RESTRUCTURING AGREEMENT

Exhibit 4.2

 

 

RESTRUCTURING AGREEMENT

 

dated as of

 

October 8, 2004

 

by and among

 

GLOBAL CROSSING LIMITED,

 

GLOBAL CROSSING HOLDINGS LIMITED,

 

GLOBAL CROSSING NORTH AMERICAN HOLDINGS, INC.,

 

GLOBAL CROSSING (UK) TELECOMMUNICATIONS LIMITED,

 

STT CROSSING LTD,

 

STT HUNGARY LIQUIDITY MANAGEMENT LIMITED LIABILITY COMPANY

 

AND

 

STT COMMUNICATIONS LTD.

 

TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

EXHIBITS

 

 

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RESTRUCTURING AGREEMENT

 

This RESTRUCTURING AGREEMENT (this “ Agreement ”) is made and entered into as of October 8, 2004, by and among Global Crossing Limited, a company organized under the laws of Bermuda (“ Global Crossing ”), Global Crossing Holdings Limited, a company organized under the laws of Bermuda (“ Global Crossing Holdings ”), Global Crossing North American Holdings, Inc., a Delaware corporation (“ GCNAH ”), Global Crossing (UK) Telecommunications Limited, a company organized under the laws of England and Wales (company number 024998) (“ GCUK ”), STT Crossing Ltd, a company organized under the laws of Mauritius (“ STT Crossing ”), STT Hungary Liquidity Management Limited Liability Company, a limited liability company organized under the laws of Hungary (“ STT Hungary ”), and (solely for the purpose of agreeing to Sections 4.2 and 4.3 of this Agreement) STT Communications Ltd., a company organized under the laws of Singapore (“ STT Communications ”).

 

W I T N E S S E T H :

 

WHEREAS, GCUK desires to borrow or privately issue secured debt (the “ GCUK Debt Financing ”);

 

WHEREAS, GCNAH issued $200,000,000 aggregate principal amount of 11% Senior Secured Notes due 2006 (the “ Senior Secured Notes ”) pursuant to an Indenture dated as of December 9, 2003 (the “ Senior Secured Notes Indenture ”) by and among GCNAH, Global Crossing and the other parties thereto and STT Hungary is the owner and holder of 100% of the Senior Secured Notes;

 

WHEREAS, GCUK, Global Crossing and STT Communications entered into a Credit Agreement dated as of May 18, 2004 (the “ Original Bridge Credit Agreement ”) pursuant to which, among other things, STT Communications made available to GCUK a credit facility of up to $100,000,000 (the “ Original Bridge Credit Facility ”), which credit facility was assigned by STT Communications and assumed by STT Crossing pursuant to an Assignment and Acceptance Agreement dated as of June 1, 2004;

 

WHEREAS, concurrently with the execution of this Agreement, STT Crossing, GCUK and Global Crossing have agreed to amend the Original Bridge Credit Agreement to increase by $25,000,000 the amount capable of being borrowed under the Original Bridge Credit Facility (such additional amount is referred to herein as the “ Additional Bridge Loan Capacity ”, the Original Bridge Credit Agreement, as amended to provide for the Additional Bridge Loan Capacity, is referred to herein as the “ Amended Bridge Credit Agreement ” and the Original Bridge Credit Facility, as amended to provide for the Additional Bridge Loan Capacity, is referred to herein as the “ Amended Bridge Credit Facility ”);

 

WHEREAS, upon the terms and subject to the conditions of this Agreement, GCNAH desires to redeem for cash, at Closing (as defined below), at par from STT Hungary (i) $50,000,000 of principal amount of the Senior Secured Notes plus (ii) an amount of the Senior Secured Notes equal to the aggregate amount advanced and outstanding as of the Closing Date (as defined below) with respect to the Additional Bridge Loan Capacity (collectively, the “ Closing Repayment Amount ”);

WHEREAS, upon the terms and subject to the conditions of this Agreement, Global Crossing, STT Crossing and STT Hungary desire to enter into an indenture (the “ GCL Notes Indenture ”), dated as of the Closing Date, pursuant to which GCL will issue to STT Crossing and STT Hungary $250,000,000 aggregate principal amount of new senior secured notes (the “ GCL Notes ”) which will be convertible into shares of common stock, par value $.01 per share, of Global Crossing (“ Common Shares ”);

