
registration of transfer or exchange or redemption of the Securities, but the
Issuer may require payment by the Holder of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental charge payable
upon transfers, exchanges or redemptions pursuant to Section 2.11, 3.09, 4.12,
4.14 or 9.04).
The Registrar shall not be required (i) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 3.04 and ending at the close of business
on the day of such mailing, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 2.07. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES. (a) The U.S.
Global Security and Offshore Global Security initially shall (i) be registered
in the name of the Depositary for such Global Securities or the nominee of such
Depositary, (ii) be delivered to the Trustee as custodian for such Depositary
and (iii) bear legends as set forth in Section 2.02.
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under any
Global Security, and the Depositary may be treated by the Company and, after the
Assumption Date, GST USA and GST, the Trustee and any agent of the Company and,
after the Assumption Date, GST USA and GST or the Trustee as the absolute owner
of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company and, after the Assumption
Date, GST USA
31
and GST, the Trustee or any agent of the Company and, after the Assumption Date,
GST USA and GST or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a beneficial owner of any Security.
(b) Transfers of a Global Security shall be limited to transfers of
such Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the applicable rules and
procedures of the Depositary and the provisions of Section 2.08. In addition,
Physical Securities shall be transferred to all beneficial owners in exchange
for their beneficial interests in the U.S. Global Security or the Offshore
Global Security, respectively, if (i) the Depositary notifies the Issuer that it
is unwilling or unable to continue as Depositary for the U.S. Global Security or
the Offshore Global Security, as the case may be, and a successor depositary is
not appointed by the Issuer within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Registrar has received a request
to the foregoing effect from the Depositary.
(c) Any beneficial interest in one of the Global Securities that is
transferred to a person who takes delivery in the form of an interest in the
other Global Security will, upon transfer, cease to be an interest in such
Global Security and become an interest in the other Global Security and,
accordingly, will thereafter be subject to all transfer restrictions, if any,
and other procedures applicable to beneficial interests in such other Global
Security for as long as it remains such an interest.
(d) In connection with any transfer pursuant to paragraph (b) of this
Section 2.07 of a portion of the beneficial interests in a Global Security to
beneficial owners who are required to hold Physical Securities, the Registrar
shall reflect on its books and records the date and a decrease in the principal
amount at maturity of the Global Security in an amount equal to the principal
amount at maturity of the beneficial interest in the Global Security to be
transferred, and the Issuer shall execute, and the Trustee shall authenticate
and deliver, one or more Physical Securities of like tenor and amount.
(e) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to paragraph (b) of this Section 2.07, the Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Issuer shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depositary in exchange for its
beneficial interest in the Global Security an equal aggregate principal amount
at maturity of Physical Securities of authorized denominations.
32
(f) Any U.S. Physical Security delivered in exchange for an interest in
the U.S. Global Security pursuant to paragraph (b) or (d) of this Section 2.07
shall, except as otherwise provided by paragraph (d) of Section 2.08, bear the
legend regarding transfer restrictions applicable to the U.S. Physical Security
set forth in Section 2.02.
(g) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(h) QIBs that are beneficial owners of interests in a Global Security
may receive Physical Securities (which shall bear the Private Placement Legend
if required by Section 2.02) in accordance with the procedures of the
Depositary. In connection with the execution, authentication and delivery of
such Physical Securities, the Registrar shall reflect on its books and records a
decrease in the principal amount at maturity of the relevant Global Security
equal to the principal amount at maturity of such Physical Securities and the
Issuer shall execute and the Trustee shall authenticate and deliver one or more
Physical Securities having an equal aggregate principal amount at maturity.
(i) Any Offshore Physical Security delivered in exchange for an
interest in the Offshore Global Security pursuant to paragraph (b) of this
Section shall, except as otherwise provided by paragraph (d) of Section 2.08,
bear the legend regarding transfer restrictions applicable to the Offshore
Physical Security set forth in Section 2.02.
SECTION 2.08. SPECIAL TRANSFER PROVISIONS. Unless and until a Security
is exchanged for an Exchange Security in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, the
following provisions shall apply:
(a) TRANSFERS TO QIBS. The following provisions shall apply with
respect to the registration of any proposed transfer of a U.S. Physical Security
or an interest in the U.S. Global Security to a QIB (excluding Non-U.S.
Persons):
(i) If the Security to be transferred consists of (A) U.S.
Physical Securities, the Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of Security stating, or has otherwise advised
the Issuer and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Security stating,
or has otherwise advised the Issuer and the Registrar in writing, that
it is purchasing the Security for its own account or an account with
respect to which it exercises sole investment discretion and that it
and any such account is a QIB within the meaning of Rule 144A, and is
aware that the sale to it is being made in reliance
33
on Rule 144A and acknowledges that it has received such information
regarding the Issuer as it has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order
to claim the exemption from registration provided by Rule 144A or (B)
an interest in the U.S. Global Security, the transfer of such interest
may be effected only through the book entry system maintained by the
Depositary.
(ii) If the proposed transferee is an Agent Member, and the
Security to be transferred consists of U.S. Physical Securities, upon
receipt by the Registrar of the documents referred to in clause (i) and
instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount at maturity of
the U.S. Global Security in an amount equal to the principal amount at
maturity of the U.S. Physical Securities to be transferred, and the
Trustee shall cancel the U.S. Physical Security so transferred.
(b) TRANSFERS OF INTERESTS IN THE TEMPORARY OFFSHORE GLOBAL SECURITY OR
LEGENDED OFFSHORE PHYSICAL SECURITIES. The following provisions shall apply with
respect to registration of any proposed transfer of interests in the Temporary
Offshore Global Security or Legended Offshore Physical Securities:
(i) The Registrar shall register the transfer of any Security (A)
if the proposed transferee is a Non-U.S. Person and the proposed
transferor has delivered to the Registrar a certificate substantially
in the form of Exhibit C hereto or (B) if the proposed transferee is a
QIB and the proposed transferor has checked the box provided for on the
form of Security stating, or has otherwise advised the Issuer and the
Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has
otherwise advised the Issuer and the Registrar in writing, that it is
purchasing the Security for its own account or an account with respect
to which it exercises sole investment discretion and that it and any
such account is a QIB within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuer
as it has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, upon receipt
by the Registrar of the documents referred to in clause (i)(B) above
and instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount at maturity of
the
34
U.S. Global Security, in an amount equal to the principal amount at
maturity of the Temporary Offshore Global Security to be transferred,
and the Trustee shall decrease the amount of the Temporary Offshore
Global Security.
(c) TRANSFERS TO NON-U.S. PERSONS AT ANY TIME. The following
provisions shall apply with respect to any transfer of a Security to a Non-U.S.
Person:
(i) Prior to June 13, 1998, the Registrar shall register any
proposed transfer of a Security to a Non-U.S. Person upon receipt of a
certificate substantially in the form of Exhibit C hereto from the
proposed transferor.
(ii) On and after June 13, 1998, the Registrar shall register any
proposed transfer to any Non-U.S. Person if the Security to be
transferred is a U.S. Physical Security or an interest in the U.S.
Global Security, upon receipt of a certificate substantially in the
form of Exhibit C from the proposed transferor.
(iii) (A) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Registrar of (1) the documents required by paragraph (i) and (2)
instructions in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the
date and a decrease in the principal amount at maturity of the U.S.
Global Security in an amount equal to the principal amount at maturity
of the beneficial interest in the U.S. Global Security to be
transferred, and (B) if the proposed transferee is an Agent Member,
upon receipt by the Registrar of instructions given in accordance with
the Depositary's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and an increase in the
principal amount at maturity of the Offshore Global Security in an
amount equal to the principal amount at maturity of the U.S. Physical
Securities or the U.S. Global Security, as the case may be, to be
transferred, and the Trustee shall cancel the Physical Security, if
any, so transferred or decrease the amount of the U.S. Global Security.
(d) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless either (i) the Private Placement Legend is
no longer required by Section 2.02 or (ii) there is delivered to the Registrar
an Opinion of Counsel reasonably satisfactory to the Issuer and the Trustee to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act. Notwithstanding the foregoing, upon the exchange of Securities for Exchange
35
Securities as described in Section 2.06 hereof and the Registration Statement,
the Registrar shall deliver Securities that do not bear the Private Placement
Legend.
(e) GENERAL. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of, or beneficial owner of an interest in,
such Security acknowledges the restrictions on transfer of such Security set
forth in this Indenture and in the Private Placement Legend and agrees that it
will transfer such Security only as provided in this Indenture. The Registrar
shall not register a transfer of any Security unless such transfer complies with
the restrictions on transfer of such Security set forth in this Indenture. In
connection with any transfer of Securities to an Institutional Accredited
Investor, each such Holder or beneficial owner agrees by its acceptance of
Securities to furnish to the Registrar or to the Issuer such certifications,
legal opinions or other information as such Person may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or a
transaction not subject to, the registration requirements of the Securities Act;
PROVIDED that the Registrar shall not be required to determine (but may rely on
a determination made by the Issuer with respect to) the sufficiency of any such
certifications, legal opinions or other information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section 2.08.
The Issuer shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
(f) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Security to any Institutional Accredited Investor which
is not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Security,
whether or not such Security bears the Private Placement Legend, if (A)
the requested transfer is after the time period referred to in Rule
144(k) under the Securities Act as in effect at the time of such
transfer or (B) the proposed transferee has delivered to the Registrar
(1) a certificate substantially in the form of Exhibit D hereto and (2)
if such transfer is in respect of an aggregate Accreted Value of
Securities at the time of transfer of less than $100,000 an Opinion of
Counsel acceptable to the Issuer that such transfer is in compliance
with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Registrar of (A) the documents, if any, required by paragraph (i) and
(B) instructions given in accordance with the Depositary's and the
Registrar's procedures the Registrar shall reflect on its books and
records the date and a decrease in the principal amount at maturity of
the U.S. Global Security in an amount equal to the principal amount at
maturity of the beneficial interest in the U.S.
36
Global Security to be transferred, and the Issuer shall execute, and
the Trustee shall authenticate and deliver, one or more U.S. Physical
Securities of like tenor and amount.
(g) TRANSFERS OF INTERESTS IN THE PERMANENT OFFSHORE GLOBAL
SECURITY OR UNLEGENDED OFFSHORE PHYSICAL SECURITIES TO U.S. PERSONS. The
following provisions shall apply with respect to any transfer of interests in
the Permanent Offshore Global Security or Offshore Physical Securities to U.S.
Persons: The Registrar shall register the transfer of any such Security without
requiring any additional certification.
SECTION 2.09. REPLACEMENT SECURITIES. If a mutilated Security is
surrendered to the Trustee or if the Holder claims that the Security has been
lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee
shall authenticate a replacement Security of like tenor and principal amount at
maturity and bearing a number not contemporaneously outstanding; PROVIDED that
the requirements of the second paragraph of Section 2.10 are met. If required by
the Trustee or the Issuer, an indemnity bond must be furnished that is
sufficient in the judgment of both the Trustee and the Issuer to protect the
Issuer, the Trustee or any Agent from any loss that any of them may suffer if a
Security is replaced. The Issuer may charge such Holder for its expenses and the
expenses of the Trustee in replacing a Security. In case any such mutilated,
lost, destroyed or wrongfully taken Security has become or is about to become
due and payable, the Issuer in its discretion may pay the principal of, premium,
if any, and interest accrued on such Security instead of issuing a new Security
in replacement thereof.
Every replacement Security is an additional obligation of the Issuer
and shall be entitled to the benefits of this Indenture.
SECTION 2.10. OUTSTANDING SECURITIES. Securities outstanding at any
time are all Securities that have been authenticated by the Trustee except for
those cancelled by it, those delivered to it for cancellation and those
described in this Section 2.10 as not outstanding.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Issuer receive proof
satisfactory to them that the replaced Security is held by a BONA FIDE
purchaser.
If the Paying Agent (other than the Issuer or an Affiliate of the
Issuer) holds on the maturity date money sufficient to pay the principal of,
premium, if any, and interest accrued on Securities payable on that date, then
on and after that date such Securities cease to be outstanding and interest on
them shall cease to accrue.
A Security does not cease to be outstanding because the Issuer or one
of its Affiliates holds such Security, PROVIDED, HOWEVER, that, in determining
whether the Holders of the requisite principal amount of the outstanding
Securities have given any request, demand,
37
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Issuer or any other obligor upon the Securities or any Affiliate of the
Issuer or of such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Issuer or any
other obligor upon the Securities or any Affiliate of the Issuer or of such
other obligor.
SECTION 2.11. TEMPORARY SECURITIES. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have insertions, substitutions, omissions and
other variations determined to be appropriate by the Officers executing the
temporary Securities, as evidenced by their execution of such temporary
Securities. If temporary Securities are issued, the Issuer will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Issuer designated for such purpose pursuant to Section 4.02,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities the Issuer shall execute and the Trustee shall authenticate
and deliver in exchange therefor a like principal amount at maturity of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall be entitled to the same benefits under this Indenture
as definitive Securities.
SECTION 2.12. CANCELLATION. The Issuer at any time may deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Securities previously authenticated
hereunder which the Issuer has not issued and sold. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
transfer, exchange or payment. The Trustee shall cancel all Securities
surrendered for transfer, exchange, payment or cancellation and shall destroy
them in accordance with its normal procedure. The Issuer shall not issue new
Securities to replace Securities it has paid in full or delivered to the Trustee
for cancellation.
SECTION 2.13. XXXXX, CINS AND ISIN NUMBERS. The Issuer in issuing the
Securities may use "CUSIP", "CINS", "ISIN" or other identification numbers (if
then generally in use), and, if so, the Trustee shall use CUSIP numbers, CINS
numbers, ISIN numbers or other identification numbers, as the case may be, in
notices of redemption or exchange as a convenience to Holders; PROVIDED that any
such notice shall state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of
38
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Securities; PROVIDED FURTHER that failure
to use "CUSIP", "CINS", "ISIN" or other identification numbers in any notice of
redemption or exchange shall not effect the validity or sufficiency of such
notice.
SECTION 2.14. DEFAULTED INTEREST. If the Issuer defaults in a payment
of interest on the Securities, it shall pay, or shall deposit with the Paying
Agent money in immediately available funds sufficient to pay the defaulted
interest, plus (to the extent lawful) any interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date. A
special record date, as used in this Section 2.14 with respect to the payment of
any defaulted interest, shall mean the 15th day next preceding the date fixed by
the Issuer for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before the subsequent special record date, the
Issuer shall mail to each Holder and to the Trustee a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION 2.15. ISSUANCE OF ADDITIONAL SECURITIES. The Issuer may,
subject to Article Four of this Indenture, issue additional Securities under
this Indenture. The Securities issued on the Closing Date and any additional
Securities subsequently issued shall be treated as a single class for all
purposes under this Indenture.
ARTICLE THREE
REDEMPTION
SECTION 3.01. RIGHT OF REDEMPTION. (a) The Securities may be redeemed
at the option of the Issuer, in whole or in part, at any time or from time to
time, on or after May 1, 2003 and prior to maturity, at the following Redemption
Prices (expressed in percentages of their principal amount at maturity), plus
accrued and unpaid interest, if any, to the Redemption Date (subject to the
right of Holders of record on the relevant Regular Record Date that is on or
prior to the Redemption Date to receive interest due on an Interest Payment
Date) if redeemed during the 12-month period commencing May 1 of the years set
forth below:
39
YEAR REDEMPTION PRICE
2003 105.250%
2004 103.500%
2005 101.750%
2006 and thereafter 100.0000%
(b) In addition, the Securities may be redeemed as a whole, but not in
part, at the option of GST, at any time after GST USA has become the obligor on
the Securities and GST has guaranteed the Securities, at 100% of their Accreted
Value on the Redemption Date, together with accrued interest thereon, if any, to
the Redemption Date, in the event GST has become or would become obligated to
pay, on the next date on which any amount would be payable with respect to the
Security Guarantee, any Additional Amounts as a result of a change in the laws
(including any regulations promulgated thereunder) of Canada (or any political
subdivision or taxing authority thereof or therein), or change in any official
position regarding the application or interpretation or such laws or
regulations, which change is announced or becomes effective on or after the
Closing Date.
SECTION 3.02. MANDATORY REDEMPTION. If on May 1, 2003 GST USA is
prohibited by the Existing Indentures from assuming all of the Securities, the
Company will redeem, upon not less than 10 nor more than 30 days' notice, on
such date the portion of the Securities that cannot be assumed or guaranteed at
105.250% of their principal amount at maturity plus accrued and unpaid interest
to the date of redemption.
SECTION 3.03. NOTICES TO TRUSTEE. If the Issuer elects to redeem
Securities pursuant to Section 3.01(a), GST elects to redeem the Securities
pursuant to Section 3.01(b) or the Company is required to redeem Securities
pursuant to Section 3.02, the Issuer, GST or the Company shall notify the
Trustee in writing of the Redemption Date and the principal amount at maturity
of Securities to be redeemed.
The Company, GST USA or GST, as the case may be, shall give each notice
provided for in this Section 3.03 in an Officers' Certificate at least 25 days
before mailing the notice to Holders required pursuant to Section 3.05 (unless a
shorter period shall be satisfactory to the Trustee).
SECTION 3.04. SELECTION OF SECURITIES TO BE REDEEMED. If less than all
of the Securities are to be redeemed at any time pursuant to Section 3.01(a) or
Section 3.02, the Trustee shall select the Securities to be redeemed in
compliance with the requirements, as certified to it by the Issuer, of the
principal national securities exchange, if any, on which the Securities are
listed or, if the Securities are not listed on a national securities exchange by
lot or by such other
40
method as the Trustee in its sole discretion shall deem fair and appropriate;
PROVIDED, HOWEVER, that no Securities of $1,000 in principal amount at maturity
or less shall be redeemed in part.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption. Securities in denominations of $1,000
in principal amount at maturity may only be redeemed in whole. The Trustee may
select for redemption portions (equal to $1,000 in principal amount at maturity
or any integral multiple thereof) of Securities that have denominations larger
than $1,000 in principal amount at maturity. Provisions of this Indenture that
apply to Securities called for redemption also apply to portions of Securities
called for redemption. The Trustee shall notify the Issuer and the Registrar
promptly in writing of the Securities or portions of Securities to be called for
redemption.