 

WHEREAS, the GCL Notes to be issued to STT Hungary will be issued in exchange for the Senior Secured Notes outstanding and held by STT Hungary after payment of the Closing Repayment Amount, and the aggregate principal amount of such GCL Notes so issued to STT Hungary will have an aggregate principal amount equal to the aggregate principal amount of such Senior Secured Notes;

 

WHEREAS, upon the terms and subject to the conditions of this Agreement, (i) GCNAH, Global Crossing, STT Hungary and the other parties to the Senior Secured Notes Indenture desire that the Senior Secured Notes Indenture be terminated at Closing, that the Senior Secured Notes be cancelled at Closing, and that GCNAH issue additional shares of common stock to Global Crossing having an aggregate value equal to the aggregate principal amount of the Senior Secured Notes outstanding after payment of the Closing Repayment Amount, and (ii) GCUK, Global Crossing and STT Crossing desire that the Amended Bridge Credit Agreement be terminated and that the Amended Bridge Credit Facility be cancelled at Closing;

 

WHEREAS, Global Crossing’s payment and other obligations under the GCL Notes will be guaranteed (the “ GCL Notes Guarantees ”) by certain affiliates of Global Crossing (the “ GCL Notes Guarantors ”) and will be secured by first priority security interests on substantially the same assets of Global Crossing and its subsidiaries that presently secure the Senior Secured Notes Indenture, other than the assets of GCUK and its subsidiaries;

 

WHEREAS, in connection with the GCUK Debt Financing and the issuance of the GCL Notes, STT Crossing and STT Hungary are willing to enter into an intercreditor deed with the agent or trustee for the holders of the GCUK Debt Financing governing the relationship among STT Crossing, STT Hungary and the holders of the GCUK Debt Financing with respect to matters concerning the GCUK Debt Financing and the assets of GCUK and its subsidiaries (the “ GCUK Intercreditor Deed ”);

 

WHEREAS, upon the terms and subject to the conditions of this Agreement, STT Crossing and STT Hungary are willing to consent to the GCUK Debt Financing and the issuance of the GCL Notes; and

 

WHEREAS, upon the terms and subject to the conditions of this Agreement, STT Crossing is willing to consent to the issuance of Common Shares in connection with the conversion of the GCL Notes.

 

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NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE I

 

RESTRUCTURING

 

1.1 GCUK Debt Financing . Upon the terms and subject to the conditions of this Agreement and the other terms, conditions and requirements of law governing the GCUK Debt Financing, GCUK will use its commercially reasonable efforts to borrow or privately issue the GCUK Debt Financing on the Closing Date. The closing of the GCUK Debt Financing and certain of the transactions contemplated by this Agreement is referred to herein as the “ Closing ” and the date on which the Closing occurs is referred to herein as the “ Closing Date ”.

 

1.2 Consent to the GCUK Debt Financing . STT Crossing, pursuant to Section 7.2(e) of the Certificate of Designations of the 2.0% Cumulative Preferred Stock of Global Crossing (the “ Certificate of Designations ”), hereby consents, effective as of the Closing Date, to the GCUK Debt Financing in accordance with the terms of this Agreement, provided (i) the GCUK Debt Financing is consummated on terms and conditions reasonably acceptable to STT Crossing, including without limitation the use of the proceeds therefrom, (ii) the gross proceeds from the GCUK Debt Financing are acceptable to STT Crossing and GCUK and (iii) the definitive documents relating to the GCUK Debt Financing are reasonably acceptable to STT Crossing.

 

1.3 Closing Payments . Upon the terms and subject to the conditions of this Agreement, at the Closing,

 

(a) GCNAH will pay the Closing Repayment Amount such that GCNAH will redeem for cash at par from STT Hungary (i) $50,000,000 of principal amount of the Senior Secured Notes plus (ii) an amount of the Senior Secured Notes equal to the aggregate amount advanced and outstanding as of the Closing Date with respect to the Additional Bridge Loan Capacity.