SECTION 3.05. NOTICE OF REDEMPTION. With respect to any redemption of
Securities, at least 30 days but not more than 60 days before a Redemption Date
in the case of the redemption under Section 3.01 and at least 10 but not more
than 30 days prior to May 1, 2003 in the case of a redemption under Section
3.02, the Issuer shall mail a notice of redemption by first class mail to each
Holder whose Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered
to the Paying Agent in order to collect the Redemption Price;
(e) that, unless the Issuer defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue
on and after the Redemption Date and the only remaining right of the
Holders is to receive payment of the Redemption Price plus accrued
interest to the Redemption Date upon surrender of the Securities to the
Paying Agent;
(f) that, if any Security is being redeemed in part, the
portion of the principal amount at maturity (equal to $1,000 in
principal amount at maturity or any integral multiple thereof) of such
Security to be redeemed and that, on and after the Redemption Date,
upon surrender of such Security, a new Security or Securities in
principal amount at maturity equal to the unredeemed portion thereof
will be reissued; and
41
(g) that, if any Security contains a CUSIP, CINS, ISIN or
other identification number as provided in Section 2.13, no
representation is being made as to the correctness of the CUSIP, CINS,
ISIN or other identification number either as printed on the Securities
or as contained in the notice of redemption and that reliance may be
placed only on the other identification numbers printed on the
Securities.
At the Issuer's request (which request may be revoked by the Issuer at
any time prior to the time at which the Trustee shall have given such notice to
the Holders), made in writing to the Trustee at least five days before mailing
the notice to Holders referred to in Section 3.01 or 3.02, the Trustee shall
give such notice of redemption in the name and at the expense of the Issuer, GST
or the Company. If, however, the Issuer, GST or the Company gives such notice to
the Holders, the Issuer, GST or the Company shall concurrently deliver to the
Trustee an Officers' Certificate stating that such notice has been given.
SECTION 3.06. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption
is mailed, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price. Upon surrender of any Securities to
the Paying Agent, such Securities shall be paid at the Redemption Price, plus
accrued interest, if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether
or not the Holder receives the notice. In any event, failure to give such
notice, or any defect therein, shall not affect the validity of the proceedings
for the redemption of Securities held by Holders to whom such notice was
properly given.
SECTION 3.07. DEPOSIT OF REDEMPTION PRICE. Prior to any Redemption
Date, the Issuer shall deposit, or cause to be deposited, with the Paying Agent
(or, if the Issuer is acting as its own Paying Agent, shall segregate and hold
in trust as provided in Section 2.05) money sufficient to pay the Redemption
Price of and accrued interest on all Securities to be redeemed on that date
other than Securities or portions thereof called for redemption on that date
that have been delivered by the Issuer to the Trustee for cancellation.
SECTION 3.08. PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If notice of
redemption has been given in the manner provided above, the Securities or
portion of Securities specified in such notice to be redeemed shall become due
and payable on the Redemption Date at the Redemption Price stated therein,
together with accrued interest to such Redemption Date, and on and after such
date (unless the Issuer shall default in the payment of such Securities at the
Redemption Price and accrued interest to the Redemption Date, in which case the
principal, until paid, shall bear interest from the Redemption Date at the rate
prescribed in the Securities), such Securities shall cease to accrue interest
(or original issue discount). Upon surrender of any Security for redemption in
accordance with a notice of redemption, such Security shall be paid and redeemed
by the Issuer at the Redemption Price, together with accrued interest, if any,
to the
42
Redemption Date; PROVIDED that installments of interest shall be payable to the
Holders registered as such at the close of business on the relevant Regular
Record Date that is on or prior to the Redemption Date.
SECTION 3.09. SECURITIES REDEEMED IN PART. Upon surrender of any
Security that is redeemed in part, the Issuer shall execute and the Trustee
shall authenticate and deliver to the Holder a new Security equal in principal
amount at maturity to the unredeemed portion of such surrendered Security.
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Issuer shall pay the principal
of, premium, if any, and interest on the Securities on the dates and in the
manner provided in the Securities and this Indenture. An installment of
principal, premium, if any, or interest shall be considered paid on the date due
if the Trustee or Paying Agent (other than the Issuer, a Subsidiary of the
Issuer, or any Affiliate of any of them) holds on that date money designated for
and sufficient to pay the installment. If the Issuer or any Subsidiary of the
Issuer or any Affiliate of any of them, acts as Paying Agent, an installment of
principal, premium, if any, or interest shall be considered paid on the due date
if the entity acting as Paying Agent complies with the last sentence of Section
2.05. As provided in Section 6.09, upon any bankruptcy or reorganization
procedure relative to the Issuer, the Trustee shall serve as the Paying Agent
and conversion agent, if any, for the Securities.
The Issuer shall pay interest on overdue principal, premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Securities.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in the Borough of Manhattan, the City of New York, an office or agency (which
may be an office of the Trustee, Registrar or co-Registrar or any Affiliate of
any of them) where Securities may be surrendered for registration of transfer or
exchange or for presentation for payment and where notices and demands to or
upon the Issuer in respect of the Securities and this Indenture may be served.
The Issuer will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the Issuer
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 12.02.
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The Issuer may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Issuer will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby initially designates the Corporate Trust Office of
the Trustee, located in the Borough of Manhattan, the City of New York, as such
office of the Issuer in accordance with Section 2.04.
SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) GST will not, and will
not permit any of its Restricted Subsidiaries to, Incur any Indebtedness (other
than the Securities and Indebtedness existing on the Closing Date); PROVIDED
that GST and GST USA may Incur Indebtedness if, after giving effect to the
Incurrence of such Indebtedness and the receipt and application of the proceeds
therefrom, the Indebtedness to EBITDA Ratio would be greater than zero and less
than 5:1. The Company may not Incur any Indebtedness other than the Securities.
Notwithstanding the foregoing, GST and any Restricted Subsidiary
(except as specified below) may Incur each and all of the following:
(i) Indebtedness outstanding at any time (including, but not
limited to, Indebtedness under the Tomen Facility) in an aggregate
principal amount not to exceed $320 million, less any amount of
Indebtedness permanently repaid as provided under Section 4.12;
(ii) Indebtedness (A) to GST evidenced by a promissory note or
(B) to any of its Restricted Subsidiaries; PROVIDED that any subsequent
event which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any subsequent transfer of such Indebtedness
(other than to GST or another Restricted Subsidiary) shall be deemed,
in each case, to constitute an Incurrence of such Indebtedness not
permitted by this clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds
of which are used to refinance or refund, then outstanding
Indebtedness, other than Indebtedness Incurred under clause (i), (ii),
(iv), (v), (vii) or (viii) of this paragraph, and any refinancings
thereof in an amount not to exceed the amount so refinanced or refunded
(plus premiums, accrued interest, fees and expenses); PROVIDED that
Indebtedness the proceeds of which are used to refinance or refund the
Securities and Security Guarantee or Indebtedness that is or would be
PARI PASSU with, or subordinated in right of payment to, the Securities
and Security Guarantee shall only be permitted under this clause (iii)
if (A) in case the Securities and Security Guarantee are refinanced in
part, or the Indebtedness to be
44
refinanced is or would be PARI PASSU with the Securities or Security
Guarantee, such new Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such new Indebtedness is
outstanding, is expressly made PARI PASSU with, or subordinate in right
of payment to, the remaining Securities or Security Guarantee, (B) in
case the Indebtedness to be refinanced is or would be subordinated in
right of payment to the Securities or Security Guarantee, such new
Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is outstanding, is
expressly made subordinate in right of payment to the Securities or
Security Guarantee at least to the extent that the Indebtedness to be
refinanced is subordinated to the Securities or Security Guarantee and
(C) such new Indebtedness, determined as of the date of Incurrence of
such new Indebtedness, does not mature prior to the Stated Maturity of
the Indebtedness to be refinanced or refunded, and the Average Life of
such new Indebtedness is at least equal to the remaining Average Life
of the Indebtedness to be refinanced or refunded; and PROVIDED FURTHER
that in no event may Indebtedness of GST or GST USA be refinanced by
means of any Indebtedness of any Restricted Subsidiary of GST USA
pursuant to this clause (iii);
(iv) Indebtedness (A) in respect of performance, surety or
appeal bonds provided in the ordinary course of business, (B) under
Currency Agreements and Interest Rate Agreements; PROVIDED that such
agreements do not increase the Indebtedness of the obligor outstanding
at any time other than as a result of fluctuations in foreign currency
exchange rates or interest rates or by reason of fees, indemnities and
compensation payable thereunder; and (C) arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of GST or any of the
Restricted Subsidiaries pursuant to such agreements, in any case
Incurred in connection with the disposition of any business, assets or
Restricted Subsidiary (other than Guarantees of Indebtedness Incurred
by any Person acquiring all or any portion of such business, assets or
Restricted Subsidiary for the purpose of financing such acquisition),
in a principal amount not to exceed the gross proceeds actually
received by GST or any Restricted Subsidiary in connection with such
disposition;
(v) Indebtedness of GST not to exceed, at any one time
outstanding, two times the Net Cash Proceeds received by GST after the
Closing Date from the issuance and sale of its Capital Stock (other
than Redeemable Stock) to a Person other than a Subsidiary of GST to
the extent such Net Cash Proceeds have not been used pursuant to clause
(C)(2) of the first paragraph or clauses (iii), (iv) or (vi) of the
second paragraph of Section 4.04 to make a Restricted Payment; PROVIDED
that such Indebtedness does not mature prior to the Stated Maturity of
the Securities and has an Average Life longer than the Securities;
45
(vi) Indebtedness Incurred to finance the cost (including,
without limitation, the cost of design, development, construction,
acquisition, installation or integration) of network assets (including,
without limitation, equipment and real property and leasehold
improvements that are necessary to install or operate network assets;
PROVIDED that in no event shall the cost of any such real property and
leasehold improvements financed hereby exceed 20% of the total cost of
the related network assets) or inventory purchased or leased by GST or
any of its Restricted Subsidiaries after the Closing Date;
(vii) Indebtedness of GST or GST USA under one or more
revolving credit or working capital facilities in an aggregate
principal amount outstanding at any time not to exceed the lesser of
(A) $50 million and (B) 75% of the consolidated book value of the
accounts receivable of GST and its Restricted Subsidiaries; and
(viii) Indebtedness of GST or GST USA to the extent the
proceeds thereof are promptly (a) used to purchase Securities tendered
in an Offer to Purchase made as a result of a Change of Control or (b)
deposited to defease the Securities under Article Eight.
(b) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (1) Indebtedness Incurred under the Tomen Facility on
or prior to the Closing Date shall be treated as Incurred pursuant to clause (i)
of the second paragraph of this Section 4.03 and (2) Guarantees, Liens or
obligations with respect to letters of credit supporting Indebtedness otherwise
included in the determination of such particular amount shall not be included.
For purposes of determining compliance with this Section 4.03, in the event that
an item of Indebtedness meets the criteria of more than one of the types of
Indebtedness described in the above clauses, GST, in its sole discretion, shall
classify such item of Indebtedness and only be required to include the amount
and type of such Indebtedness in one of such clauses.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. GST will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, (i) declare or
pay any dividend or make any distribution on its Capital Stock (other than
dividends or distributions payable solely in shares of its or such Restricted
Subsidiary's Capital Stock (other than Redeemable Stock) or in options, warrants
or other rights to acquire such shares of Capital Stock) held by Persons other
than GST or any of its Restricted Subsidiaries (and other than pro rata
dividends or distributions on Common Stock of Restricted Subsidiaries), (ii)
purchase, redeem, retire or otherwise acquire for value any shares of Capital
Stock of GST (including options, warrants or other rights to acquire such shares
of Capital Stock) held by Persons other than any Wholly Owned Restricted
Subsidiaries of GST, (iii) make any voluntary or optional principal payment, or
voluntary or optional redemption, repurchase, defeasance, or other acquisition
or retirement for value, of Indebtedness of GST USA or GST that is subordinated
in right of payment to the Securities or the Security Guarantee, as the case may
be, or (iv) make any Investment, other than a Permitted Investment, in any
Person (such payments or any other actions described in clauses (i) through (iv)
being collectively "RESTRICTED
46
PAYMENTS") if, at the time of, and after giving effect to, the proposed
Restricted Payment: (A) a Default or Event of Default shall have occurred and be
continuing, (B) GST could not Incur at least $1.00 of Indebtedness under the
first paragraph of Section 4.03 or (C) the aggregate amount of all Restricted
Payments (the amount, if other than in cash, to be determined in good faith by
the Board of Directors, whose determination shall be conclusive and evidenced by
a Board Resolution) made after the Closing Date shall exceed the sum of (1) 50%
of the aggregate amount of the Adjusted Consolidated Net Income (or, if the
Adjusted Consolidated Net Income is a loss, minus 100% of such amount)
(determined by excluding income resulting from transfers of assets by GST or a
Restricted Subsidiary to an Unrestricted Subsidiary) accrued on a cumulative
basis during the period (taken as one accounting period) beginning on the first
day of the fiscal quarter immediately following the Closing Date and ending on
the last day of the last fiscal quarter preceding the Transaction Date for which
reports have been filed pursuant to Section 4.20 plus (2) the aggregate Net Cash
Proceeds received by GST after May 13, 1997 from the issuance and sale permitted
by this Indenture of its Capital Stock (other than Redeemable Stock) to a Person
who is not a Subsidiary of GST, or from the issuance to a Person who is not a
Subsidiary of GST of any options, warrants or other rights to acquire Capital
Stock of GST (in each case, exclusive of any Redeemable Stock or any options,
warrants or other rights that are redeemable at the option of the holder, or are
required to be redeemed, prior to the Stated Maturity of the Securities), in
each case except to the extent such Net Cash Proceeds are used to Incur
Indebtedness pursuant to clause (v) of the second paragraph of Section 4.03,
plus (3) an amount equal to the net reduction in Investments (other than
reductions in Permitted Investments and reductions in Investments made pursuant
to clause (vi) of the second paragraph of this Section 4.04) in any Person
resulting from payments of interest on Indebtedness, dividends, repayments of
loans or advances, or other transfers of assets, in each case to GST or any
Restricted Subsidiary (except to the extent any such payment is included in the
calculation of Adjusted Consolidated Net Income), or from redesignations of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as
provided in the definition of "INVESTMENTS"), not to exceed the amount of
Investments previously made by GST and its Restricted Subsidiaries in such
Person.
The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the date
of declaration thereof if, at said date of declaration, such payment
would comply with the foregoing paragraph;
(ii) the redemption, repurchase, defeasance or other
acquisition or retirement for value of Indebtedness that is
subordinated in right of payment to the Intercompany Notes or, after
GST USA assumes the Securities, the Securities or Security Guarantee,
including premium, if any, and accrued and unpaid interest, with the
proceeds of, or in exchange for, Indebtedness Incurred under clause
(iii) of the second paragraph of Section 4.03;
47
(iii) the repurchase, redemption or other acquisition of
Capital Stock of GST in exchange for, or out of the proceeds of a
substantially concurrent offering of, shares of Capital Stock (other
than Redeemable Stock) of GST;
(iv) the acquisition of Indebtedness of GST USA or GST which
is subordinated in right of payment to the Intercompany Notes or, after
GST USA assumes the Securities, the Securities or Security Guarantee,
in exchange for, or out of the proceeds of, a substantially concurrent
offering of, shares of the Capital Stock of GST (other than Redeemable
Stock);
(v) payments or distributions, in the nature of satisfaction
of dissenters' rights, pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with Article
Five;
(vi) Investments in any Person or Persons (other than an
Affiliate (other than a Subsidiary) of the Company), the primary
business of which is related, ancillary or complementary to the
business of GST and its Restricted Subsidiaries on the date of such
Investments, in an aggregate amount not to exceed $50 million plus, (a)
in any fiscal year, an amount not to exceed 10% of GST's Consolidated
EBITDA (if positive) for the immediately preceding fiscal year, (b) an
amount not to exceed the Net Cash Proceeds received by GST after May
13, 1997 from the issuance and sale permitted by this Indenture of its
Capital Stock (other than Redeemable Stock) to a Person that is not a
Subsidiary of GST, except to the extent such Net Cash Proceeds are used
to Incur Indebtedness pursuant to clause (v) under Section 4.03 or to
make Restricted Payments pursuant to clause (C)(2) of the first
paragraph or clause (iii) or (iv) of this paragraph of this Section
4.04 and (c) the net reduction in Investments in any Person made
pursuant to this clause (vi), except to the extent such reduction is
included in the calculation of Adjusted Consolidated Net Income;
PROVIDED that the net reduction in any such Investment shall not exceed
the amount of Investments previously made in such Person;
(vii) Investments by GST or a Restricted Subsidiary made
pursuant to the second paragraph of Section 4.11, in an aggregate
amount not to exceed $25 million; and
(viii) cash payments in lieu of the issuance of fractional
Common Shares upon conversion (including mandatory conversion) of the
Convertible Notes provided for in the Convertible Notes Indenture or
the Redeemable Preferred Shares; PROVIDED that, except in the case of
clauses (i) and (iii), no Default or Event of Default shall have
occurred and be continuing or occur as a consequence of the actions or
payments set forth herein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof and an
exchange of Capital Stock for
48
Capital Stock or Indebtedness referred to in clause (iii) or (iv) thereof), and
the Net Cash Proceeds from any issuance of Capital Stock referred to in clauses
(iii), (iv) and (vi) shall be included in calculating whether the conditions of
clause (C) of the first paragraph of this Section 4.04 have been met with
respect to any subsequent Restricted Payments. In the event the proceeds of an
issuance of Capital Stock of GST are used for the redemption, repurchase or
other acquisition of the Securities or Indebtedness that is PARI PASSU with the
Securities or Security Guarantee, then the Net Cash Proceeds of such issuance
shall be included in clause (C) of the first paragraph of this Section 4.04 only
to the extent such proceeds are not used for such redemption, repurchase or
other acquisition of Indebtedness.
The Company will not, and will not permit any Subsidiary to, directly
or indirectly, make any Restricted Payment other than Investments in Pledged
Securities, cash, the Fee Notes and Intercompany Notes, in each case pledged to
secure the Securities.
SECTION 4.05. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES. GST will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by GST or any other Restricted Subsidiary, (ii) pay
any Indebtedness owed to GST or any other Restricted Subsidiary, (iii) make
loans or advances to GST or any other Restricted Subsidiary or (iv) transfer any
of its property or assets to GST or any other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions:
(i) existing on the Closing Date in this Indenture or any
other agreement in effect on the Closing Date, and any extensions,
refinancings, renewals or replacements of such agreements; PROVIDED
that the encumbrances and restrictions in any such extensions,
refinancings, renewals or replacements are no less favorable in any
material respect to the Holders than those encumbrances or restrictions
that are then in effect and that are being extended, refinanced,
renewed or replaced;
(ii) existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or
assets of such Person acquired by GST or any Restricted Subsidiary,
existing at the time of such acquisition and not incurred in
contemplation thereof, which encumbrances or restrictions are not
applicable to any Person or the property or assets of any Person other
than such Person or the property or assets of such Person so acquired;
49
(iv) in the case of clause (iv) of the first paragraph of this
Section 4.05, (A) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset, (B)
existing by virtue of any transfer of, agreement to transfer, option or
right with respect to, or Lien on, any property or assets of GST or any
Restricted Subsidiary not otherwise prohibited by this Indenture or (C)
arising or agreed to in the ordinary course of business, not relating
to any Indebtedness, and that do not, individually or in the aggregate,
detract from the value of property or assets of GST or any Restricted
Subsidiary in any manner material to GST or any Restricted Subsidiary;
(v) with respect to a Restricted Subsidiary and imposed
pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock of, or
property and assets of, such Restricted Subsidiary;
(vi) with respect to any Development Company, imposed pursuant
to or in connection with any Indebtedness Incurred by such Development
Company to finance at least 50% of the total financing required for the
development and construction of all of such Development Company's
alternative access networks or any Indebtedness Incurred to refinance
or replace such Indebtedness; PROVIDED that (a) such Indebtedness
(including such refinancing Indebtedness) is permitted to be Incurred
under Section 4.03, (b) such encumbrances and restrictions are no more
restrictive in any material respect than those encumbrances and
restrictions existing under the Tomen Facility as in effect on the
Closing Date and (c) such encumbrances and restrictions shall only
apply to such Development Company for so long as such Indebtedness (or
such refinancing Indebtedness) remains outstanding; or
(vii) with respect to any Development Company (a "RESTRICTED
DEVELOPMENT COMPANY"), imposed pursuant to or in connection with any
Indebtedness Incurred by another Development Company to finance at
least 50% of the total financing required for the development and
construction of all of such other Development Company's alternative
access networks or any Indebtedness Incurred to refinance or replace
such Indebtedness; PROVIDED that (a) such encumbrances and restrictions
shall not apply to such Restricted Development Company prior to the
occurrence of an event of default under such Indebtedness (or
refinancing Indebtedness), (b) such Indebtedness (including such
refinancing Indebtedness) is permitted to be Incurred under Section
4.03, (c) such encumbrances and restrictions are no more restrictive in
any material respect than those contemplated by the Tomen Facility as
in effect on the Closing Date and (d) at least 50% of the total
financing required for the development and construction of all of such
Restricted Development Company's alternative access networks was
provided by the holder of the Indebtedness of such other Development
Company.
50
The Company will not, and will not permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any of the
matters referred to in the first paragraph of this section.
Nothing contained in this Section 4.05 shall prevent GST or any
Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.09 or (2) restricting the sale
or other disposition of property or assets of GST or any of its Restricted
Subsidiaries that secure Indebtedness of GST or any of its Restricted
Subsidiaries.
SECTION 4.06. LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. GST will not sell, and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell any shares of Capital Stock
of a Restricted Subsidiary (including options, warrants or other rights to
purchase shares of such Capital Stock) except
(i) to GST or a Wholly Owned Restricted Subsidiary;
(ii) issuances or sales to foreign nationals of shares of
Capital Stock of foreign Restricted Subsidiaries, to the extent
required by applicable law;
(iii) if, immediately after giving effect to such issuance or
sale, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary; or
(iv) a sale of Common Stock of Phoenix Fiber, and in
connection and concurrently with such sale, a sale of Common Stock of
GST Tucson Lightwave, Inc.; PROVIDED that the proceeds of any such sale
under this clause (iv) shall be applied in accordance with clause (A)
or (B) of the first paragraph of Section 4.12.
The Company will not sell, and will not permit any Subsidiary, directly
or indirectly, to issue or sell, any shares of Capital Stock of a Subsidiary of
the Company (including options, warrants or other rights to purchase shares of
such Capital Stock).
SECTION 4.07. LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED
SUBSIDIARIES. GST will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee any Indebtedness of GST or any Indebtedness of GST USA
("GUARANTEED INDEBTEDNESS"), unless (i) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to this Indenture
providing for a Guarantee (a "SUBSIDIARY GUARANTEE") of payment of the
Securities by such Restricted Subsidiary and (ii) such Restricted Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company, GST or GST USA as a result of any payment by such
Restricted Subsidiary under its Subsidiary Guarantee; PROVIDED that this
51
paragraph shall not be applicable to any Guarantee of any Restricted Subsidiary
that (x) existed at the time such Person became a Restricted Subsidiary and (y)
was not Incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary. If the Guaranteed Indebtedness is (A) PARI
PASSU with the Intercompany Notes, the Securities or the Security Guarantee,
then the Guarantee of such Guaranteed Indebtedness shall be PARI PASSU with, or
subordinated to, the Subsidiary Guarantee or (B) subordinated to the
Intercompany Notes, the Securities or the Security Guarantee, then the Guarantee
of such Guaranteed Indebtedness shall be subordinated to the Subsidiary
Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Intercompany Notes, the Securities or Security Guarantee, as
the case may be.
Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or transfer,
to any Person not an Affiliate of GST of all of GST's and each Restricted
Subsidiary's Capital Stock in, or all or substantially all the assets of, such
Restricted Subsidiary (which sale, exchange or transfer is not prohibited by
this Indenture) or (ii) the release or discharge of the Guarantee which resulted
in the creation of such Subsidiary Guarantee, except a discharge or release by
or as a result of payment under such Guarantee.
The Company will not permit any Subsidiary to, directly or indirectly,
Guarantee any Indebtedness.
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH SHAREHOLDERS AND
AFFILIATES. GST will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, enter into, renew or extend any transaction (including,
without limitation, the purchase, sale, lease or exchange of property or assets,
or the rendering of any service) with any holder (or any Affiliate of such
holder) of 5% or more of any class of Capital Stock of GST or any Restricted
Subsidiary or with any Affiliate of GST or any Restricted Subsidiary, except
upon fair and reasonable terms no less favorable to GST or such Restricted
Subsidiary than could be obtained, at the time of such transaction or, if such
transaction is pursuant to a written agreement, at the time of the execution of
the agreement providing therefor, in a comparable arm's-length transaction with
a Person that is not such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors of GST or (B) for which GST or a Restricted Subsidiary
delivers to the Trustee a written opinion of a nationally recognized investment
banking firm stating that the transaction is fair to GST or such Restricted
Subsidiary from a financial point of view; (ii) any transaction solely between
GST and any of its Wholly Owned Restricted Subsidiaries or solely between Wholly
Owned Restricted Subsidiaries; (iii) the payment of reasonable and customary
regular fees (including through the issuance of shares of Common Stock of GST or
options, warrants or other rights to acquire such shares) to
52
directors of GST who are not employees of GST or any of its Subsidiaries; (iv)
any payments or other transactions pursuant to any tax-sharing agreement between
GST and any other Person with which GST files a consolidated tax return or with
which GST is part of a consolidated group for tax purposes; or (v) any
Restricted Payments not prohibited by Section 4.04. Notwithstanding the
foregoing, any transaction or series of transactions covered by the first
paragraph of this Section 4.08 and not covered by clauses (ii) through (vi) of
this paragraph, the aggregate amount of which exceeds $500,000 in value, must be
approved or determined to be fair in the manner provided for in clause (i)(A) or
(B) above.
The Company will not, and will not permit any Subsidiary to, directly
or indirectly, enter into, renew or extend any of the transactions described in
the first paragraph of this section other than any transaction between the
Company and GST or any of its Restricted Subsidiaries required or permitted by
this Indenture and Pledge Agreement.
SECTION 4.09. LIMITATION ON LIENS. GST will not, and will not permit
any Restricted Subsidiary to, create, incur, assume or suffer to exist any Lien
on any of its assets or properties of any character, or any shares of Capital
Stock or Indebtedness of any Restricted Subsidiary (collectively, "PROTECTED
PROPERTY"), without making effective provision for all of the Securities (or in
the case of a Lien on Protected Property of GST, the Security Guarantee) and all
other amounts due under this Indenture to be directly secured equally and
ratably with (or, if the obligation or liability to be secured by such Lien is
subordinated in right of payment to the Securities or the Security Guarantee,
prior to) the obligation or liability secured by such Lien; provided that
neither GST nor any Restricted Subsidiary will create, Incur, assume or suffer
to exist any Lien on the Pledged Securities, the Pledge Account or any Acquired
Equipment, except Liens securing the Securities and the Intercompany Notes.
The foregoing limitation does not apply to
(i) Liens existing on the Closing Date;
(ii) Liens granted after the Closing Date on any assets or
Capital Stock of GST or its Restricted Subsidiaries securing the
Initial Note, the Intercompany Notes or created in favor of the
Company, the Trustee or the Holders of the Securities;
(iii) Liens with respect to the assets of a Restricted
Subsidiary granted by such Restricted Subsidiary to GST or a Wholly
Owned Restricted Subsidiary to secure Indebtedness owing to GST or such
other Restricted Subsidiary;
(iv) Liens securing Indebtedness which is Incurred to
refinance secured Indebtedness which is permitted to be Incurred under
clause (iii) of the second paragraph of Section 4.03; PROVIDED that
such Liens do not extend to or cover any property or assets
53
of GST or any Restricted Subsidiary other than the property or assets
securing the Indebtedness being refinanced;
(v) Liens upon or Capital Leases with respect to inventory,
property or equipment acquired or held by GST or any of its Restricted
Subsidiaries to secure all or a part of the purchase price therefor or
GST's or such Restricted Subsidiary's obligations under such lease;
PROVIDED that such Liens do not extend to or cover any property or
assets of GST or any Restricted Subsidiary other than the inventory,
property or equipment acquired;
(vi) Liens on assets or property of, or the Capital Stock of,
a Development Company securing Indebtedness Incurred under clause (i)
of the second paragraph of Section 4.03 to finance at least 50% of the
total financing for the development and construction of the alternative
access networks owned by such Development Company; PROVIDED such Liens
do not extend to or cover any other property or assets of GST or any of
its Restricted Subsidiaries;
(vii) Liens on any property or assets of a Restricted
Subsidiary securing Indebtedness of such Restricted Subsidiary
permitted to be Incurred under the Indenture; or
(viii) Permitted Liens.
The Company will not, and will not permit any Subsidiary to, create,
incur, assume or suffer to exist any Lien on any of its assets or properties of
any character other than Liens granted in favor of the Trustee or the Holders of
the Securities.
SECTION 4.10. LIMITATION ON SALE-LEASEBACK TRANSACTIONS. GST will not,
and will not permit any Restricted Subsidiary to, enter into any sale-leaseback
transaction involving any of its assets or properties whether now owned or
hereafter acquired, whereby GST or a Restricted Subsidiary sells or transfers
such assets or properties and then or thereafter leases such assets or
properties or any part thereof or any other assets or properties which GST or
such Restricted Subsidiary, as the case may be, intends to use for substantially
the same purpose or purposes as the assets or properties sold or transferred.
The foregoing restriction does not apply to any sale-leaseback
transaction if
(i) the lease is for a period, including renewal rights, of
not in excess of three years;
(ii) the lease secures or relates to industrial revenue or
pollution control bonds;
54
(iii) the transaction is solely between GST and any Wholly
Owned Restricted Subsidiary or solely between Wholly Owned Restricted
Subsidiaries; or
(iv) GST or such Restricted Subsidiary, within 12 months after
the sale or transfer of any assets or properties is completed, applies
an amount not less than the net proceeds received from such sale in
accordance with clause (A) or (B) of the first paragraph of Section
4.12.
The Company will not, and will not permit any Subsidiary to, enter into
any sale-leaseback transaction.
SECTION 4.11. LIMITATION ON INVESTMENTS. GST will not, and will not
permit any Restricted Subsidiary to, (i) make any Investment in any Person
(including an Unrestricted Subsidiary) that during its most recent fiscal year
derived or in its current fiscal year is expected by the Board of Directors of
GST to derive more than $250,000 in revenues from, or in its most recent fiscal
year spent or in its current fiscal year is expected by the Board of Directors
of GST to spend more than $250,000 on, operations or activities located outside
the continental United States (other than in the State of Hawaii or between the
continental United States and the State of Hawaii) (an "INTERNATIONAL BUSINESS")
or (ii) acquire or own (directly or indirectly), other than through an
Unrestricted Subsidiary, any entity, business or asset that is primarily located
outside the continental United States (other than in the State of Hawaii) or any
right with respect to any of the foregoing (an "INTERNATIONAL ASSET").
Notwithstanding the foregoing, and subject to Section 4.04, GST and its
Restricted Subsidiaries may make an Investment in an Unrestricted Subsidiary
which owns, intends to acquire or has rights with respect to an International
Business or International Asset provided that the aggregate amount of such
Investments does not exceed (i) $25 million plus, (A) in any fiscal year, an
amount not to exceed 10% of GST's Consolidated EBITDA (if positive) for the
immediately preceding fiscal year and (B) an amount not to exceed the Net Cash
Proceeds received by GST after May 13, 1997 from the issuance and sale permitted
by this Indenture of its Capital Stock (other than Redeemable Stock) to a Person
who is not a Subsidiary of GST, less (ii) the amount of any Investments made
pursuant to the first paragraph, or the amount of any Restricted Payment made
pursuant to clause (iii), (iv) or (vi) of the second paragraph, of Section 4.04;
PROVIDED that the International Business or International Assets are related,
ancillary or complementary to the primary business of GST and its Restricted
Subsidiaries on the date of such Investment.
SECTION 4.12. LIMITATION ON ASSET SALES. GST will not, and will not
permit any Restricted Subsidiary to, consummate any Asset Sale, unless (i) the
consideration received by GST or such Restricted Subsidiary is at least equal to
the fair market value of the assets sold or disposed of and (ii) at least 85% of
the consideration received consists of cash or Temporary Cash
55
Investments; PROVIDED, HOWEVER, that clause (ii) shall not apply to long-term
assignments of capacity in a network. In the event and to the extent that the
Net Cash Proceeds received by GST or its Restricted Subsidiaries from one or
more Asset Sales occurring on or after the Closing Date in any period of 12
consecutive months exceed 10% of Adjusted Consolidated Net Tangible Assets
(determined as of the date closest to the commencement of such 12-month period
for which a consolidated balance sheet of GST and its Subsidiaries has been
prepared), then GST shall or shall cause the relevant Restricted Subsidiary to
(i) within 12 months after the date Net Cash Proceeds so received exceed 10% of
Adjusted Consolidated Net Tangible Assets (A) apply an amount equal to such
excess Net Cash Proceeds to permanently repay unsubordinated Indebtedness of GST
or GST USA or Indebtedness of any Restricted Subsidiary (other than GST USA), in
each case owing to a Person other than GST or any of its Restricted Subsidiaries
or (B) invest an equal amount, or the amount not so applied pursuant to clause
(A) (or enter into a definitive agreement committing to so invest within 12
months after the date of such agreement), in property or assets of a nature or
type or that are used in a business (or in a company having property and assets
of a nature or type, or engaged in a business) similar or related to the nature
or type of the property and assets of, or the business of, GST and its
Restricted Subsidiaries existing on the date of such investment (as determined
in good faith by the Board of Directors of GST, whose determination shall be
conclusive and evidenced by a Board Resolution) and (ii) apply (no later than
the end of the 12-month period referred to in clause (i)) such excess Net Cash
Proceeds (to the extent not applied pursuant to clause (i)) as provided in the
following paragraph of this Section 4.12. The amount of such excess Net Cash
Proceeds required to be applied (or to be committed to be applied) during such
12-month period as set forth in clause (i) of the preceding sentence and not
applied as so required by the end of such period shall constitute "Excess
Proceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.12 totals at least $5.0 million, the Issuer must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders on a pro rata basis an aggregate Accreted Value of
Securities equal to the Excess Proceeds on such date, at a purchase price equal
to 101% of the Accreted Value of the Securities on the relevant Payment Date,
plus, in each case, accrued interest to such Payment Date.
The Company will not, and will not permit any Subsidiary to, consummate
any Asset Sale except as permitted under the Pledge Agreement.