 

(b) (i) GCNAH will pay STT Hungary in cash all accrued and unpaid interest and any other amounts payable (other than principal) under all of the Senior Secured Notes as of the Closing Date (whether or not such amounts would otherwise be due and payable as of such date under the Senior Secured Notes) and (ii) GCUK will pay STT Crossing in cash all accrued and unpaid interest and any other amounts payable (other than principal) under the Amended Bridge Credit Facility as of the Closing Date (regardless of whether such amounts would otherwise be due and payable as of such date under the Amended Bridge Credit Facility).

 

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1.4 Issuance of GCL Notes .

 

(a) Upon the terms and subject to the conditions of this Agreement, on the Closing Date:

 

(i) Global Crossing will issue the GCL Notes to STT Crossing and STT Hungary pursuant to the GCL Notes Indenture, which indenture will be substantially similar to the Senior Secured Notes Indenture, as modified to (x) implement the terms and conditions of the GCL Notes as set forth in the term sheet attached hereto as Exhibit A and (y) include covenants requiring the continued quotation of the Common Shares on Nasdaq. The GCL Notes issued to STT Hungary will have an aggregate principal amount equal to the aggregate principal amount of the Senior Secured Notes outstanding and held by STT Hungary after payment of the Closing Repayment Amount, and will be issued in exchange for such Senior Secured Notes. The GCL Notes issued to STT Crossing will have an aggregate principal amount equal to the aggregate principal amount of the Amended Bridge Credit Facility outstanding and held by STT Crossing and will be issued in consideration of the cancellation of such Amended Bridge Credit Facility.

 

(ii) Without limiting the generality of Section 1.4(a)(i), Global Crossing agrees that, subject to the same limitations as in the Senior Secured Notes Indenture and the guarantees and security documents related thereto, (A) Global Crossing will, and will cause the GCL Notes Guarantors and relevant affiliates of Global Crossing to, enter into the GCL Notes Indenture and all relevant documents attached thereto, including without limitation the security documents relating to the GCL Notes, (B) the GCL Notes Guarantors, which guarantors will be the same guarantors that guaranteed the obligations of GCNAH under the Senior Secured Notes, will execute and deliver GCL Notes Guarantees, which guarantees will be on substantially the same terms as the respective guarantees granted with respect to the Senior Secured Notes, (C) the GCL Notes will be secured by first priority security interests on substantially the same assets of Global Crossing and its subsidiaries that presently secure the Senior Secured Notes Indenture, other than the assets of GCUK and its subsidiaries ( provided , however , that STT Crossing and STT Hungary agree to negotiate with Global Crossing in good faith to eliminate certain security instruments in certain jurisdictions (other than the security interests in Argentina, Bermuda, Brazil, France, Germany, Ireland, Luxembourg, Mexico, the Netherlands, the United Kingdom and the United States which shall not be eliminated) to the extent that the cost and time required to effect the same are unreasonable in view of the collateral value to be pledged), (D) the GCL Notes Guarantees referred to in subclause (B) above and the security interests referred to in subclause (C) above will be filed, executed, perfected or otherwise, as the case may be, prior to or on the Closing Date and (E) opinions and other certificates reasonably satisfactory to STT Crossing and STT Hungary consistent in scope and substance with those delivered in connection with the closing of the Senior Secured Notes Indenture will be delivered in connection with the issuance of the GCL Notes, with such modifications as are appropriate to reflect the terms and conditions of the GCL Notes.

 

(b) STT Crossing, pursuant to Sections 7.2(d) and (e), respectively, of the Certificate of Designations, hereby consents, effective as of the Closing Date, to the issuance of the GCL Notes in accordance with the terms of this Agreement and the issuance of Common Shares in connection with the conversion of the GCL Notes.

 

(c) By its approval of this Agreement, the Board of Directors of Global Crossing hereby approves the issuance of the GCL Notes and irrevocably delegates to the Chief Executive Officer and Chief Financial Officer of Global Crossing, and to such other

 

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officers of Global Crossing as the Chief Executive Officer and Chief Financial Officers may delegate, the power and authority to negotiate, execute and deliver the GCL Notes Indenture, the GCL Notes and all security documents and other documents related thereto and to take such other actions related to the issuance of the GCL Notes as such officers of Global Crossing deem necessary or advisable. The Board of Directors of Global Crossing shall not be required to take any additional or further action related to the issuance of the GCL Notes or the execution and delivery of the GCL Notes Indenture.