SECTION 4.13. IMPAIRMENT OF SECURITY INTEREST OR ABILITY TO ASSUME THE
SECURITIES. Except as specifically provided in the Pledge Agreement, none of
GST, GST USA nor the Company shall, nor shall they permit any Subsidiary to,
take or knowingly omit to take any action that (i) might or would have the
result of materially impairing the security interest with respect to the Pledged
Securities, any Acquired Equipment, the Fee Notes or Intercompany Notes for the
benefit of the Trustee and the Holders of the Securities, (ii) grant to any
Person other than
56
the Trustee or the Holders of the Securities, any interest whatsoever in the
Pledged Securities, other amounts in the Pledge Account, any Acquired Equipment,
the Fee Notes or any Intercompany Note, (iii) would prevent, or restrict GST USA
from assuming, or GST from guaranteeing, the Securities on May 1, 2003 or
earlier if permitted by the Existing Indentures or (iv) would prevent or
restrict GST USA from issuing Fee Notes to the Company.
SECTION 4.14. REPURCHASE OF SECURITIES UPON A CHANGE OF CONTROL. The
Issuer must commence, within 30 days of the occurrence of a Change of Control,
and consummate an Offer to Purchase for all Securities then outstanding, at a
purchase price equal to 101% of the Accreted Value thereof on the relevant
Payment Date, plus accrued interest to such Payment Date. Prior to the mailing
of the notice to Holders commencing such Offer to Purchase, but in any event
within 30 days following any Change of Control, the Issuer covenants to (i)
repay in full all indebtedness of the Issuer that would prohibit the repurchase
of the Securities pursuant to such Offer to Purchase or (ii) obtain any
requisite consents under instruments governing any such indebtedness of the
Issuer to permit the repurchase of the Securities. The Issuer shall first comply
with the covenant in the preceding sentence before it shall repurchase
Securities pursuant to this Section 4.14.
SECTION 4.15. EXISTENCE. Subject to compliance with the terms of
Articles Four and Five of this Indenture, GST will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and
the existence of each of its Restricted Subsidiaries in accordance with the
respective organizational documents of GST and each such Subsidiary and the
rights (whether pursuant to charter, partnership certificate, agreement, statute
or otherwise), material licenses and franchises of GST and each such Subsidiary;
PROVIDED that GST shall not be required to preserve any such right, license or
franchise, or the existence of any Restricted Subsidiary (other than of the
Issuer), if the maintenance or preservation thereof is no longer desirable in
the conduct of the business of GST and its Restricted Subsidiaries taken as a
whole.
SECTION 4.16. PAYMENT OF TAXES AND OTHER CLAIMS. GST will pay or
discharge and shall cause each of its Subsidiaries to pay or discharge, or cause
to be paid or discharged, before the same shall become delinquent (i) all
material taxes, assessments and governmental charges levied or imposed upon (a)
GST or any such Subsidiary, (b) the income or profits of any such Subsidiary
which is a corporation or (c) the property of GST or any such Subsidiary and
(ii) all material lawful claims for labor, materials and supplies that, if
unpaid, might by law become a lien upon the property of GST or any such
Subsidiary; PROVIDED that GST shall not be required to pay or discharge, or
cause to be paid or discharged, any such tax, assessment, charge or claim the
amount, applicability or validity of which is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established.
SECTION 4.17. MAINTENANCE OF PROPERTIES AND INSURANCE. GST will cause
all properties used or useful in the conduct of its business or the business of
any of its Restricted
57
Subsidiaries, to be maintained and kept in reasonable condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the reasonable business judgment of GST may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; PROVIDED that nothing in this Section
4.17 shall prevent GST or any such Subsidiary from discontinuing the use,
operation or maintenance of any of such properties or disposing of any of them,
if such discontinuance or disposal is, in the reasonable business judgment of
GST, desirable in the conduct of the business of GST or such Subsidiary.
GST will provide or cause to be provided, for itself and its Restricted
Subsidiaries, insurance (including appropriate self-insurance) against loss or
damage of the kinds customarily insured against by corporations similarly
situated and owning like properties, including, but not limited to, products
liability insurance and public liability insurance, with reputable insurers or
with the government of the United States of America, or an agency or
instrumentality thereof, in such amounts, with such deductibles and by such
methods as shall be customary for corporations similarly situated in the
industry in which GST or such Restricted Subsidiary, as the case may be, is then
conducting business.
SECTION 4.18. NOTICE OF DEFAULTS. In the event that GST or the Issuer
becomes aware of any Default or Event of Default, GST or the Issuer, promptly
after it becomes aware thereof, will give written notice thereof to the Trustee.
SECTION 4.19. COMPLIANCE CERTIFICATES. (a) GST shall deliver to the
Trustee, within 90 days after the end of GST's fiscal year, an Officers'
Certificate stating whether or not the signers know of any Default or Event of
Default that occurred during such fiscal year. Such certificates shall contain a
certification from the principal executive officer, principal financial officer
or principal accounting officer of GST that a review has been conducted of the
activities of GST and the Restricted Subsidiaries and GST's and the Restricted
Subsidiaries' performance under this Indenture and that, to the best knowledge
of such officer, GST has complied with all conditions and covenants under this
Indenture. For purposes of this Section 4.19, such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture. If any such officer knows of such a Default or
Event of Default, the certificate shall describe any such Default or Event of
Default and its status.
(b) GST shall deliver to the Trustee, within 90 days after the end of
its fiscal year, a certificate signed by GST's independent certified public
accountants stating (i) that their audit examination has included a review of
the terms of this Indenture and the Securities as they relate to accounting
matters, (ii) that they have read the most recent Officers' Certificate
delivered to the Trustee pursuant to paragraph (a) of this Section 4.19 and
(iii) whether, in connection with their audit examination, anything came to
their attention that caused them to believe that GST or the Issuer was not in
compliance with any of the terms, covenants, provisions or conditions of
58
Article Four and Section 5.01 of this Indenture as they pertain to accounting
matters and, if any Default or Event of Default has come to their attention,
specifying the nature and period of existence thereof; PROVIDED that such
independent certified public accountants shall not be liable in respect of such
statement by reason of any failure to obtain knowledge of any such Default or
Event of Default that would not be disclosed in the course of an audit
examination conducted in accordance with generally accepted auditing standards
in effect at the date of such examination.
(c) Within 90 days of the end of each of GST's fiscal years, GST shall
deliver to the Trustee a list of all Significant Subsidiaries. The Trustee shall
have no duty with respect to any such list except to keep it on file and make it
available for inspection by the Holders upon reasonable notice to the Trustee
and during normal business hours.
SECTION 4.20. COMMISSION REPORTS AND REPORTS TO HOLDERS. At all times
from and after the earlier of (i) the date of the commencement of an Exchange
Offer or the effectiveness of the Shelf Registration Statement (the
"REGISTRATION") and (ii) six months after the Closing Date, in either case,
whether or not the Company is then required to file reports with the Commission,
the Company shall file with the Commission all such reports and other
information as it would be required to file with the Commission by Sections
13(a) or 15(d) under the Exchange Act if it were subject thereto. In addition,
at all times prior to the earlier of the date of the Registration and six months
after the Closing Date, the Company shall, at its cost, deliver to each Holder
of the Securities quarterly and annual reports substantially equivalent to those
which would be required by the Exchange Act. In addition, at all times prior to
the Registration, upon the request of any Holder or any prospective purchaser of
the Securities designated by a Holder, the Company shall supply to such Holder
or such prospective purchaser the information required under Rule 144A under the
Securities Act. Whether or not GST is required to file reports with the
Commission, if any Securities are outstanding, GST shall file with the
Commission all such reports and other information as it would be required to
file with the Commission by Sections 13(a) or 15(d) under the Exchange Act. The
Company and GST shall supply the Trustee and each Holder of Securities or shall
supply to the Trustee for forwarding to each Holder, without cost to such Holder
or the Trustee, copies of such reports or other information.
SECTION 4.21. WAIVER OF STAY, EXTENSION OR USURY LAWS. Each of the
Issuer and GST covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law or any usury law or other
law that would prohibit or forgive the Issuer or GST, as the case may be, from
paying all or any portion of the principal of, premium, if any, or interest on
the Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or that may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) each of the Issuer and
GST hereby expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
59
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 4.22. ADDITIONAL AMOUNTS. Any payments made by GST under or
respect to the Securities pursuant to the Security Guarantee will be made free
and clear of and without withholding or deduction for or on account of any
present or future tax, duty, levy, impost, assessment or other governmental
charge (including penalties, interest and other liabilities related thereto)
imposed or levied by or on behalf of the Government of Canada or of any province
or territory thereof or by any authority or agency therein or thereof having
power to tax (hereinafter "TAXES"), unless GST is required to withhold or deduct
Taxes by law or by the interpretation or administration thereof. If GST is
required to withhold or deduct any amount for or on account of Taxes from any
payment made under or with respect to the Securities, GST will pay such
additional amounts ("ADDITIONAL AMOUNTS") as may be necessary, so that the net
amount received by each Holder of Securities (including Additional Amounts)
after such withholding or deduction will not be less than the amount such Holder
would have received if such Taxes had not been withheld or deducted; PROVIDED,
HOWEVER, that no Additional Amounts will be payable with respect to a payment
made to a Holder (an "EXCLUDED HOLDER") (i) with which GST does not deal at
arm's length (within the meaning of the Income Tax Act (Canada)) at the time of
making such payment, or (ii) which is subject to such Taxes by reason of its
being connected with Canada or any province or territory thereof otherwise than
solely by reason of the Holder's activity in connection with purchasing the
Securities, by the mere holding of Securities or by reason of the receipt of
payments thereunder. GST will, upon written request of any Holder (other than an
Excluded Holder), reimburse such Holder, for the amount of (i) any Taxes so
levied or imposed and paid by such Xxxxxx as a result of payments made under or
with respect to the Securities and (ii) any Taxes so levied or imposed with
respect to any reimbursement under the foregoing clause (i), but excluding any
such Taxes on such Xxxxxx's net income so that the net amount received by such
Xxxxxx after such reimbursement will not be less than the net amount the Holder
would have received if Taxes on such reimbursement had not been imposed.
At least 30 days prior to each date on which any payment under or with
respect to the Securities is due and payable, if GST will be obligated to pay
Additional Amounts with respect to such payment, GST will deliver to the Trustee
an Officers' Certificate stating the fact that such Additional Amounts will be
payable and the amounts so payable and will set forth such other information
necessary to enable the Trustee to pay such Additional Amounts to Holders on the
payment date. Whenever in this Indenture there is mentioned, in any context, the
payment of principal (or premium, if any), Redemption Price, interest or any
other amount payable under or with respect to any Security, such mention shall
be deemed to include mention of the payment of Additional Amounts to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof.
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SECTION 4.23. ASSUMPTION OF SECURITIES BY GST USA. (a) On May 1, 2003,
or earlier if permitted under the terms of the Existing Indentures, GST USA and
GST will execute and deliver a supplemental indenture to this Indenture in the
form attached hereto as Exhibit E and GST USA will execute and deliver a
Collateral Pledge and Security Agreement substantially in the form of the Pledge
Agreement in favor of the Trustee granting to the Trustee for the benefit of the
Holders of the Securities a first priority security interest in all Acquired
Equipment that secured the Intercompany Notes or was held by the Company on the
Assumption Date.
(b) On the Assumption Date, GST USA will deliver to the Trustee an
Opinion of Counsel to the effect that, after giving effect to the assumption of
the Securities by GST USA pursuant to the supplemental indenture delivered
pursuant to clause (a) above:
(i) each of the Securities and this Indenture constitutes a
valid and binding obligation of GST USA in accordance with its terms
and the Securities are entitled to the benefits of this Indenture,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equitable principles;
(ii) each of this Indenture and the indenture supplement
delivered under clause (a) above constitutes a valid and binding
obligation of GST in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equitable principles; and
(iii) GST USA has granted to the Trustee for the benefit of
the holders of the Securities a valid and perfected first priority
security interest in all Acquired Equipment that secured the
Intercompany Notes or was held by the Company on the Assumption Date to
secure the payment of principal of and interest on, and any other
amounts owing in respect of, the Securities.
(c) On the Assumption Date, upon delivery of the Opinion of
Counsel pursuant to clause (b) above, GST USA will liquidate the Company and
will cause the Company to distribute all of its assets (if any) to GST USA.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. CONSOLIDATION, MERGER AND SALE OF ASSETS. Neither GST nor
GST USA shall consolidate with, merge with or into, or sell, convey, transfer,
lease or otherwise dispose of all or substantially all of its property and
assets (as an entirety or substantially an
61
entirety in one transaction or a series of related transactions) to, any Person
(other than a consolidation or merger with or into a Wholly Owned Restricted
Subsidiary with a positive net worth; PROVIDED that, in connection with any such
merger or consolidation, no consideration (other than Common Stock in the
surviving Person, GST or GST USA) shall be issued or distributed to the
stockholders of GST or GST USA) or permit any Person to merge with or into GST
or GST USA unless:
(i) GST or GST USA shall be the continuing Person, or the
Person (if other than GST or GST USA) formed by such consolidation or
into which GST or GST USA is merged or that acquired or leased such
property and assets of GST or GST USA shall be a corporation organized
and validly existing under the laws of the United States of America or
any jurisdiction thereof and shall expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, all of the
obligations of GST or GST USA, as the case may be, on all of the
Securities, the Intercompany Notes and the Security Guarantee and under
this Indenture;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a
PRO FORMA basis, GST, GST USA or any Person becoming the successor
obligor of the Securities or the Security Guarantee, as the case may
be, shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of GST or GST USA, as the case may be,
immediately prior to such transaction;
(iv) immediately after giving effect to such transaction on a
PRO FORMA basis GST or GST USA, as the case may be, or any Person
becoming the successor obligor of the Securities or the Security
Guarantee, as the case may be, could Incur at least $1.00 of
Indebtedness under the first paragraph of Section 4.03(a); and
(v) GST or GST USA, as the case may be, delivers to the
Trustee an Officers' Certificate (attaching the arithmetic computations
to demonstrate compliance with clauses (iii) and (iv)) and Opinion of
Counsel, in each case stating that such consolidation, merger or
transfer and such supplemental indenture complies with this provision
and that all conditions precedent provided for herein relating to such
transaction have been complied with; PROVIDED, HOWEVER, that clauses
(iii) and (iv) above do not apply if, in the good faith determination
of the Board of Directors of GST or GST USA, as the case may be, whose
determination shall be evidenced by a Board Resolution, the principal
purpose of such transaction is to change the jurisdiction of
incorporation of GST to a state in the United States or of GST USA to
another state of the United States; and PROVIDED FURTHER that any
62
such transaction shall not have as one of its purposes the evasion of
the foregoing limitations.
The restrictions and conditions described in the preceding paragraph
shall also apply to the Company except that clauses (iii) and (iv) shall not
apply to a merger or consolidation of GST USA and the Company or the sale,
conveyance or other disposition of all or substantially all of the assets of the
Company to GST USA.
SECTION 5.02. SUCCESSOR SUBSTITUTED. Upon any consolidation or merger,
or any sale, conveyance, transfer or other disposition of all or substantially
all of the property and assets of the Company, GST USA or GST in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company, GST USA or GST is merged or to which
such sale, conveyance, transfer or other disposition is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company,
GST USA or GST, as the case may be, under this Indenture with the same effect as
if such successor Person had been named as the Company, GST USA or GST, as the
case may be, herein; PROVIDED that the Company, GST USA or GST, as the case may
be, shall not be released from its obligations to pay the principal of, premium,
if any, or interest on the Securities in the case of a lease of all or
substantially all of its property and assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall occur with
respect to the Securities if:
(a) the Issuer defaults in the payment of principal of (or
premium, if any, on) any Security when the same becomes due and payable
at maturity, upon acceleration, redemption or otherwise;
(b) the Issuer defaults in the payment of interest on any
Security when the same becomes due and payable, and such default
continues for a period of 30 days;
(c) the Company, GST USA or GST defaults in the performance of
or breaches any other covenant or agreement of the Company, GST USA or
GST in this Indenture or under the Securities, the Security Guarantee,
the Fee Notes or any Intercompany Note and such default or breach
continues for a period of 30 consecutive days after written notice by
the Trustee or the Holders of 25% or more in aggregate principal amount
of Securities;
63
(d) there occurs with respect to any issue or issues of
Indebtedness of GST or any Significant Subsidiary having an outstanding
principal amount of $5 million or more in the aggregate for all such
issues of all such Persons, whether such Indebtedness now exists or
shall hereafter be created, (I) an event of default that has caused the
holder thereof to declare such Indebtedness to be due and payable prior
to its Stated Maturity and such Indebtedness has not been discharged in
full or such acceleration has not been rescinded or annulled within 30
days of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such
defaulted payment shall not have been made, waived or extended within
30 days of such payment default;
(e) any final judgment or order (not covered by insurance) for
the payment of money in excess of $5 million in the aggregate for all
such final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company, GST USA, GST or any Significant
Subsidiary and shall not be paid or discharged, and there shall be any
period of 30 consecutive days following entry of the final judgment or
order that causes the aggregate amount for all such final judgments or
orders outstanding and not paid or discharged against all such Persons
to exceed $5 million during which a stay of enforcement of such final
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect;
(f) a court having jurisdiction in the premises enters a
decree or order for (A) relief in respect of the Company, GST USA, GST
or any Significant Subsidiary in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company,
GST USA, GST or any Significant Subsidiary (other than a liquidation of
the Company into GST USA in connection with the assumption of the
Securities) or for all or substantially all of the property and assets
of the Company, GST USA, GST or any Significant Subsidiary or (C) the
winding up or liquidation of the affairs of the Company, GST USA, GST
or any Significant Subsidiary (other than a liquidation of the Company
into GST USA in connection with the assumption of the Securities) and,
in each case, such decree or order shall remain unstayed and in effect
for a period of 30 consecutive days;
(g) the Company, GST USA, GST or any Significant Subsidiary
(A) commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents
to the entry of an order for relief in an involuntary case under any
such law, (B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Company, GST USA, GST or any Significant
Subsidiary (other than a liquidation of the Company into GST USA in
connection with the assumption of the
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Securities) or for all or substantially all of the property and assets
of the Company, GST USA, GST or any Significant Subsidiary or (C)
effects any general assignment for the benefit of creditors;
(h) the Trustee or the Company does not have at all times a
first priority perfected security interest in all Pledged Securities,
the Pledge Account, all Acquired Equipment, the Fee Notes and
Intercompany Notes or the Company, GST USA or GST asserts in writing
that the security arrangements under this Indenture, the Pledge
Account, the Fee Notes and the Intercompany Notes are not in full force
and effect; or
(i) GST USA shall not have become a direct obligor on the
Securities (other than Securities to be redeemed as described under
Section 3.02 for which the Company shall have deposited the redemption
price) and GST shall not have become a guarantor of the Securities by
May 1, 2003.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event
of Default specified in clause (f) or (g) of Section 6.01 that occurs with
respect to the Company, GST USA or GST or clause (h)) occurs and is continuing
under this Indenture, the Trustee or the Holders of at least 25% in aggregate
principal amount of the outstanding Securities, by written notice to the Issuer
(and to the Trustee if such notice is given by the Holders), may, and the
Trustee at the request of such Holders shall, declare the Accreted Value of,
premium, if any, and accrued interest, on the Securities to be immediately due
and payable. Upon a declaration of acceleration, such Accreted Value, premium,
if any, and accrued interest shall be immediately due and payable. In the event
of a declaration of acceleration because an Event of Default set forth in clause
(d) of Section 6.01 has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of
default triggering such Event of Default pursuant to clause (d) shall be
remedied or cured by GST or the relevant Significant Subsidiary or waived by the
holders of the relevant Indebtedness within 60 days after the declaration of
acceleration with respect thereto. If an Event of Default specified in clause
(f) or (g) of Section 6.01 occurs with respect to the Company, GST USA or GST or
an Event of Default specified in clause (h) occurs, the Accreted Value of,
premium, if any, and accrued interest on the Securities then outstanding shall
IPSO FACTO become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may, and at the direction of the Holders of not less
than a majority of the outstanding principal amount of the Securities shall,
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, premium, if any, or interest on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
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The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding.
SECTION 6.04. WAIVER OF PAST DEFAULTS. Subject to Sections 6.02, 6.07
and 9.02, the Holders of at least a majority in principal amount of the
outstanding Securities, by written notice to the Issuer and to the Trustee, may
waive all past Defaults and Events of Default and rescind and annul a
declaration of acceleration (except a Default in the payment of principal of,
premium, if any, or interest on any Security as specified in clause (a) or (b)
of Section 6.01 or in respect of a covenant or provision of this Indenture which
cannot be modified or amended without the consent of the holder of each
outstanding Security affected) if (i) all existing Events of Default, other than
the nonpayment of principal of, premium, if any, or interest on the Securities
that have become due solely by such declaration of acceleration, have been cured
or waived and (ii) the rescission would not conflict with any judgment or decree
of a court of competent jurisdiction. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of at least a majority
in aggregate principal amount of the outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Securities not joining in the giving of such direction and may take
any other action it deems proper that is not inconsistent with any such
direction received from Holders of Securities pursuant to this Section 6.05.
SECTION 6.06. LIMITATION ON SUITS. A Holder may not pursue any remedy
with respect to this Indenture or the Securities unless:
(i) the Holder gives the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount
of outstanding Securities make a written request to the Trustee to
pursue the remedy;
(iii) such Holder or Holders offer and, if requested provide,
the Trustee indemnity satisfactory to the Trustee against any costs,
liabilities or expenses which may be incurred in compliance with such
request;
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(iv) the Trustee does not comply with the request within 60
days after receipt of the written request and the offer of indemnity;
and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Securities do not give
the Trustee a direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section 6.06,
the Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Securities have concurred in any request or direction of the Trustee to pursue
any remedy available to the Trustee or the Holders with respect to this
Indenture or the Securities or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Security to
receive payment of the principal of, premium, if any, or interest on such
Security, or to bring suit for the enforcement of any such payment, on or after
the due date expressed in such Security, shall not be impaired or affected
without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default in
payment of principal, premium or interest specified in clause (a), (b) or (c) of
Section 6.01 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Issuer or any other
obligor of the Securities for the whole amount of principal, premium, if any,
and accrued interest remaining unpaid, together with interest on overdue
principal, premium, if any, and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
specified in the Securities, and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Issuer (or any other obligor of the Securities), its creditors or its
property and shall be entitled and empowered to collect and receive any monies,
securities or other property payable or deliverable upon conversion or exchange
of the Securities or upon any such claims and to distribute the same,
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agent and counsel, and
any other amounts due the Trustee under Section 7.07. Nothing herein contained
shall be deemed to empower the Trustee to authorize or consent to, or accept or
adopt on behalf of any Holder, any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to
this Article Six, it shall pay out the money in the following order:
FIRST: to the Trustee for all amounts due under Section 7.07;
SECOND: to the Holders for amounts then due and unpaid for
principal of, premium, if any, and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal, premium, if any, and interest, respectively; and
THIRD: to the Issuer or any other obligors of the Securities,
as their interests may appear, or as a court of competent jurisdiction
may direct.
The Trustee, upon prior written notice to the Issuer, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of the suit, and
the court may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 of this Indenture, or a suit by Holders of more than 10% in principal
amount of the outstanding Securities.
SECTION 6.12. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then, and in
every such case, subject to any determination in
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such proceeding, the Issuer, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Issuer, Trustee and the Holders shall continue as
though no such proceeding had been instituted.
SECTION 6.13. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Securities in Section 2.09, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.14. DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article Six or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. GENERAL. The duties and responsibilities of the Trustee
shall be as provided by the TIA and as set forth herein. Notwithstanding the
foregoing, no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not herein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Article Seven.
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE. Subject to TIA Sections 315(a)
through (d):
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or
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presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document and may in good faith
conclusively rely as to the truth of the statements and the correctness
of the opinions therein;
(ii) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good
faith in reliance on such certificate, opinion and/or an accountants'
certificate;
(iii) the Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care;
(iv) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders, unless such Holders shall have
offered to the Trustee security or indemnity reasonably satisfactory to
it against the costs, expenses and liabilities that might be incurred
by it in compliance with such request or direction;
(v) the Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within
its rights or powers or for any action it takes or omits to take in
accordance with the direction of the Holders of a majority in principal
amount of the outstanding Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture; PROVIDED that the Trustee's conduct does not
constitute negligence or bad faith;
(vi) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(vii) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, GST USA or GST personally
or by agent or attorney; and
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(viii) any request or direction of the Company, GST USA or GST
mentioned herein shall be sufficiently evidenced by a Company Order and
any resolution of the Board of Directors may be sufficiently evidenced
by a Board Resolution.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with the Company, GST USA, GST or their Affiliates with
the same rights it would have if it were not the Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to TIA Sections 310(b)
and 311.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the
Securities, (ii) shall not be accountable for the Company's use or application
of the proceeds from the Securities and (iii) shall not be responsible for any
statement in the Securities other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULT. If any Default or any Event of Default
occurs and is continuing and if such Default or Event of Default is known to an
officer assigned to administer corporate trust matters of the Trustee, the
Trustee shall mail to each Holder in the manner and to the extent provided in
TIA Section 313(c) notice of the Default or Event of Default within 45 days
after it occurs, unless such Default or Event of Default has been cured;
PROVIDED, HOWEVER, that, except in the case of a default in the payment of the
principal of, premium, if any, or interest on any Security, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each
May 15, beginning with May 15, 1998, the Trustee shall mail to each Holder as
provided in TIA Section 313(c) a brief report that complies with TIA Section
313(a) dated as of such May 15, if required by TIA Section 313(a).
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company and, after the
Assumption Date, GST USA and GST, jointly and severally, shall pay to the
Trustee from time to time such compensation as shall be agreed upon in writing
for its services. The compensation of the Trustee shall not be limited by any
law on compensation of a trustee of an express trust. The Company, and after the
Assumption Date, GST USA and GST, jointly and severally, shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses (including costs
of collection) and advances incurred or made by the Trustee. Such expenses shall
include the reasonable compensation and expenses of the Trustee's agents and
counsel.
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The Company, and after the Assumption Date, GST USA and GST, jointly
and severally, shall indemnify the Trustee for, and hold it harmless against,
any loss or liability or expense incurred by it without negligence or bad faith
on its part in connection with the acceptance or administration of this
Indenture and its duties under this Indenture and the Securities, including,
without limitation, the costs and expenses of defending itself against any claim
or liability and of complying with any process served upon it or any of its
officers in connection with the exercise or performance of any of its powers or
duties under this Indenture and the Securities.
To secure the Issuer's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of, premium, if any, and interest on
particular Securities.
If the Trustee incurs expenses or renders services after the occurrence
of an Event of Default specified in clause (f) or (g) of Section 6.01, the
expenses and the compensation for the services will be intended to constitute
expenses of administration under Title 11 of the United States Bankruptcy Code
or any applicable federal or state law for the relief of debtors.
SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.
The Trustee may resign at any time by so notifying the Issuer in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Securities may
remove the Trustee by so notifying the Trustee in writing and may appoint a
successor Trustee with the consent of the Issuer. The Issuer may at any time
remove the Trustee, by Company Order given at least 30 days prior to the date of
the proposed removal if: (i) the Trustee is no longer eligible under Section
7.10; (ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver
or other public officer takes charge of the Trustee or its property; or (iv) the
Trustee becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Issuer shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuer. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Issuer or the Holders
of a majority in principal amount of the outstanding Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07, (i) the retiring Trustee shall transfer all property held by it as Trustee
to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee shall become effective and (iii) the successor Trustee shall have all
the rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Holder.
If the Trustee is no longer eligible under Section 7.10, any Holder who
satisfies the requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
The Issuer shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all Holders. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuer's obligations under Section 7.07 shall continue indefinitely
for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
SECTION 7.10. ELIGIBILITY. This Indenture shall always have a Trustee
who satisfies the requirements of TIA Section 310(a)(1). The Trustee shall have
a combined capital and surplus of at least $25,000,000 as set forth in its most
recent published annual report of condition.
SECTION 7.11. MONEY HELD IN TRUST. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree in writing
with the Issuer. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law and except for money held in
trust under Article Eight of this Indenture.
SECTION 7.12. WITHHOLDING TAXES. The Trustee, as agent for the Issuer,
shall exclude and withhold from each payment of principal and interest and other
amounts due hereunder or under the Securities any and all withholding taxes
applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any
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amounts payable in respect of the Securities, to withhold such amounts and
timely pay the same to the appropriate authority in the name of and on behalf of
the holders of the Securities, that it will file any necessary withholding tax
returns or statements when due, and that, as promptly as possible after the
payment thereof, it will deliver to each holder of a Security appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such holders may reasonably request from time to time.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS. Except as otherwise
provided in this Section 8.01, the Issuer may terminate the Company's, GST USA's
and GST's obligations under the Securities and this Indenture if:
(i) all Securities previously authenticated and delivered
(other than destroyed, lost or stolen Securities that have been
replaced or Securities that are paid pursuant to Section 4.01 or
Securities for whose payment money or securities have theretofore been
held in trust and thereafter repaid to the Issuer, as provided in
Section 8.05) have been delivered to the Trustee for cancellation and
the Issuer has paid all sums payable by it hereunder; or
(ii) (A) the Securities mature within one year or all of them
are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption, (B)
the Issuer irrevocably deposits in trust with the Trustee during such
one-year period, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee, as trust funds solely
for the benefit of the Holders for that purpose, money or U.S.
Government Obligations sufficient (in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee), without
consideration of any reinvestment of any interest thereon, to pay
principal, premium, if, any, and interest on the Securities to maturity
or redemption, as the case may be, and to pay all other sums payable by
it hereunder, (C) no Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit, (D) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Company, GST USA or GST is a party or by which
it is bound and (E) the Issuer has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, in each case stating
that all conditions precedent provided for herein relating to the
satisfaction and discharge of this Indenture have been complied with.
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With respect to the foregoing clause (i), the Issuer's and, after the
Assumption Date, GST's and GST USA's obligations under Section 7.07 shall
survive. With respect to the foregoing clause (ii), the Issuer's obligations in
Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02, 4.22,
7.07, 7.08, 8.04, 8.05 and 8.06 and Article Eleven and the Security Guarantee
shall survive until the Securities are no longer outstanding. Thereafter, only
the Issuer's and, after the Assumption Date, GST's and GST USA's obligations in
Sections 7.07, 8.05 and 8.06 shall survive. After any such irrevocable deposit,
the Trustee upon request shall acknowledge in writing the discharge of the
Company's, GST USA's and GST's obligations under the Securities and this
Indenture except for those surviving obligations specified above.
SECTION 8.02. DEFEASANCE AND DISCHARGE OF INDENTURE. The Issuer will be
deemed to have paid and the Company, GST USA and GST will be discharged from any
and all obligations in respect of the Securities on the 123rd day (or, to the
extent applicable under clause (B) below, one year) after the deposit referred
to in clause (A) of this Section 8.02 if:
(A) the Issuer has irrevocably deposited or caused to be
irrevocably deposited with the Trustee (or another trustee satisfying
the requirements of Section 7.10) and conveyed all right, title and
interest for the benefit of the Holders, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
Trustee as trust funds in trust, specifically pledged to the Trustee
for the benefit of the Holders as security for payment of the principal
of, premium, if any, and interest, if any, on the Securities, and
dedicated solely to, the benefit of the Holders, in and to (1) money in
an amount, (2) U.S. Government Obligations that, through the payment of
interest, premium, if any, and principal in respect thereof in
accordance with their terms, will provide, not later than one day
before the due date of any payment referred to in this clause (A),
money in an amount or (3) a combination thereof in an amount
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of, premium, if
any, and accrued interest on the outstanding Securities at the Stated
Maturity of such principal or interest; PROVIDED that the Trustee shall
have been irrevocably instructed to apply such money or the proceeds of
such U.S. Government Obligations to the payment of such principal,
premium, if any, and interest with respect to the Securities;
(B) the Issuer shall have delivered to the Trustee (i) either
(x) an Opinion of Counsel to the effect that Holders will not recognize
income, gain or loss for United States federal income tax purposes as a
result of the Issuer's exercise of its option under this Section 8.02
and will be subject to United States federal income tax on the same
amount and in the same manner and at the same times as would have been
the case if such option had not been exercised, which Opinion of
Counsel must be based upon (and accompanied
75
by a copy of) a ruling of the United States Internal Revenue Service to
the same effect unless there has been a change in applicable United
States federal income tax law after the Closing Date such that a ruling
is no longer required or (y) a ruling directed to the Trustee received
from the United States Internal Revenue Service to the same effect as
the aforementioned Opinion of Counsel; (ii) an Opinion of Counsel or a
ruling from Revenue Canada, Taxation to the effect that Holders will
not recognize income, gain or loss for Canadian federal, provincial or
territorial income tax or other tax purposes as a result of such
deposit and defeasance and will be subject to Canadian federal or
provincial income tax and other tax on the same amounts, in the same
manner and at the same times as would have been the case had such
deposit and defeasance not occurred (and for purposes of such opinion,
such Canadian counsel shall assume that Holders of the Securities
include Holders who are not resident in Canada); and (iii) an Opinion
of Counsel to the effect that (x) the creation of the defeasance trust
does not violate the Investment Company Act of 1940 and (y) after the
passage of 123 days following the deposit (except, with respect to any
trust funds for the account of any Holder who may be deemed to be an
"insider" for purposes of the United States Bankruptcy Code, after one
year following the deposit), the trust funds will not be subject to the
effect of Section 547 of the United States Bankruptcy Code or Section
15 of the New York Debtor and Creditor Law in a case commenced by or
against the Company, GST USA or GST under either such statute, and
either (I) the trust funds will no longer remain the property of the
Issuer or GST (and therefore will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally) or (II) if a court were to rule
under any such law in any case or proceeding that the trust funds
remained property of the Issuer or GST (a) assuming such trust funds
remained in the possession of the Trustee prior to such court ruling to
the extent not paid to the Holders, the Trustee will hold, for the
benefit of the Holders, a valid and perfected security interest in such
trust funds that is not avoidable in bankruptcy or otherwise (except
for the effect of Section 552(b) of the United States Bankruptcy Code
on interest on the trust funds accruing after the commencement of a
case under such statute), (b) the Holders will be entitled to receive
adequate protection of their interests in such trust funds if such
trust funds are used in such case or proceeding and (c) no property,
rights in property or other interests granted to the Trustee or the
Holders in exchange for, or with respect to, such trust funds will be
subject to any prior rights of holders of other Indebtedness of the
Company, GST USA, GST, or any of its Subsidiaries;
(C) immediately after giving effect to such deposit on a PRO
FORMA basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or during the period ending on
the 123rd day (or one year) after the date of such deposit, and such
deposit shall not result in a breach or violation of, or constitute a
default under, any other agreement or instrument to which the Company,
GST USA, GST or any of their respective Subsidiaries is a party or by
which the Company, GST USA, GST or any of their respective Subsidiaries
is bound;
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(D) if the Securities are then listed on a national securities
exchange, the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Securities will not be delisted as a
result of such deposit, defeasance and discharge; and
(E) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day (or one
year) period referred to in clause (B)(iii)(y) of this Section 8.02, none of the
Company's, GST USA's or GST's obligations under this Indenture shall be
discharged. Subsequent to the end of such 123- day (or one year) period with
respect to this Section 8.02, the Company's, GST USA's and GST's obligations in
Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02, 4.22,
7.07, 7.08, 8.05 and 8.06 and Article Eleven and the Security Guarantee shall
survive until the Securities are no longer outstanding. Thereafter, only the
Issuer's obligations in Sections 7.07, 8.05 and 8.06 shall survive. If and when
a ruling from the United States Internal Revenue Service or an Opinion of
Counsel referred to in clause (B)(i) of this Section 8.02 may be provided
specifically without regard to, and not in reliance upon, the continuance of the
Issuer's obligations under Section 4.01 and GST's obligations under the Security
Guarantee, then the Issuer's obligations under such Section 4.01 and GST's
obligations under the Security Guarantee shall cease upon delivery to the
Trustee of such ruling or Opinion of Counsel and compliance with the other
conditions precedent provided for herein relating to the defeasance contemplated
by this Section 8.02.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's, GST USA's and GST's
obligations under the Securities and this Indenture except for those surviving
obligations in the immediately preceding paragraph.