 

1.5 Termination of Senior Secured Notes Indenture and Amended Bridge Credit Agreement and Issuance of GCNAH Common Shares . Upon the terms and subject to the conditions of this Agreement and following the issuance of the GCL Notes pursuant to Section 1.4 hereof, on the Closing Date:

 

(a) GCNAH and Global Crossing will (i) terminate, and will cause the other parties thereto to terminate, the Senior Secured Notes Indenture, (ii) cancel the Senior Secured Notes and (iii) terminate and release, and will cause the appropriate affiliates of Global Crossing to terminate and release, the guarantees and security interests entered into and granted in connection with the Senior Secured Notes. GCNAH will issue additional shares of common stock to Global Crossing, having an aggregate value equal to the aggregate principal amount of the Senior Secured Notes outstanding after payment of the Closing Repayment Amount, in exchange for and in full redemption of such Senior Secured Notes.

 

(b) (i) GCUK, Global Crossing and STT Crossing will terminate the Amended Bridge Credit Agreement and will cancel the Amended Bridge Credit Facility, (ii) GCUK will cancel the term note issued pursuant to the Amended Bridge Credit Agreement and (iii) GCUK, Global Crossing and STT Crossing will terminate and release, and will cause the appropriate affiliates of Global Crossing to terminate and release, the guarantees and security interests entered into and granted in connection with the Amended Bridge Credit Facility.

 

1.6 GCUK Intercreditor Deed . Upon the terms and subject to the conditions of this Agreement, on the Closing Date, STT Crossing and STT Hungary will enter into, and Global Crossing will cause the agent or trustee for the holders of the GCUK Debt Financing and GCUK and the relevant subsidiaries of GCUK to enter into, the GCUK Intercreditor Deed consistent with the terms set forth in the term sheet attached hereto as Exhibit B . All other documents relating to the GCUK Intercreditor Deed shall be subject to the approval of GCUK, Global Crossing, STT Crossing and STT Hungary in their reasonable discretion.

 

1.7 Registration Rights Agreements . Upon the terms and subject to the conditions of this Agreement, on the Closing Date:

 

(a) Global Crossing, STT Crossing and STT Hungary will amend the Registration Rights Agreement dated as of December 9, 2003 by and among Global Crossing and STT Crossing by entering into an Amendment No. 1 to the Registration Rights Agreement substantially in the form attached hereto as Exhibit C which provides, among other things, that the registrable securities under such Registration Rights Agreement shall include any Common Shares issued upon conversion of, or otherwise on account of, the GCL Notes.

 

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(b) Global Crossing, STT Crossing and STT Hungary will enter into a registration rights agreement providing for registration rights with respect to the GCL Notes, which registration rights agreement will be in substantially the same form as of the Registration Rights Agreement, dated as of April 30, 2004, by and among Global Crossing, Global Crossing Holdings, GCNAH and STT Hungary with respect to the Senior Secured Notes.

 

1.8 Accounts Receivable Facility . Global Crossing intends to establish a working capital facility with certain lenders secured by the accounts receivable of Global Crossing, which facility will be on terms and conditions reasonably acceptable to STT Crossing and STT Hungary. In connection with such facility, STT Crossing and STT Hungary, as holders of the GCL Notes, intend to negotiate in good faith with the lenders thereunder an intercreditor agreement relating to such facility. In connection with, and at the time of, the execution of the documentation establishing such facility, Global Crossing will pay STT Crossing and STT Hungary a 175 basis point consent fee, in the aggregate, calculated based on the committed amount under such facility at the time the facility is established.

 

1.9 Assignment of Senior Secured Notes and/or Amended Bridge Credit Facility . Until the earlier to occur of the termination of this Agreement and the Closing Date, neither STT Crossing nor STT Hungary, as applicable, shall transfer or assign any of its interests in the Senior Secured Notes or the Amended Bridge Credit Facility, as the case may be, unless the transferee or assignee thereof agrees to be bound by the terms of this Agreement. For the avoidance of doubt, the restrictions set forth in this Section 1.9 shall terminate and be no further force or effect upon the earlier to occur of the termination of this Agreement and the Closing Date.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF GLOBAL CROSSING, GLOBAL

CROSSING HOLDINGS, GCNAH AND GCUK

 

Each of the Global Crossing, Global Crossing Holdings, GCNAH and GCUK (each, a “ Global Crossing Party ”) hereby represents and warrants to STT Crossing and STT Hungary, as of the date hereof and as of the Closing Date, as follows:

 

2.1 Due Authorization; Enforceability . It has all right, corporate power and authority to enter into, execute and deliver this Agreement and to consummate the transactions contemplated hereby. Its execution and delivery of this Agreement and its compliance with each of the provisions of this Agreement are within its corporate power and authority and have been duly authorized by all requisite corporate and other action on its part. The Finance Committee of the Board of Directors of Global Crossing has recommended that the Board of Directors of Global Crossing approve, and the Board of Directors of Global Crossing has approved, this Agreement and the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by it and this Agreement constitutes its legal, valid and binding agreement, enforceable against it in accordance with its terms, except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and for limitations imposed by general principles of equity.

 

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2.2 No Conflicts or Violations; Consents . Neither the execution, delivery or performance by it of this Agreement nor the consummation by it of the transactions contemplated hereby will: (i) conflict with, or result in a breach or violation of, any provision of its memorandum of association, certificate of incorporation or bylaws or other organizational documents; (ii) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any encumbrance, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law applicable to or binding on it or any provision of any contract, agreement or other arrangement to which it is a party or pursuant to which it or any of its assets or properties is subject, except for breaches, violations, defaults, encumbrances, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on the business, properties, assets, liabilities, prospects, operations or condition (financial or otherwise) of Global Crossing and its subsidiaries taken as a whole or its ability to consummate the transactions contemplated hereby; or (iii) except for shareholder approval of Global Crossing for which the Nasdaq Waiver referred to in Section 4.4 will be sought, require any consent, approval or authorization of, notification to, filing with, or exemption or waiver by, any governmental entity or any other person on its part.

 

2.3 Brokers or Finders . Upon the consummation of the transactions contemplated by this Agreement, no agent, broker, investment banker or other person is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee from Global Crossing or any subsidiary of Global Crossing in connection with any of the transactions contemplated by this Agreement.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF STT CROSSING AND STT HUNGARY

 

Each of STT Crossing and STT Hungary (each, a “ STT Party ”) hereby represents and warrants to Global Crossing, as of the date hereof and as of the Closing Date, as follows:

 

3.1 Due Authorization; Enforceability . It has all right, power and authority to enter into, execute and deliver this Agreement and to consummate the transactions contemplated hereby. Its execution and delivery of this Agreement and its consummation of the transactions contemplated hereby are within its power and authority and have been duly authorized by all necessary action on its part. This Agreement have been duly and validly executed and delivered by it and this Agreement constitute its legal, valid and binding agreement, enforceable against it in accordance with its terms, except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and for limitations imposed by general principles of equity.

 

3.2 Consents; No Violations . Neither the execution, delivery or performance by it of this Agreement nor the consummation by it of the transactions contemplated hereby will: (i) conflict with, or result in a breach or violation of, any provision of its organizational documents; (ii) constitute, with or without notice or the passage of time or both, a breach,

 

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violation or default, create any encumbrance, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law or any provision of any contract, agreement or other arrangement of it, or to which it or any of its assets or properties is subject, except for breaches, violations, defaults, encumbrances, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on its ability to consummate the transactions contemplated hereby; or (iii) require any consent, approval or authorization of, notification to, filing with, or exemption or waiver by, any governmental entity or any other person on its part.

 

3.3 Brokers or Finders . Except for the fees of Goldman Sachs (Asia) L.L.C., whose fees shall be paid by Global Crossing in accordance with Section 4.1, upon the consummation of the transactions contemplated by this Agreement, no agent, broker, investment banker or other person is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee from the STT Parties in connection with any of the transactions contemplated by this Agreement.

 

ARTICLE IV

 

OTHER AGREEMENTS

 

4.1 Fees and Expenses . Global Crossing shall pay, or shall cause to be paid, to the STT Parties, upon the request from STT C