SECTION 8.03. DEFEASANCE OF CERTAIN OBLIGATIONS. The Company, GST USA
and GST may omit to comply with any term, provision or condition set forth in
clauses (iii) and (iv) of Section 5.01 and Sections 4.03 through 4.21, and
clause (c) of Section 6.01 with respect to clauses (iii) and (iv) of Section
5.01 and Sections 4.03 through 4.21, and clauses (d), (e) and (h) of Section
6.01 shall be deemed not to be Events of Default, in each case with respect to
the outstanding Securities if:
(i) the Issuer has irrevocably deposited or caused to be
irrevocably deposited with the Trustee (or another trustee satisfying
the requirements of Section 7.10) and conveyed all right, title and
interest to the Trustee for the benefit of the Holders, under the terms
of an irrevocable trust agreement in form and substance satisfactory to
the Trustee as trust funds in trust, specifically pledged to the
Trustee for the benefit of the Holders as security for payment of the
principal of, premium, if any, and interest, if any, on the
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Securities, and dedicated solely to, the benefit of the Holders, in and
to (A) money in an amount, (B) U.S. Government Obligations that,
through the payment of interest and principal in respect thereof in
accordance with their terms, will provide, not later than one day
before the due date of any payment referred to in this clause (i),
money in an amount or (C) a combination thereof in an amount
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of, premium, if
any, and interest on the outstanding Securities on the Stated Maturity
of such principal or interest; PROVIDED that the Trustee shall have
been irrevocably instructed to apply such money or the proceeds of such
U.S. Government Obligations to the payment of such principal, premium,
if any, and interest with respect to the Securities;
(ii) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Company, GST USA, GST or any of their
respective Subsidiaries is a party or by which it is bound;
(iii) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit;
(iv) the Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that (A) the creation of the defeasance trust
does not violate the Investment Company Act of 1940, (B) the Holders
have a valid first-priority security interest in the trust funds, (C)
the Holders will not recognize income, gain or loss for United States
federal income tax purposes as a result of such deposit and the
defeasance of the obligations referred to in the first paragraph of
this Section 8.03 and will be subject to United States federal income
tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit and defeasance had not
occurred, (D) the Holders will not recognize income, gain or loss for
Canadian federal, provincial or territorial income tax or other tax
purposes as a result of such deposit and the defeasance of the
obligations referred to in the first paragraph of this Section 8.03 and
will be subject to Canadian federal or provincial income tax and other
tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit and defeasance had not
occurred and (E) after the passage of 123 days following the deposit
(except, with respect to any trust funds for the account of any Holder
who may be deemed to be an "insider" for purposes of the United States
Bankruptcy Code, after one year following the deposit), the trust funds
will not be subject to the effect of Section 547 of the United States
Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law
in a case commenced by or against the Issuer or GST under either such
statute, and either (1) the trust funds will no longer remain the
property of the Issuer or GST (and therefore will not be subject to the
78
effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally) or (2) if a court
were to rule under any such law in any case or proceeding that the
trust funds remained property of the Issuer or GST (x) assuming such
trust funds remained in the possession of the Trustee prior to such
court ruling to the extent not paid to the Holders, the Trustee will
hold, for the benefit of the Holders, a valid and perfected security
interest in such trust funds that is not avoidable in bankruptcy or
otherwise (except for the effect of Section 552(b) of the United States
Bankruptcy Code on interest on the trust funds accruing after the
commencement of a case under such statute), (y) the Holders will be
entitled to receive adequate protection of their interests in such
trust funds if such trust funds are used in such case or proceeding and
(z) no property, rights in property or other interests granted to the
Trustee or the Holders in exchange for, or with respect to, such trust
funds will be subject to any prior rights of holders of other
Indebtedness of GST, GST USA, the Company or any of its Subsidiaries;
(v) if the Securities are then listed on a national securities
exchange, the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit and defeasance will not cause
the Securities to be delisted; and
(vi) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. APPLICATION OF TRUST MONEY. Subject to Section 8.06, the
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
and shall apply the deposited money and the money from U.S. Government
Obligations in accordance with the Securities and this Indenture to the payment
of principal of, premium, if any, and interest on the Securities; but such money
need not be segregated from other funds except to the extent required by law.
SECTION 8.05. REPAYMENT TO ISSUER. Subject to Sections 7.07, 8.01, 8.02
and 8.03, the Trustee and the Paying Agent shall promptly pay to the Issuer upon
request any excess money held by them at any time and thereupon shall be
relieved from all liability with respect to such money. The Trustee and the
Paying Agent shall pay to the Issuer any money held by them for the payment of
principal, premium, if any, or interest that remains unclaimed for two years;
PROVIDED that the Trustee or such Paying Agent before being required to make any
payment may cause to be published at the expense of the Issuer once in a
newspaper of general circulation in the City of New York or mail to each Holder
entitled to such money at such Xxxxxx's address (as set forth in the Security
Register) notice that such money remains unclaimed and that after a date
specified therein (which shall be at least 30 days from the date of such
publication or mailing) any unclaimed balance of such money then remaining will
be repaid to the Issuer. After payment to the Issuer, Holders entitled to such
money must look to the Issuer for payment as general creditors
79
unless an applicable law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with Section
8.01, 8.02 or 8.03, as the case may be, by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's,
GST USA's and GST's obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section
8.01, 8.02 or 8.03, as the case may be, until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 8.01, 8.02 or 8.03, as the case may be; PROVIDED that,
if the Company, GST USA or GST has made any payment of principal of, premium, if
any, or interest on any Securities because of the reinstatement of its
obligations, the Company, GST USA or GST, as the case may be, shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
SECTION 8.07. INSIDERS. With respect to the determination of the
Persons constituting beneficial owners of Securities and whether any such Person
is an "insider" for purposes of Sections 8.02(B)(iii)(y) and 8.03(iv)(E), the
Trustee may rely on an Officers' Certificate.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company, GST USA and GST,
when authorized by resolutions of their Boards of Directors, and the Trustee may
amend or supplement this Indenture, the Securities or the Pledge Agreement
without notice to or the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency in this
Indenture or the Pledge Agreement; PROVIDED that such amendments or
supplements shall not adversely affect the interests of the Holders in
any material respect;
(b) to comply with Article Five or Section 4.23 hereof;
(c) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
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(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Xxxxxxx; or
(e) to make any change that, in the opinion of the Board of
Directors of GST evidenced by a Board Resolution, does not materially
and adversely affect the rights of any Holder.
SECTION 9.02. WITH CONSENT OF HOLDERS. Subject to Sections 6.04 and
6.07 and without prior notice to the Holders, the Company, GST USA and GST, when
authorized by their Boards of Directors (as evidenced by a Board Resolution),
and the Trustee may amend this Indenture, the Securities or the Pledge Agreement
with the written consent of the Holders of a majority in aggregate principal
amount of the outstanding Securities, and the Holders of a majority in aggregate
principal amount of the outstanding Securities by written notice to the Trustee
may waive future compliance by the Company, GST USA or GST with any provision of
this Indenture, the Securities or the Pledge Agreement.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Security;
(ii) reduce the Accreted Value or principal of, or premium, if
any, or interest on, any Security or adversely affect any right of
repayment at the option of any Holder of any Security;
(iii) change the place or currency of payment of principal of,
or premium, if any, or interest on, any Security;
(iv) impair the right to institute suit for the enforcement of
any payment on or after the Stated Maturity (or, in the case of a
redemption, on or after the Redemption Date) of any Security;
(v) reduce the percentage of outstanding Securities the
consent of whose Holders is required for any such supplemental
indenture or for any waiver of compliance with certain provisions of
this Indenture or certain Defaults and their consequences provided for
in this Indenture;
(vi) waive a default in the payment of principal of, premium,
if any, or interest on the Securities;
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(vii) amend or modify the terms of the Pledge Agreement in a
manner that would materially and adversely affect the Holders;
(viii) release GST from its Security Guarantee; or
(ix) modify any of the provisions of this Section 9.02, except
to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each outstanding Security affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Issuer shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. The Issuer will
mail supplemental indentures to Holders upon request. Any failure of the Issuer
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. REVOCATION AND EFFECT OF CONSENT. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the Security of the consenting Holder, even if
notation of the consent is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to its Security or portion of its
Security. Such revocation shall be effective only if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Securities.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies) and only those
persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
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After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in any of clauses (i)
through (ix) of Section 9.02. In case of an amendment or waiver of the type
described in clauses (i) through (ix) of Section 9.02, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder of a
Security that evidences the same indebtedness as the Security of the consenting
Holder.
SECTION 9.04. NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment,
supplement or waiver changes the terms of a Security, the Trustee may require
the Holder to deliver such Security to the Trustee. At the Issuer's expense the
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder and the Trustee may place an appropriate
notation on any Security thereafter authenticated. Alternatively, if the Issuer
or the Trustee so determines, the Issuer in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
SECTION 9.05. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Subject to the preceding sentence, the Trustee shall sign such
amendment, supplement or waiver if the same does not adversely affect the rights
of the Trustee. The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.06. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
ARTICLE TEN
MEETINGS OF HOLDERS
SECTION 10.01. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A meeting of
Holders may be called at any time and from time to time pursuant to the
provisions of this Article Ten for any of the following purposes:
(a) to give any notice to the Issuer or to the Trustee, or to
give any directions to the Trustee, or to waive or to consent to the
waiving of any Default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by
Holders pursuant to any of the provisions of Article Six;
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(b) to remove the Trustee or appoint a successor Trustee
pursuant to the provisions of Article Seven;
(c) to consent to an amendment, supplement or waiver pursuant
to the provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount at
maturity of the Securities under any other provision of this Indenture,
or authorized or permitted by law.
SECTION 10.02. MANNER OF CALLING MEETINGS. The Trustee may at any time
call a meeting of Holders to take any action specified in Section 10.01, to be
held at such time and at such place in The City of New York, New York or
elsewhere as the Trustee will determine. Notice of every meeting of Holders,
setting forth the time and place of such meeting and in general terms the action
proposed to be taken at such meeting, will be mailed by the Trustee, first-class
postage prepaid, to the Issuer and to the Holders at their last addresses as
they will appear on the registration books of the Registrar not less than 10 nor
more than 60 days prior to the date fixed for a meeting.
Any meeting of Holders will be valid without notice if the Holders of
all outstanding Securities are present in Person or by proxy, or if notice is
waived before or after the meeting by the Holders of all outstanding Securities,
and if the Issuer and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
SECTION 10.03. CALL OF MEETINGS BY ISSUER OR HOLDERS. In case at any
time the Issuer, pursuant to a Board Resolution, or the Holders of not less than
10% in aggregate principal amount at maturity of the outstanding Securities will
have requested the Trustee to call a meeting of Holders to take any action
specified in Section 10.01, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee will not
have mailed the notice of such meeting within 20 days after receipt of such
request, then the Issuer or the Holders of Securities in the amount above
specified may determine the time and place in The City of New York, New York or
elsewhere for such meeting and may call such meeting for the purpose of taking
such action, by mailing or causing to be mailed notice thereof as provided in
Section 10.02, or by causing notice thereof to be published at least once in
each of two successive calendar weeks (on any Business Day during such week) in
a newspaper or newspapers printed in the English language, customarily published
at least five days a week of a general circulation in The City of New York,
State of New York, the first such publication to be not less than 10 nor more
than 60 days prior to the date fixed for the meeting.
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SECTION 10.04. WHO MAY ATTEND AND VOTE AT MEETINGS. To be entitled to
vote at any meeting of Holders, a Person will (i) be a registered Holder of one
or more Securities, or (ii) be a Person appointed by an instrument in writing as
proxy for the registered Holder or Holders of Securities. The only Persons who
will be entitled to be present or to speak at any meeting of Holders will be the
Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Issuer or GST and their counsel.
SECTION 10.05. QUORUM; ACTION. The Persons entitled to vote a majority
in principal amount of the outstanding Securities shall constitute a quorum. In
the absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of Securities,
be dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 10.02, except that such
notice need be given only once and not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage of the principal amount
of the outstanding Securities which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned
for a lack of a quorum, the Persons entitled to vote 25% in principal amount at
maturity of the outstanding Securities at the time shall constitute a quorum for
the taking of any action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any action or matter, except as otherwise
specified herein, shall be effectively passed and decided if passed or decided
by the Persons entitled to vote not less than a majority in principal amount at
maturity of outstanding Securities represented and voting at such meeting.
Any action or matter passed or decision taken at any meeting of Holders
of Securities duly held in accordance with this Section 10.05 shall be binding
on all the Holders of Securities, whether or not present or represented at the
meeting.
SECTION 10.06. REGULATIONS MAY BE MADE BY TRUSTEE; CONDUCT OF THE
MEETING; VOTING RIGHTS; ADJOURNMENT. Notwithstanding any other provision of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any action by or any meeting of Holders, in regard to proof of the
holding of Securities and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, and submission and examination
85
of proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it will think appropriate. Such
regulations may fix a record date and time for determining the Holders of record
of Securities entitled to vote at such meeting, in which case those and only
those Persons who are Holders of Securities at the record date and time so
fixed, or their proxies, will be entitled to vote at such meeting whether or not
they will be such Holders at the time of the meeting.
The Trustee will, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting will have been called by the Issuer
or by Holders as provided in Section 10.03, in which case the Issuer or the
Holders calling the meeting, as the case may be, will in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting will be elected by vote of the Holders of a majority in principal amount
at maturity of the Securities represented at the meeting and entitled to vote.
At any meeting each Holder or proxy will, subject to the provisions of
Section 10.04 hereof, be entitled to one vote for each $1,000 principal amount
at maturity of Securities held or represented by him or her; PROVIDED, HOWEVER,
that no vote will be cast or counted at any meeting in respect of any Securities
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman may adjourn any such meeting if he is unable to
determine whether any Holder or proxy will be entitled to vote at such meeting.
The chairman of the meeting will have no right to vote other than by virtue of
Securities held by him or instruments in writing as aforesaid duly designating
him as the proxy to vote on behalf of other Holders. Any meeting of Holders duly
called pursuant to the provisions of Section 10.02 or Section 10.03 may be
adjourned from time to time by vote of the Holders of a majority in aggregate
principal amount at maturity of the Securities represented at the meeting and
entitled to vote, and the meeting may be held as so adjourned without further
notice.
SECTION 10.07. VOTING AT THE MEETING AND RECORD TO BE KEPT. The vote
upon any resolution submitted to any meeting of Holders will be by written
ballots on which will be subscribed the signatures of the Holders of Securities
or/of their representatives by proxy and the principal amount at maturity of the
Securities voted by the ballot. The permanent chairman of the meeting will
appoint two inspectors of votes, who will count all votes cast at the meeting
for or against any resolution and will make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of Holders
will be prepared by the secretary of the meeting and there will be attached to
such record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more Persons having knowledge of
the facts, setting forth a copy of the notice of the meeting and showing that
such notice was mailed as provided in Section 10.02. The record will be signed
and verified by the affidavits of the permanent chairman and the secretary of
the meeting and one of the duplicates will be delivered to the Issuer and the
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other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified will be conclusive evidence of the
matters therein stated.
SECTION 10.08. EXERCISE OF RIGHTS OF TRUSTEE OR HOLDERS MAY NOT BE
HINDERED OR DELAYED BY CALL OF MEETING. Nothing contained in this Article Ten
will be deemed or construed to authorize or permit, by reason of any call of a
meeting of Holders or any rights expressly or impliedly conferred hereunder to
make such call, any hindrance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Holders under any of the
provisions of this Indenture or of the Securities.
SECTION 10.09. PROCEDURES NOT EXCLUSIVE. The procedures set forth in
this Article Ten are not exclusive and the rights and obligations of the Issuer,
GST, the Trustee and the Holders under other Articles of this Indenture
(including, without limitation, Articles Six, Seven, Eight and Nine) will in no
way be limited by the provisions of this Article Ten.
ARTICLE ELEVEN
SECURITY
SECTION 11.01. SECURITY. (a) On the Closing Date, the Company shall (i)
enter into the Pledge Agreement and comply with the terms and provisions thereof
and (ii) purchase the Pledged Securities to be pledged to the Trustee for the
benefit of the Holders in an amount equal to the net proceeds to be received by
the Company from the sale of the Securities (plus all cash owned by the Company
on the Closing Date). The Pledged Securities shall be pledged by the Company to
the Trustee for the benefit of the Holders and shall be held by the Trustee in
the Pledge Account pending disposition pursuant to the Pledge Agreement.
(b) On the Closing Date, GST USA, GST and the Company shall
enter into the Reimbursement and Commitment Fee Agreement. The Securities will
be secured by a first priority security interest in the Pledged Securities and
in the Pledge Account and by a first priority security interest in the Company's
rights under the Reimbursement and Commitment Fee Agreement and any Fee Notes
issued thereunder.
(c) Each Holder, by its acceptance of a Security, consents and
agrees to the terms of the Pledge Agreement (including, without limitation, the
provisions providing for foreclosure and release of the Pledged Securities) as
the same may be in effect or may be amended from time to time in accordance with
its terms, and authorizes and directs the Trustee to enter into the Pledge
Agreement and to perform its respective obligations and exercise its
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respective rights thereunder in accordance therewith. The Company will do or
cause to be done all such acts and things as may be necessary or proper, or as
may be required by the provisions of the Pledge Agreement, to assure and confirm
to the Trustee the security interest in the Pledged Securities contemplated
hereby, by the Pledge Agreement or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Securities secured hereby, according to the intent and
purposes herein expressed. The Company shall take, or shall cause to be taken,
any and all actions reasonably required (and any action requested by the
Trustee) to cause the Pledge Agreement to create and maintain, as security for
the obligations of the Company under this Indenture and the Securities, valid
and enforceable first priority security interests in and on all the Pledged
Securities, the Pledge Account, the Fee Notes, the Intercompany Notes and the
Acquired Equipment in favor of the Trustee, superior to and prior to the rights
of third Persons and subject to no other Liens.
(d) Upon written request by the Company to the Trustee,
Pledged Securities shall be released from the Pledge Account to the Company in
order to finance the cost (including, without limitation, the cost of design,
development, construction, acquisition, installation or integration)
(collectively, "ACQUIRED EQUIPMENT COST") of telecommunications inventory or
equipment purchased or leased by the Company ("ACQUIRED EQUIPMENT"). The release
of amounts to the Company in order to finance Acquired Equipment Cost shall
occur concurrently with the expenditure of funds by the Company with respect to
such costs and shall be in an amount equal to such costs. Immediately upon the
acquisition of Acquired Equipment, the Company shall grant a first priority
security interest in such Acquired Equipment to the Trustee for the benefit of
the Holders of the Securities. GST USA shall purchase all Acquired Equipment
from the Company at a purchase price equal to the Acquired Equipment Cost for
such Acquired Equipment and the purchase price shall be paid in the form of an
Intercompany Note in a principal amount equal to the Acquired Equipment Cost,
issued by GST USA and fully and unconditionally guaranteed by GST. Each
Intercompany Note shall be secured by a first priority security interest in all
Acquired Equipment purchased by GST USA. The Company shall grant a first
priority security interest in all Intercompany Notes to the Trustee for the
benefit of the Holders of the Securities. On the Assumption Date, GST USA shall
grant a first priority security interest in all Acquired Equipment securing
Intercompany Notes or then held by the Company to the Trustee for the benefit of
the Holders of the Securities.
(e) The release of any Pledged Securities pursuant to the
Pledge Agreement will not be deemed to impair the security under this Indenture
in contravention of the provisions hereof if and to the extent the Pledged
Securities are released pursuant to this Indenture and the Pledge Agreement. To
the extent applicable, the Company shall cause TIA Section 314(d) relating to
the release of property or securities from the Lien and security interest of the
Pledge Agreement (other than pursuant to Sections 7(a), 7(b) or 7(c) thereof)
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and relating to the substitution therefor of any property or securities to be
subjected to the Lien and security interest of the Pledge Agreement to be
complied with. Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the Company, except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person shall be an independent engineer, appraiser or other expert
selected by the Company.
(f) The Company shall cause TIA Section 314(b), relating to
opinions of counsel regarding the Lien under the Pledge Agreement, to be
complied with. The Trustee may, to the extent permitted by Sections 7.01 and
7.02 hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such instruments.
(g) The Trustee, in its sole discretion and without the
consent of the Holders, may, and at the request of the Holders of at least 25%
in aggregate principal amount at maturity of Securities then outstanding shall,
on behalf of the Holders, take all actions it deems necessary or appropriate in
order to (i) enforce any of the terms of the Pledge Agreement and (ii) collect
and receive any and all amounts payable in respect of the obligations of the
Company thereunder. The Trustee shall have power to institute and to maintain
such suits and proceedings as the Trustee may deem expedient to preserve or
protect its interests and the interests of the Holders in the Pledged Securities
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of the
Holders or of the Trustee).
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT OF 1939. Prior to the effectiveness
of the Registration Statement, this Indenture shall incorporate and be governed
by the provisions of the TIA that are required to be part of and to govern
indentures qualified under the TIA. After the effectiveness of the Registration
Statement, this Indenture shall be subject to the provisions of the TIA that are
required to be a part of this Indenture and shall, to the extent applicable, be
governed by such provisions.
SECTION 12.02. NOTICES. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail addressed as follows:
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IF TO THE COMPANY:
GST Network Funding, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
IF TO GST USA:
GST USA, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
IF TO GST:
GST Telecommunications, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
IF TO THE TRUSTEE:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-1532
Attention: Corporate Trust Division
The Company, GST USA, GST or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be mailed
to him at his address as it appears on the Security Register by first class mail
and shall be sufficiently given to him if so mailed within the time prescribed.
Copies of any such communication or notice to a Holder shall also be mailed to
the Trustee and each Agent at the same time.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
Except for a notice to the Trustee, which is deemed given only when received,
and except as otherwise provided in this Indenture, if a notice or communication
is mailed in the manner provided in this Section 12.02, it is duly given,
whether or not the addressee receives it.
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Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 12.03. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT. Upon any request or application by the Company, GST USA or GST to the
Trustee to take any action under this Indenture, the Company, GST USA or GST
shall furnish to the Trustee:
(i) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of
such Counsel, all such conditions precedent have been complied with.
SECTION 12.04. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion
contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each
such person, such condition or covenant has been complied with;
PROVIDED, HOWEVER, that, with respect to matters of fact, an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials.
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SECTION 12.05. RULES BY TRUSTEE, PAYING AGENT OR REGISTRAR. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
SECTION 12.06. PAYMENT DATE OTHER THAN A BUSINESS DAY. If an Interest
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of maturity
of any Security shall not be a Business Day, then payment of principal of,
premium, if any, or interest on such Security, as the case may be, need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date, Payment Date,
Redemption Date, or at the Stated Maturity or date of maturity of such Security;
PROVIDED that no interest shall accrue for the period from and after such
Interest Payment Date, Payment Date, Redemption Date, Stated Maturity or date of
maturity, as the case may be.
SECTION 12.07. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. This
Indenture and the Securities shall be governed by the laws of the State of New
York. Each of the Company, GST USA and GST will appoint Olshan Xxxxxxxx Frome &
Xxxxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Xxxxx, Esq. as its agent for service of process in any suit, action or
proceeding with respect to this Indenture or the Securities and for actions
brought under federal or state securities laws brought in any federal or state
court located in The City of New York and each of the Company, GST USA and GST
agrees to submit to the jurisdiction of any such court.
SECTION 12.08. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company, GST USA, GST or any of their Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.09. NO RECOURSE AGAINST OTHERS. No recourse for the payment
of the principal of, premium, if any, or interest on any of the Securities, or
for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company, GST USA or
GST contained in this Indenture, or in any of the Securities, or because of the
creation of any Indebtedness represented thereby, shall be had against any
incorporator or against any past, present or future partner, shareholder, other
equityholder, officer, director, employee or controlling person, as such, of the
Company, GST USA or GST or of any successor Person, either directly or through
the Company, GST USA or GST or any successor Person, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Securities.
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SECTION 12.10. SUCCESSORS. All agreements of the Company, GST USA and
GST in this Indenture and the Securities shall bind their respective successors.
All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 12.11. DUPLICATE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 12.12. SEPARABILITY. In case any provision in this Indenture or
in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents,
Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
and provisions hereof.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
GST NETWORK FUNDING, INC.
By:/s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Title: Senior Vice President
GST USA, INC.
By:/s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Title: Senior Vice President
GST TELECOMMUNICATIONS, INC.
By:/s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice Chairman and
Secretary
UNITED STATES TRUST COMPANY
OF NEW YORK
By:/s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
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EXHIBIT A
[FACE OF NOTE]
THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME TAX
PURPOSES. FOR INFORMATION REGARDING ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE
DISCOUNT, ISSUE DATE AND YIELD TO MATURITY, THE HOLDER MAY CONTACT XXXXXX
XXXXXXXX, CHIEF FINANCIAL OFFICER OF THE COMPANY, AT (000) 000-0000.
GST NETWORK FUNDING, INC.
10 1/2% Senior Secured Discount Note due 2008
[CUSIP _______]
No. ____________ $_________
GST NETWORK FUNDING, INC., a Delaware corporation (the "COMPANY" or
together with any successor under the Indenture hereinafter referred to, the
"ISSUER") for value received, promises to pay to __________, or its registered
assigns, the principal sum of $__________ on May 1, 2008.
Interest Payment Dates: May 1 and November 1, commencing November 1,
2003.
Regular Record Dates: April 15 and October 15.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.
Date: ____________ GST NETWORK FUNDING, INC.
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 10 1/2% Senior Secured Discount Notes due 2008 described in
the within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By:
------------------------------
Authorized Signatory
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[REVERSE SIDE OF NOTE]
GST NETWORK FUNDING, INC.
10 1/2% Senior Secured Discount Note due 2008
1. PRINCIPAL AND INTEREST.
On or after May 1, 2003, or earlier if permitted by the Existing
Indentures (the "ASSUMPTION DATE"), the Notes will be unconditionally and
irrevocably assumed by GST USA, Inc. a Delaware corporation ("GST USA"), and
guaranteed (the "NOTE GUARANTEE") by GST Telecommunications, Inc., a federally
chartered Canadian corporation ("GST"). As used in this Note, the term Issuer
means the Company until GST USA becomes the obligor hereunder, after which the
term "Issuer" means GST USA or any successor thereto. Upon GST USA's assumption
of this note, the Company will be liquidated and all of its assets distributed
to its sole stockholder, GST USA.
The Issuer will pay the principal of this Note on May 1, 2008.
The Issuer promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest on the Notes shall accrue at the rate of 10 1/2% per annum
(the "INTEREST RATE") and will be payable in U.S. dollars semiannually (to the
Holders of record of the Notes at the close of business on the April 15 or
October 15 immediately preceding the Interest Payment Date) on May 1 and
November 1 of each year, commencing November 1, 2003; PROVIDED that no interest
shall accrue on the principal amount of this Note prior to May 1, 2003 and no
interest shall be paid on this Note prior to November 1, 2003, except as
provided in the next paragraph.
If an exchange offer registered under the Securities Act (the "Exchange
Offer") is not consummated, and a shelf registration statement under the
Securities Act with respect to resales of the Notes (the "Shelf Registration
Statement) is not declared effective by the Commission, on or before November 4,
1998 in accordance with the terms of the Registration Rights Agreement dated May
4, 1998 among the Company, GST USA, GST, Xxxxxx Xxxxxxx & Co. Incorporated,
Bear, Xxxxxxx & Co., Inc., Credit Suisse First Boston Corporation and SBC
Warburg Dillon Read Inc., interest (in addition to the accrual of original issue
discount during the period ending May 1, 2003 and in addition to the interest
otherwise due on the Notes after such date) will accrue, at an annual rate of
0.5%, from November 4, 1998 payable in cash semiannually, in arrears on each May
1 and November 1, commencing May 1, 1999 until the Exchange Offer is consummated
or the
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Shelf Registration Statement is declared effective; PROVIDED that failure to
cause such exchange offer to be consummated or such shelf registration statement
to be declared effective shall be deemed not to be a default or breach of a
covenant for purposes of Section 6.01(c) of the Indenture. The Holder of this
Note is entitled to the benefits of such Registration Rights Agreement. To the
extent there is a conflict between this Note and such Registration Rights
Agreement, such Registration Rights Agreement shall control to the extent
permitted by applicable law.
From and after May 1, 2003, interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from May 1, 2003; PROVIDED that, if there is no existing default in the
payment of interest and this Note is authenticated between a Regular Record Date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such Interest Payment Date. Interest will be computed
on the basis of a 360-day year of 12 30-day months.
The Issuer shall pay interest on overdue principal and premium, if any,
and (to the extent lawful) interest on overdue installments of interest at the
rate per annum borne by the Notes.
2. METHOD OF PAYMENT.
The Issuer will pay principal as provided above and interest (except
defaulted interest) on the principal amount of the Notes as provided above on
each May 1 and November 1 to the persons who are Holders (as reflected in the
Security Register at the close of business on the April 15 and October 15
immediately preceding the Interest Payment Date), in each case, even if the Note
is cancelled on registration of transfer or registration of exchange after such
record date; PROVIDED that, with respect to the payment of principal, the Issuer
will not make payment to the Holder unless this Note is surrendered to a Paying
Agent.
The Issuer will pay principal, premium, if any, and as provided above,
interest in money of the United States of America that at the time of payment is
legal tender for payment of public and private debts. If a payment date is a
date other than a Business Day at a place of payment, payment may be made at
that place on the next succeeding day that is a Business Day and no interest
shall accrue for the intervening period.
3. PAYING AGENT AND REGISTRAR.
Initially, the Trustee will act as authenticating agent, Paying Agent
and Registrar. The Issuer may change any authenticating agent, Paying Agent or
Registrar without notice. The Issuer, any Subsidiary or any Affiliate of any of
them may act as Paying Agent, Registrar or co-Registrar.
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4. INDENTURE; LIMITATIONS.
The Company issued the Notes under an Indenture dated as of May 4, 1998
(the "INDENTURE"), among the Company, GST USA, GST and United States Trust
Company of New York, as trustee (the "TRUSTEE"). Capitalized terms herein are
used as defined in the Indenture unless otherwise indicated. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act. The Notes are subject to all such
terms, and Holders are referred to the Indenture and the Trust Indenture Act for
a statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Note and the terms of the
Indenture, the terms of the Indenture shall control.
The Notes are general secured, unsubordinated indebtedness of the
Issuer, will rank PARI PASSU in right of payment with all existing and future
secured, unsubordinated indebtedness of the Issuer and will be senior in right
of payment to all existing and future subordinated indebtedness of the Issuer.
5. REDEMPTION.
The Notes will be redeemable, at the Issuer's option, in whole or in
part, at any time and from time to time on or after May 1, 2003 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holders' last address as it appears in the Security
Register, at the following Redemption Prices (expressed in percentages of their
principal amount at maturity), plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date that is on or prior to the Redemption Date to receive
interest due on an Interest Payment Date that is on or prior to the Redemption
Date) if redeemed during the 12-month period commencing on May 1 of the
applicable year set forth below:
YEAR REDEMPTION PRICE
2003 105.250%
2004 103.500%
2005 101.750%
2006 and thereafter 100.0000%
In addition, the Notes may be redeemed as a whole, but not in part, at
the option of GST, at any time after GST USA has become the obligor on the Notes
and GST has guaranteed the Notes, at 100% of their Accreted Value on the
Redemption Date, together with accrued interest thereon, if any, to the
Redemption Date, in the event GST has become or would become obligated to pay,
on the next date on which any amount would be payable with respect to the Note
Guarantee, any Additional Amounts as a result of a change in the laws (including
any regulations promulgated
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thereunder) of Canada (or any political subdivision or taxing authority thereof
or therein), or change in any official position regarding the application or
interpretation or such laws or regulations, which change is announced or becomes
effective on or after the Closing Date.
If on May 1, 2003, GST USA is prohibited by the Existing Indentures
from assuming all of the indebtedness represented by, and becoming direct
obligor on, the Notes, or GST is prohibited by the Existing Indentures from
issuing the Note Guarantee, the Company will redeem the portion of the Notes
that can not be assumed or guaranteed at 105.250% of their principal amount at
maturity plus accrued and unpaid interest to the applicable Redemption Date.
6. NOTICE OF REDEMPTION.
Notice of any optional redemption will be mailed at least 30 days but
not more than 60 days before the Redemption Date, and notice of any mandatory
redemption will be mailed at least 10 days but not more than 30 days before the
Redemption Date, in each case, to each Holder of Notes to be redeemed at such
Xxxxxx's last address as it appears in the Security Register. Notes in original
denominations larger than $1,000 may be redeemed in part; PROVIDED that Notes
will only be issued in denominations of $1,000 principal amount at maturity or
integral multiples thereof. On and after the Redemption Date, interest ceases to
accrue on Notes or portions of Notes called for redemption, unless the Issuer
defaults in the payment of the Redemption Price.
7. REPURCHASE UPON CHANGE IN CONTROL.
Upon the occurrence of any Change of Control, each Holder shall have
the right to require the repurchase of its Notes by the Issuer in cash pursuant
to the offer described in the Indenture at a purchase price equal to 101% of the
Accreted Value thereof plus accrued and unpaid interest, if any, to the date of
purchase (the "CHANGE OF CONTROL PAYMENT").
A notice of such Change of Control will be mailed within 30 days after
any Change of Control occurs to each Holder at his last address as it appears in
the Security Register. Notes in original denominations larger than $1,000 may be
sold to the Issuer in part; PROVIDED that Notes will only be issued in
denominations of $1,000 principal amount at maturity or integral multiples
thereof. On and after the applicable Payment Date, interest ceases to accrue on
Notes or portions of Notes surrendered for purchase by the Issuer, unless the
Issuer defaults in the payment of the Change of Control Payment.
8. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount at maturity and integral multiples thereof. A Holder
may register the transfer or exchange of Notes in accordance with the Indenture.
The Registrar may require a Holder, among
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other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer or exchange of any Notes selected for
redemption. Also, it need not register the transfer or exchange of any Notes for
a period of 15 days before a selection of Notes to be redeemed is made.
9. PERSONS DEEMED OWNERS.
A Holder shall be treated as the owner of a Note for all purposes.
10. UNCLAIMED MONEY.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Issuer. After that, Holders entitled to the money must look to
the Issuer for payment, unless an applicable law designates another Person, and
all liability of the Trustee and such Paying Agent with respect to such money
shall cease.
11. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Issuer deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company, GST USA and GST will be discharged from the Indenture and the Notes,
except in certain circumstances for certain sections thereof, and (b) to the
Stated Maturity, the Company, GST USA and GST will be discharged from certain
covenants set forth in the Indenture.
12. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding. Without
notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not materially
and adversely affect the rights of any Holder.
13. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of GST and its
Restricted Subsidiaries, among other things, to incur additional indebtedness;
create liens; engage in sale-leaseback transactions; pay dividends or make
distributions in respect of their capital stock; make
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investments or make certain other restricted payments; sell assets; issue or
sell stock of Restricted Subsidiaries; enter into transactions with stockholders
or affiliates; acquire assets or businesses located outside the continental
United States and Hawaii; or, with respect to GST, GST USA and the Company
consolidate, merge or sell all or substantially all of its assets. Within 90
days after the end of the last quarter of each fiscal year, GST must report to
the Trustee on compliance with such limitations.
14. SUCCESSOR PERSONS.
Generally, when a successor person or other entity assumes all the
obligations of its predecessor under the Notes and the Indenture, the
predecessor person will be released from those obligations.
15. DEFAULTS AND REMEDIES.
The following events constitute "Events of Default" under the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise; (b) default in the payment of interest on any Note when
the same becomes due and payable, and such default continues for a period of 30
days; (c) the Company, GST USA or GST defaults in the performance of or breaches
any other covenant or agreement of the Company, GST USA or GST in the Indenture
or under the Notes, the Note Guarantee, the Fee Notes or the Intercompany Notes
and such default or breach continues for a period of 30 consecutive days after
written notice by the Trustee or the Holders of 25% or more in aggregate
principal amount of the Notes; (d) there occurs with respect to any issue or
issues of Indebtedness of GST or any Significant Subsidiary having an
outstanding principal amount of $5,000,000 or more in the aggregate for all such
issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (I) an event of default that has caused the holder thereof
to declare such Indebtedness to be due and payable prior to its Stated Maturity
and such Indebtedness has not been discharged in full or such acceleration has
not been rescinded or annulled within 30 days of such acceleration and/or (II)
the failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default; (e) any final judgment or order (not
covered by insurance) for the payment of money in excess of $5,000,000 in the
aggregate for all such final judgments or orders against all such Persons
(treating any deductibles, self-insurance or retention as not so covered) shall
be rendered against the Company, GST USA, GST or any Significant Subsidiary and
shall not be paid or discharged, and there shall be any period of 30 consecutive
days following entry of the final judgment or order that causes the aggregate
amount for all such final judgments or orders outstanding and not paid or
discharged against all such Persons to exceed $5,000,000 during which a stay of
enforcement of such final judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; (f) a court having jurisdiction in the
premises enters a decree or order for (A) relief in respect of the Company, GST
USA, GST or
A-8
any Significant Subsidiary in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (B)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company, GST USA, GST or any Significant
Subsidiary (other than a liquidation of the Company into GST USA in connection
with the assumption of the Notes) or for all or substantially all of the
property and assets of the Company, GST USA, GST or any Significant Subsidiary
or (C) the winding up or liquidation of the affairs of the Company, GST USA, GST
or any Significant Subsidiary (other than a liquidation of the Company into GST
USA in connection with the assumption of the Notes) and, in each case, such
decree or order shall remain unstayed and in effect for a period of 30
consecutive days; or (g) the Company, GST USA, GST or any Significant Subsidiary
(A) commences a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consents to the entry of an
order for relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company, GST USA,
GST or any Significant Subsidiary (other than a liquidation of the Company into
GST USA in connection with the assumption of the Notes) or for all or
substantially all of the property and assets of the Company, GST USA, GST or any
Significant Subsidiary or (C) effects any general assignment for the benefit of
creditors; (h) the Trustee or the Company does not have at all times a first
priority perfected security interest in all Pledged Securities, the Pledge
Account, all Acquired Equipment, the Fee Notes and Intercompany Notes or GST,
GST USA or the Company asserts in writing that the security arrangements under
the Indenture, the Pledge Account, the Fee Notes and the Intercompany Notes are
not in full force and effect; or (i) GST USA shall not have become a direct
obligor on the Notes (other than Notes to be redeemed as described under
"Mandatory Redemption" for which the Company shall have deposited the redemption
price) and GST shall not have become a guarantor of the Notes by May 1, 2003.
If an Event of Default (other than an Event of Default specified in
clause (f) or (g) above that occurs with respect to the Company, GST USA, or GST
or clause (h)) occurs and is continuing under the Indenture, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes, then
outstanding, by written notice to the Company (and to the Trustee if such notice
is given by the Holders), may, and the Trustee at the request of such Holders
shall, declare the Accreted Value of, premium, if any, and accrued interest, if
any, on the Notes to be immediately due and payable. If a bankruptcy or
insolvency default with respect to the Company, GST USA or GST occurs and is
continuing, the Accreted Value of, premium, if any, and accrued interest on the
Notes automatically becomes due and payable. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Notes. Subject to certain limitations, Holders of at least a majority in
principal amount of the Notes then outstanding may direct the Trustee in its
exercise of any trust or power.
A-9
16. ADDITIONAL AMOUNTS.
Any payments by GST under or with respect to the Notes may require the
payment of Additional Amounts as may become payable under Section 4.22 of the
Indenture.
17. TRUSTEE DEALINGS WITH COMPANY OR GUARANTOR.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for GST
or the Issuer or their Affiliates and may otherwise deal with GST or the Issuer
or their Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No incorporator or any past, present or future partner, shareholder,
other equity holder, officer, director, employee or controlling person as such,
of the Company, GST USA or GST or of any successor Person shall have any
liability for any obligations of the Company, GST USA or GST under the Notes or
the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
19. AUTHENTICATION.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
21. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to GST Network Funding,
Inc., 0000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Chief Financial
Officer.
A-10
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
INSERT TAXPAYER IDENTIFICATION NO.
m
--------------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
--------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
___________ appointing attorney to transfer said Note on the books of the
Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL SECURITIES OTHER THAN EXCHANGE SECURITIES,
PERMANENT OFFSHORE GLOBAL SECURITIES AND
UNLEGENDED OFFSHORE PHYSICAL SECURITIES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of an effective Registration or (ii)
the end of the period referred to in Rule 144(k) under the Securities Act, the
undersigned confirms that without utilizing any general solicitation or general
advertising that:
[CHECK ONE]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
OR
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
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If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date: ______________________ ____________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:_____________________ ____________________________________
NOTICE: To be executed by an
executive officer
A-12
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 4.12 or Section 4.14 of the Indenture, check the Box: |_|
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.12 or Section 4.14 of the Indenture, state the amount (in
principal amount):
$________________.
Date:_____________
Your Signature:_________________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: ______________________________
A-13
EXHIBIT B
FORM OF CERTIFICATE
------- --, ----
United States Trust Company
of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Corporate Trust Division
Re: GST Network Funding, Inc. (the "COMPANY")
10 1/2% Senior Secured Discount NotES
DUE 2008 (THE "SECURITIES")
Ladies and Gentlemen:
This letter relates to U.S. $_________ principal amount at maturity of
Securities represented by a Note (the "LEGENDED NOTE") which bears a legend
outlining restrictions upon transfer of such Legended Note. Pursuant to Section
2.02 of the Indenture (the "INDENTURE") dated as of May 4, 1998 relating to the
Securities, we hereby certify that we are (or we will hold such Securities on
behalf of) a person outside the United States to whom the Securities could be
transferred in accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933, as amended. Accordingly, you are hereby requested
to exchange the legended certificate for an unlegended certificate representing
an identical principal amount at maturity of Securities, all in the manner
provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Xxxxxx]
By:
--------------------------------
Authorized Signature
EXHIBIT C
Form of Certificate to be Delivered
in Connection with Transfers
Pursuant to Regulation S
------ --, ----
United States Trust Company
of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Corporate Trust Division
Re: GST Network Funding, Inc. (the "COMPANY")
10 1/2% Senior Secured Discount Notes
Due 2008 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of U.S.$__________ aggregate
principal amount at maturity of the Securities, we confirm that such sale has
been effected pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended, and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-------------------------------
Authorized Signature
C-2
EXHIBIT D
Form of Certificate to be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
------ --, ----
United States Trust Company
of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Corporate Trust Division
Re: GST Network Funding, Inc. (the "COMPANY")
10 1/2% Senior Secured Discount NotES
Due 2008 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of $___________ aggregate
principal amount at maturity of the Securities, we confirm that:
1. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture
dated as of May 4, 1998 relating to the Securities (the "INDENTURE") and
the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"SECURITIES ACT").
2. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not
be offered or sold except as permitted in the following sentence. We agree,
on our own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell any Securities, we will do so
only (A) to GST, the Company or any subsidiary thereof, (B) in accordance
with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor"
(as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter, (D)
outside the United States in accordance with Rule 904 of Regulation S under
the Securities Act, (E) pursuant to the provisions of Rule 144 under the
Securities Act or (F) pursuant to an effective registration statement under
the Securities Act, and we further agree to provide to any person
purchasing any of the Securities from us a notice advising such purchaser
that resales of the Securities are restricted as stated herein.
3. We understand that, on any proposed resale of any Securities, we
will be required to furnish to you and the Company such certifications,
legal opinions and other information as you and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able
to bear the economic risk of our or its investment.
5. We are acquiring the Securities purchased by us for our own account
or for one or more accounts (each of which is an institutional "ACCREDITED
INVESTOR") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
--------------------------
Authorized Signature
D-2
EXHIBIT E
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (the "SUPPLEMENTAL INDENTURE"), dated as of
_______, ____, among GST USA, INC., a Delaware corporation ("GST USA"), GST
TELECOMMUNICATIONS, INC., a federally chartered Canadian corporation ("GST"),
and UNITED STATES TRUST COMPANY OF NEW YORK, as trustee (the "TRUSTEE").
W I T N E S S E T H:
WHEREAS, in accordance with Section 4.23(a) of the Indenture, dated as
of May 4, 1998, among GST Network Funding, Inc., GST USA, GST and the Trustee
(the "INDENTURE"), relating to the 10 1/2% Senior Secured Discount Notes due
2008 of the Company (the "SECURITIES"), GST USA and GST are required to deliver
this Supplemental Indenture providing for GST USA to assume the indebtedness
represented by, and become the direct obligor on, the Securities and for GST to
guarantee (the "SECURITY GUARANTEE") the performance of all of GST USA's
obligations under the Securities and the Indenture;
WHEREAS, the terms of the Existing Indentures do not prohibit GST USA's
assuming the indebtedness represented by, and becoming the direct obligor on,
the Securities or GST's issuance of the Security Guarantee;
WHEREAS, the Boards of Directors of each of GST USA and GST have
authorized and approved delivery of this Supplemental Indenture; and
WHEREAS, all other things necessary to make this Supplemental Indenture
a valid supplement to the Indenture according to its terms and the terms of the
Indenture have been done.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1.1. CERTAIN TERMS DEFINED IN THE INDENTURE. All capitalized
terms used herein without definition herein shall have the meanings ascribed
thereto in the Indenture.
SECTION 1.2. ASSUMPTION OF THE SECURITIES BY GST USA. GST USA hereby,
effective on the date of this Indenture Supplement, unconditionally and
irrevocably assumes the indebtedness represented by, and agrees to become the
direct obligor on, the Securities.
SECTION 1.3. SECURITY GUARANTEE. Subject to the provisions of this
Indenture Supplement, effective on the date of this Indenture Supplement, GST
hereby fully, unconditionally and irrevocably guarantees to each Holder and to
the Trustee on behalf of the Holders: (i) the due and punctual payment of the
principal of, premium, if any, on and interest on each Security, when and as the
same shall become due and payable, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal of
and interest, if any, on the Securities, to the extent lawful, and the due and
punctual performance of all other obligations of GST USA to the Holders or the
Trustee, all in accordance with the terms of such Security and the Indenture and
(ii) in the case of any extension of time of payment or renewal of any
Securities or any of such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, at Stated Maturity, by acceleration or otherwise. GST hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of merger or bankruptcy of GST USA, any right to require a proceeding
first against GST USA, the benefit of discussion, protest or notice with respect
to any such Security or the debt evidenced thereby and all demands whatsoever,
and covenants that this Security Guarantee will not be discharged as to any such
Security except by payment in full of the principal thereof and interest thereon
and as provided in Section 8.01 and Section 8.02 of the Indenture (subject to
Section 8.06 of the Indenture). The maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Six of the Indenture for the
purposes of this Security Guarantee. In the event of any declaration of
acceleration of such obligations as provided in Article Six of the Indenture,
such obligations (whether or not due and payable) shall forthwith become due and
payable by GST for the purpose of this Security Guarantee. In addition, without
limiting the foregoing provisions, upon the effectiveness of an acceleration
under Article Six of the Indenture, the Trustee shall promptly make a demand for
payment on the Securities under the Security Guarantee provided for in this
Indenture Supplement.
If the Trustee or the Holder of any Security is required by any court
or otherwise to return to GST USA or GST, or any custodian, receiver,
liquidator, trustee, sequestrator or other similar official acting in relation
to GST USA or GST, any amount paid to the Trustee or such Holder in respect of a
Security, this Security Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect. GST further agrees, to the fullest
extent that it may lawfully do so, that, as between it, on the one hand, and the
Holders and the Trustee, on the other hand, the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Six of the Indenture
for the purposes of this Security Guarantee, notwithstanding any stay,
injunction or other prohibition extant under any applicable bankruptcy law
preventing such acceleration in respect of the obligations Guaranteed hereby.
E-2
GST hereby irrevocably waives any claim or other rights which it may
now or hereafter acquire against GST USA that arise from the existence, payment,
performance or enforcement of its obligations under this Security Guarantee and
the Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, any right to
participate in any claim or remedy of the Holders against GST USA or any
collateral which any such Holder or the Trustee on behalf of such Holder
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law, including, without limitation, the
right to take or receive from GST USA, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other rights. If any amount shall be paid to GST in violation of
the preceding sentence and the principal of, premium, if any, and accrued
interest on the Securities shall not have been paid in full, such amount shall
be deemed to have been paid to GST for the benefit of, and held in trust for the
benefit of, the Holders, and shall forthwith be paid to the Trustee for the
benefit of the Holders to be credited and applied upon the principal of,
premium, if any, and accrued interest on the Securities. GST acknowledges that
it received direct and indirect benefits from the issuance of the Securities
pursuant to the Indenture, and that such Securities were issued, in part, on the
promise that this Security Guarantee would be issued, and that the waivers set
forth in this Indenture Supplement are knowingly made in consideration of such
benefits.
SECTION 1.4. OBLIGATIONS UNCONDITIONAL. Subject to Section 1.7 of this
Indenture Supplement, nothing contained in this Indenture Supplement or
elsewhere in the Indenture or in the Securities is intended to or shall impair,
as among GST and the holders of the Securities, the obligation of GST, which
will be absolute and unconditional, upon failure by GST USA, to pay to the
holders of the Securities the principal of, premium, if any, and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
holders of the Securities and creditors of GST, nor shall anything herein or
therein prevent the holder of any Security or the Trustee on their behalf from
exercising all remedies otherwise permitted by applicable law upon default under
the Indenture.
Without limiting the foregoing, nothing contained in this Indenture
Supplement will restrict the right of the Trustee or the holders of the
Securities to take any action to declare the Security Guarantee to be due and
payable prior to the Stated Maturity of the Securities pursuant to Section 6.02
of the Indenture or to pursue any rights or remedies hereunder or under the
Indenture.
SECTION 1.5. NOTICE TO TRUSTEE. GST shall give prompt written notice to
the Trustee of any fact known to GST which would prohibit the making of any
payment to or by the Trustee in respect of the Security Guarantee pursuant to
the provisions of this Indenture Supplement.
E-3
SECTION 1.6. THIS ARTICLE NOT TO PREVENT EVENTS OF DEFAULT. The failure
to make a payment on account of principal of, premium, if any, or interest on
the Securities by reason of any provision of this Indenture Supplement will not
be construed as preventing the occurrence of an Event of Default.
SECTION 1.7. LIMITATION. Notwithstanding any other provision of this
Indenture Supplement, the Indenture or the Securities, the Security Guarantee
shall not be enforceable against GST in an amount in excess of the maximum
amount which, after giving effect to all other contingent and fixed liabilities
of GST and after giving effect to any collections for or payments made by or on
behalf of any obligor on the Securities under the Indenture, will result in the
obligations of GST under the Security Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under applicable law.
SECTION 2. GOVERNING LAW; SUBMISSION TO JURISDICTION; AGENT FOR
SERVICE. This Indenture Supplement shall be governed by the laws of the State of
New York. GST and GST USA each hereby appoints Olshan Xxxxxxxx Frome &
Xxxxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Xxxxx, Esq. as its agent for service of process in any suit, action or
proceeding with respect to this Indenture Supplement and for actions brought
under federal or state securities laws brought in any federal or state court
located in The City of New York and each of GST USA and GST agrees to submit to
the jurisdiction of any such court.
SECTION 3. COUNTERPARTS. This Supplemental Indenture may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 4. RATIFICATION. Except that GST USA has become the direct
obligor on the Securities and GST has provided the Security Guarantee, each
provision of the Indenture shall remain in full force and effect and the
Indenture is in all respects agreed to, ratified and confirmed by each of GST
USA, GST and the Trustee.
E-4
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
GST USA, INC.
By:
-----------------------------------------
Name:
Title:
GST TELECOMMUNICATIONS, INC.
By:
-----------------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK
By:
-----------------------------------------
Name:
Title: