{"id":41487,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/bye-laws-global-telesystems-holdings-ltd.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"bye-laws-global-telesystems-holdings-ltd","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/formation\/bye-laws-global-telesystems-holdings-ltd.html","title":{"rendered":"Bye-Laws &#8211; Global Telesystems Holdings Ltd."},"content":{"rendered":"<pre>\n                                B Y E - L A W S\n\n                                       OF\n\n                        GLOBAL TELESYSTEMS HOLDINGS LTD.\n                                        \n I HEREBY CERTIFY that the within written Bye-Laws are a true copy of the Bye-\n                                    Laws of\n\n                        GLOBAL TELESYSEMS HOLDINGS LTD.\n\nas subscribed by the subscribers to the Memorandum of Association and approved\nat the Statutory meeting of the above Company on the 25\/th\/ March, 1997.\n\n                                    Secretary\n\n\n\n                                  Prepared by\n                        Messrs Appleby Spurling &amp; Kempe\n                                  Cedar House\n                                41 Cedar Avenue\n                               Hamilton, Bermuda\n\n \n                                   I N D E X\n\n\nBYE-LAW                 SUBJECT\n-------                 -------\n\n1                       Interpretation\n2                       Registered Office\n3-4                     Share Rights\n5-6                     Modification of Rights\n7-9                     Shares\n10-12                   Certificates\n13-15                   Lien\n16-21                   Calls on Shares\n22-28                   Forfeiture of Shares\n29                      Register of Shareholders\n30                      Register of Directors and Officers\n31-34                   Transfer of Shares\n35-38                   Transmission of Shares\n39-41                   Increase of Capital\n42-43                   Alteration of Capital\n44-45                   Reduction of Capital\n46                      General Meetings and Written Resolutions\n47-48                   Notice of General Meetings\n49-55                   Proceedings at General Meetings\n56-67                   Voting\n68-73                   Proxies and Corporate Representatives\n74-76                   Appointment and Removal of Directors\n77                      Resignation and Disqualification of Directors\n78-80                   Alternate Directors\n81                      Directors' Fees and Additional\n                                Remuneration and Expenses\n82                      Directors' Interests\n83-87                   Powers and Duties of the Board\n88-90                   Delegation of the Board's Powers\n91-99                   Proceedings of the Board\n100                     Officers\n101                     Minutes\n102-103                 Secretary and Resident Representative\n104                     The Seal\n105-111                 Dividends and Other Payments\n112                     Reserves\n113-114                 Capitalization of Profits\n115                     Record Dates\n116-118                 Accounting Records\n119                     Audit\n120-122                 Service of Notices and Other Documents\n123                     Winding Up\n\n \n124-126                 Indemnity\n127                     Amalgamation\n128                     Alteration of Bye-Laws\n\n \n                                B Y E - L A W S\n\n                                      OF\n\n                        GLOBAL TELESYSTEMS HOLDINGS LTD\n\n\nINTERPRETATION\n--------------\n\n     1.   In these Bye-Laws unless the context otherwise requires -\n\n     \"Bermuda\" means the Islands of Bermuda;\n\n     \"Board\" means the Board of Directors of the Company or the Directors\npresent at a meeting of Directors at which there is a quorum;\n\n     \"the Companies Acts\" means every Bermuda statute from time to time in force\nconcerning companies insofar as the same applies to the Company;\n\n     \"Company\" means the company incorporated in Bermuda under the name of\nGlobal Telesystems Holdings Ltd on the   25th day of  March, 1997;\n\n     \"paid up\" means paid up or credited as paid up;\n\n     \"Parent\" means the company incorporated in the Cayman Islands under the\nname of GT Parent Holdings LDC;\n\n     \"Register\" means the Register of Shareholders of the Company;\n\n     \"Registered Office\" means the registered office for the time being of the\nCompany;\n\n     \"Resident Representative\" means the person (or, if permitted in accordance\nwith the Companies Acts, the company) appointed to perform the duties of\nresident representative set out in the Companies Acts and includes any assistant\nor deputy Resident Representative appointed by the Board to perform any of the\nduties of the Resident Representative;\n\n     \"Resolution\" means a resolution of the Shareholders or, where required, of\na separate class or separate classes of Shareholders, adopted either in general\nmeeting or by written resolution, in accordance with the provisions of these\nBye-Laws;\n\n     \"Seal\" means the common seal of the Company and includes any duplicate\nthereof;\n\n     \"Secretary\" includes a temporary or assistant or deputy Secretary and any\nperson appointed by the Board to perform any of the duties of the Secretary;\n\n     \"Shareholder\" means a shareholder or member of the Company;\n\n \n                                                                               2\n\n\n\n     \"Stockholders Agreement\" means the agreement dated 24th March, 1997, and\nmade between Parent and its shareholders relating, inter alia,  to the\nmanagement and operation of the Parent;\n\n     \"these Bye-Laws\" means these Bye-Laws in their present form or as from time\nto time amended;\n\n     for the purposes of these Bye-Laws a corporation shall be deemed to be\npresent in person if its representative duly authorised pursuant to the\nCompanies Acts is present;\n\n     words importing only the singular number include the plural number and vice\nversa;\n\n     words importing only the masculine gender include the feminine and neuter\ngenders respectively;\n\n     words importing persons include companies or associations or bodies of\npersons, whether corporate or un-incorporate;\n\n     reference to writing shall include typewriting, printing, lithography,\nphotography and other modes of representing or reproducing words in a legible\nand non-transitory form;\n\n     any words or expressions defined in the Companies Acts in force at the date\nwhen these Bye-Laws or any part thereof are adopted shall bear the same meaning\nin these Bye-Laws or such part (as the case may be).\n\nREGISTERED OFFICE\n-----------------\n\n     2.   The Registered Office shall be at such place in Bermuda as the Board\nshall from time to time appoint.\n\nSHARE RIGHTS\n------------\n\n     3.   Subject to any special rights conferred on the holders of any share or\nclass of shares, any share in the Company may be issued with or have attached\nthereto such preferred, deferred, qualified or other special rights or such\nrestrictions, whether in regard to dividend, voting, return of capital or\notherwise, as the Company may by Resolution determine or, if there has not been\nany such determination or so far as the same shall not make specific provision,\nas the Board may determine.\n\n     4.   Subject to the Companies Acts, any preference shares may, with the\nsanction of a Resolution, be issued on terms:\n\n          (a) that they are to be redeemed on the happening of a specified event\n     or on a given date; and\/or,\n\n          (b) that they are liable to be redeemed at the option of the Company;\n     and\/or,\n\n \n                                                                               3\n\n          (c) if authorised by the memorandum\/Incorporating Act of the Company,\n     that they are liable to be redeemed at the option of the holder.\n\n     The terms and manner of redemption shall be provided for by way of such\nResolution, or if the shareholders so direct by Resolution, as the Board may\ndetermine, provided that such rights, when so determined, shall be attached to\nthese Bye-Laws.\n\nMODIFICATION OF RIGHTS\n----------------------\n\n     5.   Subject to the Companies Acts, all or any of the special rights for\nthe time being attached to any class of shares for the time being issued may\nfrom time to time (whether or not the Company is being wound up) be altered or\nabrogated with the consent in writing of the holders of not less than seventy\nfive percent of the issued shares of that class or with the sanction of a\nresolution passed at a separate general meeting of the holders of such shares\nvoting in person or by proxy.  To any such separate general meeting, all the\nprovisions of these Bye-Laws as to general meetings of the Company shall mutatis\nmutandis apply, but so that the necessary quorum shall be two or more persons\nholding or representing by proxy any of the shares of the relevant class, that\nevery holder of shares of the relevant class shall be entitled on a poll to one\nvote for every such share held by him and that any holder of shares of the\nrelevant class present in person or by proxy may demand a poll; provided,\nhowever, that if the Company or a class of Shareholders shall have only one\nShareholder, one Shareholder present in person or by proxy shall constitute the\nnecessary quorum.\n\n     6.   The special rights conferred upon the holders of any shares or class\nof shares shall not, unless otherwise expressly provided in the rights attaching\nto or the terms of issue of such shares, be deemed to be altered by the creation\nor issue of further shares ranking pari passu therewith.\n\nSHARES\n------\n\n     7.   (a)  Subject to the provisions of these Bye-Laws and to sub-paragraph\n(b) below, the unissued shares of the Company (whether forming part of the\noriginal capital or any increased capital) shall be at the disposal of the\nBoard, which may offer, allot, grant options over or otherwise dispose of them\nto such persons, at such times and for such consideration and upon such terms\nand conditions as the Board may determine.\n\n          (b) Notwithstanding the foregoing, no shares in the capital of the\n     Company  may be issued to the Parent except in accordance with the terms of\n     the Stockholders Agreement.\n\n     8.   The Board may in connection with the issue of any shares exercise all\npowers of paying commission and brokerage conferred or permitted by law.\n\n \n                                                                               4\n\n     9.   Except as ordered by a court of competent jurisdiction or as required\nby law, no person shall be recognised by the Company as holding any share upon\ntrust and the Company shall not be bound by or required in any way to recognise\n(even when having notice thereof) any equitable, contingent, future or partial\ninterest in any share or any interest in any fractional part of a share or\n(except only as otherwise provided in these Bye-Laws, or by law) any other right\nin respect of any share except an absolute right to the entirety thereof in the\nregistered holder.\n\nCERTIFICATES\n-------------\n\n     10.  The preparation, issue and delivery of certificates shall be governed\nby the Companies Acts.  In the case of a share held jointly by several persons,\ndelivery of a certificate to one of several joint holders shall be sufficient\ndelivery to all.\n\n     11.  If a share certificate is defaced, lost or destroyed it may be\nreplaced without fee but on such terms (if any) as to evidence and indemnity and\nto payment of the costs and out of pocket expenses of the Company in\ninvestigating such evidence and preparing such indemnity as the Board may think\nfit and, in case of defacement, on delivery of the old certificate to the\nCompany.\n\n     12.  All certificates for share or loan capital or other securities of the\nCompany (other than letters of allotment, scrip certificates and other like\ndocuments) shall, except to the extent that the terms and conditions for the\ntime being relating thereto otherwise provide, be issued under the Seal. The\nBoard may by resolution determine, either generally or in any particular case,\nthat any signatures on any such certificates need not be autographic but may be\naffixed to such certificates by some mechanical means or may be printed thereon\nor that such certificates need not be signed by any persons.\n\nLIEN\n----\n\n     13.  The Company shall have a first and paramount lien on every share (not\nbeing a fully paid share) for all moneys, whether presently payable or not,\ncalled or payable, at a date fixed by or in accordance with the terms of issue\nof such share in respect of such share, and the Company shall also have a first\nand paramount lien on every share (other than a fully paid share) standing\nregistered in the name of a Shareholder, whether singly or jointly with any\nother person, for all the debts and liabilities of such Shareholder or his\nestate to the Company, whether the same shall have been incurred before or after\nnotice to the Company of any interest of any person other than such Shareholder,\nand whether the time for the payment or discharge of the same shall have\nactually arrived or not, and notwithstanding that the same are joint debts or\nliabilities of such Shareholder or his estate and any other person, whether a\nShareholder or not.  The Company's lien on a share shall extend to all dividends\npayable thereon.  The Board may at any time, either generally or in any\nparticular case, waive any lien that has arisen or declare any share to be\nwholly or in part exempt from the provisions of this Bye-Law.\n\n \n                                                                               5\n\n     14.  The Company may sell, in such manner as the Board may think fit, any\nshare on which the Company has a lien but no sale shall be made unless some sum\nin respect of which the lien exists is presently payable nor until the\nexpiration of fourteen days after a notice in writing, stating and demanding\npayment of the sum presently payable and giving notice of the intention to sell\nin default of such payment, has been served on the holder for the time being of\nthe share.\n\n     15.  The net proceeds of sale by the Company of any shares on which it has\na lien shall be applied in or towards payment or discharge of the debt or\nliability in respect of which the lien exists so far as the same is presently\npayable, and any residue shall (subject to a like lien for debts or liabilities\nnot presently payable as existed upon the share prior to the sale) be paid to\nthe holder of the share immediately before such sale.  For giving effect to any\nsuch sale the Board may authorise some person to transfer the share sold to the\npurchaser thereof.  The purchaser shall be registered as the holder of the share\nand he shall not be bound to see to the application of the purchase money, nor\nshall his title to the share be affected by any irregularity or invalidity in\nthe proceedings relating to the sale.\n\nCALLS ON SHARES\n---------------\n\n     16.  The Board may from time to time make calls upon the Shareholders in\nrespect of any moneys unpaid on their shares (whether on account of the par\nvalue of the shares or by way of premium) and not by the terms of issue thereof\nmade payable at a date fixed by or in accordance with such terms of issue, and\neach Shareholder shall (subject to the Company serving upon him at least\nfourteen days notice specifying the time or times and place of payment) pay to\nthe Company at the time or times and place so specified the amount called on his\nshares.  A call may be revoked or postponed as the Board may determine.\n\n     17.  A call may be made payable by installments and shall be deemed to have\nbeen made at the time when the resolution of the Board authorizing the call was\npassed.\n\n     18.  The joint holders of a share shall be jointly and severally liable to\npay all calls in respect thereof.\n\n     19.  If a sum called in respect of the share shall not be paid before or on\nthe day appointed for payment thereof the person from whom the sum is due shall\npay interest on the sum from the day appointed for the payment thereof to the\ntime of actual payment at such rate as the Board may determine, but the Board\nshall be at liberty to waive payment of such interest wholly or in part.\n\n     20.  Any sum which, by the terms of issue of a share, becomes payable on\nallotment or at any date fixed by or in accordance with such terms of issue,\nwhether on account of the nominal amount of the share or by way of premium,\nshall for all the purposes of these Bye-Laws be deemed to be a call duly made,\nnotified and payable on the date on which, by the terms of issue, the same\nbecomes payable and, in case of non-payment, all the relevant provisions of\nthese Bye-Laws as to payment of interest, forfeiture or otherwise shall apply as\nif such sum had become payable by virtue of a call duly made and notified.\n\n \n                                                                               6\n\n     21.  The Board may on the issue of shares differentiate between the\nallottees or holders as to the amount of calls to be paid and the times of\npayment.\n\nFORFEITURE OF SHARES\n--------------------\n\n     22.  If a Shareholder fails to pay any call or installment of a call on the\nday appointed for payment thereof, the Board may at any time thereafter during\nsuch time as any part of such call or installment remains unpaid serve a notice\non him requiring payment of so much of the call or installment as is unpaid,\ntogether with any interest which may have accrued.\n\n     23.  The notice shall name a further day (not being less than 14 days from\nthe date of the notice) on or before which, and the place where, the payment\nrequired by the notice is to be made and shall state that, in the event of non-\npayment on or before the day and at the place appointed, the shares in respect\nof which such call is made or installment is payable will be liable to be\nforfeited.  The Board may accept the surrender of any share liable to be\nforfeited hereunder and, in such case, references in these Bye-Laws to\nforfeiture shall include surrender.\n\n     24.  If the requirements of any such notice as aforesaid are not complied\nwith, any share in respect of which such notice has been given may at any time\nthereafter, before payment of all calls or installments and interest due in\nrespect thereof has been made, be forfeited by a resolution of the Board to that\neffect.  Such forfeiture shall include all dividends declared in respect of the\nforfeited shares and not actually paid before the forfeiture.\n\n     25.  When any share has been forfeited, notice of the forfeiture shall be\nserved upon the person who was before forfeiture the holder of the share; but no\nforfeiture shall be in any manner invalidated by any omission or neglect to give\nsuch notice as aforesaid.\n\n     26.  A forfeited share shall be deemed to be the property of the Company\nand may be sold, re-offered or otherwise disposed of either to the person who\nwas, before forfeiture, the holder thereof or entitled thereto or to any other\nperson upon such terms and in such manner as the Board shall think fit, and at\nany time before a sale, re-allotment or disposition the forfeiture may be\ncancelled on such terms as the Board may think fit.\n\n     27.  A person whose shares have been forfeited shall thereupon cease to be\na Shareholder in respect of the forfeited shares but shall, notwithstanding the\nforfeiture, remain liable to pay to the Company all moneys which at the date of\nforfeiture were presently payable by him to the Company in respect of the shares\nwith interest thereon at such rate as the Board may determine from the date of\nforfeiture until payment, and the Company may enforce payment without being\nunder any obligation to make any allowance for the value of the shares\nforfeited.\n\n \n                                                                               7\n\n     28.  An affidavit in writing that the deponent is a Director or the\nSecretary and that a share has been duly forfeited on the date stated in the\naffidavit shall be conclusive evidence of the facts therein stated as against\nall persons claiming to be entitled to the share.  The Company may receive the\nconsideration (if any) given for the share on the sale, re-allotment or\ndisposition thereof and the Board may authorise some person to transfer the\nshare to the person to whom the same is sold, re-allotted or disposed of, and he\nshall thereupon be registered as the holder of the share and shall not be bound\nto see to the application of the purchase money (if any) nor shall his title to\nthe share be affected by any irregularity or invalidity in the proceedings\nrelating to the forfeiture, sale, re-allotment or disposal of the share.\n\nREGISTER OF SHAREHOLDERS\n------------------------\n\n     29.  The Secretary shall establish and maintain the Register of\nShareholders at the Registered Office in the manner prescribed by the Companies\nActs.  Unless the Board otherwise determines, the Register of Shareholders shall\nbe open to inspection in the manner prescribed by the Companies Acts between\n10.00 a.m. and 12.00 noon on every working day. Unless the Board so determines,\nno Shareholder or intending Shareholder shall be entitled to have entered in the\nRegister any indication of any trust or any equitable, contingent, future or\npartial interest in any share or any interest in any fractional part of a share\nand if any such entry exists or is permitted by the Board it shall not be deemed\nto abrogate any of the provisions of Bye-Law 9.\n\nREGISTER OF DIRECTORS AND OFFICERS\n----------------------------------\n\n     30.  The Secretary shall establish and maintain a register of the Directors\nand Officers of the Company as required by the Companies Acts.  The register of\nDirectors and Officers shall be open to inspection in the manner prescribed by\nthe Companies Acts between 10:00 a.m. and 12:00 noon on every working day.\n\nTRANSFER OF SHARES\n------------------\n\n     31.  Subject to the Companies Acts and to such of the restrictions\ncontained in these Bye-Laws as may be applicable, any Shareholder may transfer\nall or any of his shares by an instrument of transfer in the usual common form\nor in any other form which the Board may approve.\n\n     32.  The instrument of transfer of a share shall be signed by or on behalf\nof the transferor and where any share is not fully-paid, the transferee and the\ntransferor shall be deemed to remain the holder of the share until the name of\nthe transferee is entered in the Register in respect thereof.  All instruments\nof transfer when registered may be retained by the Company. The Board may, in\nits absolute discretion and without assigning any reason therefor, decline to\nregister any transfer of any share which is not a fully-paid share.  The Board\nmay also decline to register any transfer unless:-\n\n \n                                                                               8\n\n          (a)  the instrument of transfer is duly stamped and lodged with the\n     Company, accompanied by the certificate for the shares to which it relates,\n     and such   other evidence as the Board may reasonably require to show the\n     right of the transferor to make the transfer,\n\n          (b) the instrument of transfer is in respect of only one class of\n     share,\n\n          (c) where applicable, the permission of the Bermuda Monetary Authority\n     with respect thereto has been obtained.\n\n     Subject to any directions of the Board from time to time in force, the\nSecretary may exercise the powers and discretions of the Board under this Bye-\nLaw and Bye-Laws 31 and 33.\n\n     33.  If the Board declines to register a transfer it shall, within three\nmonths after the date on which the instrument of transfer was lodged, send to\nthe transferee notice of such refusal.\n\n     34.  No fee shall be charged by the Company for registering any transfer,\nprobate, letters of administration, certificate of death or marriage, power of\nattorney, distringas or stop notice, order of court or other instrument relating\nto or affecting the title to any share, or otherwise making an entry in the\nRegister relating to any share.\n\nTRANSMISSION OF SHARES\n----------------------\n\n     35.  In the case of the death of a Shareholder, the survivor or survivors,\nwhere the deceased was a joint holder, and the estate representative, where he\nwas sole holder, shall be the only person recognised by the Company as having\nany title to his shares; but nothing herein contained shall release the estate\nof a deceased holder (whether the sole or joint) from any liability in respect\nof any share held by him solely or jointly with other persons.  For the purpose\nof this Bye-Law, estate representative means the person to whom probate or\nletters of administration has or have been granted in Bermuda or, failing any\nsuch person, such other person as the Board may in its absolute discretion\ndetermine to be the person recognised by the Company for the purpose of this\nBye-Law.\n\n     36.  Any person becoming entitled to a share in consequence of the death of\na Shareholder or otherwise by operation of applicable law may, subject as\nhereafter provided and upon such evidence being produced as may from time to\ntime be required by the Board as to his entitlement, either be registered\nhimself as the holder of the share or elect to have some person nominated by him\nregistered as the transferee thereof.  If the person so becoming entitled elects\nto be registered himself, he shall deliver or send to the Company a notice in\nwriting signed by him stating that he so elects.  If he shall elect to have his\nnominee registered, he shall signify his election by signing an instrument of\ntransfer of such share in favour of his nominee.  All the limitations,\nrestrictions and provisions of these Bye-Laws relating to the right to transfer\nand the registration of transfer of shares shall be applicable to any such\nnotice or instrument of transfer as aforesaid as if the death of the Shareholder\nor\n\n \n                                                                               9\n\nother event giving rise to the transmission had not occurred and the notice or\ninstrument of transfer was an instrument of transfer signed by such Shareholder.\n\n     37.  A person becoming entitled to a share in consequence of the death of a\nShareholder or otherwise by operation of applicable law shall (upon such\nevidence being produced as may from time to time be required by the Board as to\nhis entitlement) be entitled to receive and may give a discharge for any\ndividends or other moneys payable in respect of the share, but he shall not be\nentitled in respect of the share to receive notices of or to attend or vote at\ngeneral meetings of the Company or, save as aforesaid, to exercise in respect of\nthe share any of the rights or privileges of a Shareholder until he shall have\nbecome registered as the holder thereof. The Board may at any time give notice\nrequiring such person to elect either to be registered himself or to transfer\nthe share and, if the notice is not complied with within sixty days, the Board\nmay thereafter withhold payment of all dividends and other moneys payable in\nrespect of the shares until the requirements of the notice have been complied\nwith.\n\n     38.  Subject to any directions of the Board from time to time in force, the\nSecretary may exercise the powers and discretions of the Board under Bye-Laws\n35, 36 and 37.\n\nINCREASE OF CAPITAL\n-------------------\n\n     39.  The Company may from time to time increase its capital by such sum to\nbe divided into shares of such par value as the Company by Resolution shall\nprescribe.\n\n     40.  The Company may, by the Resolution increasing the capital, direct that\nthe new shares or any of them shall be offered in the first instance either at\npar or at a premium or (subject to the provisions of the Companies Acts) at a\ndiscount to all the holders for the time being of shares of any class or classes\nin proportion to the number of such shares held by them respectively or make any\nother provision as to the issue of the new shares.\n\n     41.  The new shares shall be subject to all the provisions of these Bye-\nLaws with reference to lien, the payment of calls, forfeiture, transfer,\ntransmission and otherwise.\n\nALTERATION OF CAPITAL\n---------------------\n\n     42.  The Company may from time to time by Resolution:-\n\n          (a) divide its shares into several classes and attach thereto\n     respectively any preferential, deferred, qualified or special rights,\n     privileges or conditions;\n\n          (b) consolidate and divide all or any of its share capital into shares\n     of larger par value than its existing shares;\n\n \n                                                                              10\n\n          (c) sub-divide its shares or any of them into shares of smaller par\n     value than is fixed by its memorandum, so, however, that in the sub-\n     division the proportion between the amount paid and the amount, if any,\n     unpaid on each reduced share shall be the same as it was in the case of the\n     share from which the reduced share is derived;\n\n          (d) make provision for the issue and allotment of shares which do not\n     carry any voting rights;\n\n          (e) cancel shares which, at the date of the passing of the resolution\n     in that behalf, have not been taken or agreed to be taken by any person,\n     and diminish the amount of its share capital by the amount of the shares so\n     cancelled; and\n\n          (f) change the currency denomination of its share capital.  Where any\n     difficulty arises in regard to any division, consolidation, or sub-division\n     under this Bye-Law, the Board may settle the same as it thinks expedient\n     and, in particular, may arrange for the sale of the shares representing\n     fractions and the distribution of the net proceeds of sale in due\n     proportion amongst the Shareholders who would have been entitled to the\n     fractions, and for this purpose the Board may authorise some person to\n     transfer the shares representing fractions to the purchaser thereof, who\n     shall not be bound to see to the application of the purchase money nor\n     shall his title to the shares be affected by any irregularity or invalidity\n     in the proceedings relating to the sale.\n\n     43.  Subject to the Companies Acts and to any confirmation or consent\nrequired by law or these Bye-Laws, the Company may by Resolution from time to\ntime convert any preference shares into redeemable preference shares.\n\nREDUCTION OF CAPITAL\n--------------------\n\n     44.  Subject to the Companies Acts, its memorandum and any confirmation or\nconsent required by law or these Bye-Laws, the Company may from time to time by\nResolution authorise the reduction of its issued share capital or any capital\nredemption reserve fund or any share premium or contributed surplus account in\nany manner.\n\n     45.  In relation to any such reduction, the Company may  by Resolution\ndetermine the terms upon which such reduction is to be effected including in the\ncase of a reduction of part only of a class of shares, those shares to be\naffected.\n\nGENERAL MEETINGS AND WRITTEN RESOLUTIONS\n----------------------------------------\n\n     46.  (a)  The Board shall convene and the Company shall hold general\nmeetings as Annual General Meetings in accordance with the requirements of the\nCompanies Acts at such times and places as the Board shall appoint.  The Board\nmay, whenever it thinks fit, and shall, when required by the Companies Acts,\nconvene general meetings other than Annual General Meetings which shall be\ncalled Special General Meetings.\n\n \n                                                                              11\n\n          (b) Except in the case of the removal of auditors and Directors,\n     anything which may be done by resolution of the Company in general meeting\n     or by resolution of a meeting of any class of the Shareholders of the\n     Company may, without a meeting and without any previous notice being\n     required, be done by resolution in writing, signed by all of the\n     Shareholders or their proxies, or in the case of a Shareholder that is a\n     corporation (whether or not a company within the meaning of the Companies\n     Acts) on behalf of such Shareholder, being all of the Shareholders of the\n     Company who at the date of the resolution in writing would be entitled to\n     attend a meeting and vote on the resolution.  Such resolution in writing\n     may be signed by, or in the case of a Shareholder that is a corporation\n     (whether or not a company within the meaning of the Companies Acts), on\n     behalf of, all the Shareholders of the Company, or any class thereof, in as\n     many counterparts as may be necessary.\n\n          (c) For the purposes of this Bye-Law, the date of the resolution in\n     writing is the date when the resolution is signed by, or in the case of a\n     Shareholder that is a corporation (whether or not a company within the\n     meaning of the Companies Acts), on behalf of, the last Shareholder to sign\n     and any reference in any enactment to the date of passing of a resolution\n     is, in relation to a resolution in writing made in accordance with this\n     section, a reference to such date.\n\n          (d) A resolution in writing made in accordance with this Bye-Law is as\n     valid as if it had been passed by the Company in general meeting or, if\n     applicable, by a meeting of the relevant class of Shareholders of the\n     Company, as the case may be.  A resolution in writing made in accordance\n     with this section shall constitute minutes for the purposes of the\n     Companies Acts and these Bye-Laws.\n\nNOTICE OF GENERAL MEETINGS\n--------------------------\n\n     47.  An Annual General Meeting shall be called by not less than  5 days\nnotice in writing and a Special General Meeting shall be called by not less than\n5 days notice in writing.  The notice shall be exclusive of the day on which it\nis served or deemed to be served and of the day for which it is given, and shall\nspecify the place, day and time of the meeting, and, in the case of a Special\nGeneral Meeting, the general nature of the business to be considered. Notice of\nevery general meeting shall be given in any manner permitted by Bye-Laws 120 and\n121 to all Shareholders other than such as, under the provisions of these Bye-\nLaws or the terms of issue of the shares they hold, are not entitled to receive\nsuch notice from the Company and to any Director or Resident Representative who\nor which has delivered a written notice upon the Registered Office requiring\nthat such notice be sent to him or it.\n\n     Notwithstanding that a meeting of the Company is called by shorter notice\nthan that specified in this Bye-Law, it shall be deemed to have been duly called\nif it is so agreed:-\n\n          (a) in the case of a meeting called as an Annual General Meeting, by\n     all the Shareholders entitled to attend and vote thereat;\n\n \n                                                                              12\n\n          (b) in the case of any other meeting, by a majority in number of the\n     Shareholders having the right to attend and vote at the meeting, being a\n     majority together holding not less than 95 percent in nominal value of the\n     shares giving that right.\n\n     48.  The accidental omission to give notice of a meeting or (in cases where\ninstruments of proxy are sent out with the notice) the accidental omission to\nsend such instrument of proxy to, or the non-receipt of notice of a meeting or\nsuch instrument of proxy by, any person entitled to receive such notice shall\nnot invalidate the proceedings at that meeting.\n\nPROCEEDINGS AT GENERAL MEETINGS\n-------------------------------\n\n     49.  No business shall be transacted at any general meeting unless a quorum\nis present when the meeting proceeds to business, but the absence of a quorum\nshall not preclude the appointment, choice or election of a chairman which shall\nnot be treated as part of the business of the meeting.  Save as otherwise\nprovided by these Bye-Laws, at least two Shareholders present in person or by\nproxy and entitled to vote shall be a quorum for all purposes; provided,\nhowever, that if the Company shall have only one Shareholder, one Shareholder\npresent in person or by proxy shall constitute the necessary quorum.\n\n     50.  If within five minutes (or such longer time as the chairman of the\nmeeting may determine to wait) after the time appointed for the meeting, a\nquorum is not present, the meeting, if convened on the requisition of\nShareholders, shall be dissolved.  In any other case, it shall stand adjourned\nto such other day and such other time and place as the chairman of the meeting\nmay determine and at such adjourned meeting two Shareholders present in person\nor by proxy (whatever the number of shares held by them) shall be a quorum\nprovided that if the Company shall have only one Shareholder, one Shareholder\npresent in person or by proxy shall constitute the necessary quorum.  The\nCompany shall give not less than  5  days notice of any meeting adjourned\nthrough want of a quorum and such notice shall state that the sole Shareholder\nor, if more than one, two Shareholders present in person or by proxy (whatever\nthe number of shares held by them) shall be a quorum.\n\n     51.  A meeting of the Shareholders or any class thereof may be held by\nmeans of such telephone, electronic or other communication facilities as permit\nall persons participating in the meeting to communicate with each other\nsimultaneously and instantaneously and participation in such a meeting shall\nconstitute presence in person at such meeting.\n\n     52.  Each Director upon giving the notice referred to in Bye-Law 47 above,\nand the Resident Representative shall be entitled to attend and speak at any\ngeneral meeting of the Company.\n\n     53.  The Chairman (if any) of the Board or, in his absence, the President\nshall preside as chairman at every general meeting.  If there is no such\nChairman or President, or if at any meeting neither the Chairman nor the\nPresident is present within five minutes after the time appointed for holding\nthe meeting, or if neither of them is willing to act as chairman, the\n\n \n                                                                              13\n\nDirectors present shall choose one of their number to act or if one Director\nonly is present he shall preside as chairman if willing to act.  If no Director\nis present, or if each of the Directors present declines to take the chair, the\npersons present and entitled to vote on a poll shall elect one of their number\nto be chairman.\n\n     54.  The chairman of the meeting may, with the consent of any meeting at\nwhich a quorum is present (and shall if so directed by the meeting), adjourn the\nmeeting from time to time and from place to place but no business shall be\ntransacted at any adjourned meeting except business which might lawfully have\nbeen transacted at the meeting from which the adjournment took place.  When a\nmeeting is adjourned for three months or more, notice of the adjourned meeting\nshall be given as in the case of an original meeting.\n\n     55.  Save as expressly provided by these Bye-Laws, it shall not be\nnecessary to give any notice of an adjournment or of the business to be\ntransacted at an adjourned meeting.\n\nVOTING\n------\n\n     56.  Save where a greater majority is required by the Companies Acts or\nthese Bye-Laws, any question proposed for consideration at any general meeting\nshall be decided on by a simple majority of votes cast.\n\n     57.  At any general meeting, a resolution put to the vote of the meeting\nshall be decided on a show of hands unless (before or on the declaration of the\nresult of the show of hands or on the withdrawal of any other demand for a poll)\na poll is demanded by:-\n\n          (a)  the chairman of the meeting; or\n\n          (b) at least three Shareholders present in person or represented by\n     proxy; or\n\n          (c) any Shareholder or Shareholders present in person or represented\n     by proxy and holding between them not less than one tenth of the total\n     voting rights of all the Shareholders having the right to vote at such\n     meeting; or\n\n          (d) a Shareholder or Shareholders present in person or represented by\n     proxy holding shares conferring the right to vote at such meeting, being\n     shares on which an aggregate sum has been paid up equal to not less than\n     one tenth of the total sum paid up on all such shares conferring such\n     right.\n\n     Unless a poll is so demanded and the demand is not withdrawn, a declaration\nby the chairman that a resolution has, on a show of hands, been carried or\ncarried unanimously or by a particular majority or not carried by a particular\nmajority or lost shall be final and conclusive, and an entry to that effect in\nthe minute book of the Company shall be conclusive evidence of the fact without\nproof of the number of votes recorded for or against such resolution.\n\n \n                                                                              14\n\n     58.  If a poll is duly demanded, the result of the poll shall be deemed to\nbe the resolution of the meeting at which the poll is demanded.\n\n     59.  A poll demanded on the election of a chairman, or on a question of\nadjournment, shall be taken forthwith.  A poll demanded on any other question\nshall be taken in such manner and either forthwith or at such time (being not\nlater than three months after the date of the demand) and place as the chairman\nshall direct.  It shall not be necessary (unless the chairman otherwise directs)\nfor notice to be given of a poll.\n\n     60.  The demand for a poll shall not prevent the continuance of a meeting\nfor the transaction of any business other than the question on which the poll\nhas been demanded and it may be withdrawn at any time before the close of the\nmeeting or the taking of the poll, whichever is the earlier.\n\n     61.  On a poll, votes may be cast either personally or by proxy.\n\n     62.  A person entitled to more than one vote on a poll need not use all his\nvotes or cast all the votes he uses in the same way.\n\n     63.  In the case of an equality of votes at a general meeting, whether on a\nshow of hands or on a poll, the chairman of such meeting shall not be entitled\nto a second or casting vote.\n\n     64.  In the case of joint holders of a share, the vote of the senior who\ntenders a vote, whether in person or by proxy, shall be accepted to the\nexclusion of the votes of the other joint holders, and for this purpose\nseniority shall be determined by the order in which the names stand in the\nRegister in respect of the joint holding.\n\n     65.  A Shareholder who is a patient for any purpose of any statute or\napplicable law relating to mental health or in respect of whom an order has been\nmade by any Court having jurisdiction for the protection or management of the\naffairs of persons incapable of managing their own affairs may vote, whether on\na show of hands or on a poll, by his receiver, committee, curator bonis or other\nperson in the nature of a receiver, committee or curator bonis appointed by such\nCourt and such receiver, committee, curator bonis or other person may vote on a\npoll by proxy, and may otherwise act and be treated as such Shareholder for the\npurpose of general meetings.\n\n     66.  No Shareholder shall, unless the Board otherwise determines, be\nentitled to vote at any general meeting unless all calls or other sums presently\npayable by him in respect of shares in the Company have been paid.\n\n     67.  If (i) any objection shall be raised to the qualification of any voter\nor (ii) any votes have been counted which ought not to have been counted or\nwhich might have been rejected or (iii) any votes are not counted which ought to\nhave been counted, the objection or error shall not vitiate the decision of the\nmeeting or adjourned meeting on any resolution unless the same is raised or\npointed out at the meeting or, as the case may be, the adjourned\n\n \n                                                                              15\n\nmeeting at which the vote objected to is given or tendered or at which the error\noccurs.  Any objection or error shall be referred to the chairman of the meeting\nand shall only vitiate the decision of the meeting on any resolution if the\nchairman decides that the same may have affected the decision of the meeting.\nThe decision of the chairman on such matters shall be final and conclusive.\n\nPROXIES AND CORPORATE REPRESENTATIVES\n-------------------------------------\n\n     68.  The instrument appointing a proxy shall be in writing under the hand\nof the appointor or of his attorney authorised by him in writing or, if the\nappointor is a corporation, either under its seal or under the hand of an\nofficer, attorney or other person authorised to sign the same.\n\n     69.  Any Shareholder may appoint a standing proxy or (if a corporation)\nrepresentative by depositing at the Registered Office a proxy or (if a\ncorporation) an authorisation and such proxy or authorisation shall be valid for\nall general meetings and adjournments thereof or, resolutions in writing, as the\ncase may be, until notice of revocation is received at the Registered Office.\nWhere a standing proxy or authorisation exists, its operation shall be deemed to\nhave been suspended at any general meeting or adjournment thereof at which the\nShareholder is present or in respect to which the Shareholder has specially\nappointed a proxy or representative. The Board may from time to time require\nsuch evidence as it shall deem necessary as to the due execution and continuing\nvalidity of any such standing proxy or authorisation and the operation of any\nsuch standing proxy or authorisation shall be deemed to be suspended until such\ntime as the Board determines that it has received the requested evidence or\nother evidence satisfactory to it.\n\n     70.  Subject to Bye-Law 69, the instrument appointing a proxy together with\nsuch other evidence as to its due execution as the Board may from time to time\nrequire, shall be delivered at the Registered Office (or at such place as may be\nspecified in the notice convening the meeting or in any notice of any\nadjournment or, in either case or the case of a written resolution, in any\ndocument sent therewith) prior to the holding of the relevant meeting or\nadjourned meeting at which the person named in the instrument proposes to vote\nor, in the case of a poll taken subsequently to the date of a meeting or\nadjourned meeting, before the time appointed for the taking of the poll, or, in\nthe case of a written resolution, prior to the effective date of the written\nresolution and in default the instrument of proxy shall not be treated as valid.\n\n     71.  Instruments of proxy shall be in any common form or in such other form\nas the Board may approve and the Board may, if it thinks fit, send out with the\nnotice of any meeting or any written resolution forms of instruments of proxy\nfor use at that meeting or in connection with that written resolution.  The\ninstrument of proxy shall be deemed to confer authority to demand or join in\ndemanding a poll and to vote on any amendment of a written resolution or\namendment of a resolution put to the meeting for which it is given as the proxy\nthinks fit.  The instrument of proxy shall unless the contrary is stated therein\nbe valid as well for any adjournment of the meeting as for the meeting to which\nit relates.\n\n \n                                                                              16\n\n     72.  A vote given in accordance with the terms of an instrument of proxy\nshall be valid notwithstanding the previous death or insanity of the principal,\nor revocation of the instrument of proxy or of the authority under which it was\nexecuted, provided that no intimation in writing of such death, insanity or\nrevocation shall have been received by the Company at the Registered Office (or\nsuch other place as may be specified for the delivery of instruments of proxy in\nthe notice convening the meeting or other documents sent therewith) one hour at\nleast before the commencement of the meeting or adjourned meeting, or the taking\nof the poll, or the day before the effective date of any written resolution at\nwhich the instrument of proxy is used.\n\n     73.  Subject to the Companies Acts, the Board may at its discretion waive\nany of the provisions of these Bye-Laws related to proxies or authorisations\nand, in particular, may accept such verbal or other assurances as it thinks fit\nas to the right of any person to attend and vote on behalf of any Shareholder at\ngeneral meetings or to sign written resolutions.\n\nAPPOINTMENT AND REMOVAL OF DIRECTORS\n------------------------------------\n\n     74.  The number of Directors shall be such number not less than two as the\nCompany by Resolution may from time to time determine and, subject to the\nCompanies Acts and these Bye-Laws, shall serve until re-elected or their\nsuccessors are appointed at the next Annual General Meeting.\n\n     75.  The Company shall at the Annual General Meeting and may by Resolution\ndetermine the minimum and the maximum number of Directors and may by Resolution\ndetermine that one or more vacancies in the Board shall be deemed casual\nvacancies for the purposes of these Bye-Laws.  Without prejudice to the power of\nthe Company by Resolution in pursuance of any of the provisions of these Bye-\nLaws to appoint any person to be a Director, the Board, so long as a quorum of\nDirectors remains in office, shall have power at any time and from time to time\nto appoint any individual to be a Director so as to fill a casual vacancy.\n\n     76.  The Company may in a Special General Meeting called for that purpose\nremove a Director provided notice of any such meeting shall be served upon the\nDirector concerned not less than 14 days before the meeting and he shall be\nentitled to be heard at that meeting.  Any vacancy created by the removal of a\nDirector at a Special General Meeting may be filled at the Meeting by the\nelection of another Director in his place or, in the absence of any such\nelection, by the Board.\n\nRESIGNATION AND DISQUALIFICATION OF DIRECTORS\n---------------------------------------------\n\n     77.  The office of a Director shall be vacated upon the happening of any of\nthe following events:\n\n          (a) if he resigns his office by notice in writing delivered to the\n     Registered Office or tendered at a meeting of the Board;\n\n \n                                                                              17\n\n          (b) if he becomes of unsound mind or a patient for any purpose of any\n     statute or applicable law relating to mental health and the Board resolves\n     that his office is vacated;\n\n          (c) if he becomes bankrupt or compounds with his creditors;\n\n          (d) if he is prohibited by law from being a Director;\n\n          (e) if he ceases to be a Director by virtue of the Companies Acts or\n     is removed from office pursuant to these Bye-Laws.\n\nALTERNATE DIRECTORS\n-------------------\n\n     78.  The Company may by Resolution elect any person or persons to act as\nDirectors in the alternative to any of the Directors or may authorise the Board\nto appoint such Alternate Directors and a Director may appoint and remove his\nown Alternate Director.  Any appointment or removal of an Alternate Director by\na Director shall be effected by depositing a notice of appointment or removal\nwith the Secretary at the Registered Office, signed by such Director, and such\nappointment or removal shall become effective on the date of receipt by the\nSecretary.  Any Alternate Director may be removed by Resolution of the Company\nand, if appointed by the Board, may be removed by the Board.  Subject as\naforesaid, the office of Alternate Director shall continue until the next annual\nelection of Directors or, if earlier, the date on which the relevant Director\nceases to be a Director.  An Alternate Director may also be a Director in his\nown right and may act as alternate to more than one Director.\n\n     79.  An Alternate Director shall be entitled to receive notices of all\nmeetings of Directors, to attend, be counted in the quorum and vote at any such\nmeeting at which any Director to whom he is alternate is not personally present,\nand generally to perform all the functions of any Director to whom he is\nalternate in his absence.\n\n     80.  Every person acting as an Alternate Director shall (except as regards\npowers to appoint an alternate and remuneration) be subject in all respects to\nthe provisions of these Bye-Laws relating to Directors and shall alone be\nresponsible to the Company for his acts and defaults and shall not be deemed to\nbe the agent of or for any Director for whom he is alternate.  An Alternate\nDirector may be paid expenses and shall be entitled to be indemnified by the\nCompany to the same extent mutatis mutandis as if he were a Director.  Every\nperson acting as an Alternate Director shall have one vote for each Director for\nwhom he acts as alternate (in addition to his own vote if he is also a\nDirector).  The signature of an Alternate Director to any resolution in writing\nof the Board or a committee of the Board shall, unless the terms of his\nappointment provides to the contrary, be as effective as the signature of the\nDirector or Directors to whom he is alternate.\n\n \n                                                                              18\n\nDIRECTORS' FEES AND ADDITIONAL REMUNERATION AND EXPENSES\n--------------------------------------------------------\n\n     81.  The amount, if any, of Directors' fees shall from time to time be\ndetermined by the Company by Resolution and in the absence of a determination to\nthe contrary such fees shall be deemed to accrue from day to day. Each Director\nmay be paid his reasonable travel, hotel and incidental expenses in attending\nand returning from meetings of the Board or committees constituted pursuant to\nthese Bye-Laws or general meetings and shall be paid all expenses properly and\nreasonably incurred by him in the conduct of the Company's business or in the\ndischarge of his duties as a Director.  Any Director who, by request, goes or\nresides abroad for any purposes of the Company or who performs services which in\nthe opinion of the Board go beyond the ordinary duties of a Director may be paid\nsuch extra remuneration (whether by way of salary, commission, participation in\nprofits or otherwise) as the Board may determine, and such extra remuneration\nshall be in addition to any remuneration provided for by or pursuant to any\nother Bye-Law.\n\nDIRECTORS' INTERESTS\n--------------------\n\n     82.  (a)  A Director may hold any other office or place of profit with the\nCompany (except that of auditor) in conjunction with his office of Director for\nsuch period and upon such terms as the Board may determine, and may be paid such\nextra remuneration therefor (whether by way of salary, commission, participation\nin profits or otherwise) as the Board may determine, and such extra remuneration\nshall be in addition to any remuneration provided for by or pursuant to any\nother Bye-Law.\n\n          (b) A Director may act by himself or his firm in a professional\n     capacity for the Company (otherwise than as auditor) and he or his firm\n     shall be entitled to remuneration for professional services as if he were\n     not a Director.\n\n          (c) Subject to the provisions of the Companies Acts, a Director may\n     notwithstanding his office be a party to, or otherwise interested in, any\n     transaction or arrangement with the Company or in which the Company is\n     otherwise interested; and be a Director or other officer of, or employed\n     by, or a party to any transaction or arrangement with, or otherwise\n     interested in, any body corporate promoted by the Company or in which the\n     Company is interested.  The Board may also cause the voting power conferred\n     by the shares in any other company held or owned by the Company to be\n     exercised in such manner in all respects as it thinks fit, including the\n     exercise thereof in favour of any resolution appointing the Directors or\n     any of them to be directors or officers of such other company, or voting or\n     providing for the payment of remuneration to the directors or officers of\n     such other company.\n\n          (d) So long as, where it is necessary, he declares the nature of his\n     interest at the first opportunity at a meeting of the Board or by writing\n     to the Directors as required by the Companies Acts, a Director shall not by\n     reason of his office be accountable to the Company for any benefit which he\n     derives from any office or employment to which these Bye-Laws allow him to\n     be appointed or from any transaction or arrangement in which these Bye-Laws\n     allow him to be interested, and\n\n \n                                                                              19\n\n     no such transaction or arrangement shall be liable to be avoided on the\n     ground of any interest or benefit.\n\n          (e) Subject to the Companies Acts and any further disclosure required\n     thereby, a general notice to the Directors by a Director or officer\n     declaring that he is a director or officer or has an interest in a person\n     and is to be regarded as interested in any transaction or arrangement made\n     with that person, shall be a sufficient declaration of interest in relation\n     to any transaction or arrangement so made.\n\nPOWERS AND DUTIES OF THE BOARD\n------------------------------\n\n     83.  Subject to the provisions of the Companies Acts and these Bye-Laws and\nto any directions given by the Company by Resolution, the Board shall manage the\nbusiness of the Company and may pay all expenses incurred in promoting and\nincorporating the Company and may exercise all the powers of the Company.  No\nalteration of these Bye-Laws and no such direction shall invalidate any prior\nact of the Board which would have been valid if that alteration had not been\nmade or that direction had not been given.  The powers given by this Bye-Law\nshall not be limited by any special power given to the Board by these Bye-Laws\nand a meeting of the Board at which a quorum is present shall be competent to\nexercise all the powers, authorities and discretions for the time being vested\nin or exercisable by the Board.\n\n     84.  The Board may exercise all the powers of the Company to borrow money\nand to mortgage or charge all or any part of the undertaking, property and\nassets (present and future) and uncalled capital of the Company and to issue\ndebentures and other securities, whether outright or as collateral security for\nany debt, liability or obligation of the Company or of any other persons.\n\n     85.  All cheques, promissory notes, drafts, bills of exchange and other\ninstruments, whether negotiable or transferable or not, and all receipts for\nmoney paid to the Company shall be signed, drawn, accepted, endorsed or\notherwise executed, as the case may be, in such manner as the Board shall from\ntime to time by resolution determine.\n\n     86.  The Board on behalf of the Company may provide benefits, whether by\nthe payment of gratuities or pensions or otherwise, for any person including any\nDirector or former Director who has held any executive office or employment with\nthe Company or with any body corporate which is or has been a subsidiary or\naffiliate of the Company or a predecessor in the business of the Company or of\nany such subsidiary or affiliate, and to any member of his family or any person\nwho is or was dependent on him, and may contribute to any fund and pay premiums\nfor the purchase or provision of any such gratuity, pension or other benefit, or\nfor the insurance of any such person.\n\n     87.  The Board may from time to time appoint one or more of its body to be\na managing director, joint managing director or an assistant managing director\nor to hold any other employment or executive office with the Company for such\nperiod and upon such terms as the Board may determine and may revoke or\nterminate any such appointments.  Any such\n\n \n                                                                              20\n\nrevocation or termination as aforesaid shall be without prejudice to any claim\nfor damages that such Director may have against the Company or the Company may\nhave against such Director for any breach of any contract of service between him\nand the Company which may be involved in such revocation or termination.  Any\nperson so appointed shall receive such remuneration (if any) (whether by way of\nsalary, commission, participation in profits or otherwise) as the Board may\ndetermine, and either in addition to or in lieu of his remuneration as a\nDirector.\n\nDELEGATION OF THE BOARD'S POWERS\n--------------------------------\n\n     88.  The Board may by power of attorney appoint any company, firm or person\nor any fluctuating body of persons, whether nominated directly or indirectly by\nthe Board, to be the attorney or attorneys of the Company for such purposes and\nwith such powers, authorities and discretions (not exceeding those vested in or\nexercisable by the Board under these Bye-Laws) and for such period and subject\nto such conditions as it may think fit, and any such power of attorney may\ncontain such provisions for the protection and convenience of persons dealing\nwith any such attorney and of such attorney as the Board may think fit, and may\nalso authorise any such attorney to sub-delegate all or any of the powers,\nauthorities and discretions vested in him.\n\n     89.  The Board may entrust to and confer upon any Director, officer or,\nwithout prejudice to the provisions of Bye-Law 90, other individual any of the\npowers exercisable by it upon such terms and conditions with such restrictions\nas it thinks fit, and either collaterally with, or to the exclusion of, its own\npowers, and may from time to time revoke or vary all or any of such powers but\nno person dealing in good faith and without notice of such revocation or\nvariation shall be affected thereby.\n\n     90.  The Board may delegate any of its powers, authorities and discretions\nto committees, consisting of such person or persons (whether a member or members\nof its body or not) as it thinks fit.  Any committee so formed shall, in the\nexercise of the powers, authorities and discretions so delegated, conform to any\nregulations which may be imposed upon it by the Board.\n\nPROCEEDINGS OF THE BOARD\n------------------------\n\n     91.  The Board may meet for the despatch of business, adjourn and otherwise\nregulate its meetings as it thinks fit. Questions arising at any meeting shall\nbe determined by a majority of votes.  In the case of an equality of votes the\nmotion shall be deemed to have been lost.  A Director may, and the Secretary on\nthe requisition of a Director shall, at any time summon a meeting of the Board.\n\n     92.  Notice of a meeting of the Board shall be deemed to be duly given to a\nDirector if it is given to him personally or by word of mouth or sent to him by\npost, cable, telex, telecopier or other mode of representing or reproducing\nwords in a legible and non-transitory form at his last known address or any\nother address given by him to the Company\n\n \n                                                                              21\n\nfor this purpose.  A Director may waive notice of any meeting either\nprospectively or retrospectively.\n\n     93.  (a)  The quorum necessary for the transaction of the business of the\nBoard may be fixed by the Board and, unless so fixed at any other number, shall\nbe two individuals.  Any Director who ceases to be a Director at a meeting of\nthe Board may continue to be present and to act as a Director and be counted in\nthe quorum until the termination of the meeting if no other Director objects and\nif otherwise a quorum of Directors would not be present.\n\n          (b) A Director who to his knowledge is in any way, whether directly or\n     indirectly, interested in a contract or proposed contract, transaction or\n     arrangement with the Company and has complied with the provisions of the\n     Companies Acts and these Bye-Laws with regard to disclosure of his interest\n     shall be entitled to vote in respect of any contract, transaction or\n     arrangement in which he is so interested and if he shall do so his vote\n     shall be counted, and he shall be taken into account in ascertaining\n     whether a quorum is present.\n\n          (c) The Resident Representative shall, upon delivering written notice\n     of an address for the purposes of receipt of notice, to the Registered\n     Office, be entitled to receive notice of, attend and be heard at, and to\n     receive minutes of all meetings of the Board.\n\n     94.  So long as a quorum of Directors remains in office, the continuing\nDirectors may act notwithstanding any vacancy in the Board but, if no such\nquorum remains, the continuing Directors or a sole continuing Director may act\nonly for the purpose of calling a general meeting.\n\n     95.  The Chairman (if any) of the Board or, in his absence, the President\nshall preside as chairman at every meeting of the Board.  If there is no such\nChairman or President, or if at any meeting the Chairman or the President is not\npresent within five minutes after the time appointed for holding the meeting, or\nis not willing to act as chairman, the Directors present may choose one of their\nnumber to be chairman of the meeting.\n\n     96.  The meetings and proceedings of any committee consisting of two or\nmore members shall be governed by the provisions contained in these Bye-Laws for\nregulating the meetings and proceedings of the Board so far as the same are\napplicable and are not superseded by any regulations imposed by the Board.\n\n     97.  A resolution in writing signed by all the Directors for the time being\nentitled to receive notice of a meeting of the Board or by all the members of a\ncommittee for the time being shall be as valid and effectual as a resolution\npassed at a meeting of the Board or, as the case may be, of such committee duly\ncalled and constituted.  Such resolution may be contained in one document or in\nseveral documents in the like form each signed by one or more of the Directors\nor members of the committee concerned.\n\n \n                                                                              22\n\n     98.  A meeting of the Board or a committee appointed by the Board may be\nheld by means of such telephone, electronic or other communication facilities as\npermit all persons participating in the meeting to communicate with each other\nsimultaneously and instantaneously and participation in such a meeting shall\nconstitute presence in person at such meeting.\n\n     99.  All acts done by the Board or by any committee or by any person acting\nas a Director or member of a committee or any person duly authorised by the\nBoard or any committee, shall, notwithstanding that it is afterwards discovered\nthat there was some defect in the appointment of any member of the Board or such\ncommittee or person acting as aforesaid or that they or any of them were\ndisqualified or had vacated their office, be as valid as if every such person\nhad been duly appointed and was qualified and had continued to be a Director,\nmember of such committee or person so authorised.\n\nOFFICERS\n--------\n\n     100. The officers of the Company shall include a President and a Vice-\nPresident or a Chairman and a Deputy Chairman who shall be Directors and shall\nbe elected by the Board as soon as possible after the statutory meeting and each\nAnnual General Meeting.  In addition, the Board may appoint any person whether\nor not he is a Director to hold such office as the Board may from time to time\ndetermine. Any person elected or appointed pursuant to this Bye-Law shall hold\noffice for such period and upon such terms as the Board may determine and the\nBoard may revoke or terminate any such election or appointment.  Any such\nrevocation or termination shall be without prejudice to any claim for damages\nthat such officer may have against the Company or the Company may have against\nsuch officer for any breach of any contract of service between him and the\nCompany which may be involved in such revocation or termination.  Save as\nprovided in the Companies Acts or these Bye-Laws, the powers and duties of the\nofficers of the Company shall be such (if any) as are determined from time to\ntime by the Board.\n\nMINUTES\n-------\n\n     101. The Directors shall cause minutes to be made and books kept for the\npurpose of recording -\n\n          (a) all appointments of officers made by the Directors;\n\n          (b) the names of the Directors and other persons (if any) present at\n     each meeting of Directors and of any committee;\n\n          (c) of all proceedings at meetings of the Company, of the holders of\n     any class of shares in the Company, and of committees;\n\n          (d) of all proceedings of its managers (if any).\n\n \n                                                                              23\n\nSECRETARY AND RESIDENT REPRESENTATIVE\n-------------------------------------\n\n     102. The Secretary and, if required, the Resident Representative,  shall be\nappointed by the Board at such remuneration (if any) and upon such terms as it\nmay think fit and any Secretary and Resident Representative so appointed may be\nremoved by the Board.\n\nThe duties of the Secretary and the duties of the Resident Representative shall\nbe those prescribed by the Companies Acts together with such other duties as\nshall from time to time be prescribed by the Board.\n\n     103. A provision of the Companies Acts or these Bye-Laws requiring or\nauthorising a thing to be done by or to a Director and the Secretary shall not\nbe satisfied by its being done by or to the same person acting both as Director\nand as, or in the place of, the Secretary.\n\nTHE SEAL\n--------\n\n     104. (a)  The Seal shall consist of a circular metal device with the name\nof the Company around the outer margin thereof and the country and year of\nincorporation across the centre thereof.  Should the Seal not have been received\nat the Registered Office in such form at the date of adoption of this Bye-Law\nthen, pending such receipt, any document requiring to be sealed with the Seal\nshall be sealed by affixing a red wafer seal to the document with the name of\nthe Company, and the country and year of incorporation type written across the\ncentre thereof.\n\n          (b) The Board shall provide for the custody of every Seal.  A Seal\n     shall only be used by authority of the Board or of a committee constituted\n     by the Board.  Subject to these Bye-laws, any instrument to which a Seal is\n     affixed shall be signed by either two Directors, or by the Secretary and\n     one Director, or by the Secretary or by any one person whether or not a\n     Director or Officer, who has been authorised either generally or\n     specifically to attest to the use of a Seal.\n\nDIVIDENDS AND OTHER PAYMENTS\n----------------------------\n\n     105. The Board may from time to time declare cash dividends or\ndistributions out of contributed surplus to be paid to the Shareholders\naccording to their rights and interests including such interim dividends as\nappear to the Board to be justified by the position of the Company.  The Board\nmay also pay any fixed cash dividend which is payable on any shares of the\nCompany half yearly or on such other dates, whenever the position of the\nCompany, in the opinion of the Board, justifies such payment.\n\n106. Except insofar as the rights attaching to, or the terms of issue of, any\nshare otherwise provide:-\n\n          (a) all dividends or distributions out of contributed surplus may be\n     declared and paid according to the amounts paid up on the shares in respect\n     of which the dividend or distribution is paid, and an amount paid up on a\n     share in advance of calls may be treated for the purpose of this Bye-Law as\n     paid-up on the share;\n\n \n                                                                              24\n\n          (b) dividends or distributions out of contributed surplus may be\n     apportioned and paid pro rata according to the amounts paid-up on the\n     shares during any portion or portions of the period in respect of which the\n     dividend or distribution is paid.\n\n     107. The Board may deduct from any dividend, distribution or other moneys\npayable to a Shareholder by the Company on or in respect of any shares all sums\nof money (if any) presently payable by him to the Company on account of calls or\notherwise in respect of shares of the Company.\n\n     108. No dividend, distribution or other moneys payable by the Company on or\nin respect of any share shall bear interest against the Company.\n\n     109. Any dividend, distribution, interest or other sum payable in cash to\nthe holder of shares may be paid by cheque or warrant sent through the post\naddressed to the holder at his address in the Register or, in the case of joint\nholders, addressed to the holder whose name stands first in the Register in\nrespect of the shares at his registered address as appearing in the Register or\naddressed to such person at such address as the holder or joint holders may in\nwriting direct.  Every such cheque or warrant shall, unless the holder or joint\nholders otherwise direct, be made payable to the order of the holder or, in the\ncase of joint holders, to the order of the holder whose name stands first in the\nRegister in respect of such shares, and shall be sent at his or their risk and\npayment of the cheque or warrant by the bank on which it is drawn shall\nconstitute a good discharge to the Company.  Any one of two or more joint\nholders may give effectual receipts for any dividends, distributions or other\nmoneys payable or property distributable in respect of the shares held by such\njoint holders.\n\n     110. Any dividend or distribution out of contributed surplus unclaimed for\na period of six years from the date of declaration of such dividend or\ndistribution shall be forfeited and shall revert to the Company and the payment\nby the Board of any unclaimed dividend, distribution, interest or other sum\npayable on or in respect of the share into a separate account shall not\nconstitute the Company a trustee in respect thereof.\n\n     111. The Board may direct payment or satisfaction of any dividend or\ndistribution out of contributed surplus wholly or in part by the distribution of\nspecific assets, and in particular of paid-up shares or debentures of any other\ncompany, and where any difficulty arises in regard to such distribution or\ndividend the Board may settle it as it thinks expedient, and in particular, may\nauthorise any person to sell and transfer any fractions or may ignore fractions\naltogether, and may fix the value for distribution or dividend purposes of any\nsuch specific assets and may determine that cash payments shall be made to any\nShareholders upon the footing of the values so fixed in order to secure equality\nof distribution and may vest any such specific assets in trustees as may seem\nexpedient to the Board provided that such dividend or distribution may not be\nsatisfied by the distribution of any partly paid shares or debentures of any\ncompany without the sanction of a Resolution.\n\n \n                                                                              25\n\nRESERVES\n--------\n\n     112. The Board may, before recommending or declaring any dividend or\ndistribution out of contributed surplus, set aside such sums as it thinks proper\nas reserves which shall, at the discretion of the Board, be applicable for any\npurpose of the Company and pending such application may, also at such\ndiscretion, either be employed in the business of the Company or be invested in\nsuch investments as the Board may from time to time think fit.  The Board may\nalso without placing the same to reserve carry forward any sums which it may\nthink it prudent not to distribute.\n\nCAPITALIZATION OF PROFITS\n-------------------------\n\n     113. The Company may, upon the recommendation of the Board, at any time and\nfrom time to time pass a Resolution to the effect that it is desirable to\ncapitalize all or any part of any amount for the time being standing to the\ncredit of any reserve or fund which is available for distribution or to the\ncredit of any share premium account or any capital redemption reserve fund and\naccordingly that such amount be set free for distribution amongst the\nShareholders or any class of Shareholders who would be entitled thereto if\ndistributed by way of dividend and in the same proportions, on the footing that\nthe same be not paid in cash but be applied either in or towards paying up\namounts for the time being unpaid on any shares in the Company held by such\nShareholders respectively or in payment up in full of unissued shares,\ndebentures or other obligations of the Company, to be allotted and distributed\ncredited as fully paid amongst such Shareholders, or partly in one way and\npartly in the other, and the Board shall give effect to such Resolution,\nprovided that for the purpose of this Bye-Law, a share premium account and a\ncapital redemption reserve fund may be applied only in paying up of unissued\nshares to be issued to such Shareholders credited as fully paid and provided\nfurther that any sum standing to the credit of a share premium account may only\nbe applied in crediting as fully paid shares of the same class as that from\nwhich the relevant share premium was derived.\n\n     114. Where any difficulty arises in regard to any distribution under the\nlast preceding Bye-Law, the Board may settle the same as it thinks expedient\nand, in particular, may authorise any person to sell and transfer any fractions\nor may resolve that the distribution should be as nearly as may be practicable\nin the correct proportion but not exactly so or may ignore fractions altogether,\nand may determine that cash payments should be made to any Shareholders in order\nto adjust the rights of all parties, as may seem expedient to the Board.  The\nBoard may appoint any person to sign on behalf of the persons entitled to\nparticipate in the distribution any contract necessary or desirable for giving\neffect thereto and such appointment shall be effective and binding upon the\nShareholders.\n\nRECORD DATES\n------------\n\n     115. Notwithstanding any other provisions of these Bye-Laws, the Company\nmay by Resolution or the Board may fix any date as the record date for any\ndividend, distribution, allotment or issue and for the purpose of identifying\nthe persons entitled to receive notices of general meetings.  Any such record\ndate may be on or at any time before or after any date on\n\n \n                                                                              26\n\nwhich such dividend, distribution, allotment or issue is declared, paid or made\nor such notice is despatched.\n\nACCOUNTING RECORDS\n------------------\n\n     116. The Board shall cause to be kept accounting records sufficient to give\na true and fair view of the state of the Company's affairs and to show and\nexplain its transactions, in accordance with the Companies Acts.\n\n     117. The records of account shall be kept at the Registered Office or at\nsuch other place or places as the Board thinks fit, and shall at all times be\nopen to inspection by the Directors: PROVIDED that if the records of account are\nkept at some place outside Bermuda, there shall be kept at an office of the\nCompany in Bermuda such records as will enable the Directors to ascertain with\nreasonable accuracy the financial position of the Company at the end of each\nthree month period.  No Shareholder (other than an officer of the Company) shall\nhave any right to inspect any accounting record or book or document of the\nCompany except as conferred by law or authorised by the Board or by Resolution.\n\n     118. A copy of every balance sheet and statement of income and expenditure,\nincluding every document required by law to be annexed thereto, which is to be\nlaid before the Company in general meeting, together with a copy of the\nauditors' report, shall be sent to each person entitled thereto in accordance\nwith the requirements of the Companies Acts.\n\nAUDIT\n-----\n\n     119. Save and to the extent that an audit is waived in the manner permitted\nby the Companies Acts, auditors shall be appointed and their duties regulated in\naccordance with the Companies Acts, any other applicable law and such\nrequirements not inconsistent with the Companies Acts as the Board may from time\nto time determine.\n\nSERVICE OF NOTICES AND OTHER DOCUMENTS\n--------------------------------------\n\n     120. Any notice or other document (including a share certificate) may be\nserved on or delivered to any Shareholder by the Company either personally or by\nsending it through the post (by airmail where applicable) in a pre-paid letter\naddressed to such Shareholder at his address as appearing in the Register or by\ndelivering it to or leaving it at such registered address.  In the case of joint\nholders of a share, service or delivery of any notice or other document on or to\none of the joint holders shall for all purposes be deemed as sufficient service\non or delivery to all the joint holders.  Any notice or other document if sent\nby post shall be deemed to have been served or delivered seven days after it was\nput in the post, and in proving such service or delivery, it shall be sufficient\nto prove that the notice or document was properly addressed, stamped and put in\nthe post.\n\n     121. Any notice of a general meeting of the Company shall be deemed to be\nduly given to a Shareholder, or other person entitled to it, if it is sent to\nhim by cable, telex, telecopier or other mode of representing or reproducing\nwords in a legible and non-transitory\n\n \n                                                                              27\n\nform at his address as appearing in the Register or any other address given by\nhim to the Company for this purpose.  Any such notice shall be deemed to have\nbeen served twenty-four hours after its despatch.\n\n     122. Any notice or other document delivered, sent or given to a Shareholder\nin any manner permitted by these Bye-Laws shall, notwithstanding that such\nShareholder is then dead or bankrupt or that any other event has occurred, and\nwhether or not the Company has notice of the death or bankruptcy or other event,\nbe deemed to have been duly served or delivered in respect of any share\nregistered in the name of such Shareholder as sole or joint holder unless his\nname shall, at the time of the service or delivery of the notice or document,\nhave been removed from the Register as the holder of the share, and such service\nor delivery shall for all purposes be deemed as sufficient service or delivery\nof such notice or document on all persons interested (whether jointly with or as\nclaiming through or under him) in the share.\n\nWINDING UP\n----------\n\n     123. If the Company shall be wound up, the liquidator may, with the\nsanction of a Resolution of the Company and any other sanction required by the\nCompanies Acts, divide amongst the Shareholders in specie or kind the whole or\nany part of the assets of the Company (whether they shall consist of property of\nthe same kind or not) and may for such purposes set such values as he deems fair\nupon any property to be divided as aforesaid and may determine how such division\nshall be carried out as between the Shareholders or different classes of\nShareholders.  The liquidator may, with the like sanction, vest the whole or any\npart of such assets in trustees upon such trust for the benefit of the\ncontributories as the liquidator, with the like sanction, shall think fit, but\nso that no Shareholder shall be compelled to accept any shares or other assets\nupon which there is any liability.\n\nINDEMNITY\n---------\n\n     124. Subject to the proviso below, every Director, officer of the Company\nand member of a committee constituted under Bye-Law 90 and any Resident\nRepresentative shall be indemnified out of the funds of the Company against all\nliabilities, loss, damage or expense (including but not limited to liabilities\nunder contract, tort and statute or any applicable foreign law or regulation and\nall reasonable legal and other costs and expenses properly payable) incurred or\nsuffered by him as such Director, officer, committee member or Resident\nRepresentative and the indemnity contained in this Bye-Law shall extend to any\nperson acting as a Director, officer, committee member or Resident\nRepresentative in the reasonable belief that he has been so appointed or elected\nnotwithstanding any defect in such appointment or election PROVIDED ALWAYS that\nthe indemnity contained in this Bye-Law shall not extend to any matter which\nwould render it void pursuant to the Companies Acts.\n\n     125. Every Director, officer, member of a committee duly constituted under\nBye-Law 90 or Resident Representative of the Company shall be indemnified out of\nthe funds of the Company against all liabilities incurred by him as such\nDirector, officer, committee member or Resident Representative in defending any\nproceedings, whether civil or criminal,\n\n \n                                                                              28\n\nin which judgment is given in his favour, or in which he is acquitted, or in\nconnection with any application under the Companies Acts in which relief from\nliability is granted to him by the court.\n\n     126. To the extent that any Director, officer, member of a committee duly\nconstituted under Bye-Law 90 or Resident Representative is entitled to claim an\nindemnity pursuant to these Bye-Laws in respect of amounts paid or discharged by\nhim, the relative indemnity shall take effect as an obligation of the Company to\nreimburse the person making such payment or effecting such discharge.\n\nAMALGAMATION\n------------\n\n     127. Any resolution proposed for consideration at any general meeting to\napprove the amalgamation of the Company with any other company, wherever\nincorporated, shall require the approval of a simple majority of votes cast at\nsuch meeting and the quorum for such meeting shall be that required in Bye-law\n49.\n\nALTERATION OF BYE-LAWS\n----------------------\n\n     128. These Bye-Laws may be amended from time to time in the manner provided\nfor in the Companies Acts.\n\n \n                                                         (Revised June 13, 1997)\n\n                                              Form of Schedule I to the Bye-Laws\n                                             of Global Telesystems Holdings Ltd.\n\n\n                                   SCHEDULE I\n\n                       Senior Increasing Rate Redeemable\n                         Exchangeable Preference Shares\n                        ----------------------------------\n\n          The terms of the Company's authorized Senior Increasing Rate\nRedeemable Exchangeable Preference Shares shall be as set forth below in this\nSchedule I.\n\n          (a) Designation.  There is hereby created out of the authorized and\n              -----------                                                    \nunissued Preferred Shares of the Company a class of Preferred Shares designated\nas the \"Senior Increasing Rate Redeemable Exchangeable Preference Shares.\"  The\nnumber of shares constituting such class shall be 500,000 and are referred to as\nthe \"Preference Shares.\"  100,000 Preference Shares shall be initially issued\nwith the remaining 400,000 shares reserved for issuance in accordance with\nparagraph (d) hereof.  The liquidation preference of the Preference Shares shall\nbe $1,000.00 per share.\n\n          (b) Currency.  The Preference Shares shall be denominated in United\n              --------                                                       \nStates currency and all payments and distributions thereon or with respect\nthereto shall be made in United States currency.  All references to \"$\" or\n\"dollars\" refer to United States currency.\n\n          (c) Rank.  The Preference Shares shall, with respect to dividends and\n              ----                                                             \ndistributions upon liquidation, winding-up and dissolution of the Company, rank\n(i) senior to all classes of Common Stock of the Company and to each other class\nof Capital Stock of the Company or series of Preference Shares of the Company\nhereafter created the terms of which do not expressly provide that it ranks\nsenior to or on a parity with the Preference Shares as to dividends and\ndistributions upon liquidation, winding up and dissolution of the Company\n(collectively referred to as \"Junior Securities\"); (ii) pari passu with each\n                                                        ---- -----          \nclass of Capital Stock of the Company or series of Preferred Stock of the\nCompany hereafter created, the terms of which expressly provide that such class\nor series will rank on a parity with the Preference Shares as to dividends and\ndistributions upon liquidation, winding-up and dissolution (collectively\nreferred to as \"Parity Securities\"); provided that any such Parity Securities\n                                     --------                                \nnot issued in accordance with the requirements of paragraph (g)(ii)(A) hereof\nshall be deemed to be Junior Securities and not Parity Securities; and (iii)\njunior to each class of Capital Stock of the Company or series of Preferred\nShares of the Company hereafter created the terms of which expressly provide\nthat such class or series will rank senior to the Preference Shares as to\ndividends and distributions upon\n\n \n                                                                               2\n\n\nliquidation, winding-up and dissolution of the Company (collectively referred to\nas \"Senior Securities\"); provided that any such Senior Securities that were not\n                         --------                                              \napproved by the Holders in accordance with paragraph (g)(ii)(B) hereof shall be\ndeemed to be Junior Securities and not Senior Securities.\n\n          (d)  Dividends.\n               --------- \n\n            (i) Beginning on the Issue Date, the Holders of the outstanding\n     Preference Shares shall be entitled to receive, when, as and if declared by\n     the Board of Directors, out of funds legally available therefor,\n     distributions in the form of dividends on each Preference Share, at a rate\n                                                                               \n     per annum equal to 14% of the liquidation preference per Preference Share,\n     --- -----                                                                 \n     payable on each Dividend Payment Date.  If the Preference Shares are not\n     redeemed prior to April 1, 2001 the dividend rate shall increase by 0.50%\n                                                                              \n     per annum on April 1, 2001 and by an additional 0.50% per annum on each\n     --- -----                                             --- -----        \n     subsequent April 1; provided that in no event shall the dividend rate borne\n                         --------                                               \n     by the Preference Shares exceed 20% per annum.  All dividends shall be\n                                         --- -----                         \n     cumulative, whether or not earned or declared, on a daily basis from the\n     date of issuance of the Preference Shares and shall be payable in arrears,\n     on each Dividend Payment Date, commencing June 1, 1997.  Dividends may be\n     paid, at the Company's option, on any applicable Dividend Payment Date\n     occurring on or prior to April 1, 2002 either in cash (and, if paid in\n     cash, payable only for such consecutive Dividend Periods immediately\n     preceding the applicable Dividend Payment Date for which dividends, whether\n     cash or in-kind, have not been declared and paid) or by the issuance of\n     additional Preference Shares (including fractional shares) having an\n     aggregate liquidation preference equal to the amount of such dividends.\n     Thereafter, dividends will be payable in cash only; provided that if the\n                                                         --------            \n     dividend rate exceeds 15% per annum, the Company may, at its option, cause\n                               --- -----                                       \n     any dividends in excess of 15% per annum to be paid in additional\n                                    --- -----                         \n     Preference Shares (including fractional Shares).  In the event that\n     dividends are declared and paid through the issuance of additional\n     Preference Shares on or prior to April 1, 2002 or as provided in the\n     previous sentence, such dividends shall be deemed paid in full and shall\n     not accumulate.  Each dividend shall be payable to the Holders of record as\n     they appear on the stock books of the Company on the Dividend Record Date\n     immediately preceding the related Dividend Payment Date.  Dividends shall\n     cease to accumulate in respect of the Preference Shares on the Exchange\n     Date or on the date of their earlier redemption unless the Company shall\n     have failed to issue the appropriate aggregate principal amount of Exchange\n     Notes in respect of the Preference Shares on such Exchange Date or shall\n     have failed to pay the relevant redemption price on the date fixed for\n     redemption.\n\n \n                                                                               3\n\n            (ii) All dividends paid with respect to the Preference Shares\n     pursuant to paragraph (d)(i) shall be paid pro rata to the Holders entitled\n                                                --- ----                        \n     thereto.\n\n            (iii)  Nothing herein contained shall in any way or under any\n     circumstances be construed or deemed to require the Board of Directors to\n     declare, or the Company to pay or set apart for payment, any dividends on\n     Preference Shares at any time.\n\n            (iv) Dividends accruing after April 1, 2002 on the Preference Shares\n     for any past Dividend Period and dividends in connection with any optional\n     redemption pursuant to paragraph (f)(i) may be declared and paid at any\n     time, without reference to any regular Dividend Payment Date, to Holders of\n     record on such date, not more than forty-five (45) days prior to the\n     payment thereof, as may be fixed by the Board of Directors of the Company.\n\n            (v) Dividends payable on the Preference Shares for any period less\n     than a year shall be computed on the basis of a 360-day year of twelve 30-\n     day months and the actual number of days elapsed in the period for which\n     payable.\n\n            (e)  Liquidation Preference.\n                 ---------------------- \n\n          (i) In the event of any voluntary or involuntary liquidation,\n     dissolution or winding up of the affairs of the Company, the Holders of\n     Preference Shares then outstanding shall be entitled to be paid out of the\n     assets of the Company available for distribution to its stockholders an\n     amount in cash equal to the liquidation preference for each share\n     outstanding, plus, without duplication, an amount in cash equal to\n     accumulated and unpaid dividends thereon to the date fixed for liquidation,\n     dissolution or winding up (including an amount equal to a prorated dividend\n     for the period from the last Dividend Payment Date to the date fixed for\n     liquidation, dissolution or winding up) before any distribution shall be\n     made or any assets distributed to the holders of any of the Junior\n     Securities including, without limitation, Common Stock of the Company.\n     Except as provided in the preceding sentence, Holders of Preference Shares\n     shall not be entitled to any distribution in the event of any liquidation,\n     dissolution or winding up of the affairs of the Company.  If the assets of\n     the Company are not sufficient to pay in full the liquidation payments\n     payable to the Holders of outstanding Preference Shares, then the holders\n     of all such shares shall share equally and ratably in such distribution of\n     assets first in proportion to the full liquidation preference to which each\n     is entitled until such preferences are paid in full, and then in proportion\n     to their respective amounts of accumulated but unpaid dividends.\n\n \n                                                                               4\n\n          (ii) For the purposes of this paragraph (e), neither the sale,\n     conveyance, exchange or transfer (for cash, shares of stock, securities or\n     other consideration) of all or substantially all of the property or assets\n     of the Company nor the consolidation or merger of the Company with or into\n     one or more entities shall be deemed to be a liquidation, dissolution or\n     winding up of the affairs of the Company.\n\n          (f)  Redemption.\n               ---------- \n\n          (i) Optional Redemption.  (A) The Company may, at the option of the\n              -------------------                                            \n     Board of Directors, redeem at any time on or after April 1, 1997, in whole\n     or in part, in the manner provided for in paragraph (f)(iii) hereof, any or\n     all of the Preference Shares, at the redemption prices (expressed as a\n     percentage of the liquidation preference) set forth below plus, without\n     duplication, an amount in cash equal to all accumulated and unpaid\n     dividends per share (including an amount in cash equal to a prorated\n     dividend for the period from the Dividend Payment Date immediately prior to\n     the Redemption Date to the Redemption Date) (the \"Optional Redemption\n     Price\").  The redemption prices shall be as follows if redeemed during the\n     12-month period beginning April 1 of each of the years set forth below:\n\n               1997............................ 114%\n               1998............................ 114%\n               1999............................ 114%\n               2000............................ 114%\n               2001............................ 114%\n               2002............................ 111%\n               2003............................ 108%\n               2004............................ 105%\n               2005............................ 102%\n               2006............................ 100%\n\n     ; provided that no redemption pursuant to this paragraph (f)(i)(A) shall be\n       --------                                                                 \n     authorized or made unless prior thereto full accumulated and unpaid\n     dividends are declared and paid in full, or declared and a sum in cash set\n     apart sufficient for such payment, on the Preference Shares for all\n     Dividend Periods terminating on or prior to the Redemption Date.\n\n          (B) In the event of a redemption pursuant to paragrap h (f)(i)(A)\n     hereof of only a portion of the then outstanding Preference Shares, the\n     Company shall effect such redemption on a pro rata basis according to the\n                                               --- ----                       \n     number of shares held by each Holder of the Preference Shares, except that\n     the Company may redeem such shares held by Holders of fewer than 10 shares\n     (or shares held by Holders who would hold less than 10 shares as a result\n     of such redemption), as may be determined by the Company.\n\n \n                                                                               5\n\n          (ii) Mandatory Redemption.  (A) The Company will, on each June 1 and\n               --------------------                                           \n     December 1 commencing on the first such date to occur more than 90 days\n     after the Commercial Operation Date, apply an amount equal to 100% of\n     Excess Cash Flow to mandatorily redeem the Preference Shares on a pro rata\n     basis, at the redemption prices (expressed as a percentage of the\n     liquidation preference) set forth below, plus, without duplication, an\n     amount in cash equal to all accumulated and unpaid dividends per share\n     (including an amount in cash equal to a prorated dividend for the period\n     from the Dividend Payment Date immediately prior to the Redemption Date to\n     the Redemption Date); provided that any Excess Cash Flow shall be applied\n                           --------                                           \n     (i) first, to mandatorily redeem the Senior Notes pursuant to the\n     provisions thereof, (ii) second, if none of the Senior Notes are\n     outstanding, to pay accumulated but unpaid dividends in cash on the\n     Preference Shares and (iii) third, to redeem the Preference Shares in\n     accordance with the terms of this Section (f)(ii)(A).  The redemption\n     prices shall be as follows if redeemed during the 12-month period beginning\n     April 1 of the years set forth below:\n\n\n                                1997.................  114%\n                                1998.................  114%\n                                1999.................  112%\n                                2000.................  112%\n                                2001.................  107%\n                                2002 and thereafter..  100%\n\nNotwithstanding the foregoing, at such time as at least $50 million in aggregate\nliquidation preference of Preference Shares has been redeemed or repurchased,\nExcess Cash Flow may be used for a Permitted System Upgrade in lieu of redeeming\nany Preference Shares.\n\n          (B)  On April 1, 2007, the Company shall redeem, to the extent of\n     funds legally available therefor, in the manner provided for in paragraph\n     (e)(iii) hereof, all of the Prefe rence Shares then outstanding at a\n     redemption price equal to 100% of the liquidation preference per share,\n     plus, without duplication, an amount in cash equal to all accumulated and\n     unpaid dividends per share (including an amount equal to a prorated\n     dividend for the period from the Dividend Payment Date immediately prior to\n     the Redemption Date to the Redemp tion Date) (the \"Mandatory Redemption\n     Price\").\n\n          (iii)  Procedures for Redemption.  (A) At least thirty (30) days and\n                 -------------------------                                    \n     not more than sixty (60) days prior to the date fixed for any redemption of\n     the Preference Shares, written notice (the \"Redemption Notice\") shall be\n     given by first class mail, postage prepaid, to each Holder of record on the\n     record date fixed for such redemption of the Preference Shares at such\n     Holder's address as it appears on the stock books of the Company, provided\n                                                                       --------\n     that no failure to\n\n \n                                                                               6\n\n     give such notice nor any deficiency therein shall affect the validity of\n     the procedure for the redemption of any Preference Shares to be redeemed\n     except as to the Holder or Holders to whom the Company has failed to give\n     said notice or to whom such notice was defective.  The Redemption Notice\n     shall state:\n\n               (1)  whether the redemption is pursuant to paragraph (f)(i) or\n          (f)(ii) hereof;\n\n               (2) the Optional Redemption Price or the Mandatory Redemption\n          Price, as the case may be;\n\n               (3) whether all or less than all the outstanding shares of the\n          Preference Shares are to be redeemed and the total number of\n          Preference Shares being redeemed;\n\n               (4)  the date fixed for redemption;\n\n               (5) that the Holder is to surrender to the Company, in the\n          manner, at the place or places and at the price designated, his\n          certificate or certificates representing the Preference Shares to be\n          redeemed; and\n\n               (6) that dividends on the Preference Shares to be redeemed shall\n          cease to accumulate on such Redemption Date unless the Company\n          defaults in the payment of the Optional Redemption Price or the\n          Mandatory Redemption Price, as the case may be.\n\n          (B)  Each Holder of Preference Shares shall surrender the certificate\n     or certificates representing such Preference Shares to the Company, duly\n     endorsed (or otherwise in proper form for transfer, as determined by the\n     Company), in the manner and at the place designated in the Redemption\n     Notice, and on the Redemption Date the full Optional Redemption Price or\n     Mandatory Redemption Price, as the case may be, for such shares shall be\n     payable in cash to the Person whose name appears on such certificate or\n     certificates as the owner thereof, and each surrendered certificate shall\n     be canceled and retired.  In the event that less than all of the shares\n     represented by any such certificate are redeemed, a new certificate shall\n     be issued representing the unredeemed shares.\n\n          (C)  On and after the Redemption Date, unless the Company defaults in\n     the payment in full of the applicable redemption price, dividends on the\n     Preference Shares called for redemption shall cease to accumulate on the\n     Redemption Date, and all rights of the Holders of redeemed shares shall\n     terminate with respect thereto on the Redemption Date, other than the right\n     to receive the Optional Redemption Price or the Mandatory Redemption Price,\n     as the case may be, without interest; provided, however, that if a notice\n                                           --------  -------                  \n     of redemption\n\n \n                                                                               7\n\n     shall have been given as provided in paragraph (iii)(A) above and the funds\n     necessary for redemption (including an amount in respect of all dividends\n     that will accrue to the Redemption Date) shall have been irrevocably\n     deposited in trust for the equal and ratable benefit for the Holders of the\n     shares to be redeemed, then, at the close of business on the day on which\n     such funds are segregated and set aside, the Holders of the shares to be\n     redeemed shall cease to be stockholders of the Company and shall be\n     entitled only to receive the Optional Redemption Price or the Mandatory\n     Redemption Price, as the case may be, without interest.\n\n          (g)  Voting Rights.\n               ------------- \n\n          (i)  The Holders of Preference Shares, except as otherwise required\n     under Bermuda law or as set forth in paragraphs (ii), (iii) and (iv) below,\n     shall not be entitled or permitted to vote on any matter required or\n     permitted to be voted upon by the stockholders of the Company.\n\n          (ii) (A) So long as any shares of the Preference Shares are\n     outstanding, the Company shall not authorize any additional Preference\n     Shares or any class of Parity Securities without the affirmative vote or\n     consent of Holders of at least a majority of the then outstanding\n     Preference Shares, voting or consenting, as the case may be, as one class,\n     given in person or by proxy, either in writing or by resolution adopted at\n     an annual or special meeting; provided, however, that no such vote or\n                                   --------  -------                      \n     consent shall be necessary in connection with the issuance of additional\n     Preference Shares pursuant to the provisions of paragraph (d) hereof.\n\n          (B) So long as any Preference Shares are outstanding, the Company\n     shall not authorize any class of Senior Securities without the affirmative\n     vote or consent of Holders of at least a majority of the outstanding\n     Preference Shares, voting or consenting, as the case may be, as one class,\n     given in person or by proxy, either in writing or by resolution adopted at\n     an annual or special meeting.\n\n          (C) So long as any Preference Shares are outstanding, the Company\n     shall not amend this Certificate of Designation so as to affect materially\n     and adversely the specified rights, preferences, privileges or voting\n     rights of holders of Preference Shares without the affirmative vote or\n     consent of Holders of at least a majority of the issued and outstanding\n     Preference Shares, voting or consenting, as the case may be, as one class,\n     given in person or by proxy, either in writing or by resolution adopted at\n     an annual or special meeting.\n\n          (D) While any of the Preference Shares are outstanding, the Company\n     shall not amend or modify the\n\n \n                                                                               8\n\n     Exchange Notes to be issued upon an exchange of Preference Shares in\n     accordance with paragraph (h) hereof in the form as executed on the Issue\n     Date without the affirmative vote or consent of Holders of at least a\n     majority of the Preference Shares then outstanding, voting or consenting,\n     as the case may be, as one class, and given in person or by proxy, either\n     in writing or by resolution adopted at an annual or special meeting.\n\n          (E) Except as set forth in paragraphs (g)(ii)(A), (g)(ii)(B) and\n     (g)(ii)(C) above, (x) the creation, authorization or issuance of any shares\n     of any Junior Securities, Parity Securities or Senior Securities or (y) the\n     increase or decrease in the amount of authorized Capital Stock of any\n     class, including Preference Shares, shall not require the consent of\n     Holders of Preference Shares and shall not be deemed to affect adversely\n     the rights, preferences, privileges or voting rights of Holders of\n     Preference Shares.\n\n          (iii)  Without the affirmative vote or consent of Holders of a\n     majority of the issued and outstanding Preference Shares, voting or\n     consenting, as the case may be, as one class, given in person or by proxy,\n     either in writing or by resolution adopted at an annual or special meeting,\n     the Company shall not, in a single transaction or series of related\n     transactions, consolidate or merge with or into, or sell, assign, transfer,\n     lease, convey or otherwise dispose of all or substantially all of its\n     assets to, another Person or adopt a plan of liquidation unless:  (A)\n     either (1) the Company is the surviving or continuing Person or (2) the\n     Person (if other than the Company) formed by such consolidation or into\n     which the Company is merged or the Person that acquires by conveyance,\n     transfer or lease the properties and assets of the Company substantially as\n     an entirety or in the case of a plan of liquidation, the Person to which\n     assets of the Company have been transferred, shall be a corporation,\n     partnership or trust organized and existing under the laws of the United\n     States or any State thereof or the District of Columbia or under the laws\n     of Bermuda; (B) the Preference Shares shall be converted into or exchanged\n     for and shall become shares of such successor, transferee or resulting\n     Person, having in respect of such successor, transferee or resulting Person\n     the same powers, preferences and relative, participating, optional or other\n     special rights and the qualifications, limitations or restrictions thereon,\n     that the Preference Shares had immediately prior to such transaction; (C)\n     immediately after giving effect to such transactions, no Voting Rights\n     Triggering Event shall have occurred or be continuing; and (D) the Company\n     has delivered to the Holders of the Preference Shares prior to the\n     consummation of the proposed transaction an Officers' Certificate and an\n     Opinion of Counsel, each stating that such consolidation, merger or\n\n \n                                                                               9\n\n     transfer complies with the terms hereof and that all conditions precedent\n     herein relating to such transaction have been satisfied.\n\n          For purposes of the foregoing, the transfer (by lease, assignment,\n     sale or otherwise, in a single transaction or series of related\n     transactions) of all or substantially all of the properties or assets of\n     one or more Subsidiaries of the Company, the Capital Stock of which\n     constitutes all or substantially all of the properties and assets of the\n     Company shall be deemed to be the transfer of all or substantially all of\n     the properties and assets of the Company.\n\n          (iv) (A)  If (1) the Company fails to pay dividends on the Preference\n     Shares in an amount equivalent to at least four quarterly dividends (a\n     \"Dividend Default\"); (2) the Company fails to redeem all of the then\n     outstanding Preference Shares on April 1, 2007 or otherwise fails to\n     discharge any redemption obligation with respect to the Preference Shares;\n     (3) the Company fails to make a Change of Control Offer (whether pursuant\n     to the terms of paragraph (i)(v) or otherwise) following a Change of\n     Control if such Change of Control Offer is required by paragraph (i) hereof\n     or fails to purchase Preference Shares from Holders who elect to have such\n     shares purchased pursuant to the Change of Control Offer; then in the case\n     of any of clauses (1)-(3) the number of directors constituting the Board of\n     Directors shall be adjusted by the number, if any, necessary to permit the\n     Holders of Preference Shares, voting separately and as one class, to elect\n     the lesser of two directors or that number of directors constituting 25% of\n     the members of the Board of Directors.  Each such event described in\n     clauses (1), (2) and (3) is a \"Voting Rights Triggering Event.\"  Holders of\n     a majority of the issued and outstanding Preference Shares, voting\n     separately and as one class, shall have the exclusive right to elect the\n     lesser of two directors or that number of directors constituting 25% of the\n     members of the Board of Directors at a meeting therefor called upon\n     occurrence of such Voting Rights Triggering Event, and at every subsequent\n     meeting at which the terms of office of the directors so elected by the\n     Holders of Preference Shares expire (other than as described in (g)(iv)(B)\n     below).  The voting rights provided herein shall be the exclusive remedy at\n     law or in equity of the holders of Preference Shares for any Voting Rights\n     Triggering Event.\n\n          (B) The right of the Holders of Preference Shares voting together as a\n     separate class to elect members of the Board of Directors as set forth in\n     subparagraph (g)(iv)(A) above shall continue until such time as (x) in the\n     event such right arises due to a Dividend Default, all accumulated\n     dividends that are in arrears on the Preference Shares are\n\n \n                                                                              10\n\n     paid in full in cash; and (y) in all other cases, the failure, breach or\n     default giving rise to such Voting Rights Triggering Event is remedied,\n     cured or waived by the holders of at least a majority of the Preference\n     Shares then outstanding and entitled to vote thereon, at which time (1) the\n     special right of the Holders of Preference Shares so to vote as a class for\n     the election of directors and (2) the term of office of the directors\n     elected by the Holders of Preference Shares shall each terminate and the\n     directors elected by the holders of Common Stock or Capital Stock (other\n     than the Preference Shares), if applicable, shall constitute the entire\n     Board of Directors.  At any time after voting power to elect directors\n     shall have become vested and be continuing in the Holders of Preference\n     Shares pursuant to paragraph (g)(iv) hereof, or if vacancies shall exist in\n     the offices of directors elected by the Holders of Preference Shares, a\n     proper officer of the Company may, and upon the written request of the\n     Holders of record of at least twenty-five percent (25%) of the Preference\n     Shares then outstanding addressed to the secretary of the Company shall,\n     call a special meeting of the Holders of Preference Shares, for the purpose\n     of electing the directors which such Holders are entitled to elect.  If\n     such meeting shall not be called by a proper officer of the Company within\n     twenty (20) days after personal service of said written request upon the\n     secretary of the Company, or within twenty (20) days after mailing the same\n     within the United States by certified mail, addressed to the secretary of\n     the Company at its principal executive offices, then the Holders of record\n     of at least twenty-five percent (25%) of the outstanding Preference Shares\n     may designate in writing one of their number to call such meeting at the\n     reasonable expense of the Company, and such meeting may be called by the\n     Person so designated upon the notice required for the annual meetings of\n     stockholders of the Company and shall be held at the place for holding the\n     annual meetings of stockholders.  Any Holder of Preference Shares so\n     designated shall have, and the Company shall provide, access to the lists\n     of stockholders to be called pursuant to the provisions hereof.\n\n          (C) At any meeting held for the purpose of electing directors at which\n     the Holders of Preference Shares shall have the right, voting together as a\n     separate class, to elect directors as aforesaid, the presence in person or\n     by proxy of the Holders of at least a majority of the outstanding\n     Preference Shares shall be required to constitute a quorum of such\n     Preference Shares.\n\n          (D) Any vacancy occurring in the office of a director elected by the\n     Holders of Preference Shares may be filled by the remaining directors\n     elected by the Holders of Preference Shares unless and until such vacancy\n     shall be filled by the Holders of Preference Shares.\n\n \n                                                                              11\n\n          (v) In any case in which the Holders of Preference Shares shall be\n     entitled to vote pursuant to this paragraph (g) or pursuant to Bermuda law,\n     each Holder of Preference Shares entitled to vote with respect to such\n     matter shall be entitled to one vote for each Preference Share held.\n\n          (h)  Exchange.\n               -------- \n\n          (i) Requirements.  The outstanding Preference Shares are exchangeable,\n              ------------                                                      \n     in whole but not in part, at the option of the Company, at any time for\n     Global's Exchange Notes due 2007 (the \"Exchange Notes\") to be substantially\n     in the form of Exhibit A hereto; provided, however, that any such exchange\n                                      --------  -------                        \n     may only be made if on or prior to the date of such exchange (i) the\n     Company has paid (or is deemed to have paid) all accumulated dividends on\n     the Preference Shares (including the dividends payable on the date of\n     exchange) and there shall be no contractual impediment to such exchange;\n     (ii) no default or event of default under any other material instrument\n     governing Indebtedness of Global outstanding at the time would be caused\n     thereby; and (iii) the Company shall have delivered a written opinion to\n     the effect that all conditions to be satisfied prior to such exchange have\n     been satisfied.  The exchange rate shall be $1.00 principal amount of\n     Exchange Notes for each $1.00 of liquidation preference of Preference\n     Shares, including, to the extent necessary, Exchange Notes in principal\n     amounts less than $1,000, provided that the Company shall have the right,\n                               --------                                       \n     at its option, to pay cash in an amount equal to the principal amount of\n     that portion of any Exchange Note that is not an integral multiple of\n     $1,000 instead of delivering an Exchange Note in a denomination of less\n     than $1,000.  Each holder of Preference Shares by so holding agrees to\n     accept Exchange Notes and, in lieu of fractional shares, cash, in\n     satisfaction of the amounts due to him on redemption or repurchase of the\n     Preference Shares that is deemed to occur upon the exchange and waives any\n     right to receive cash other than as aforesaid in respect of such redemption\n     or repurchase.\n\n          (ii) Procedure for Exchange.  (A)  At least thirty (30) days and not\n               ----------------------                                         \n     more than sixty (60) days prior to the date fixed for exchange, written\n     notice (the \"Exchange Notice\") shall be given by first-class mail, postage\n     prepaid, to each Holder of record on the record date fixed for such\n     exchange of Preference Shares at such Holder's address as the same appears\n     on the stock books of the Company; provided that no failure to give such\n                                        --------                             \n     notice nor any deficiency therein shall affect the validity of the\n     procedure for the exchange of any Preference Shares to be exchanged except\n     as to the Holder or Holders to whom the Company has failed to give said\n     notice or to whom such notice was defective.  The Exchange Notice shall\n     state:\n\n \n                                                                              12\n\n               (1) the date fixed for exchange;\n\n               (2) that the Holder is to surrender to the Company, in the manner\n          and at the place or places designated, his certificate or certificates\n          representing the Preference Shares to be exchanged;\n\n               (3) that dividends on the Preference Shares to be exchanged shall\n          cease to accrue on such Exchange Date whether or not certificates for\n          Preference Shares are surrendered for exchange on such Exchange Date\n          unless the Company shall default in the delivery of Exchange Notes;\n          and\n\n               (4) that interest on the Exchange Notes shall accrue from the\n          Exchange Date whether or not certificates for Preference Shares are\n          surrendered for exchange on such Exchange Date.\n\n               (B)  On or before the Exchange Date, each Holder of Preference\n          Shares shall surrender the certificate or certificates representing\n          such Preference Shares, in the manner and at the place designated in\n          the Exchange Notice.  The Company shall cause the Exchange Notes to be\n          executed on the Exchange Date and, upon surrender in accordance with\n          the Exchange Notice of the certificates for any Preference Shares so\n          exchanged, duly endorsed (or otherwise in proper form for transfer, as\n          determined by the Company), such shares shall be exchanged by the\n          Company into Exchange Notes.  The Company shall pay interest on the\n          Exchange Notes at the rate and on the dates specified therein from the\n          Exchange Date.\n\n               (C) If notice has been mailed as aforesaid and all Exchange Notes\n          necessary for such exchange shall have been duly executed by the\n          Company and delivered to the Holders of Preference Shares, then the\n          rights of the Holders of Preference Shares so exchanged as\n          stockholders of the Company shall cease (except the right to receive\n          Exchange Notes, an amount in cash equal to the amount of accrued and\n          unpaid dividends to the Exchange Date and, if the Company so elects,\n          cash in lieu of any Exchange Notes not in an integral multiple of\n          $1,000), and the Person or Persons entitled to receive the Exchange\n          Notes issuable upon exchange shall be treated for all purposes as the\n          registered Holder or Holders of such Exchange Notes as of the Exchange\n          Date.\n\n               (iii)  No Exchange in Certain Cases.  Notwithstanding the\n          foregoing provisions of this paragraph (h), the Company shall not be\n          entitled to exchange the Preference Shares for Exchange Notes\n\n \n                                                                              13\n\n          (i) if such exchange, or any term or provision of the Exchange Notes,\n          or the performance of the Company's obligations under the Exchange\n          Notes, shall materially violate any applicable law or if, at the time\n          of such exchange, the Company is insolvent or if it would be rendered\n          insolvent by such exchange or (ii) in the event Global or any of its\n          Subsidiaries, after the issuance of the Preference Shares, has\n          transferred, directly or indirectly, to any Subsidiary of the Company,\n          other than any Subsidiary of Global, assets or property of Global or\n          its Subsidiaries constituting in any individual transfer at least 10%,\n          or in the aggregate at least 20%, of the assets of Global and its\n          Subsidiaries, taken as a whole, unless each such transferee\n          simultaneously with the exchange of Preference Shares for Exchange\n          Notes executes and delivers in favor of the holders of the Exchange\n          Notes a guarantee of all of Global's obligations with respect to the\n          Exchange Notes, which guarantee shall be subordinated to Senior\n          Indebtedness (as defined in the Exchange Notes) of such transferee to\n          the same extent as the Exchange Notes are subordinated to Senior\n          Indebtedness of Global and which is otherwise in form and substance\n          reasonably satisfactory to the holders of a majority of the Preference\n          Shares.\n\n               (i)   Change of Control.\n                     ----------------- \n\n               (i)  In the event of a Change of Control (the date of such\n          occurrence being the \"Change of Control Date\"), the Company shall\n          notify the Holders of the Preference Shares in writing of such\n          occurrence and shall make an offer to purchase (the \"Change of Control\n          Offer\") all then outstanding Preference Shares at a purchase price of\n          101% of the liquidation preference thereof plus, without duplication,\n          an amount in cash equal to all accumulated and unpaid dividends per\n          share (including an amount in cash equal to a prorated dividend for\n          the period from the Dividend Payment Date immediately prior to the\n          Change of Control Payment Date to the Change of Control Payment Date).\n\n               (ii) Within 30 days following the Change of Control Date, the\n          Company shall send, by first class mail, postage prepaid, a notice to\n          each Holder of Preference Shares at such Holder's address as it\n          appears on the stock books of the Company, which notice shall govern\n          the terms of the Change of Control Offer.  The notice to the Holders\n          shall contain all instructions and materials necessary to enable such\n          Holders to tender Preference Shares pursuant to the Change of Control\n          Offer.  Such notice shall state:\n\n \n                                                                              14\n\n               (A)  that a Change of Control has occurred, that the Change of\n          Control Offer is being made pursuant to this paragraph (i) and that\n          all Preference Shares validly tendered and not withdrawn will be\n          accepted for payment;\n\n               (B) the purchase price (including the amount of accumulated and\n          unpaid dividends, if any) and the purchase date (which shall be no\n          earlier than 30 days nor later than 45 days from the date such notice\n          is mailed, other than as may be required by law) (the \"Change of\n          Control Payment Date\");\n\n               (C) that any Preference Shares not tendered will continue to\n          accrue dividends;\n\n               (D) that, unless the Company defaults in making payment therefor,\n     any Preference Shares accepted for payment pursuant to the Change of\n     Control Offer shall cease to accrue dividends after the Change of Control\n     Payment Date;\n\n               (E) that Holders electing to have any Preference Shares purchased\n     pursuant to a Change of Control Offer will be required to surrender the\n     certificate or certificates representing such shares, properly endorsed for\n     transfer together with such customary documents as the Company and the\n     transfer agent may reasonably require, in the manner and at the place\n     specified in the notice prior to the close of business on the Business Day\n     prior to the Change of Control  Payment Date;\n\n               (F) that Holders will be entitled to withdraw their election if\n     the Company receives, not later than five Business Days prior to the Change\n     of Control Payment Date, a telegram, telex, facsimile transmission or\n     letter setting forth the name of the Holder, the number of Preference\n     Shares the Holder delivered for purchase and a statement that such Holder\n     is withdrawing his election to have such Preference Shares purchased;\n\n               (G) that Holders whose Preference Shares are purchased only in\n     part will be issued a new certificate representing the unpurchased\n     Preference Shares; and\n\n               (H) the circumstances and relevant facts regarding such Change of\n     Control.\n\n               (iii)  The Company will comply with any securities laws and\n     regulations, to the extent such laws and regulations are applicable to the\n     repurchase of Preference Shares in connection with a Change of Control\n     Offer.\n\n               (iv) On the Change of Control Payment Date the Company shall (A)\n     accept for payment the Preference Shares\n\n \n                                                                              15\n\n     validly tendered pursuant to the Change of Control Offer, (B) pay to the\n     Holders of shares so accepted the purchase price therefor in cash and (C)\n     cancel and retire each surrendered certificate.  Unless the Company\n     defaults in the payment for the Preference Shares tendered pursuant to the\n     Change of Control Offer, dividends will cease to accumulate with respect to\n     the Preference Shares tendered and all rights of Holders of such tendered\n     shares will terminate, except for the right to receive payment therefor, on\n     the Change of Control Payment Date.\n\n               (v) If the purchase of the Preference Shares would violate or\n     constitute a default under the Senior Credit Facilities, the Senior Notes\n     or any other Indebtedness, then, notwithstanding anything to the contrary\n     contained above, prior to complying with the foregoing provisions, but in\n     any event within 30 days following the Change of Control Date, the Company\n     shall, to the extent needed to permit such purchase of the Preference\n     Shares, either (A) repay in full all such Indebtedness under the Senior\n     Credit Facilities, the Senior Notes and such other Indebtedness and, in the\n     case of the Senior Credit Facilities, the Senior Notes or other\n     Indebtedness, terminate all commitments outstanding thereunder or (B)\n     obtain the requisite consents, if any, under the Senior Credit Facilities,\n     the Senior Notes or the instruments governing such Indebtedness required to\n     permit the repurchase of Preference Shares required by this paragraph (i).\n     Until the requirements of the immediately preceding sentence are satisfied,\n     the Company shall not make, and shall not be obligated to make, any Change\n     of Control Offer; provided that the Company's failure to comply with the\n                       --------                                              \n     provisions of this paragraph (i)(v) shall constitute a Voting Rights\n     Triggering Event.\n\n          (j) Conversion or Exchange.  The Holders of Preference Shares shall\n              ----------------------                                         \nnot have any rights hereunder to convert such shares into or exchange such\nshares for shares of any other class or classes or of any other series of any\nclass or classes of Capital Stock of the Company or for Exchange Notes.\n\n          (k) Reissuance of Preference Shares.  Preference Shares that have been\n              -------------------------------                                   \nissued and reacquired in any manner, including shares purchased or redeemed or\nexchanged, shall (upon compliance with any applicable provisions of the laws of\nBermuda) have the status of authorized and unissued Preference Shares\nundesignated as to series and may be redesignated and reissued as part of any\nseries of Preference Shares, provided that any issuance of such Preference\n                             --------                                     \nShares must be in compliance with the terms hereof.\n\n          (l) Business Day.  If any payment, redemption or exchange shall be\n              ------------                                                  \nrequired by the terms hereof to be made on a day that is not a Business Day,\nsuch payment, redemption or\n\n \n                                                                              16\n\nexchange shall be made on the immediately succeeding Business Day.\n\n          (m) Definitions.  As used in this Certificate of Designation, the\n              -----------                                                  \nfollowing terms shall have the following meanings (with terms defined in the\nsingular having comparable meanings when used in the plural and vice versa),\nunless the context otherwise requires:\n\n          \"Advisory Services Agreement\" means the Advisory Services Agreement,\n           ---------------------------                                        \n     dated as of March 25, 1997, between Global and PCG Telecom Services LLC, a\n     Delaware limited liability company.\n\n          \"Affiliate\" as applied to any Person, means any other Person directly\n           ---------                                                           \n     or indirectly controlling, controlled by, or under common control with,\n     that Person.  For the purposes of this definition, \"control\" (including the\n     correlative meanings, the terms \"controlling,\" \"controlled by\" and \"under\n     common control with\"), as applied to any Person, means (i) the possession,\n     directly or indirectly, of the power to direct or cause the direction of\n     the management and policies of that Person, whether through the ownership\n     of voting securities or by contract or otherwise, or (ii) the ownership of\n     more than 10% of the voting securities of that Person; provided that\n                                                            --------     \n     Preference Shares shall not constitute voting securities.\n\n          \"Board of Directors\" means, with respect to any Person, the Board of\n           ------------------                                                 \n     Directors of such Person or any duly authorized committee of that Board.\n\n          \"Board Resolution\" means a copy of a resolution certified pursuant to\n           ----------------                                                    \n     an Officers' Certificate to have been duly adopted by the Board of\n     Directors of the Company and to be in full force and effect, and delivered\n     to the Holders.\n\n          \"Business Day\" means any day excluding Saturday, Sunday and any day\n           ------------                                                      \n     which is a legal holiday under the laws of New York, New York or of Canada\n     or Bermuda or is a day on which banking institutions therein located are\n     authorized or required by law or other governmental action to close.\n\n          \"Cable System\" means the submarine fiber optic cable system linking\n           ------------                                                      \n     the United States to the United Kingdom, the United Kingdom to Germany\n     (and\/or the Netherlands) and Germany (and\/or the Netherlands) to the United\n     States.\n\n          \"Capital Stock\" means (i) with respect to any Person that is a\n           -------------                                                \n     corporation, any and all shares, interests, membership units,\n     participations or other equivalents (however designated and whether or not\n     voting) of corporate stock, including, without limitation, each class of\n     Common Stock or Preferred Shares of such Person and (ii) with\n\n \n                                                                              17\n\n     respect to any Person that is not a corporation, any and all partnership or\n     other equity interests of such Person.\n\n          \"Change in Law\" means any change in or amendment to any Law, or any\n           -------------                                                     \n     change in official position regarding the application or interpretation of\n     such Law.\n\n          \"Change of Control\" means the occurrence of one or more of the\n           -----------------                                            \n     following events:  (i) any sale, lease, exchange or other transfer (in one\n     transaction or a series of related transactions) of all or substantially\n     all of the assets of Parent or the Company to any Person or group of\n     related Persons for purposes of Section 13(d) of the Exchange Act (a\n     \"Group\"), together with any Affiliates thereof; (ii) the approval by the\n     holders of Capital Stock of Parent or the Company of any plan or proposal\n     for the liquidation or dissolution of Parent or the Company; (iii) any\n     Person or Group (other than the Permitted Holders or Parent) shall become\n     the owner, directly or indirectly, beneficially or of record, of Voting\n     Stock representing more than 35% of the total voting power of all Voting\n     Stock of Parent or the Company; (iv) the occurrence of any \"Change of\n     Control\" as defined in the Senior Credit Facilities or the Senior Notes; or\n     (v) the termination of PCG or its Affiliates under the Advisory Services\n     Agreement.\n\n          \"Change of Control Date\" shall have the meaning ascribed to it in\n           ----------------------                                          \n     paragraph (i)(i) hereof.\n\n          \"Change of Control Offer\" shall have the meaning ascribed to it in\n           -----------------------                                          \n     paragraph (i)(i) hereof.\n\n          \"Change of Control Payment Date\" shall have the meaning ascribed to it\n           ------------------------------                                       \n     in paragraph (i)(ii) hereof.\n\n          \"Commercial Operation Date\" means the date of commercial service for\n           -------------------------                                          \n     the entire Cable System as defined in the Supply Contract.\n\n          \"Common Stock\" of any Person means any and all shares, interests or\n           ------------                                                      \n     other participations in, and other equivalents (however designated and\n     whether voting or non-voting) of, such Person's common stock, whether\n     outstanding on the Issue Date or issued after the Issue Date, and includes,\n     without limitation, all series and classes of such common stock.\n\n          \"Company Taxes\" means, with respect to any semi-annual period, the\n           -------------                                                    \n     amount of any Tax imposed during, or with respect to, such period and to\n     which the Company becomes subject after the date hereof as a result of any\n     change in or amendment to any law or any change in official position\n     regarding the application or interpretation of such law which becomes\n     effective after the date hereof.\n\n \n                                                                              18\n\n          \"Company\" means Global Telesystems Holdings Ltd., a company organized\n           -------                                                             \n     under the laws of Bermuda.\n\n          \"Disqualified Capital Stock\" means any Capital Stock of the Company or\n           --------------------------                                           \n     a Subsidiary thereof which, by its terms (or by the terms of any security\n     into which it is convertible or for which it is exchangeable at the option\n     of the holder), or upon the happening of any event, matures or is\n     mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,\n     or is redeemable at the option of the holder thereof, in whole or in part,\n     on or prior to the maturity date of the Preference Shares, for cash or\n     securities constituting Indebtedness.  Without limitation of the foregoing,\n     Disqualified Capital Stock shall be deemed to include (i) any Preferred\n     Shares of a Subsidiary of the Company and (ii) any Preferred Shares of the\n     Company, with respect to either of which, under the terms of such Preferred\n     Shares, by agreement or otherwise, such Subsidiary of the Company is\n     obligated to pay current dividends or distributions in cash during the\n     period prior to the maturity date of the Preference Shares; provided,\n                                                                 -------- \n     however, that Preferred Shares of the Company or any Subsidiary thereof\n     -------                                                                \n     that are issued with the benefit of provisions requiring a change of\n     control offer to be made for such Preferred Shares in the event of a change\n     of control of the Company or Subsidiary, which provisions have\n     substantially the same effect as the provisions hereof described under\n     \"Change of Control,\" shall not be deemed to be Disqualified Capital Stock\n     solely by virtue of such provisions.\n\n          \"Dividend Default\" shall have the meaning ascribed to it in paragraph\n           ----------------                                                    \n     (g)(ii) hereof.\n\n          \"Dividend Payment Date\" means March 1, June 1, September 1 and\n           ---------------------                                        \n     December 1 of each year; provided that the payment of cash dividends shall\n                              --------                                         \n     occur only on each June 1 and December 1.\n\n          \"Dividend Period\" means each semi-annual period ending on a Dividend\n           ---------------                                                    \n     Payment Date.\n\n          \"Dividend Record Date\" means the February 15, May 15, August 15 and\n           --------------------                                              \n     November 15 of each year preceding such Dividend Payment Date.\n\n          \"Excess Cash Flow\" means for each semi-annual period commencing after\n           ----------------                                                    \n     the Commercial Operation Date, 100% of Operating Cash Flow minus (i) an\n                                                                -----       \n     amount of Company operating expenses not to exceed $2.5 million per annum\n     without the consent of the holders of a majority in aggregate liquidation\n     preference of the outstanding Preference Shares, minus (ii) an amount equal\n                                                      -----                     \n     to all Permitted Tax Distributions, minus (iii) all Parent expenses not to\n                                         -----                                 \n     exceed $1.5 million without the consent of the holders of a\n\n \n                                                                              19\n\n     majority in aggregate liquidation preference of the outstanding Preference\n     Shares, minus (iv) any Company Taxes and minus (v) an amount equal to the\n             -----                            -----                           \n     aggregate of all amounts required to be paid to the holders of Senior Notes\n     during such semi-annual period.\n\n          \"Exchange Act\" means the Securities Exchange Act of 1934, as amended\n           ------------                                                       \n     from time to time, and any successor statute.\n\n          \"Exchange Date\" means the date of issuance of any Exchange Notes in\n           -------------                                                     \n     accordance with paragraph (h) hereof.\n\n          \"Exchange Notes\" shall have the meaning ascribed to it in paragraph\n           --------------                                                    \n     (h)(i) hereof.\n\n          \"Exchange Notice\" shall have the meaning ascribed to it in paragraph\n           ---------------                                                    \n     (h)(ii) hereof.\n\n          \"Global\" means Global Telesystems Ltd., a company organized under the\n           ------                                                              \n     laws of Bermuda, and which is a wholly-owned Subsidiary of the Company.\n\n          \"Holder\" means a holder of Preference Shares as reflected in the stock\n           ------                                                               \n     books of the Company.\n\n          \"Indebtedness\" means, with respect to any Person, (i) all\n           ------------                                            \n     indebtedness, obligations and liabilities of such Person for borrowed\n     money, (ii) that portion of obligations with respect to capital leases that\n     is properly classified as a liability on a balance sheet of such Person in\n     conformity with generally accepted accounting principles, (iii) notes\n     payable and drafts accepted representing extensions of credit, whether or\n     not representing obligations for borrowed money, of such Person, (iv) any\n     indebtedness, obligation or liability of such Person owed for all or any\n     part of the deferred purchase price of property or services, which purchase\n     price is (a) due more than six months (or a longer period of up to one\n     year, if such terms are available from suppliers in the ordinary course of\n     business) from the date of incurrence of the obligation in respect thereof\n     or (b) evidenced by a note or similar written instrument, (v) all\n     indebtedness, obligations and liabilities secured by any lien on any\n     property or asset owned or held by that Person regardless of whether the\n     indebtedness secured thereby shall have been assumed by that Person or is\n     nonrecourse to the credit of that Person except that \"Indebtedness\" shall\n     not include trade payables and accrued liabilities incurred in the ordinary\n     course of business for the purchase of goods or services which are not\n     secured by a lien, (vi) guarantees of such Person in respect of\n     Indebtedness of other Persons and (vii) all Disqualified Capital Stock\n     issued by such Person with the amount of Indebtedness represented by such\n\n \n                                                                              20\n\n     Disqualified Capital Stock being equal to the greater of its voluntary or\n     involuntary liquidation preference and its maximum fixed repurchase price,\n     but excluding accrued dividends, if any; provided that Indebtedness shall\n                                              --------                        \n     not include any obligations of Global under the Supply Contract.  For\n     purposes hereof, the \"maximum fixed repurchase price\" of any Disqualified\n     Capital Stock which does not have a fixed repurchase price shall be\n     calculated in accordance with the terms of such Disqualified Capital Stock\n     as if such Disqualified Capital Stock were purchased on any date on which\n     Indebtedness shall be required to be determined pursuant to this Agreement,\n     and if such price is based upon, or measured by, the fair market value of\n     such Disqualified Capital Stock, such fair market value to be determined\n     reasonably and in good faith by the Board of Directors of the issuer of\n     such Disqualified Capital Stock.\n\n          \"Issue Date\" means the date of original issuance of the Preference\n           ----------                                                       \n     Shares.\n\n          \"Junior Securities\" shall have the meaning ascribed to it in paragraph\n           -----------------                                                    \n     (d) hereof.\n\n          \"Laws\" means all applicable statutes, laws, ordinances, regulations,\n           ----                                                               \n     rules, orders, judgments, writs, injunctions or decrees of any state,\n     commonwealth, nation, territory, possession, province, county, parish,\n     town, township, village municipality or Tribunal and \"Law\" means each of\n     the foregoing.\n\n          \"Mandatory Redemption Price\" shall have the meaning ascribed to it in\n           --------------------------                                          \n     paragraph (f)(ii) hereof.\n\n          \"Officer\" means the Chairman of the Board, the Chief Executive\n           -------                                                      \n     Officer, the President, any Vice President, the Chief Financial Officer,\n     the Controller, the Treasurer or the Secretary of the Company, as the case\n     may be.\n\n          \"Officers' Certificate\" means, as applied to any corporation, a\n           ---------------------                                         \n     certificate executed on behalf of such corporation by two Officers.\n\n          \"Operating Cash Flow\" means, with respect to Global, for each semi-\n           -------------------                                              \n     annual period commencing after the Commercial Operation Date, that portion\n     of Global's \"Excess Cash Flow\" (as defined in the Senior Credit Facilities\n     as in effect on June   , 1997, which definition is incorporated by\n     reference herein and may be amended, supplemented or otherwise modified in\n     a manner that is not materially adverse to the Holders) available to the\n     Company pursuant to the terms of the Senior Credit Facilities as in effect\n     on June   , 1997 (which terms are incorporated by reference herein and may\n     be amended, supplemented or otherwise modified in a manner that\n\n \n                                                                              21\n\n     is not materially adverse to the Holders) in respect of such period.\n\n          \"Opinion of Counsel\" means an opinion of counsel that, in such\n           ------------------                                           \n     counsel's opinion, all conditions precedent to be performed by the Company\n     prior to the taking of any proposed action have been taken.\n\n          \"Optional Redemption Price\" shall have the meaning ascribed to it in\n           -------------------------                                          \n     paragraph (f)(i) hereof.\n\n          \"Parent\" means GT Parent Holdings LDC, a Cayman Islands limited\n           ------                                                        \n     duration company, and the parent company of the Company.\n\n          \"Parity Securities\" shall have the meaning ascribed to it in paragraph\n           -----------------                                                    \n     (c) hereof.\n\n          \"PCG\" means Pacific Capital Group, Inc., or its Affiliates.\n           ---                                                       \n\n          \"Permitted Holders\" means each of PCG, CIBC and PCG Telecom LDC and\n           -----------------                                                 \n     their respective Affiliates.\n\n          \"Permitted System Upgrade\" means upgrades to the Cable System\n           ------------------------                                    \n     contemplated by Article 6-A of the Supply Contract in an amount not to\n     exceed $75 million.\n\n          \"Permitted Tax Distributions\" means the payment of distributions to\n           ---------------------------                                       \n     Parent at such times and in such amounts that are sufficient to enable\n     Parent to satisfy timely, or to further distribute such amounts to its\n     members or their members, partners, or shareholders (collectively, \"Upper\n     Tier Persons\") in order that such Upper Tier Persons may satisfy timely,\n     any Tax liability resulting from a Change in Law that becomes effective\n     after the date hereof, which distributions shall take into account, and be\n     increased by, any further Taxes imposed upon Parent or an Upper Tier Entity\n     as a result of the receipt of such distributions.\n\n          \"Person\" means and includes natural persons, corporations, limited\n           ------                                                           \n     liability companies, limited partnerships, general partnerships, joint\n     stock companies, joint ventures, associations, companies, trusts, banks,\n     trust companies, land trusts, business trusts or other organizations,\n     whether or not legal entities, and governments and agencies and political\n     subdivisions thereof.\n\n          \"Preference Shares\" shall have the meaning ascribed to it in the\n           -----------------                                              \n     introductory paragraph hereof.\n\n          \"Preferred Shares\" of any Person means any Capital Stock of such\n           ----------------                                               \n     Person that has preferential rights (as\n\n \n                                                                              22\n\n     compared to any other Capital Stock of such Person) with respect to\n     dividends or redemptions or upon liquidation.\n\n          \"Redemption Date\", with respect to any Preference Shares, means the\n           ---------------                                                   \n     date on which such Preference Shares are redeemed by the Company.\n\n          \"Redemption Notice\" shall have the meaning ascribed to it in paragraph\n           -----------------                                                    \n     (f)(iii) hereof.\n\n          \"Senior Credit Facilities\" means the long form Senior Credit\n           ------------------------                                   \n     Facilities Commitment Letter and, upon execution thereof, instead means,\n     the Credit Agreement among Global, the lenders named therein and Canadian\n     Imperial Bank of Commerce, as agent, together with the documents related\n     thereto (including, without limitation, any guarantee agreements and\n     security documents), in each case as such agreements may be amended\n     (including any amendment and restatement thereof), supplemented or\n     otherwise modified from time to time, including any agreement extending the\n     maturity of, refinancing, replacing or otherwise restructuring (including\n     adding Subsidiaries of Global as additional borrowers or guarantors\n     thereunder) all or any portion of the Indebtedness under such agreement or\n     any successor or replacement agreement and whether by the same or any other\n     agent, lender or group of lenders.\n\n          \"Senior Notes\" means the Senior Notes due 2004 of the Company issued\n           ------------                                                       \n     pursuant to the Senior Note Securities Purchase Agreement dated as of March\n     25, 1997 among the Company and the purchasers named therein as such\n     agreement may be amended (including any amendment and restatement thereof),\n     supplemented or otherwise modified from time to time.\n\n          \"Senior Securities\" shall have the meaning ascribed to it in paragraph\n           -----------------                                                    \n     (c) hereof.\n\n          \"Subsidiary\" means, with respect to any Person, any corporation,\n           ----------                                                     \n     association or other business entity of which more than 50% of the total\n     voting power of shares of stock or other equity interest entitled (without\n     regard to the occurrence of any contingency) to vote in the election of\n     directors, managers or trustees thereto is at the time owned or controlled,\n     directly or indirectly, by that Person or one or more of the other\n     Subsidiaries of that Person or a combination thereof.\n\n          \"Supply Contract\" means the Project Development and Construction\n           ---------------                                                \n     Contract dated as of March 25, 1997 between AT&amp;T-Submarine Services, Inc.\n     and Global, as amended from time to time.\n\n \n                                                                              23\n\n          \"Taxes\" means all taxes, assessments, fees, levies, impost, duties,\n           -----                                                             \n     penalties, deductions, liabilities, withholdings or other charges of any\n     nature whatsoever, including interest penalties, from time to time or at\n     any time imposed by any Law or any Tribunal.\n\n          \"Tribunal\" means any government, any arbitration panel, any court or\n           --------                                                           \n     any governmental department, commission, board, agency, authority or\n     instrumentality of the United States or any state, province, commonwealth,\n     nation, territory, possession, county, parish, town, township, village or\n     municipality, whether now or hereafter constituted and\/or existing.\n\n          \"Voting Rights Triggering Event\" shall have the meaning ascribed to it\n           ------------------------------                                       \n     in paragraph (g)(iv) hereof.\n\n \n                                                                              24\n\n          IN WITNESS WHEREOF, the Company has caused this Certificate to be\nsigned by                          , its                       , this     day of\nJune, 1997.\n\n\n                              GLOBAL TELESYSTEMS HOLDINGS LTD.\n\n\n                              By:___________________________\n                                 Name:\n                                 Title:\n\n \n                                                         (Revised June 13, 1997)\n\nSENIOR SUBORDINATED EXCHANGE NOTE THE SECURITIES REPRESENTED BY THIS CERTIFICATE\nHAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS\nAMENDED (THE \"ACT\"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE DISPOSED OF OR\nTRANSFERRED UNLESS REGISTERED UNDER SUCH ACT OR UNLESS AN EXEMPTION FROM SUCH\nREGISTRATION IS AVAILABLE.  IN THE CASE OF A TRANSFER OTHER THAN (1) PURSUANT TO\nAN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (2) PURSUANT TO RULE 144A\nUNDER THE ACT, FOR SO LONG AS IT IS AVAILABLE, TO A PERSON IT REASONABLY\nBELIEVES IS A \"QUALIFIED INSTITUTIONAL BUYER\" AS DEFINED IN RULE 144A UNDER THE\nACT THAT PURCHASES FOR ITS ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED\nINSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN\nRELIANCE ON RULE 144A, THE HOLDER SHALL, AT THE REQUEST OF THE COMPANY, PROVIDE\nTO THE ISSUER HEREOF AN OPINION OF COUNSEL THAT THE TRANSFER DOES NOT REQUIRE\nREGISTRATION UNDER THE ACT.\n\n                    GLOBAL TELESYSTEMS LTD. (the \"Company\")\n\n                       SENIOR SUBORDINATED EXCHANGE NOTE\n                               DUE APRIL 1, 2007\n\n$____________                                               [DATE]\n\n\n          GLOBAL TELESYSTEMS LTD., a Bermuda company (\"Payor\"), for value\nreceived, promises to pay to the order of _________ (\"Payee\") the principal\namount of __________ DOLLARS ($____________), together with accrued interest\nthereon, calculated and payable as set forth below in this Note (together with\nany PIK Notes issued pursuant to Section 2.1 below, the \"Notes\").  The principal\nand interest on the Notes is payable in lawful money of the United States of\nAmerica in immediately available funds at such place in the United States as\nPayee may from time to time designate in writing to Payor.\n\n          This Note is made pursuant to that certain Preference Share Securities\nPurchase Agreement (the \"Purchase Agreement\"), dated March 25, 1997, by and\nbetween Global Telesystems Holdings Ltd. (\"Holdings\") and the Purchasers named\ntherein, and is one of the \"Exchange Notes\" referred to therein.  All\ncapitalized terms used herein and not defined herein shall have the meanings\nassigned to such terms in the Purchase Agreement.\n\nSECTION 1 DEFINITIONS\n\n          1.1  Certain Defined Terms\n               ---------------------\n\n          The following terms used in this Note shall have the following\nmeanings:\n\n          \"Acquired Indebtedness\" means Indebtedness of a Person existing at the\ntime such Person becomes a Subsidiary of the\n\n \n                                                                               2\n\n\nCompany or assumed in connection with the acquisition of assets from such\nPerson.\n\n          \"Additional Amounts\" has the meaning ascribed to such term in Section\n7.10.\n\n          \"Additional Shares\" means the purchase by one or more Persons of\nshares of the Class A Common Shares of Parent representing 8.5% of such\noutstanding shares of voting Common Stock of Parent on the Closing Date for\ngross proceeds to Parent of at least $7.5 million, which proceeds will be\ncontributed to Holdings on the Closing Date.\n\n          \"Advisory Services Agreement\" means the Advisory Services Agreement,\ndated as of March 25, 1997, between Global and PCG Telecom Services LLC, a\nDelaware limited liability company.\n\n          \"Affiliate,\" as applied to any Person, means any other Person directly\nor indirectly controlling, controlled by, or under common control with, that\nPerson.  For the purposes of this definition, \"control\" (including with\ncorrelative meanings, the terms \"controlling\", \"controlled by\" and \"under common\ncontrol with\"), as applied to any Person, means (i) the possession, directly or\nindirectly, of the power to direct or cause the direction of the management and\npolicies of that Person, whether through the ownership of voting securities or\nby contract or otherwise, or (ii) the ownership of more than 10% of the voting\nsecurities of that Person; provided that the Senior Preferred Stock shall not\nconstitute voting securities.\n\n          \"Affiliate Transaction\" has the meaning ascribed to such term in\nSection 4.9.\n\n          \"Agent\" has the meaning ascribed to such term in Section 7.8.\n\n          \"Asset Sale\" means any direct or indirect sale, issuance, conveyance,\nlease, assignment, transfer or other disposition for value (including, without\nlimitation, pursuant to any amalgamation, merger or consolidation or pursuant to\nany sale-and-leaseback transaction) by the Company or by any of its Subsidiaries\nto any Person other than the Company or any of its wholly-owned Subsidiaries\n(any such transaction, a \"disposition\") of (i) any Capital Stock of any of the\nCompany's Subsidiaries, (ii) all or substantially all of the assets of any\ndivision or line of business of the Company or of any of its Subsidiaries, or\n(iii) any other assets (whether tangible or intangible) of the Company or of any\nof its Subsidiaries; excluding (a) any disposition of inventory in the ordinary\n                     ---------                                                 \ncourse of business or obsolete equipment in the ordinary course of business\nconsistent with past practices of the Company or the lease or sub-lease of any\nreal or personal property in the ordinary course of business, (b) any sale,\nlease or transfer of Capacity and (c) any\n\n \n                                                                               3\n\ndisposition of stock or assets in any single transaction or related series of\ntransactions the aggregate value of which is equal to $1,000,000 or less.\n\n          \"Asset Sale Proceeds\" means, with respect to any Asset Sale, (i) cash\nreceived by the Company or any Subsidiary from such Asset Sale (including cash\nreceived as consideration for the assumption of liabilities incurred in\nconnection with or in anticipation of such Asset Sale), after (a) provision for\nall income or other taxes measured by or resulting from such Asset Sale, (b)\npayment of all brokerage commissions, underwriting and other fees and expenses\nrelated to such Asset Sale, (c) provision for minority interest holders in any\nSubsidiary as a result of such Asset Sale and (d) deduction of appropriate\namounts to be provided by the Company or a Subsidiary as a reserve, in\naccordance with GAAP, against any liabilities associated with the assets sold or\ndisposed of in such Asset Sale and retained by the Company or a Subsidiary after\nsuch Asset Sale, including, without limitation, pension and other post\nemployment benefit liabilities and liabilities related to environmental matters\nor against any indemnification obligations associated with the assets sold or\ndisposed of in such Asset Sale, and (ii) promissory notes and other noncash\nconsideration received by the Company or any Subsidiary from such Asset Sale or\nother disposition upon the liquidation or conversion of such notes or noncash\nconsideration into cash.\n\n          \"AT&amp;T-SSI\" means AT&amp;T Submarine Systems, Inc.\n\n     \"Available Asset Sale Proceeds\" means, with respect to any Asset Sale, the\naggregate Asset Sale Proceeds from such Asset Sale that have not been applied in\naccordance with clause (III)(a) or (III)(b), and which have not yet been the\nbasis for an Excess Proceeds Offer in accordance with clause (III)(c), of\nSection 2.2C(i).\n\n          \"Bank Indebtedness\" means any and all obligations of every nature of\nthe Company and its Subsidiaries under or in respect of the Senior Credit\nFacilities whether for principal, reimbursements, interest, fees, expenses,\nindemnities or otherwise, and whether primary, secondary, direct, indirect,\ncontingent, fixed or otherwise (including obligations of performance).\n\n          \"Bankruptcy Law\" means Title 11 of the United States Code entitled\n\"Bankruptcy\", as now and hereafter in effect, or any successor statute or any\nother United States federal, state or local law or the law of any other\njurisdiction relating to bankruptcy, insolvency, winding up, liquidation,\nreorganization or relief of debtors, whether in effect on the date hereof or\nhereafter.\n\n          \"Bankruptcy Order\" means any court order made in a proceeding pursuant\nto or within the meaning of any Bankruptcy Law, containing an adjudication of\nbankruptcy or insolvency, or\n\n \n                                                                               4\n\nproviding for liquidation, winding up, dissolution or reorganization, or\nappointing a custodian of a debtor or of all or any substantial part of a\ndebtor's property, or providing for the staying, arrangement, adjustment or\ncomposition of indebtedness or other relief of a debtor.\n\n          \"Board of Directors\" means, with respect to any Person, the Board of\nDirectors of such Person or any duly authorized committee of that Board.\n\n          \"Business Day\" means any day excluding Saturday, Sunday and any day\nwhich is a legal holiday under the laws of New York, New York or of Canada or\nBermuda or is a day on which banking institutions therein located are authorized\nor required by law or other governmental action to close.\n\n          \"Cable System\" means the submarine fiber optic cable system linking\nthe United States to the United Kingdom, the United Kingdom to Germany (and\/or\nthe Netherlands) and Germany (and\/or the Netherlands) to the United States.\n\n          \"Capacity\" means all capacity of the Cable System which is available\nfor sale, lease or other disposition, as more specifically defined in the\nCapacity Sales Agreements.\n\n          \"Capacity Sales Agreements\" means any agreement between the Company or\nany of its Subsidiaries and any other Person providing for the sale, lease or\nother disposition of Capacity of the Cable System.\n\n          \"Capital Lease,\" as applied to any Person, means any lease of any\nproperty (whether real, personal or mixed) by that Person as lessee which, in\nconformity with GAAP, is required to be accounted for as a capital lease on the\nbalance sheet of that Person.\n\n          \"Capitalized Lease Obligation\" means obligations under a lease that is\nrequired to be capitalized for financial reporting purposes in accordance with\nGAAP, and the amount of Indebtedness represented by such obligations shall be\nthe capitalized amount of such obligations determined in accordance with GAAP.\n\n          \"Capital Stock\" means (i) with respect to any Person that is a\ncorporation, any and all shares, interests, membership units, participations or\nother equivalents (however designated and whether or not voting) of corporate\nstock, including, without limitation, each class of Common Stock and Preferred\nStock of such Person and (ii) with respect to any Person that is not a\ncorporation, any and all partnership or other equity interests of such Person.\n\n          \"Cash Equivalents\" means (i) marketable direct obligations issued or\nunconditionally guaranteed by the United\n\n \n                                                                               5\n\nStates Government or issued by any agency thereof and backed by the full faith\nand credit of the United States, in each case maturing within one year from the\ndate of acquisition thereof; (ii) marketable direct obligations issued by any\nstate of the United States of America or any political subdivision of any such\nstate or any public instrumentality thereof maturing within one year from the\ndate of acquisition thereof and, at the time of acquisition, having the highest\nrating obtainable from either Standard &amp; Poor's Rating Group (\"S&amp;P\") or Moody's\nInvestors Service, Inc. (\"Moody's\"); (iii) commercial paper maturing no more\nthan one year from the date of creation thereof and, at the time of acquisition,\nhaving the highest rating obtainable from either S&amp;P's or Moody's; and (iv)\ncertificates of deposit or bankers' acceptances maturing within one year from\nthe date of acquisition thereof issued by any commercial bank organized under\nthe laws of the United States of America or any state thereof or the District of\nColumbia that (a) is at least \"adequately capitalized\" (as defined in the\nregulations of its primary Federal banking regulator) and (b) has Tier 1 capital\n(as defined in such regulations) of not less than $100,000,000; (v) shares of\nany money market mutual fund that (a) has at least 95% of its assets invested\ncontinuously in the types of investments referred to in clauses (i) and (ii)\nabove, (b) has net assets of not less than $500,000,000, and (c) has the highest\nrating obtainable from either S&amp;P's or Moody's; and (vi) repurchase agreements\nwith respect to, and which are fully secured by a perfected security interest\nin, obligations of a type described in clause (i) or clause (ii) above and are\nwith any commercial bank described in clause (iv) above.\n\n          \"Certificate of Designation\" means the Certificate of Designation duly\nadopted by the Board of Directors of the Company setting forth the rights,\npreferences and priorities of the Preference Shares.\n\n          \"Change in Law\" means any change in or amendment to any Law, or any\nchange in official position regarding the application or interpretation of such\nLaw.\n\n          \"Change of Control\" means the occurrence of one or more of the\nfollowing events:  (i) any sale, lease, exchange or other transfer (in one\ntransaction or a series of related transactions) of all or substantially all of\nthe assets of Parent, Holdings or the Company to any Person or group of related\nPersons for purposes of Section 13(d) of the Exchange Act (a \"Group\"), together\nwith any Affiliates thereof; (ii) the approval by the holders of Capital Stock\nof Parent, Holdings or the Company of any plan or proposal for the liquidation\nor dissolution of Parent, Holdings or the Company; (iii) any Person or Group\n(other than the Permitted Holders or Parent or Holdings) shall become the owner,\ndirectly or indirectly, beneficially or of record, of Voting Stock representing\nmore than 35% of the total voting power of all Voting Stock of Parent, Holdings\nor the Company; (iv) the occurrence of any \"Change of Control\" as defined in the\nSenior\n\n \n                                                                               6\n\nCredit Facilities; or (v) the termination of PCG or its Affiliates under the\nAdvisory Services Agreement.\n\n          \"Change of Control Date\" has the meaning ascribed to such term in\nSection 2.2C(ii).\n\n          \"Change of Control Offer\" has the meaning ascribed to such term in\nSection 2.2C(ii).\n\n          \"CIBC\" means CIBC Wood Gundy Securities Corp. or its Affiliates.\n\n          \"CIBC Capital Equity Investment\" means the purchase by CIBC Wood Gundy\nCapital (SFC) Inc. or one or more of its Affiliates of shares of Class C Common\nShares of Parent representing 38.25% of the outstanding shares of voting Common\nStock on the Closing Date for gross proceeds to Parent of at least $33.75\nmillion, which proceeds will be contributed to the Company on the Closing Date.\n\n          \"Closing Date\" means the date of the consummation of the purchase of\nthe Preference Shares.\n\n          \"Commercial Operation Date\" means the date of commercial service for\nthe entire Cable System as defined in the Supply Contract.\n\n          \"Common Stock\" of any Person means any and all shares, interests or\nother participations in, and other equivalents (however designated and whether\nvoting or non-voting) of, such Person's common stock, whether outstanding on the\nClosing Date or issued after the Closing Date, and includes, without limitation,\nall series and classes of such common stock.\n\n          \"Company\" has the meaning ascribed to such term in the introduction to\nthis Note.\n\n          \"Company Taxes\" means with respect to any Taxable period of the\nCompany, the amount of Tax imposed during, or with respect to, such period as a\nresult of a Change in Law which change becomes effective after the Closing Date.\n\n          \"Consolidated Interest Coverage Ratio\" means of any Person, with\nrespect to any determination date, the ratio of (i) EBITDA for such Person's\nprior four full Fiscal Quarters for which financial results are available, to\n(ii) consolidated Interest Expense of such Person for such period.  For purposes\nof computing the Consolidated Interest Coverage Ratio, (A) if the Indebtedness\nwhich is the subject of a determination under this provision is Acquired\nIndebtedness, or Indebtedness incurred in connection with the simultaneous\nacquisition (by way of merger, consolidation or otherwise) of any Person,\nbusiness, property or assets (an \"Acquisition\"), then such ratio shall be\ndetermined by giving effect (on a pro forma basis, as if the transaction had\n\n \n                                                                               7\n\noccurred at the beginning of the four-quarter period) to both the incurrence or\nassumption of such Acquired Indebtedness or such other Indebtedness by the\nCompany and the inclusion in the Company's EBITDA of the EBITDA of the acquired\nPerson, business, property or assets, (B) if any Indebtedness outstanding or to\nbe incurred (x) bears a floating rate of interest, the interest expense on such\nIndebtedness shall be calculated as if the rate in effect on the date of\ndetermination had been the applicable rate for the entire period (taking into\naccount on a pro forma basis any Interest Rate Agreement applicable to such\nIndebtedness if such Interest Rate Agreement has a remaining term as at the date\nof determination in excess of 12 months), (y) bears, at the option of the\nCompany or a Subsidiary, a fixed or floating rate of interest, the interest\nexpense on such Indebtedness shall be computed by applying, at the option of the\nCompany or such Subsidiary, either a fixed or floating rate and (z) was incurred\nunder a revolving credit facility, the interest expense on such Indebtedness\nshall be computed based upon the average daily balance of such Indebtedness\nduring the applicable period, (C) for any Fiscal Quarter prior to the date\nhereof included in the calculation of such ratio, such calculation shall be made\non a pro forma basis, giving effect to the Transaction, the issuance of the\nNotes, the incurrence of Indebtedness under the Senior Credit Facilities and the\nuse of the net proceeds therefrom as if the same had occurred at the beginning\nof the four-quarter period used to make such calculation and (D) for any Fiscal\nQuarter included in the calculation of such ratio prior to the date that any\nAsset Sale was consummated, or that any Indebtedness was incurred, or that any\nAcquisition was affected, by the Company or any of its Subsidiaries, such\ncalculation shall be made on a pro forma basis, giving effect to each Asset\nSale, incurrence of Indebtedness or Acquisition, as the case may be, and the use\nof any proceeds therefrom, as if the same had occurred at the beginning of the\nfour-quarter period used to make such calculation.\n\n          \"Consolidated Interest Expense\" means, with respect to any Person for\nany period, without duplication, the sum of (i) the total interest expense of\nsuch Person and its Subsidiaries for such period, on a consolidated basis,\ndetermined in accordance with GAAP (including amortization of original issue\ndiscount (other than original issue discount attributable to the issuance of the\nSenior Notes), non-cash interest payments and the interest component of\nCapitalized Lease Obligations), whether paid or accrued, to the extent such\nexpense was deducted in computing the Consolidated Net Income of such Person,\nand (ii) an amount equal to the product of (A) all redeemable cash dividends\npaid during such period on any Disqualified Capital Stock of such Person and its\nSubsidiaries times (B) a fraction, the numerator of which is one and the\n             -----                                                      \ndenominator of which is one minus the then effective consolidated Federal, state\nand local tax rate of such Person expressed as a decimal.\n\n \n                                                                               8\n\n          \"Consolidated Net Income\" means, with respect to any Person, for any\nperiod, the aggregate of the net income (or loss) of such Person and its\nSubsidiaries for such period, on a consolidated basis, determined in accordance\nwith GAAP; provided that (a) the net income of any other Person in which such\n           --------                                                          \nPerson or any of its Subsidiaries has an interest (which interest does not cause\nthe net income of such other Person to be consolidated with the net income of\nsuch Person and its Subsidiaries in accordance with GAAP) shall be included only\nto the extent of the amount of dividends or distributions actually paid to such\nPerson or such Subsidiary by such other Person during such period; (b) the net\nincome of any Subsidiary of such Person that is subject to any Payment\nRestriction shall be excluded to the extent such Payment Restriction would\nprevent the payment of an amount that otherwise could have been paid to such\nPerson or to a Subsidiary of such Person not subject to any Payment Restriction;\nand (c) there shall be excluded (i) the net income (or loss) of any other Person\nacquired in a pooling of interests transaction for any period prior to the date\nof such acquisition, (ii) all gains and losses realized on any Asset Sale\n(without regard to the $1,000,000 threshold set forth in the definition of Asset\nSale), (iii) all gains and losses realized on the purchase or other acquisition\nby such Person or any of its Subsidiaries of any Securities of such Person or\nany of its Subsidiaries, (iv) all other net extraordinary gains\/losses, and\n(v)(A) all non-cash charges (provided, however, that any cash payments actually\n                             --------  -------                                 \nmade with respect to the liabilities for which such charges were created shall\nbe deducted from Consolidated Net Income in the period when made) and (B) all\ndeferred financing costs written off in connection with the early extinguishment\nof any Indebtedness, in each case, incurred by such Person or any of its\nSubsidiaries in connection with the Transaction.\n\n          \"Consolidated Tax Expense\" means, for any Person, for any period, the\naggregate income tax expense of such Person and its Subsidiaries determined on a\nconsolidated basis in accordance with GAAP, excluding, however, the income tax\nexpense of such Person attributable to a disposition of assets the gain from\nwhich is excluded form the calculation of \"Consolidated Net Income,\" but only to\nthe extent such income tax expense does not exceed the cash portion of the\nconsideration received by such Person in connection with the disposition of such\nassets.\n\n          \"Contingent Obligation,\" as applied to any Person, means any direct or\nindirect liability, contingent or otherwise, of that Person (i) with respect to\nany Indebtedness, lease, dividend or other obligation of another if the primary\npurpose or intent thereof by the Person incurring the Contingent Obligation is\nto provide assurance to the obligee of such obligation of another that such\nobligation of another will be paid or discharged, or that any agreements\nrelating thereto will be complied with, or that the holders of such obligation\nwill be protected (in whole or in part) against loss in respect thereof, (ii)\nwith respect to any letter of credit issued for the account\n\n \n                                                                               9\n\nof that Person or as to which that Person is otherwise liable for reimbursement\nof drawings, or (iii) under Interest Rate Agreements and Currency Agreements.\nContingent Obligations shall include, without limitation, (a) the direct or\nindirect guaranty, endorsement (otherwise than for collection or deposit in the\nordinary course of business), co-making, discounting with recourse or sale with\nrecourse by such Person of the obligation of another, (b) the obligation to make\ntake-or-pay or similar payments if required regardless of non-performance by any\nother party or parties to an agreement, and (c) any liability of such Person for\nthe obligation of another through any agreement (contingent or otherwise) (X) to\npurchase, repurchase or otherwise acquire such obligation or any security\ntherefor, or to provide funds for the payment or discharge of such obligation\n(whether in the form of loans, advances, stock purchases, capital contributions\nor otherwise) or (Y) to maintain the solvency or any balance sheet item, level\nof income or financial condition of another if, in the case of any agreement\ndescribed under subclause (X) or (Y) of this sentence, the primary purpose or\nintent thereof is as described in the preceding sentence.  The amount of any\nContingent Obligation shall be equal to the amount of the obligation so\nguaranteed or otherwise supported or, if less, the amount to which such\nContingent Obligation is specifically limited.\n\n          \"Contractual Obligation\", as applied to any Person, means any\nprovision of any security issued by that Person or of any indenture, mortgage,\ndeed of trust, contract, undertaking, agreement or other instrument to which\nthat Person is a party or by which it or any of its properties is bound or to\nwhich it or any of its properties is subject.\n\n          \"Controlled Group\" means (i) a controlled group of corporations as\ndefined in Section 1563(a) of the Internal Revenue Code or (ii) a group of\ntrades or businesses under common control, as defined in Section 414(c) of the\nInternal Revenue Code, of which the Company or any of its Subsidiaries is a part\nor becomes a part.\n\n          \"Currency Agreement\" means any foreign exchange contract, currency\nswap agreement, futures contract, option contract, synthetic cap or other\nsimilar agreement or arrangement designed to protect the Company or any of its\nSubsidiaries against fluctuations in currency values.\n\n          \"Custodian\" means any receiver, interim receiver, receiver and\nmanager, trustee, assignee, liquidator, sequestrator or similar official charged\nwith maintaining possession or control over property for one or more creditors,\nwhether under any Bankruptcy Law or otherwise.\n\n          \"Designated Senior Indebtedness,\" as to the Company, means any Senior\nIndebtedness (a) under the Senior Credit Facilities, or (b) which at the time of\ndetermination exceeds\n\n \n                                                                              10\n\n$75,000,000 in aggregate principal amount (or accreted value in the case of\nIndebtedness issued at a discount) outstanding or available under a committed\nfacility and (x) which is specifically designated in the instrument evidencing\nsuch Senior Indebtedness as \"Designated Senior Indebtedness\" by such Person and\n(y) as to which the Holders have been given written notice of such designation.\n\n          \"Disqualified Capital Stock\" means any Capital Stock of the Company or\na Subsidiary thereof which, by its terms (or by the terms of any security into\nwhich it is convertible or for which it is exchangeable at the option of the\nholder), or upon the happening of any event, matures or is mandatorily\nredeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable\nat the option of the holder thereof, in whole or in part, on or prior to the\nmaturity date of the Senior Notes, for cash or securities constituting\nIndebtedness.  Without limitation of the foregoing, Disqualified Capital Stock\nshall be deemed to include (i) any Preferred Stock of a Subsidiary of the\nCompany and (ii) any Preferred Stock of the Company, with respect to either of\nwhich, under the terms of such Preferred Stock, by agreement or otherwise, such\nSubsidiary or the Company is obligated to pay current dividends or distributions\nin cash during the period prior to the maturity date of the Senior Notes;\nprovided, however, that Preferred Stock of the Company or any Subsidiary thereof\n--------  -------                                                               \nthat is issued with the benefit of provisions requiring a change of control\noffer to be made for such Preferred Stock in the event of a change of control of\nthe Company or Subsidiary, which provisions have substantially the same effect\nas the provisions of this Note described under \"Change of Control,\" shall not be\ndeemed to be Disqualified Capital Stock solely by virtue of such provisions.\n\n          \"Dollars\" or the sign \"$\" means the lawful money of the United States\nof America.\n\n          \"EBITDA\" means, for any Person, for any period, an amount equal to (a)\nthe sum of (i) Consolidated Net Income for such period, plus (ii) Consolidated\nTax Expense for such period, plus (iii) Consolidated Interest Expense (but only\nto the extent included in the determination of Consolidated Net Income) for such\nperiod, plus (iv) depreciation for such period on a consolidated basis, plus (v)\namortization of intangibles for such period on a consolidated basis, plus (vi)\nany other non-cash items reducing Consolidated Net Income for such period, minus\n(b) all non-cash items increasing Consolidated Net Income for such period, all\nfor such Person and its Subsidiaries determined in accordance with GAAP.\n\n          \"Environmental Laws\" means the common law and all statutes,\nordinances, orders, rules, regulations, plans, policies or decrees and the like\nrelating to (i) environmental matters, including, without limitation, those\nrelating to fines, injunctions, penalties, damages, contribution, cost recovery\n\n \n                                                                              11\n\ncompensation, losses or injuries resulting from the Release or threatened\nRelease of Hazardous Materials, (ii) the generation, use, storage,\ntransportation or disposal of Hazardous Materials, or (iii) occupational safety\nand health, industrial hygiene, land use or the protection of human, plant or\nanimal health or welfare, including, without limitation, the Comprehensive\nEnvironmental Response, Compensation, and Liability Act (42 U.S.C. (S) 9601 et\n                                                                            --\nseq.), the Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.),\n---                                                                   -- ---   \nthe Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the\n                                                               -- ---       \nFederal Water Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the Clean Air\n                                                        -- ---                 \nAct (42 U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.\n                        -- ---                                               \n(S) 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7\n         -- ---                                                             \nU.S.C. (S) 136 et seq.), the Occupational Safety and Health Act (29 U.S.C. (S)\n               -- ---                                                         \n651 et seq.) and the Emergency Planning and Community Right-to-Know Act (42\n    -- ---                                                                 \nU.S.C. (S) 11001 et seq.), each as amended or supplemented, and any analogous\n                 -- ---                                                      \nfuture or present statutes and regulations promulgated pursuant thereto, each as\nin effect as of the date of determination.\n\n          \"Environmental Lien\" means a Lien in favor of a Tribunal or other\nPerson (i) for any liability under an Environmental Law or (ii) for damages\narising from or costs incurred by such Tribunal or other Person in response to a\nRelease or threatened Release of hazardous or toxic waste, substance or\nconstituent into the environment.\n\n          \"ERISA\" means the Employee Retirement Income Security Act of 1974, as\namended from time to time, and any successor statute.\n\n          \"Escrow Agreement\" means the Escrow Agreement dated as of March 25,\n1997 between Parent and United States Trust Company of New York, as escrow\nagent, relating to the Warrants.\n\n          \"Event of Default\" means each of the events set forth in Section 5.\n\n          \"Excess Cash Flow\" means for each semi-annual period commencing after\nthe Commercial Operation Date, 100% of Operating Cash Flow minus (i) an amount\nof Holdings operating expenses not to exceed $2.5 million per annum without the\nconsent of the holders of a majority in aggregate principal amount of the\noutstanding Notes, (ii) an amount equal to all Permitted Tax Distributions,\n(iii) all Parent expenses not to exceed $1.5 million without the consent of the\nholders of Senior Notes as provided for in the Senior Notes, (iv) any Company\nTaxes and (v) an amount equal to the aggregate of all amounts required to be\npaid to the holders of Senior Notes during such semi-annual period pursuant to\nthe Senior Note Purchase Agreement.\n\n          \"Excess Proceeds Offer\" has the meaning ascribed to such term in\nSection 2.2C(i).\n\n \n                                                                              12\n\n          \"Exchange Act\" means the Securities Exchange Act of 1934, as amended\nfrom time to time, and any successor statute.\n\n          \"Exchange Date\" means the date on which Holdings exercises its right\npursuant to the terms of the Certificate of Designation to exchange all of its\nthen outstanding Preference Shares for Notes.\n\n          \"Facilities\" means any and all real property (including, without\nlimitation, all buildings, fixtures or other improvements located thereon) now,\nhereafter or heretofore owned, leased, operated or used by any of Parent,\nHoldings, the Company or any of their respective Subsidiaries or any of their\nrespective predecessors in interest.\n\n          \"Fiscal Quarter\" means each quarterly accounting period of each Fiscal\nYear of the Company.\n\n          \"Fiscal Year\" means each annual accounting period of the Company,\nending on December 31 of each calendar year.\n\n          \"GAAP\" means those generally accepted accounting principles and\npractices which are recognized as such by The Financial Accounting Standards\nBoard and which are consistently applied for all periods after the date hereof\nso as to properly reflect the financial conditions, and the results of\noperations and changes in financial position, of the Company and its\nSubsidiaries, except that any accounting principle or practice required to be\nchanged in order to continue as a generally accepted accounting principle or\npractice may be so changed.\n\n          \"Guaranteed Completion Date\" means August 15, 1999.\n\n          \"Guaranty\" means the Guaranty of AT&amp;T Corp. of certain of the\nobligations of AT&amp;T-SSI under the Supply Contract.\n\n          \"Hazardous Materials\" means (i) any chemical, material or substance at\nany time defined as or included in the definition of \"hazardous substances,\"\n\"hazardous wastes,\" \"hazardous materials,\" \"extremely hazardous waste,\"\n\"restricted hazardous waste,\" \"infectious waste,\" \"toxic substances\" or any\nother formulations intended to define, list or classify substances by reason of\ndeleterious properties such as ignitability, corrosivity, reactivity,\ncarcinogenicity, toxicity, reproductive toxicity, \"TCLP toxicity\" or \"EP\ntoxicity\" or words of similar import under any applicable Environmental Laws or\npublications promulgated pursuant thereto; (ii) any oil, petroleum, petroleum\nfraction or petroleum derived substance; (iii) any drilling fluids, produced\nwaters and other wastes associated with the exploration, development or\nproduction of crude oil, natural gas or geothermal resources; (iv) any flammable\nsubstances or explosives; (v) any radioactive materials; (vi) asbestos in any\nform; (vii) urea formaldehyde foam insulation; (viii) electrical equipment which\ncontains any oil or dielectric fluid containing\n\n \n                                                                              13\n\nlevels of polychlorinated biphenyls in excess of fifty parts per million; (ix)\npesticides; and (x) any other chemical, material or substance, exposure to which\nis prohibited, limited or regulated by any governmental authority or which may\nor could pose a hazard to human health or safety or the environment.\n\n          \"Holder\" shall mean the holder of this Note and \"Holders\" shall mean\n                                                           -------            \neach of the holders of the Notes.\n\n          \"Holdings\" means Global Telesystems Holdings Ltd., a Bermuda company.\n\n          \"Incur\" means, with respect to any Indebtedness or other obligation of\nany Person, to create, issue, incur (by conversion, exchange or otherwise),\nassume, guarantee or otherwise become liable in respect of such Indebtedness or\nother obligation or the recording, as required pursuant to GAAP or otherwise, of\nany such Indebtedness or other obligation on the balance sheet of such Person\n(and \"Incurrence,\" \"Incurred,\" \"Incurrable\" and \"Incurring\" shall have meanings\ncorrelative to the foregoing); provided, however, that any amendment,\n                               --------  -------                     \nmodification or waiver of any document pursuant to which Indebtedness was\npreviously Incurred shall only be deemed to be an Incurrence of Indebtedness if\nand to the extent such amendment, modification or waiver (i) increases the\nprincipal thereof or interest rate or premium payable thereon or (ii) changes to\nan earlier date the stated maturity thereof or the date of any scheduled or\nrequired principal payment thereon or the time or circumstances under which such\nIndebtedness shall be redeemed; provided, further, that any Indebtedness of a\n                                --------  -------                            \nPerson existing at the time such Person becomes a Subsidiary of the Company\n(whether by merger, consolidation, acquisition or otherwise) shall be deemed to\nbe Incurred by such Subsidiary at the time it becomes a Subsidiary of the\nCompany.\n\n          \"Indebtedness\" means, with respect to any Person, (i) all\nindebtedness, obligations and liabilities of such Person for borrowed money,\n(ii) that portion of obligations with respect to Capital Leases that is properly\nclassified as a liability on a balance sheet of such Person in conformity with\nGAAP, (iii) notes payable and drafts accepted representing extensions of credit,\nwhether or not representing obligations for borrowed money, of such Person, (iv)\nany indebtedness, obligation or liability of such Person owed for all or any\npart of the deferred purchase price of property or services (excluding any such\nobligations incurred under ERISA), which purchase price is (a) due more than six\nmonths (or a longer period of up to one year, if such terms are available from\nsuppliers in the ordinary course of business) from the date of incurrence of the\nobligation in respect thereof or (b) evidenced by a note or similar written\ninstrument, (v) all indebtedness, obligations and liabilities secured by any\nLien on any property or asset owned or held by that Person regardless of whether\nthe indebtedness secured thereby shall have been assumed by that Person or is\nnonrecourse to the credit of that Person\n\n \n                                                                              14\n\nexcept that \"Indebtedness\" shall not include trade payables and accrued\nliabilities Incurred in the ordinary course of business for the purchase of\ngoods or services which are not secured by a Lien other than a Permitted\nEncumbrance and obligations under Interest Rate Agreements, Currency Agreements\nand obligations of Global under the Supply Contract (which constitute Contingent\nObligations, not Indebtedness), (vi) guarantees of such Person in respect of\nIndebtedness of other Persons and (vii) all Disqualified Capital Stock issued by\nsuch Person with the amount of Indebtedness represented by such Disqualified\nCapital Stock being equal to the greater of its voluntary or involuntary\nliquidation preference and its maximum fixed repurchase price, but excluding\naccrued dividends, if any.  For purposes hereof, the \"maximum fixed repurchase\nprice\" of any Disqualified Capital Stock which does not have a fixed repurchase\nprice shall be calculated in accordance with the terms of such Disqualified\nCapital Stock as if such Disqualified Capital Stock were purchased on any date\non which Indebtedness shall be required to be determined pursuant to this Note,\nand if such price is based upon, or measured by, the fair market value of such\nDisqualified Capital Stock, such fair market value to be determined reasonably\nand in good faith by the board of directors of the issuer of such Disqualified\nCapital Stock.\n\n          \"Independent Financial Advisor\" means an accounting, appraisal,\ninvestment banking or consulting firm of nationally recognized standing that is,\nin the reasonable and good faith judgment of the Board of Directors of the\nCompany, qualified to perform the task for which such firm has been engaged and\ndisinterested and independent with respect to the Company and its Affiliates.\n\n          \"Initial Blockage Period\" has the meaning ascribed to such term in\nSection 6.2(b).\n\n          \"Intercompany Indebtedness\" means any Indebtedness of the Company or\nany Subsidiary of the Company which, in the case of the Company, is owing to any\nwholly-owned Subsidiary of the Company and which, in the case of any such\nSubsidiary, is owing to the Company or any wholly-owned Subsidiary of the\nCompany; provided, however, that if as of any date any Person other than the\n         --------  -------                                                  \nCompany or a wholly-owned Subsidiary of the Company or any lender under the\nSenior Credit Facilities owns or holds such Indebtedness, or holds any Lien in\nrespect thereof, such Indebtedness shall no longer be Intercompany Indebtedness\npermitted to be Incurred pursuant to Section 4.1(v).\n\n          \"Interest Rate Agreement\" means any interest rate swap agreement,\ninterest rate cap agreement, interest rate collar agreement or other similar\nagreement or arrangement designed to protect the Company or any of its\nSubsidiaries against fluctuations in interest rates.\n\n \n                                                                              15\n\n          \"Internal Revenue Code\" means the Internal Revenue Code of 1986, as\namended from time to time, and any successor code or statute.\n\n          \"Investment\" means (i) any direct or indirect purchase or other\nacquisition of, or of a beneficial interest in, any securities of any other\nPerson or (ii) any direct or indirect loan, advance (other than advances to\nemployees for moving, entertainment and travel expenses, drawing accounts and\nsimilar expenditures in the ordinary course of business), extension of credit or\ncapital contribution to any other Person, including all indebtedness and\naccounts receivable from that other Person that are not current assets or did\nnot arise from sales to that other Person in the ordinary course of business.\nThe amount of any Investment shall be the original cost of such Investment plus\nthe cost of all additions thereto, without any adjustments for increases or\ndecreases in value, or write-ups, write-downs or write-offs with respect to such\nInvestment.\n\n          \"Investor Shares\" means shares of the Class A Common Shares of Parent\nrepresenting up to 15% of the outstanding shares of voting Common Stock on the\nClosing Date issued by Parent to holders of the Senior Preferred Stock.\n\n          \"Judgment Currency\" has the meaning ascribed to such term in Section\n7.8.\n\n          \"Laws\" means all applicable statutes, laws, ordinances, regulations,\nrules, orders, judgments, writs, injunctions or decrees of any state,\ncommonwealth, nation, territory, possession, province, county, parish, town,\ntownship, village, municipality or Tribunal, and \"Law\" means each of the\n                                                  ---                   \nforegoing.\n\n          \"Lien\" means any lien, mortgage, pledge, assignment, security\ninterest, charge or encumbrance of any kind (including any conditional sale or\nother title retention agreement, any lease in the nature thereof, and any\nagreement to give any security interest) and any option, trust or other\npreferential arrangement having the practical effect of any of the foregoing.\n\n          \"Margin Stock\" has the meaning assigned to that term in Regulation U\nand Regulation G of the Board of Governors of the Federal Reserve System as in\neffect from time to time.\n\n          \"Material Adverse Effect\" means (i) a material adverse effect on (a)\nthe Cable System or (b) the business, assets, revenues (after the Commercial\nOperation Date), results of operations (after the Commercial Operation Date) or\nfinancial condition of the Company and its Subsidiaries, taken as a whole, or\n(c) the ability of the Company and its Subsidiaries to achieve the Commercial\nOperation Date by the Guaranteed Completion Date, (ii) a material adverse effect\non the ability of the Company or its Subsidiaries to perform, or the impairment\nof the ability of the Holders to enforce, the obligations of the Company under\nthis\n\n \n                                                                              16\n\nNote or (iii) a material adverse effect on the ability of Global, the Company or\nits Subsidiaries to perform their obligations under the System Contracts,\nprovided that an adverse change in sales or prospective sales of Capacity on the\nCable System whether or not based on changes or perceived changes in external\nmarket conditions (including as a result of increased competition or\nintroductions or applications of new technology) will not provide a basis that\nan event described above has occurred.\n\n          \"Maturity Date\" has the meaning ascribed to such term in Section 2.1D.\n\n          \"Maximum Cash Interest Rate\" means an interest rate of 15% per annum;\n                                                                               \nprovided that any interest payable on the Notes pursuant to Section 2.1E shall\n--------                                                                      \nbe included in the determination.\n\n          \"Multiemployer Plan\" means a Pension Plan which is a \"multiemployer\nplan\" as defined in Section 4001(a)(3) of ERISA.\n\n          \"Net Proceeds\" means (a) in the case of any sale of Capital Stock by\nthe Company, the aggregate net proceeds received by the Company, after payment\nof expenses, commissions and the like incurred in connection therewith, whether\nsuch proceeds are in cash or in property (valued at the fair market value\nthereof, as determined in good faith by the board of directors, at the time of\nreceipt) and (b) in the case of any exchange, exercise, conversion or surrender\nof outstanding securities of any kind for or into shares of Capital Stock of the\nCompany which is not Disqualified Capital Stock, the net book value of such\noutstanding securities on the date of such exchange, exercise, conversion or\nsurrender (plus any additional amount required to be paid by the holder to the\nCompany upon such exchange, exercise, conversion or surrender, less any and all\npayments made to the holders, e.g., on account of fractional shares and less all\nexpenses incurred by the Company in connection therewith).\n\n          \"Non-Payment Event of Default\" means any event (other than a Payment\nDefault) the occurrence of which entitles one or more Persons to accelerate the\nmaturity of any Designated Senior Indebtedness.\n\n          \"Obligations\" means the Company's obligation to make timely payments\nof principal and interest on the Notes.\n\n          \"Officer\" means the Chairman of the Board, the Chief Executive\nOfficer, the President, any Vice President, the Chief Financial Officer, the\nController, the Treasurer or the Secretary of the Company.\n\n          \"Officers' Certificate\" means, as applied to any corporation, a\ncertificate executed on behalf of such corporation by two Officers; provided,\n                                                                    -------- \nhowever, that every Officers' Certificate with respect to the compliance with a\n-------                                                                        \ncondition precedent to the issuance of the Notes hereunder shall include\n\n \n                                                                              17\n\n(i) a statement that the officer or officers making or giving such Officers'\nCertificate have read such condition and any definitions or other provisions\ncontained in this Note relating thereto, (ii) a statement that, in the opinion\nof the signers, they have made or have caused to be made such examination or\ninvestigation as is necessary to enable them to express an informed opinion as\nto whether or not such condition has been complied with, and (iii) a statement\nas to whether, in the opinion of the signers, such condition has been complied\nwith.\n\n          \"Operating Cash Flow\" means, with respect to the Company, for each\nsemi-annual period commencing after the Commercial Operation Date, that portion\nof the Company's \"Excess Cash Flow\" (as defined in the Senior Credit Facilities)\navailable to Holdings pursuant to the terms of the Senior Credit Facilities in\nrespect of such period.\n\n          \"Operations Agreement\" means the Operations, Administration and\nMaintenance Agreement dated as of March 25, 1997 between AT&amp;T-SSI and the\nCompany, as amended from time to time.\n\n          \"Parent\" means GT Parent Holdings LDC, a Cayman Islands limited\nduration company and the parent company of Holdings and Company.\n\n          \"Payment Blockage Period\" has the meaning ascribed to such term in\nSection 6.2(b).\n\n          \"Payment Date\" has the meaning ascribed to such term in Section\n2.2(D).\n\n          \"Payment Default\" means any default, whether or not any requirement\nfor the giving of notice, the lapse of time or both, or any other condition to\nsuch default becoming an event of default has occurred, in the payment of\nprincipal of (or premium, if any) or interest on or any other amount payable in\nconnection with Designated Senior Indebtedness.\n\n          \"Payment Restriction\" has the meaning ascribed to such term in Section\n4.8.\n\n          \"PBGC\" means the Pension Benefit Guaranty Corporation, and any\nsuccessor to all or any of the Pension Benefit Guaranty Corporation's functions\nunder ERISA.\n\n          \"PCG\" means Pacific Capital Group, Inc. or its Affiliates.\n\n          \"PCG Common Equity Investment\" means the issuance of shares of the\nClass B Common Shares of Parent representing 38.25% of the outstanding shares of\nvoting Common Stock on the Closing Date for gross proceeds to Parent of at least\n$33.75 million,\n\n \n                                                                              18\n\nwhich proceeds will be contributed to the Company on the Closing Date.\n\n          \"Pension Plan\" means an employee pension benefit plan as defined in\nSection 3(2) of ERISA which is subject to the provisions of Title IV of ERISA\nand which is maintained for employees of Parent, the Company, any of their\nrespective Subsidiaries or any member of the Controlled Group.\n\n          \"Permitted Encumbrances\" means (i) Liens granted to secure the Bank\nIndebtedness and the obligations of the Company and the Guarantors under this\nNote and the Guarantees; (ii) Liens existing on the Closing Date to the extent\nand in the manner such Liens are in effect on the Closing Date; (iii) Liens for\nObligations under or otherwise contemplated by the Supply Contract; (iv) Liens\nfor taxes, assessments or governmental charges or claims the payment of which is\nnot, at the time, required by Section 4.3; (v) statutory Liens of landlords and\nbanks and rights of offset, and Liens of carriers, warehousemen, workmen,\nrepairmen, mechanics and materialmen and other Liens imposed by law incurred in\nthe ordinary course of business for sums not yet delinquent or being contested\nin good faith, if such reserve or other appropriate provision, if any, as shall\nbe required by GAAP shall have been made therefor; (vi) Liens incurred or\ndeposits made in the ordinary course of business in connection with workers'\ncompensation, unemployment insurance and other types of social security, or to\nsecure the performance of tenders, statutory obligations, surety and appeal\nbonds, bids, leases, government contracts, trade contracts, utility payments,\nperformance and return-of-money bonds and other similar obligations (exclusive\nof obligations for the payment of borrowed money); (vii) any attachment or\njudgment Lien not constituting an Event of Default; (viii) leases or subleases\ngranted to others not interfering in any material respect with the ordinary\nconduct of the business of the Company and its Subsidiaries, taken as a whole;\n(ix) easements, rights-of-way, restrictions, minor defects, encroachments or\nirregularities in title and other similar charges or encumbrances not\ninterfering in any material respect with the ordinary conduct of the business of\nthe Company and its Subsidiaries, taken as a whole; (x) any (a) interest or\ntitle of a lessor or sublessor (other than the Company or any of its\nSubsidiaries) under any lease, (b) restriction or encumbrance that the interest\nor title of such lessor or sublessor may be subject to (including without\nlimitation ground leases or other prior leases of the demised premises,\nmortgages, mechanics' liens, tax liens, and easements), or (c) subordination of\nthe interest of the lessee or sublessee under such lease to any restrictions or\nencumbrance referred to in the preceding clause (b); (x) Liens arising from\nfiling UCC financing statements for precautionary purposes relating solely to\ntrue leases of personal property permitted by this Note under which the Company\nor any of its Subsidiaries is a lessee; (xii) Liens in favor of customs and\nrevenue authorities arising as a matter of law to secure payment of customs\nduties in connection with the importation of goods;\n\n \n                                                                              19\n\n(xiii) any zoning or similar law or right reserved to or vested in any\ngovernmental office or agency to control or regulate the use of any real\nproperty; (xiv) Liens securing obligations (other than obligations representing\nIndebtedness for borrowed money) under operating, reciprocal easement or similar\nagreements entered into in the ordinary course of business of the Company and\nits Subsidiaries; (xv) Liens upon specific items of inventory or other goods and\nproceeds of any Person securing such Person's obligations in respect of bankers'\nacceptances issued or created for the account of such Person to facilitate the\npurchase, shipment or storage of such inventory or other goods in the ordinary\ncourse of business; (xv) Liens securing reimbursement obligations with respect\nto letters of credit which encumber documents and other property relating to\nsuch letters of credit and the products and proceeds thereof; (xvii) Liens\narising out of consignment or similar arrangements for the sale of goods entered\ninto by the Company or any Subsidiary in the ordinary course of business in\naccordance with past practices; and (xix) Liens to secure Permitted Refinancing\nIndebtedness to the extent the Indebtedness Refinanced was secured and such\nLiens do not extend to any property other than the property which was subject to\nthe Lien under the Indebtedness being Refinanced.\n\n          \"Permitted Holders\" means each of PCG, CIBC and PCG Telecom LDC and\ntheir respective Affiliates.\n\n          \"Permitted Investments\" means\n\n          (i) Investments by the Company, or by a Subsidiary thereof, in the\n     Company or a Subsidiary;\n\n          (ii) any Investment (including, without limitation, any promissory\n     note or other debt obligation) issued by a purchaser or lessee or other\n     user of any portion of the Cable System located within the jurisdiction of\n     a Landing Country to the Company or Global in connection with a transaction\n     permitted by the Senior Credit Facilities;\n\n          (iii)  Investments in cash and Cash Equivalents;\n\n          (iv) Investments by the Company, or by a Subsidiary thereof, in a\n     Person, if as a result of such Investment (a) such Person becomes a\n     Subsidiary of the Company or (b) such Person is merged, consolidated or\n     amalgamated with or into, or transfers or conveys substantially all of its\n     assets to, or is liquidated into, the Company or a Subsidiary thereof;\n\n          (v) reasonable and customary loans made to employees in connection\n     with their relocation not to exceed $2 million in the aggregate at any one\n     time outstanding; and\n\n          (vi) an Investment that is made by the Company or a Subsidiary thereof\n     in the form of any stock, bonds, notes, debentures, partnership or joint\n     venture interests or other\n\n \n                                                                              20\n\n     securities that are issued by a third party to the Company or Subsidiary\n     solely as partial consideration for the consummation of an Asset Sale that\n     is otherwise permitted under the covenant described under Section 2.2C.\n\n          \"Permitted Refinancing Indebtedness\" means (A) any Refinancing by the\nCompany of Indebtedness of the Company or of its Subsidiaries and (B) any\nIndebtedness incurred pursuant to a Refinancing by any Subsidiary of the Company\nof Indebtedness Incurred by such Subsidiary, that does not (1) result in an\nincrease in the total of the aggregate principal amount of the Indebtedness of\nsuch Person being Refinanced as of the date of such proposed Refinancing (if\nsuch Indebtedness that is Refinancing the existing Indebtedness is issued at a\nprice less than 100% of the principal amount thereof, an increase shall not be\ndeemed to have occurred unless the gross proceeds of such Indebtedness that is\nRefinancing the existing Indebtedness is in excess of the total of the aggregate\nprincipal amount of the Indebtedness being Refinanced as of the date of such\nproposed Refinancing) or (2) create Indebtedness with a Weighted Average Life to\nMaturity that is less than the Weighted Average Life to Maturity of the\nIndebtedness being Refinanced; provided, however, that (x) if such Indebtedness\n                               --------  -------                               \nbeing Refinanced is Indebtedness of the Company, then such Refinancing\nIndebtedness shall be Indebtedness solely of the Company and (y) if such\nIndebtedness being Refinanced is subordinate or junior in right of payment to\nthe Notes or if recourse in respect of the Indebtedness being Refinanced is\nlimited in any respect, then such Indebtedness proposed to be Incurred to\nRefinance the existing Indebtedness shall be subordinate in right of payment to\nthe Notes and recourse with respect thereto, as the case may be, shall be\nlimited at least to the same extent and in the same manner as the Indebtedness\nbeing Refinanced.\n\n          \"Permitted System Upgrade\" means upgrades to the Cable System\ncontemplated by Article 6-A of the Supply Contract in an amount not to exceed\n$75 million.\n\n          \"Permitted Tax Distributions\" means the payment of distributions to\nHoldings at such times and in such amounts that are sufficient to enable\nHoldings and Parent to satisfy timely, or to further distribute such amounts to\nits members or their members, partners, or shareholders (collectively, \"Upper\nTier Persons\") in order that such Upper Tier Persons may satisfy timely, any Tax\nliability resulting from a Change in Law that becomes effective after the\nClosing Date, which distributions shall take into account, and be increased by,\nany further Taxes imposed upon Holdings, Parent or an Upper Tier Entity as a\nresult of the receipt of such distributions.\n\n          \"Person\" means and includes natural persons, corporations, limited\nliability companies, limited partnerships, general partnerships, joint stock\ncompanies, joint ventures, associations, companies, trusts, banks, trust\ncompanies, land\n\n \n                                                                              21\n\ntrusts, business trusts or other organizations, whether or not legal entities,\nand governments and agencies and political subdivisions thereof.\n\n          \"PIK Interest Amount\" has the meaning ascribed to such term in Section\n2.1B.\n\n          \"Placement Agent\" means CIBC Wood Gundy Securities Corp., as placement\nagent for the Transaction.\n\n          \"Placement Agreement\" means the Placement Agreement dated as of March\n25, 1997 among Parent, Holdings and the Placement Agent, relating to the\nTransaction.\n\n          \"Plan\" means an employee benefit plan as defined in Section 3(3) of\nERISA maintained by the Company or any of its Subsidiaries for employees of the\nCompany or any of its Subsidiaries.\n\n          \"Plan Assets\" means the assets of (i) an \"employee benefit plan\" (as\ndefined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (ii) a\n\"plan\" (as defined in Section 4975(e)(1) of the Code), (iii) any other entity\ndeemed to hold \"plan assets\" within the meaning of 29 C.F.R. (S) 2510.3-101 or\notherwise under ERISA or (iv) any governmental plan subject to Federal, state or\nlocal law substantially similar to the provisions of Section 406 of ERISA or\nSection 4975 of the Code.\n\n          \"Potential Event of Default\" means a condition or event which, after\nnotice or lapse of time or both, would constitute an Event of Default if that\ncondition or event were not cured or removed within any applicable grace or cure\nperiod.\n\n          \"Preference Share\" means the Senior Increasing Rate Redeemable\nExchangeable Preference Shares of Holdings.\n\n          \"Preferred Stock\" of any Person means any Capital Stock of such Person\nthat has preferential rights (as compared to any other Capital Stock of such\nPerson) with respect to dividends or redemptions or upon liquidation.\n\n          \"Projections\" means the financial projection of the Company provided\nto the Holders by the Company, its representatives, advisors or Affiliates in\nconnection with the Transaction.\n\n          \"Purchase Agreement\" has the meaning ascribed to such term in the\nintroductory paragraphs hereof.\n\n          \"Real Property Assets\" means interests in land, buildings,\nimprovements, and fixtures attached thereto or used in the operation thereof, in\neach case owned or leased (as lessee) by the Company or its Subsidiaries.\n\n \n                                                                              22\n\n          \"Refinance\" means, in respect of any security or Indebtedness, to\nrefinance, extend, renew, refund or defease, or to issue a security or\nIndebtedness in exchange or replacement for, such security or Indebtedness in\nwhole or in part.\n\n          \"Refinanced\" and \"Refinancing\" shall have correlative meanings.\n\n          \"Related Business Investment\" means (i) any Investment by a Person in\nany other Person a majority of whose revenues are derived from a spur to the\nCable System, (ii) any capital expenditure or Investment, in each case,\nreasonably related to a spur to the Cable System and (iii) any investment or\ncapital expenditure in respect of any other submarine cable system.\n\n          \"Release\" means any release, spill, emission, leaking, pumping,\npouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,\nleaching or migration of Hazardous Materials into the indoor or outdoor\nenvironment (including, without limitation, the abandonment or disposal of any\nbarrels, containers or other closed receptacles containing any Hazardous\nMaterials), or into or out of any Facility, including the movement of any\nHazardous Material through the air, soil, surface water, groundwater or\nproperty.\n\n          \"Reinvestment Date\" has the meaning ascribed to such term in Section\n2.2C(i).\n\n          \"Reportable Event\" has the meaning set forth in Section 4043 of ERISA,\nbut excluding any event for which the 30-day notice requirement has been waived\nby applicable regulations of the PBGC.\n\n          \"Representative\" has the meaning ascribed to such term in Section\n6.3(b).\n\n          \"Required Holders\" means Holders holding in the aggregate more than\n50% of the outstanding principal amount of Notes.\n\n          \"Restricted Payment\" means any of the following:  (i) the declaration\nor payment of any dividend or any other distribution or payment on Capital Stock\nof the Company or any Subsidiary of the Company or any payment made to the\ndirect or indirect holders (in their capacities as such) of Capital Stock of the\nCompany or any Subsidiary of the Company (other than (x) dividends or\ndistributions payable solely in Capital Stock (other than Disqualified Capital\nStock) or in options, warrants or other rights to purchase Capital Stock (other\nthan Disqualified Capital Stock), and (y) in the case of Subsidiaries of the\nCompany, dividends or distributions payable to the Company or to a wholly-owned\nSubsidiary of the Company), (ii) the purchase, redemption or other acquisition\nor retirement for value of any Capital Stock of the Company or any of its\nSubsidiaries (other\n\n \n                                                                              23\n\nthan Capital Stock owned by the Company or a wholly-owned Subsidiary of the\nCompany, excluding Disqualified Capital Stock), (iii) the purchase, defeasance,\nrepurchase, redemption or other acquisition or retirement for value, prior to\nany scheduled maturity, scheduled repayment or scheduled sinking fund payment\nof, or the making of any principal payment on, any Subordinated Indebtedness\nother than Subordinated Indebtedness acquired in anticipation of satisfying a\nscheduled sinking fund obligation, principal installment or final maturity (in\neach case due within one year of the date of acquisition), (iv) the making of\nany Investment or guarantee of any Investment in any Person other than a\nPermitted Investment and (v) forgiveness of any Indebtedness of an Affiliate of\nthe Company to the Company or a Subsidiary.  For purposes of determining the\namount expended for Restricted Payments, cash distributed or invested shall be\nvalued at the face amount thereof and property other than cash shall be valued\nat its fair market value determined in good faith by the Board of Directors of\nthe Company.\n\n          \"Sales Agency Agreement\" means the Sales Agency Agreement dated as of\nMarch 25, 1997 between AT&amp;T-SSI and the Company, as amended.\n\n          \"Securities Act\" means the Securities Act of 1933, as amended from\ntime to time, and any successor statute.\n\n          \"Senior Credit Facilities\" means the long form Senior Credit\nFacilities Commitment Letter and upon execution the Credit Agreement among the\nCompany, the lenders named therein and Canadian Imperial Bank of Commerce, as\nagent, together with the documents related thereto (including, without\nlimitation, any guarantee agreements and security documents), in each case as\nsuch agreements may be amended (including any amendment and restatement\nthereof), supplemented or otherwise modified from time to time, including any\nagreement extending the maturity of, refinancing, replacing or otherwise\nrestructuring (including adding Subsidiaries of the Company as additional\nborrowers or guarantors thereunder) all or any portion of the Indebtedness under\nsuch agreement or any successor or replacement agreement and whether by the same\nor any other agent, lender or group of lenders.\n\n          \"Senior Indebtedness\" means for any Person the principal of, premium,\nif any, and interest on and all other obligations with respect to any\nIndebtedness of such Person, whether outstanding on the Closing Date or\nthereafter created, incurred or assumed, unless, in the case of any particular\nIndebtedness, the instrument creating or evidencing the same or pursuant to\nwhich the same is outstanding expressly provides that such Indebtedness shall\nnot be senior in right of payment to the Notes.  Without limiting the generality\nof the foregoing, \"Senior Indebtedness\" shall include (x) the principal of,\npremium, if any, and interest on all obligations of every nature of the Company\nfrom time to time owed to the lenders under the Senior\n\n \n                                                                              24\n\nCredit Facilities, including, without limitation, all obligations in respect of\nletters of credit and principal of and interest on and all fees, indemnities,\nand expenses payable under the Senior Credit Facilities and (y) interest\naccruing thereon subsequent to the occurrence of any Event of Default specified\nin Sections 5.7 and 5.8 relating to the Company, whether or not the claim for\nsuch interest is allowed under any applicable Bankruptcy Law.  Notwithstanding\nthe foregoing, \"Senior Indebtedness\" of any Person shall not include (a)\nIndebtedness evidenced by the Notes, (b) Indebtedness that is expressly\nsubordinate or junior in right of payment to any Indebtedness of such Person,\n(c) Indebtedness which, when incurred and without respect to any election under\nSection 1111(b) of Title 11, United States Code, is without recourse to such\nPerson, (d) Indebtedness which is represented by Disqualified Capital Stock, (e)\nobligations for goods, materials or services purchased in the ordinary course of\nbusiness or obligations consisting of trade payables, (f) Indebtedness of or\namounts owed by such Person for compensation to employees or for services\nrendered such Person, (g) any liability for federal, state, local or other taxes\nowed or owing by such Person, (h) Indebtedness of such Person to a Subsidiary of\nsuch Person and (i) that portion of any Indebtedness which is incurred by such\nPerson in violation of this Note.\n\n          \"Senior Note Purchase Agreement\" means the Senior Note Securities\nPurchase Agreement, dated March 25, 1997, among Holdings and the Purchasers\nnamed therein.\n\n          \"Senior Notes\" are the Senior Notes of Holdings as described in the\nSenior Note Purchase Agreement.\n\n          \"Senior Officers\" means each of the Chief Executive Officer, Senior\nVice President and Chief Financial Officer of the Company.\n\n          \"Subordinated Indebtedness\" means Indebtedness of the Company which is\nexpressly subordinated in right of payment to the Notes.\n\n          \"Subsequent Notes\" has the meaning ascribed to such term in Section\n2.1C.\n\n          \"Subsidiary\" means, with respect to any Person, any corporation,\nassociation or other business entity of which more than 50% of the total voting\npower of shares of stock or other equity interest entitled (without regard to\nthe occurrence of any contingency) to vote in the election of directors,\nmanagers or trustees thereto is at the time owned or controlled, directly or\nindirectly, by that Person or one or more of the other Subsidiaries of that\nPerson or a combination thereof.\n\n          \"Supply Contract\" means the Project Development and Construction\nContract dated as of March 25, 1997 between AT&amp;T-SSI and the Company.\n\n \n                                                                              25\n\n          \"System Contracts\" means, collectively, the Supply Contract,\nOperations Agreement, Sales Agency Agreement and the Guaranty.\n\n          \"Taxes\" means all taxes, assessments, fees, levies, imposts, duties,\npenalties, deductions, liabilities, withholdings or other charges of any nature\nwhatsoever, including interest penalties, from time to time or at any time\nimposed by any Law or any Tribunal.\n\n          \"Transaction\" shall mean, collectively, (i) the entering into of the\nSystem Contracts for the purpose of establishing the Cable System, (ii) the PCG\nCommon Equity Investment, (iii) the CIBC Capital Common Equity Investment, (iv)\nthe purchase of the Preference Shares, (v) the Senior Notes Purchase Commitment,\n(vi) the issuance of the Investor Shares pursuant to the Escrow Agreement, if\napplicable, and the Additional Shares and the commitment to issue the Warrants\npursuant to the Escrow Agreement, (vii)  the execution of a commitment letter to\nprovide for the Senior Credit Facilities and (viii) the execution of the\nAdvisory Services Agreement.\n\n          \"Transaction Documents\" means the Preference Shares, the Purchase\nAgreement, the Notes, the Senior Note Purchase Agreement, the Senior Notes, the\nSenior Credit Facilities, the Advisory Services Agreement, the System Contracts,\nthe Escrow Agreement and each agreement or instrument entered into in accordance\nwith the foregoing and each other agreement or instrument entered into in\naccordance with the PCG Common Equity Investment, the CIBC Capital Common Equity\nInvestment, the Investor Shares, the Additional Shares and the Warrants and each\nother agreement entered into in connection with the Transaction.\n\n          \"Tribunal\" means any government, any arbitration panel, any court or\nany governmental department, commission, board, bureau, agency, authority or\ninstrumentality of the United States or any state, province, commonwealth,\nnation, territory, possession, county, parish, town, township, village or\nmunicipality, whether now or hereafter constituted and\/or existing.\n\n          \"Trigger Event\" means the occurrence of any event or the existence of\nany circumstances requiring or permitting the redemption of the Notes, or\nrequiring an offer to purchase the Notes, in each case pursuant to the\nprovisions of Section 2.2.\n\n          \"U.S. Legal Tender\" means such coin or currency of the United States\nof America as at the time of payment shall be legal tender for the payment of\npublic and private debts.\n\n          \"Voting Stock\" means, with respect to any Person, securities of any\nclass or classes of Capital Stock in such Person entitling the holders thereof\nto vote under ordinary\n\n \n                                                                              26\n\ncircumstances in the election of members of the board of directors or other\ngoverning body of such Person.\n\n          \"Warrants\" means Warrants to purchase shares of Class A Common Stock\nof Parent representing up to 5% of the fully diluted shares of Common Stock of\nParent issued on the Execution Date and held pursuant to the Escrow Agreement\npending delivery to holders of outstanding Preference Shares on April 1, 2001.\n\n          \"Weighted Average Life to Maturity\" means, when applied to any\nIndebtedness at any date, the number of years obtained by dividing (a) the then\noutstanding aggregate principal amount of such Indebtedness into (b) the total\nof the products obtained by multiplying (i) the amount of each then remaining\ninstallment, sinking fund, serial maturity or other required payment of\nprincipal, including payment at final maturity, in respect thereof, by (ii) the\nnumber of years (calculated to the nearest one-twelfth) that will elapse between\nsuch date and the making of such payment.\n\n          \"wholly owned Subsidiary\" means, with respect to any Person, any\ncorporation, association or other business entity of which 100% of the total\nvoting power of shares of stock or other equity interest entitled (without\nregard to the occurrence of any contingency) to vote in the election of\ndirectors, managers or trustees thereof is at the time owned or controlled,\ndirectly or indirectly, by that Person or one or more of the other wholly-owned\nSubsidiaries of that Person or a combination thereof.\n\n          1.2  Accounting Terms\n               ----------------\n\n          For the purposes of this Note, all accounting terms not otherwise\ndefined herein shall have the meanings assigned to them in conformity with GAAP.\n\n          1.3  Other Definitional Provisions\n               -----------------------------\n\n          Any of the terms defined in Section 1.1 may, unless the context\notherwise requires, be used in the singular or the plural depending on the\nreference.\n\nSECTION 2 TERMS OF NOTE\n\n          2.1  Interest on the Notes\n               ---------------------\n\n          A.   Rate of Interest.  The Notes shall bear cash interest on the\n               ----------------                                            \nunpaid principal amount thereof from the date of issuance (the \"Issue Date\")\nthrough maturity (whether by prepayment, acceleration or otherwise) initially at\na rate of 14.00% per annum, which rate shall increase by .50% per annum\ncommencing on April 1, 2001 and by an additional .50% per annum on each\nsubsequent April 1, provided that in no case will the interest rate exceed\n                    --------                                              \n20.00% per annum.\n\n \n                                                                              27\n\n          B.  Interest Payments.  Interest shall be payable with respect to the\n              -----------------                                                \nNotes, semi-annually in arrears on each December 1 and June 1 commencing on the\nfirst June 1 or December 1 after issuance thereof, and upon any prepayment of\nthe Notes (to the extent accrued on the amount being prepaid) and at maturity of\nthe Notes; provided, however, that if, on any interest payment date, the\n           --------  -------                                            \ninterest rate borne by the Notes exceeds the Maximum Cash Interest Rate, the\nCompany may pay all or a portion of the interest payable in excess of the\nMaximum Cash Interest Rate by issuance of Subsequent Notes in an aggregate\nprincipal amount equal to the amount of such interest in excess of the Maximum\nCash Interest Rate being so paid (the \"PIK Interest Amount\").\n\n          C.  PIK Notes.  On each interest payment date on which the Company\n              ---------                                                     \nelects to pay a PIK Interest Amount pursuant to Section 2.1B, the Company shall\nexecute and deliver to each Holder on such interest payment date a Note dated\nsuch interest payment date substantially in the form of this Note in a principal\namount equal to such Holder's pro rata portion of such PIK Interest Amount (each\na \"Subsequent Note\" and, together with all other Notes, the \"Notes\").  A\nSubsequent Note shall bear interest from the date of its issuance at the same\nrate borne by all Notes.\n\n          D.  Maturity of Notes.  The Notes shall mature and the Company shall\n              -----------------                                               \npay in full the outstanding principal amount thereof and accrued interest\nthereon on April 1, 2007 (the \"Maturity Date\").\n\n          E.  Defaulted Interest.  Any principal payments on the Notes not paid\n              ------------------                                               \nwhen due and, to the extent permitted by applicable law, any interest payment on\nthe Notes not paid when due, in each case whether at stated maturity, by notice\nof prepayment, by acceleration or otherwise, shall thereafter bear interest\npayable upon demand at a rate which is 2.00% per annum in excess of the rate of\ninterest otherwise then payable on the Notes.\n\n          F.  Computation of Interest.  Interest on the Notes shall be computed\n              -----------------------                                          \non the basis of a 360-day year of twelve 30-day months.  In computing interest\non the Notes, the Exchange Date shall be included and the date of payment shall\nbe excluded; provided, however, that if a Note is repaid on the same day on\n             --------  -------                                             \nwhich it is issued, one day's interest shall be paid on that Note.\n\n          2.2  Optional and Mandatory Redemption\n               of Notes; Offers to Purchase Notes\n               ----------------------------------\n\n          A.   Optional Redemption.  The Company may, upon not less than three\n               -------------------                                            \nBusiness Days' prior written notice confirmed in writing to each Holder, at any\ntime and from time to time, on a pro rata basis, repurchase the Notes in whole\n                                 --- ----                                     \nor in part at the redemption prices (expressed as a percentage of principal\namount)\n\n \n                                                                              28\n\nset forth below, plus accrued and unpaid interest to the redemption date, if\nredeemed during the 12-month period beginning on April 1 of each year indicated\nbelow:\n\n\n \n          Year             Percentage\n          ----             -----------\n                       \n \n          1997................ 114%\n          1998................ 114\n          1999................ 114\n          2000................ 114\n          2001................ 114\n          2002................ 111\n          2003................ 108\n          2004................ 105\n          2005................ 102\n          2006................ 100\n \n\n\n          B.   Excess Cash Flow Sweep.  Subject to the terms and conditions of\n               ----------------------                                         \nthe Senior Credit Facilities and the Senior Notes the Company will, on each June\n1 and December 1 commencing on the first such date to occur more than 90 days\nafter the Commercial Operation Date, apply an amount equal to 100% of Excess\nCash Flow to mandatorily redeem the Notes on a pro rata basis, at the redemption\n                                               --- ----                         \nprices set forth below, plus, without duplication, an amount in cash equal to\nall unpaid and accumulated interest (including an amount in cash equal to all\ninterest accrued since the interest payment date immediately prior to the\nredemption date); provided that any Excess Cash Flow shall be applied (i) first,\n                  --------                                                      \nto mandatorily redeem the Senior Notes pursuant to the provisions thereof and\n(ii) second, to redeem the Notes in accordance with the terms of this Section\n2.2B.  The redemption prices shall be as follows if redeemed during the 12-month\nperiod beginning April 1 of the years set forth below:\n\n\n \n          Year                       Percentage\n          --------                   -----------\n                            \n \n          1997......................... 114%\n          1998......................... 114\n          1999......................... 112\n          2000......................... 112\n          2001......................... 107\n          2002 and thereafter.......... 111\n \n\n\nAt such time as at least 50% of the outstanding principal amount of Notes has\nbeen redeemed or repurchased pursuant to the terms of this Note, Excess Cash\nFlow may be used for a Permitted System Upgrade in lieu of redeeming any Notes.\n\n \n                                                                              29\n\n          C.  Offers to Purchase Notes.\n              ------------------------ \n\n          (i) Prepayments from Asset Sales.  The Company will not, and will not\n              ----------------------------                                     \n     permit any of its Subsidiaries to, consummate an Asset Sale (other than\n     those permitted under or contemplated by the Senior Credit Facilities)\n     unless (I) the Company or such Subsidiary, as the case may be, receives\n     consideration at the time of such sale or other disposition at least equal\n     to the fair market value thereof (as determined in good faith by the\n     Company's Board of Directors); (II) not less than 85% of the consideration\n     received by the Company or its Subsidiaries, as the case may be, is in the\n     form of cash or Cash Equivalents; and (III) the Asset Sale Proceeds\n     received by the Company or such Subsidiary are applied (a) first, to the\n     extent the Company elects, or is required, to prepay, repay or purchase\n     debt under the Senior Credit Facilities within 180 days following the\n     receipt of the Asset Sale Proceeds from any Asset Sale; (b) second, to the\n     extent of the balance of Asset Sale Proceeds after application as described\n     above, to the extent the Company elects, to a Related Business Investment,\n     provided that such investment occurs or the Company or a Subsidiary enters\n     --------                                                                  \n     into contractual commitments to make such investment, subject only to\n     customary conditions (other than the obtaining of financing), on or prior\n     to the 181st day following receipt of such Asset Sale Proceeds and Asset\n     Sale Proceeds contractually committed are so applied within 270 days\n     following the receipt of such Asset Sale Proceeds (the \"Reinvestment\n     Date\"); (d) third, to an offer by Holdings to repurchase Senior Notes\n     pursuant to the asset sale provisions thereof; and (d) fourth, if, on the\n     Reinvestment Date with respect to any Asset Sale, the Available Asset Sale\n     Proceeds exceed $5,000,000, the Company shall apply an amount equal to such\n     Available Asset Sale Proceeds to an offer to repurchase the Notes, at a\n     purchase price in cash equal to 100% of the principal amount thereof plus\n     accrued and unpaid interest, if any, to the date of repurchase (an \"Excess\n     Proceeds Offer\").\n\n          (ii) Change of Control.  Upon the occurrence of a Change of Control\n               -----------------                                             \n     (the date of such occurrence, the \"Change of Control Date\"), the Holders\n     shall have the right to require the repurchase of all of the Notes pursuant\n     to an offer to purchase (the \"Change of Control Offer\") at a purchase price\n     equal to 101% of the aggregate principal amount thereof, plus accrued\n     interest thereon to the date of repurchase.\n\n          If the Senior Credit Facilities are in effect, or any amounts are\nowing thereunder, at the time of the occurrence of a Change of Control, prior to\nthe mailing of the notice to Holders described in paragraph 2.2D below, but in\nany event within 30 days following any Change of Control, the Company covenants\nto (i) repay in full all obligations under the Senior Credit\n\n \n                                                                              30\n\nFacilities or offer to repay in full all obligations under the Senior Credit\nFacilities and repay the obligations under the Senior Credit Facilities of each\nlender who has accepted such offer or (ii) obtain the requisite consent under\nthe Senior Credit Facilities to permit the repurchase of the Notes pursuant to\nthis Section 2.2C.  The Company must first comply with the covenant described in\nthe preceding sentence before it shall be required to purchase Notes in the\nevent of a Change of Control; provided that the Company's failure to comply with\n                              --------                                          \nthe covenant described in the preceding sentence constitutes an Event of Default\ndescribed under Section 5.3 hereof if not cured within 30 days after the notice\nrequired by such clause.\n\n          D.   Procedure for Redemption or Purchase.  Within 30 days following\n               ------------------------------------                           \nany Trigger Event the Company shall mail a notice to each Holder stating:\n\n               (1)  that the offer is being made pursuant to this Section 2.2\n     and stating the relevant subsection thereof and that, in the case of\n     Section 2.2A, the principal amount of Notes to be redeemed and, in the case\n     of Section 2.2C, that all Notes validly tendered will be accepted for\n     payment (in the case of an Excess Proceeds Offer, to the extent of the\n     Available Asset Sale Proceeds);\n\n          (2) the purchase price and the purchase date which shall be no earlier\n     than 30 days nor later than 60 days from the date such notice is mailed\n     (the \"Payment Date\");\n\n          (3)  that any Note not tendered or accepted for payment will continue\n     to accrue interest;\n\n          (4) that any Note accepted for payment shall cease to accrue interest\n     after the Payment Date unless the Company shall default in the payment of\n     the repurchase price of the Notes;\n\n          (5)  that Holders electing to have Notes purchased pursuant to Section\n     2.4C will be required to surrender the Note, with the form entitled \"Option\n     of Holder to Elect Purchase\" on the reverse of the Note completed, to the\n     Company on or prior to 5:00 p.m. New York time on the Payment Date;\n\n          (6)  that Holders will be entitled to withdraw their election in the\n     case of an offer pursuant to Section 2.2C if the Company receives, not\n     later than 5:00 p.m. New York time on the Business Day preceding the\n     Payment Date, a facsimile transmission or letter setting forth the name of\n     the Holder, the principal amount of the Notes the Holder delivered for\n     purchase and a statement that such Holder is withdrawing his election to\n     have such Notes purchased;\n\n \n                                                                              31\n\n          (7)  that, in the case of an Excess Proceeds Offer, the method of\n     calculating the Available Asset Sale Proceeds and that if the aggregate\n     principal amount of Notes surrendered by Holders exceeds the Available\n     Asset Sale Proceeds, the Company shall select the Notes to be purchased on\n     a pro rata basis (with such adjustments as may be deemed appropriate by the\n     Company so that only Notes in denominations of $1,000, or integral\n     multiples thereof, shall be purchased);\n\n          (8) that Holders whose Notes were purchased or redeemed only in part\n     will be issued new Notes equal in principal amount to the unpurchased\n     portion of the Notes surrendered; and\n\n          (9) such other information or calculations reasonably necessary to the\n     consummation of any such offer in accordance with the provisions hereof.\n\n          On or before the Payment Date, the Company shall, to the extent lawful\nand to the extent required by this Note, accept for payment Notes or portions\nthereof tendered and shall mail or deliver to each tendering Holder an amount\nequal to the purchase or redemption price of the Notes tendered by such Holder\nand accepted by the Company for purchase, and the Company shall promptly issue\nnew Notes and mail or make available for delivery such new Notes to such Holder\nequal in principal amount to any unpurchased portion of the Notes surrendered,\nif applicable.\n\n          Rule 14e-1.  The Company shall comply with the requirements of Rule\n          ----------                                                         \n14e-1 under the Exchange Act and any other securities laws and regulations\nthereunder to the extent such laws and regulations are applicable in connection\nwith the purchase of Notes pursuant to an offer hereunder.  To the extent the\nprovisions of any securities laws or regulations conflict with the provisions\nunder this Section, the Company shall comply with the applicable securities laws\nand regulations and shall not be deemed to have breached its obligations under\nthis Section 2.2 by virtue thereof.\n\n          E.   Manner and Time of Payment.  All payments of obligations under\n               --------------------------                                    \nthe Notes by the Company shall be made without defense, set-off or counterclaim\nand in same-day funds and delivered to each Holder, unless otherwise specified,\nnot later than 10:00 A.M. New York time on the date due to the account of such\nHolder as indicated on the relevant signature page hereto; funds received by a\nHolder after that time shall be deemed to have been paid by the Company on the\nnext succeeding Business Day.\n\n          F.   Payments on Non-Business Days.  Whenever any payment to be made\n               -----------------------------                                  \nunder the Notes shall be stated to be due on a day which is not a Business Day,\nthe payment shall be made on the next succeeding Business Day and such extension\nof time shall be\n\n \n                                                                              32\n\nincluded in the computation of the payment of interest hereunder or under the\nNotes.\n\nSECTION 3 AFFIRMATIVE COVENANTS\n\n          The Company covenants and agrees that, until the Notes and all other\namounts due under this Note have been indefeasibly paid in full it shall perform\nall covenants in this Section 3 required to be performed by it:\n\n          3.1  Financial Statements and Other Reports\n               --------------------------------------\n\n          The Company will maintain, and cause each of its Subsidiaries to\nmaintain, a system of accounting established and administered in accordance with\nsound business practices to permit preparation of consolidated financial\nstatements in conformity with GAAP.  The Company will deliver to each Holder\nfollowing the Exchange Date:\n\n          (i) as soon as available and in any event within 45 days after the end\n     of each of the first three fiscal quarters of each fiscal year and within\n     90 days after the end of the fourth fiscal quarter of each fiscal year, (1)\n     the consolidated balance sheets of the Company and its Subsidiaries as at\n     the end of such fiscal quarter, (2) the related consolidated statements of\n     operations, stockholders' equity and cash flows for such fiscal quarter and\n     for the period from the beginning of the then current fiscal year to the\n     end of such fiscal quarter, setting forth in each case in comparative form\n     the corresponding figures for the corresponding periods of the previous\n     fiscal year and the corresponding figures from the consolidated plan and\n     financial forecast for the current fiscal year delivered pursuant to\n     Section 3.1(viii), all in reasonable detail and certified by the chief\n     financial officer of the Company that they fairly present the financial\n     condition of each the Company and its Subsidiaries, as at the dates\n     indicated and the results of their operations and their cash flows for the\n     periods indicated, subject to changes resulting from audit and normal year-\n     end adjustments, and (3) a narrative report describing the operations of\n     the Company and its Subsidiaries (in the form of management's discussion\n     and analysis of such operations which would comply with the disclosure\n     requirements of the Exchange Act and rules and regulations promulgated\n     thereunder with respect to management's discussion and analysis set forth\n     in quarterly reports on Form 10-Q) prepared for such fiscal quarter and for\n     the period from the beginning of the then current fiscal year to the end of\n     such fiscal quarter;\n\n          (ii) as soon as available and in any event within 90 days after the\n     end of each fiscal year, (1) the consolidated balance sheets of the Company\n     and its Subsidiaries as at the end of such fiscal year, (2) the related\n     consolidated\n\n \n                                                                              33\n\n     statements of operations, stockholders' equity and cash flows for such\n     fiscal year, setting forth in each case in comparative form the\n     corresponding figures for the previous fiscal year and the corresponding\n     figures from the consolidated plan and financial forecast for the current\n     fiscal year delivered pursuant to Section 3.1(viii) for the fiscal year\n     covered by such financial statements, all in reasonable detail and\n     certified by the chief financial officer of the Company that they fairly\n     present the financial condition of the Company and its Subsidiaries as at\n     the dates and the results of their operations and their cash flows for the\n     periods indicated, (3) a narrative report describing the operations of the\n     Company and its Subsidiaries (in the form of management's discussion and\n     analysis of such operations which would comply with the disclosure\n     requirements of the Exchange Act and rules and regulations promulgated\n     thereunder with respect to management's discussion and analysis set forth\n     in quarterly reports on Form 10-K) prepared for such fiscal year, and (4) a\n     report thereon of independent certified public accountants of recognized\n     national standing, which report shall be unqualified as to scope of audit,\n     shall express no doubts about the ability of the Company and its\n     Subsidiaries to continue as a going concern, and shall state that such\n     consolidated financial statements fairly present the consolidated financial\n     position of the Company and its Subsidiaries as at the dates indicated and\n     the results of their operations and their cash flows for the periods\n     indicated in conformity with GAAP applied on a basis consistent with prior\n     years (except as otherwise disclosed in such financial statements) and that\n     the examination by such accountants in connection with such consolidated\n     financial statements has been made in accordance with generally accepted\n     auditing standards;\n\n          (iii)  together with each delivery of financial statements pursuant to\n     Sections (i) and (ii) above, (a) an Officers' Certificate of the Company\n     stating that the signers have reviewed the terms of the Notes and have\n     made, or caused to be made under their supervision, a review in reasonable\n     detail of the transactions and condition of the Company and its\n     Subsidiaries during the accounting period covered by such financial\n     statements and that such review has not disclosed the existence during or\n     at the end of such accounting period, and that the signers do not have\n     knowledge of the existence as at the date of the Officers' Certificate, of\n     any condition or event which constitutes an Event of Default or Potential\n     Event of Default, or, if any such condition or event existed or exists,\n     specifying the nature and period of existence thereof and what action the\n     Company has taken, is taking and proposes to take with respect thereto; and\n     (b) a compliance certificate demonstrating in reasonable detail compliance\n     (as determined in accordance with GAAP) during and at the end of such\n\n \n                                                                              34\n\n     accounting periods with the restrictions contained in Sections 4.1 through\n     4.17 inclusive;\n\n          (iv) together with each delivery of consolidated financial statements\n     pursuant to Section (iii) above, a written statement by the independent\n     certified public accountants giving the report thereon (a) stating whether,\n     in connection with their audit examination, any condition or event that\n     constitutes an Event of Default or Potential Event of Default that relates\n     to accounting matters has come to their attention and, if any such\n     condition or event has come to their attention, specifying the nature and\n     period of existence thereof; provided that such accountants shall not be\n                                  --------                                   \n     liable by reason of any failure to obtain knowledge of any such Event of\n     Default or Potential Event of Default that would not be disclosed in the\n     course of their audit examination, and (b) stating that based on their\n     audit examination nothing has come to their attention that causes them to\n     believe that the information contained in the certificates delivered\n     therewith is not correct;\n\n          (v) promptly upon the sending or filing thereof, copies of all\n     financial statements, reports, notices and proxy statements sent or made\n     available generally by the Company to its security holders or by any\n     Subsidiary of the Company to its security holders other than the Company or\n     another Subsidiary of the Company;\n\n          (vi) promptly after a responsible officer has knowledge thereof, the\n     Company will give written notice to the Holders of (a) the occurrence of an\n     Event of Default or Potential Event of Default, (b) any default under any\n     Contractual Obligation of the Company that could reasonably be expected to\n     have a Material Adverse Effect, and (c) any other development that has\n     resulted in, or could reasonably be expected to result in, a Material\n     Adverse Effect;\n\n          (vii)  promptly upon any Senior Officer obtaining knowledge of (X) the\n     institution of, or non-frivolous threat of, any action, suit, proceeding\n     (whether administrative, judicial or otherwise), governmental investigation\n     or arbitration against or affecting the Company or any of its Subsidiaries\n     or any property of the Company or any of its Subsidiaries (collectively,\n     \"Proceedings\") not previously disclosed in writing by the Company to\n     Holders or (Y) any material development in any Proceeding that, in any\n     case:\n\n               (1) could reasonably be expected to have a Material Adverse\n          Effect; or\n\n               (2) seeks to enjoin or otherwise prevent the consummation of, or\n          to recover any material damages or obtain material relief as a result\n          of, the Transaction,\n\n \n                                                                              35\n\n     written notice thereof together with such other information as may be\n     reasonably available to the Company or any of its Subsidiaries to enable\n     the Holders and their counsel to evaluate such matters;\n\n          (viii)  within 60 days of the Commercial Operation Date, the Company\n     will adopt an operating budget and an operating plan for the initial\n     operating year and within 60 days of each subsequent operating year, an\n     operating plan for such year;\n\n          (ix) in writing, promptly upon an Officer obtaining knowledge that the\n     Company or any of its Subsidiaries has received notice or otherwise learned\n     of any claim, demand, action, event, condition, report or investigation\n     indicating any potential or actual liability arising in connection with (x)\n     the non-compliance with or violation of the requirements of any\n     Environmental Law which could reasonably be expected to have, individually\n     or in the aggregate, a Material Adverse Effect, (y) the release or\n     threatened release of any toxic or hazardous waste, substance or\n     constituent into the environment which could reasonably be expected to\n     have, individually or in the aggregate, a Material Adverse Effect, or (z)\n     the existence of any Environmental Lien on any properties or assets of the\n     Company or any of its Subsidiaries;\n\n          (x) promptly after the availability thereof, copies of all material\n     amendments to the certificate of incorporation or by-laws of the Company or\n     any of its Subsidiaries;\n\n          (xi) promptly upon any Person becoming a Subsidiary of the Company, a\n     written notice setting forth with respect to such Person the date on which\n     such Person became a Subsidiary of the Company; and\n\n          (xii)  with reasonable promptness, such other information and data\n     with respect to the Company or any of its Subsidiaries or any of their\n     respective property, business or assets as from time to time may be\n     reasonably requested by any Holder of $25 million or more of Notes to\n     enable such purchaser to confirm compliance by the Company with the\n     covenants contained herein; provided that no information or data shall be\n                                 --------                                     \n     required to be delivered hereunder or under any other provision of this\n     Note if it would violate any applicable attorney-client or accountant-\n     client privilege.\n\n\n          3.2  Corporate Existence, Etc.\n               ------------------------ \n\n          The Company will at all times preserve and keep in full force and\neffect its corporate existence and rights and franchises to its business and\nthose of each of its Subsidiaries,\n\n \n                                                                              36\n\nexcept where the failure to so preserve or keep could not, singly or in the\naggregate, reasonably be expected to have a Material Adverse Effect.\n\n          3.3  Payment of Taxes and Claims;\n               Tax Consolidation\n               ----------------------------\n\n          A.   The Company will, and will cause each of its Subsidiaries to, pay\nall material Taxes, assessments and other governmental charges imposed upon it\nor any of its material properties or assets or in respect of any of its\nfranchises, business, income or property before any material penalty accrues\nthereon, and all claims (including, without limitation, claims for labor,\nservices, materials and supplies) for sums which have become due and payable and\nwhich by law have or may become a Lien upon any of its properties or assets\nprior to the time when any material penalty or fine shall be incurred with\nrespect thereto, provided, however, that no such Tax assessment, charge or claim\n                 --------  -------                                              \nneed be paid if the validity or amount of such charge or claim is being\ndiligently contested in good faith and if such reserve or other appropriate\nprovision, if any, as shall be required in conformity with GAAP shall have been\nmade therefor.\n\n          B.  The Company will not, nor will it permit any of its Subsidiaries\nto, file or consent to the filing of any consolidated income tax return with any\nPerson (other than the Company or any of its Subsidiaries so long as the filing\nof such consolidated income tax return is permitted by applicable law).\n\n          3.4  Maintenance of Properties; Insurance\n               ------------------------------------\n\n          From and after the Commercial Operation Date, the Company will cause\nthe Cable System to be operated in an efficient and businesslike manner in\naccordance with the Supply Contract and the Operations Agreement.  The Company\nwill maintain or cause to be maintained, with financially sound and reputable\ninsurers or with self insurance programs, in each case to the extent consistent\nwith prudent business practices and customary in its industries, insurance with\nrespect to its properties and business and the properties and businesses of its\nSubsidiaries against loss or damage of the kinds (including, in any event,\nbusiness interruption insurance) and in the amounts customarily carried or\nmaintained under similar circumstances by corporations of established reputation\nengaged in similar businesses and owning similar properties in the same general\nrespective areas in which the Company and its Subsidiaries operate; provided,\n                                                                    -------- \nthat in no event shall the Company maintain insurance at levels below those\nrequired by the Senior Credit Facilities.\n\n          3.5  Inspection\n               ----------\n\n          The Company shall permit one authorized representative designated by\nthe Holders to visit and inspect any of the properties of the Company or its\nSubsidiaries, including, without\n\n \n                                                                              37\n\nlimitation, its and their financial and accounting records, and to make copies,\nand to discuss its and their affairs, finances and accounts with its and their\nofficers and independent public accountants (provided that representatives of\nthe Company or any of its Subsidiaries may, if it so chooses, be present at or\nparticipate in any such discussion), all upon reasonable notice and at such\nreasonable times during normal business hours and as often as may be reasonably\nrequested.\n\n          3.6  Limitation on Loans\n               -------------------\n\n          The Company will not, and will not permit any of its Subsidiaries to,\ncreate, incur or otherwise cause of suffer to exist or become effective any\nLiens of any kind other than Liens permitted by Section 4.3 upon any property or\nasset of the Company or and Subsidiary or any shares of stock or debt of any\nSubsidiary which owns property or assets, now owned or hereafter acquired,\nunless (i) if such Lien secures Indebtedness which is pari passu with the Notes,\n                                                      ---- -----                \nthen the Notes are secured on an equal and ratable basis with the obligations so\nsecured until such time as such obligation is no longer secured by a Lien or\n(ii) if such Lien secures Indebtedness which is subordinated to the Notes, any\nsuch Lien shall be subordinated to the Lien granted to the Holders of the Notes\nto the same extent as such subordinated Indebtedness is subordinated to the\nNotes.\n\n          3.7  Compliance with Laws, Etc.\n               ------------------------- \n\n          The Company shall and shall cause each of its Subsidiaries to comply\nwith the requirements of all applicable Laws of any Tribunal, noncompliance with\nwhich, singly or in the aggregate, could reasonably be expected to have a\nMaterial Adverse Effect.\n\n          3.8  Maintenance of Accurate Records, Etc.\n               ------------------------------------ \n\n          The Company shall keep, and shall cause each of its Subsidiaries to\nkeep, true books and records and accounts in which full and correct entries will\nbe made of all its respective business transactions, and will reflect, and cause\neach of its Subsidiaries to reflect, in its respective financial statements\nadequate accruals and appropriations to reserves.\n\n          3.9  ERISA Compliance\n               ----------------\n\n          Each of the Company and its Subsidiaries will (i) make prompt payment\nof all contributions which it is obligated to make under all Pension Plans and\nwhich are required to meet the minimum funding standard set forth in ERISA with\nrespect to each of the Pension Plans, except where the failure to make such\npayment could not reasonably be expected to have a Material Adverse Effect, and\n(ii) notify the Holders promptly upon becoming aware of any fact, including but\nnot limited to, any Reportable Event arising in connection with any of the\nPension\n\n \n                                                                              38\n\nPlans that is not a Multiemployer Plan, which could be reasonably expected to\nconstitute grounds for termination thereof by the PBGC or for the appointment by\nthe appropriate United States District Court of a trustee to administer such\nPension Plan, together with a statement as to the action, if any, proposed to be\ntaken with respect thereto.\n\n          3.10 Payments in U.S. Dollars\n               ------------------------\n\n          Other than with respect to PIK Interest Amounts, all payments of any\nobligations to be made hereunder by the Company or any other obligor with\nrespect thereto shall be made solely in U.S. Dollars or such other currency as\nis then legal tender for public and private debts in the United States of\nAmerica.\n\n          3.11 Form, Registration, Transfer and\n               Exchange of Notes; Lost Notes\n               --------------------------------\n\n          The Notes are issuable as registered Notes without coupons in\ndenominations of at least $1,000, except as may be necessary to reflect any\nprincipal amount not evenly divisible by $1,000.  The Company shall keep at its\nprincipal office a register in which the Company shall provide for the\nregistration of Notes and of transfers of Notes.  Upon surrender for\nregistration of transfer of any Note at the principal office of the Company, the\nCompany shall, at its expense, execute and deliver one or more new Notes of the\nlike tenor and of a like aggregate principal amount, registered in the name of\nsuch transferee or transferees.  At the option of the holder of any Note, such\nNote may be exchanged for other Notes of like tenor and of any authorized\ndenominations, of a like aggregate principal amount, upon surrender of the Note\nto be exchanged at the principal office of the Company.  Whenever any Notes are\nso surrendered for exchange, the Company shall, at its expense, execute and\ndeliver the Notes which the Holder making the exchange is entitled to receive.\nEvery Note surrendered for registration of transfer or exchange shall be duly\nendorsed, or be accompanied by a written instrument of transfer duly executed by\nthe holder of such Note or such holder's attorney duly authorized in writing.\nAny Note or Notes issued in exchange for any Note or upon transfer thereof shall\ncarry the rights to unpaid interest and interest to accrue which were carried by\nthe Note so exchanged or transferred, so that neither gain nor loss of interest\nshall result from any such transfer or exchange.  Upon receipt of written notice\nfrom the holder of any Note of the loss, theft, destruction or mutilation of\nsuch Note and, in the case of any such loss, theft or destruction, upon receipt\nof such holder's unsecured indemnity agreement, or in the case of any such\nmutilation upon surrender and cancellation of such Note, the Company will make\nand deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or\nmutilated Note.\n\n          Prior to due presentment for registration of transfer, the Company may\ntreat the Person in whose name any Note is\n\n \n                                                                              39\n\nregistered as the owner and holder of such Note for the purpose of receiving\npayment of principal of and interest on such Note and for all other purposes\nwhatsoever, whether or not such Note shall be overdue, and the Company shall not\nbe affected by notice to the contrary.\n\n          3.12 Holders' Meeting\n               ----------------\n\n          The Company will participate in a meeting with the Holders twice\nduring each fiscal year to be held at a location and a time selected by the\nHolders and reasonably satisfactory to the Company.\n\nSECTION 4 NEGATIVE COVENANTS\n\n          The Company covenants and agrees that until the repayment in full of\nthe Notes and all other obligations due under this Note it will fully and timely\nperform all covenants in this Section 4.\n\n          4.1  Indebtedness\n               ------------\n\n          The Company shall not, and shall not cause or permit any of its\nSubsidiaries to, directly or indirectly, Incur, or remain or become directly or\nindirectly liable with respect to, any Indebtedness, except for the following\n(\"Permitted Indebtedness\"):\n\n          (i) the Company may Incur and remain liable with respect to the\n     obligations under the Notes;\n\n          (ii) the Company and its Subsidiaries may Incur and remain liable with\n     respect to the Bank Indebtedness; provided, however, that the aggregate\n                                       --------  -------                    \n     principal amount of Indebtedness under the Senior Credit Facilities shall\n     not exceed the sum of $425,000,000 less the sum of (a) the aggregate amount\n     of scheduled amortization payments of the principal amount thereof actually\n     made (other than with respect to the revolving loan commitments under the\n     Senior Credit Facilities), (b) the aggregate amount of mandatory\n     prepayments of the principal amount thereof actually made (other than with\n     respect to the revolving loan commitments under the Senior Credit\n     Facilities) and (c) each permanent reduction of commitments to extend\n     credit thereunder not otherwise caused pursuant to clause (a) or (b);\n\n          (iii)  the Company and its Subsidiaries may become and remain liable\n     with respect to Contingent Obligations permitted by Section 4.6 and, upon\n     any matured obligations actually arising pursuant thereto, the Indebtedness\n     corresponding to the Contingent Obligations so extinguished;\n\n          (iv) the Company and its Subsidiaries may remain liable with respect\n     to Indebtedness in respect of Capital Leases or\n\n \n                                                                              40\n\n     incurred to finance (a) the purchase price of equipment, fixtures and any\n     other similar property or the remodeling or other improvement costs of any\n     facility of the Company or any of its Subsidiaries or (b) the purchase\n     price of any Real Property Assets; provided that the aggregate amount of\n                                        --------                             \n     Indebtedness incurred under this Section 4.1(iv) from and after the Closing\n     Date shall not exceed $25 million at any time outstanding;\n\n          (v) the Company and its Subsidiaries may Incur and remain liable with\n     respect to Intercompany Indebtedness;\n\n          (vi) the Company and its Subsidiaries may Incur and remain liable with\n     respect to Permitted Refinancing Indebtedness;\n\n          (vii)  Subsidiaries of the Company acquired after the Closing Date may\n     remain liable with respect to Indebtedness existing immediately prior to\n     the time any such entity became a Subsidiary of Company in an aggregate\n     amount for all such Subsidiaries not to exceed $10 million at any time\n     outstanding; provided that such Indebtedness is not incurred in\n                  --------                                          \n     contemplation of such acquisition;\n\n          (viii)  the Company may become and remain liable with respect to other\n     Indebtedness in an aggregate principal amount not to exceed at any time\n     outstanding $25 million;\n\n          (ix) to the extent permitted under the Senior Credit Facilities,\n     Indebtedness under, or constituting net exposure under, interest and\n     currency hedging arrangements entered into to hedge obligations under the\n     Senior Credit Facilities; and\n\n          (x) Indebtedness incurred in connection with Permitted Sale Leasebacks\n     (as defined in the Senior Credit Facilities) in an amount not to exceed at\n     any time outstanding $ 5.0 million.\n\n          In addition to the foregoing, at any time if no Event of Default or\nPotential Event of Default with respect to the Notes shall have occurred and be\ncontinuing at the time of or as a consequence of the incurrence of any such\nIndebtedness, the Company may incur Indebtedness if the Consolidated Interest\nCoverage Ratio immediately preceding the time at which such additional\nIndebtedness is incurred would have been at least 2.0 to 1, determined on a pro\nforma basis in accordance with GAAP.\n\n          4.2  Senior Subordinated Indebtedness\n               --------------------------------\n\n          The Company shall not, nor shall it cause or permit any of its\nSubsidiaries to, directly or indirectly, Incur any Indebtedness that is by its\nterms (or by the terms of any agreement governing such Indebtedness)\nsubordinated in right of\n\n \n                                                                              41\n\npayment to any other Indebtedness of the Company or of such Subsidiary\n(\"Subordinated Indebtedness\") unless such Subordinated Indebtedness is also by\nits terms (or by the terms of any agreement governing such Subordinated\nIndebtedness) made expressly subordinate to the Notes to the same extent and in\nthe same manner as such Notes are subordinated to Senior Indebtedness of the\nCompany.\n\n          4.3  Liens\n               -----\n\n          The Company shall not, nor shall it cause or permit any of its\nSubsidiaries to, directly or indirectly, create, incur, assume or permit to\nexist any Lien on or with respect to any property or asset (including any\ndocument or instrument in respect of goods or accounts receivable) of the\nCompany or of any of its Subsidiaries, whether now owned or hereafter acquired,\nor assign or otherwise convey any right to receive any income or profits\ntherefrom, or file or permit the filing of, or permit to remain in effect, any\nfinancing statement or other similar notice of any Lien with respect to any such\nproperty, asset, income or profits under the Uniform Commercial Code of any\nState or under any similar recording or notice statute, except:\n\n          (i)  Permitted Encumbrances;\n\n          (ii) Liens on (a) Real Property Assets or (b) equipment, fixtures and\n     other similar property of Company and any of its Subsidiaries, in each case\n     securing Indebtedness described in Sections 4.1(iv) and 4.1(vii); provided\n                                                                       --------\n     that such Liens shall extend only to the equipment, fixtures, and other\n     similar property so financed (and improvements or attachments thereto) and\n     the proceeds thereof;\n\n          (iii)  Liens securing Indebtedness permitted under Section 3.1(viii),\n     which Liens are existing prior to the time the entity which incurred such\n     Indebtedness became a Subsidiary of the Company; provided that such Liens\n                                                      --------                \n     were not incurred in connection with, or in contemplation of, the\n     acquisition of such Subsidiary of the Company and such Liens extend or\n     cover only the property and assets of such entity which were covered by\n     such Liens and which were owned by such entity, in each case at the time\n     such entity became a Subsidiary of the Company (and improvements or\n     attachments thereto); and\n\n          (iv) the replacement, extension or renewal of any Lien permitted by\n     this Section 4.3 upon or in the same property subject to such Lien and as\n     security for the same obligations or any refinancings thereof to the extent\n     such refinancings are permitted under Section 4.1; provided that such Lien\n                                                        --------               \n     does not extend to or cover any property other than the property covered by\n     such Lien immediately prior to\n\n \n                                                                              42\n\n     such replacement, extension or renewal of such Lien (and improvements or\n     attachments thereto) and the principal of the obligations secured thereby\n     is not increased.\n\n          4.4  Restricted Payments\n               -------------------\n\n          The Company shall not make, and shall not permit any of its\nSubsidiaries to, directly or indirectly, make, any Restricted Payment, unless:\n\n          (a) no Event of Default or Potential Event of Default shall have\n     occurred and be continuing at the time of or immediately after giving\n     effect to such Restricted Payment;\n\n          (b)  immediately after giving pro forma effect to such Restricted\n                                        --- -----                          \n     Payment, the Company could incur $1.00 of additional Indebtedness (other\n     than Permitted Indebtedness) under the last paragraph of Section 4.1; and\n\n          (c)  immediately after giving effect to such Restricted Payment, the\n     aggregate of all Restricted Payments declared or made after the Closing\n     Date does not exceed the sum of (1) 25% of the Company's Consolidated Net\n     Income (or in the event that such Consolidated Net Income shall be a\n     deficit, minus 100% of such deficit) after the Closing Date, plus (2) 100%\n     of the aggregate Net Proceeds from the issue or sale, after the Issue Date,\n     of Capital Stock (other than Disqualified Capital Stock or Capital Stock of\n     the Company issued to any Subsidiary of the Company) of the Company or any\n     Indebtedness or other securities of the Company convertible into or\n     exercisable or exchangeable for Capital Stock (other than Disqualified\n     Capital Stock) of the Company which has been so converted or exercised or\n     exchanged, as the case may be.\n\n          The provisions of this Section 4.4 shall not prohibit (i) the payment\nof any distribution within 60 days after the date of declaration thereof, if at\nsuch date of declaration such payment would comply with the provisions of this\nNote, (ii) the retirement of any shares of Capital Stock of the Company or\nSubordinated Indebtedness by conversion into, or by or in exchange for, shares\nof Capital Stock (other than Disqualified Capital Stock), or out of, the Net\nProceeds of the substantially concurrent sale (other than to a Subsidiary of the\nCompany) of other shares of Capital Stock of the Company (other than\nDisqualified Capital Stock), (iii) the redemption, repayment or retirement of\nSubordinated Indebtedness in exchange for, by conversion into, or out of the Net\nCash Proceeds of, a substantially concurrent sale or incurrence of Capital Stock\n(other than Disqualified Capital Stock) or of Indebtedness (other than any\nIndebtedness owed to a Subsidiary) of the Company that is contractually\nsubordinated in right of payment to the Notes to at least the same extent as the\nIndebtedness being redeemed, repair or retired, (iv) the retirement of any\nshares of\n\n \n                                                                              43\n\nDisqualified Capital Stock by conversion into, or by exchange for, shares of\nDisqualified Capital Stock, or out of the Net Proceeds of the substantially\nconcurrent issuance or sale (other than to a Subsidiary of the Company) of other\nshares of Disqualified Capital Stock, (v) the payment of dividends to Holdings\nin such amounts and at such time as is necessary for the payment of interest,\nprincipal or premium on the Senior Notes in accordance with the terms thereof\nand the Senior Note Purchase Agreement in effect on the Closing Date, (vi) the\npayment of an amount not to exceed 1.5% of the gross revenues of Holdings for\nmanagement services provided by PCG under the Advisory Services Agreement, (vii)\nthe payment of dividends to Holdings, in an amount not to exceed $4.0 million\nper year, to be used by Holdings and Parent for overhead and operating expenses\nof Holdings and Parent or (viii) Permitted Tax Distributions.\n\n          4.5  Investments\n               -----------\n\n     The Company will not, and will not permit any of its Restricted\nSubsidiaries to, make any Investment other than (i) a Permitted Investment or\n(ii) an Investment that is made as a Restricted Payment in compliance with\nSection 4.4.\n\n          4.6  Contingent Obligations\n               ----------------------\n\n          The Company shall not, nor shall it cause or permit any of its\nSubsidiaries to, directly or indirectly, create or become or remain liable with\nrespect to any Contingent Obligation, except:\n\n          (i) the Company and its Subsidiaries may become and remain liable with\n     respect to Contingent Obligations in respect of letters of credit under the\n     Senior Credit Facilities;\n\n          (ii) the Company and its Subsidiaries may become and remain liable\n     with respect to Contingent Obligations in respect of customary\n     indemnification and purchase price adjustment obligations incurred in\n     connection with Asset Sales or other sales of assets; provided that the\n                                                           --------         \n     maximum assumable liability in respect of all such obligations shall at no\n     time exceed the gross proceeds actually received by the Company and its\n     Subsidiaries in connection with such Asset Sales and other sales;\n\n          (iii)  the Company and its Subsidiaries, as applicable, may remain\n     liable with respect to existing Contingent Obligations existing on the\n     Closing Date;\n\n          (iv) the Company and its Subsidiaries may become and remain liable\n     with respect to Contingent Obligations under guarantees made under the\n     Senior Credit Facilities;\n\n \n                                                                              44\n\n          (v) the Company and its Subsidiaries may become and remain liable with\n     respect to guarantees of Indebtedness or Contingent Obligations of a\n     wholly-owned Subsidiary of the Company and a Subsidiary of the Company may\n     become and remain liable with respect to guarantees of Indebtedness or\n     Contingent Obligations of the Company or a wholly-owned Subsidiary of the\n     Company;\n\n          (vi) with respect to the Company and its Subsidiaries, Contingent\n     Obligations permitted in accordance with the terms of Senior Credit\n     Facilities; and\n\n          (vii)  the Company and its Subsidiaries may become and remain liable\n     with respect to other Contingent Obligations; provided that the maximum\n                                                   --------                 \n     aggregate liability, contingent or otherwise, of the Company and its\n     Subsidiaries in respect of all such Contingent Obligations shall at no time\n     exceed $5 million.\n\n          4.7  Restriction on Fundamental Changes\n               ----------------------------------\n\n          Other than the sale of Capital Stock of a Subsidiary of the Company in\naccordance with Section 2.4C(i) and Section 4.15, the Company shall not, nor\nshall it cause or permit any of its Subsidiaries to, directly or indirectly,\nenter into any transaction, or series of related transactions, of merger,\namalgamation, consolidation or combination, or consolidate, or liquidate, wind-\nup or dissolve itself (or suffer any liquidation or dissolution), or convey,\nsell, lease, sublease, transfer or otherwise dispose of, in one transaction or\nin a series of transactions, all or substantially all of its business, property\nor assets, whether now owned or hereafter acquired, except any Subsidiary of the\nCompany may be merged, amalgamated, consolidated or combined with or into the\nCompany or any wholly-owned Subsidiary of the Company or be liquidated, wound up\nor dissolved, or all or substantially all of its business, property or assets\nmay be conveyed, sold, leased, transferred or otherwise disposed of, in one\ntransaction or in a series of transactions, to the Company or to any wholly-\nowned Subsidiary of the Company; provided, however, that (A) no Potential Event\n                                 --------  -------                             \nof Default or Event of Default shall have occurred and be continuing or would\nresult therefrom, (B) in the case of such a merger, amalgamation, consolidation\nor combination of the Company and a Subsidiary of the Company, the Company shall\nbe the continuing or surviving corporation, and (C) where one of the predecessor\nentities is the Company, the surviving entity (i) if it is the Company (I)\ncontinues to be bound as such under this Note and (II) executes and delivers to\nthe Holders immediately upon consummation of such transaction a written\nconfirmation or acknowledgment to such effect, in form and substance\nsatisfactory to the Holders, together with evidence of appropriate corporate\npower, authority and action and a written legal opinion in form and substance\nsatisfactory to the Holders to the effect that this Note continues to be a\nlegal, valid and binding obligation of\n\n \n                                                                              45\n\nsuch entity, enforceable against such entity in accordance with its terms\n(subject to customary exceptions in respect of bankruptcy, insolvency and other\nequitable remedies) and with respect to such other matters as the Holders may\nreasonably request, and (ii) if it is not the Company, executes and delivers to\nthe Holders immediately upon the consummation of such transaction an amendment\nto this Note, in form and substance satisfactory to the Holders, whereby such\nsurviving entity assumes the due and punctual performance of all obligations and\nliabilities of such predecessor, together with evidence of appropriate corporate\npower, authority and action and a written legal opinion in form and substance\nsatisfactory to the Holders to the effect that such Note is the legal, valid and\nbinding obligation of such surviving entity, enforceable against such surviving\nentity in accordance with its terms (subject to customary exceptions in respect\nof bankruptcy, insolvency and other equitable remedies) and with respect to such\nother matters as the Holders may reasonably request.\n\n          4.8  Limitation on Dividend and Other Payment\n               Restrictions Affecting Subsidiaries\n               -----------------------------------\n\n          The Company shall not, nor shall it cause or permit any of its\nSubsidiaries to, directly or indirectly, create or otherwise cause or permit or\nsuffer to exist or become effective any encumbrance or restriction on the\nability of any Subsidiary of the Company to (a) pay dividends or make any other\ndistributions on its Capital Stock or any other interest or participation in, or\nmeasured by, such Subsidiary's profits; (b) make loans or advances or pay any\nIndebtedness or other obligation owed to the Company or to any Subsidiary of the\nCompany; or (c) transfer any of its property or assets to the Company or to any\nSubsidiary of the Company (any such restriction or encumbrance a \"Payment\nRestriction\"), except for such encumbrances or restrictions existing under or by\nreason of:  (1) any restrictions contained in (i) this Note; (ii) the Senior\nCredit Facilities (or any of the documents contemplated therein) as in effect on\nthe Closing Date; (iii) the Indebtedness pertaining to a Subsidiary of the\nCompany that is not a Subsidiary of the Company on the Closing Date in existence\nat the time such Subsidiary becomes a Subsidiary of the Company; provided,\n                                                                 -------- \nhowever, that any such Indebtedness was not incurred as a result of, in\n-------                                                                \nconnection with or in anticipation of the transaction pursuant to which such\nentity becomes a Subsidiary of the Company and it does not apply to any Person,\nor the properties of assets of any Person, other than the Subsidiary acquired\nand such Indebtedness is otherwise permitted to be incurred pursuant to Section\n4.1; (iv) secured Indebtedness otherwise permitted to be incurred pursuant to\nSections 4.1 and 4.2 that limits the right of the debtor to dispose of the\nassets securing such Indebtedness; (2) customary non-assignment provisions of\nany lease governing a leasehold interest of any Subsidiary of the Company; (3)\ncustomary net worth provisions contained in leases and other agreements entered\ninto by a\n\n \n                                                                              46\n\nSubsidiary in the ordinary course of business; (4) customary restrictions with\nrespect to a Subsidiary pursuant to an agreement that has been entered into for\nthe sale or disposition of all or substantially all of the Capital Stock or\nassets of such Subsidiary; (5) applicable law; and (6) any instrument that\nRefinances any Indebtedness effecting any such encumbrance or restriction\npursuant to clause (1) above; provided, however, that the provisions relating to\n                              --------  -------                                 \nany such encumbrance or restriction in any such instrument are not materially\nless favorable to the Company or its Subsidiaries or the Holders than those\ncontained in the agreements referred to in clause (1).\n\n          4.9  Transactions with Shareholders\n               and Affiliates\n               ------------------------------\n\n          The Company shall not, nor shall it cause or permit any of its\nSubsidiaries to, directly or indirectly, enter into or permit to exist any\ntransaction or series of related transactions (including, without limitation,\nthe purchase, sale, lease or exchange of any property or the rendering of any\nservice) with any Affiliate of the Company (an \"Affiliate Transaction\") or\nextend, renew, waive or otherwise modify the terms of any Affiliate Transaction\nentered into prior to the Closing Date unless (i) such Affiliate Transaction is\nbetween or among the Company and its wholly-owned Subsidiaries; or (ii) the\nterms of such Affiliate Transaction are fair and reasonable to the Company or\nsuch Subsidiary, as the case may be, and the terms of such Affiliate Transaction\nare at least as favorable as the terms which could be obtained by the Company or\nsuch Subsidiary, as the case may be, in a comparable transaction made on an\narm's-length basis between unaffiliated parties.  In any Affiliate Transaction\ninvolving an amount or having a value in excess of $3 million which is not\npermitted under clause (i) above, the Company must obtain a resolution of the\nBoard of Directors certifying that such Affiliate Transaction complies with\nclause (ii) above.  In transactions with a value in excess of $5 million which\nare not permitted under clause (i) above, the Company must obtain a written\nopinion as to the fairness of such a transaction from an Independent Financial\nAdvisor.\n\n          The foregoing restrictions shall not apply to the following \"Permitted\nAffiliate Transactions\":  (i) any transaction exclusively between the Company\nand any of its wholly-owned Subsidiaries or exclusively between any of the\nCompany's wholly-owned Subsidiaries, (ii) reasonable and customary fees paid to\nmembers of the Board of Directors of the Company, (iii) reasonable and customary\nfees and compensation paid to, and indemnity provided on behalf of, officers,\ndirectors or employees of the Company or any of its Subsidiaries, as determined\nby the Board of Directors of the Company or any such Subsidiary or the senior\nmanagement thereof in good faith, including, without limitation, issuances of\nstock, payment of bonuses and other transactions pursuant to employment or\ncompensation agreements, stock option agreements, indemnification\n\n \n                                                                              47\n\nagreements and other arrangements approved by the Board of Directors of the\napplicable company, in good faith, and director and officer and other insurance\npurchased by the Company and benefiting the officers and directors of Parent or\nHoldings, (iv) transactions pursuant to or affecting the Advisory Services\nAgreement, (v) transactions pursuant to or affecting the Placement Agreement and\n(vi) any transactions with PCG or CIBC.\n\n          4.10 Subsidiary Stock\n               ----------------\n\n          Except for any sale of 100% of the Capital Stock or other equity\nsecurities of any of the Company's Subsidiaries in compliance with the\nprovisions of Section 4.7, the Company will not and will not permit any of its\nSubsidiaries to directly or indirectly sell, assign, pledge or otherwise\nencumber or dispose of any shares of Capital Stock or other equity securities of\nany of its Subsidiaries, except (i) to qualify directors if required by\napplicable law, (ii) in the case of the Company's Subsidiaries, to the Company\nor to a wholly-owned Subsidiary of the Company, (iii) Asset Sales made in\ncompliance with this Note or (iv) Liens in favor of the lenders under the Senior\nCredit Facilities.\n\n          4.11 Business Activities\n               -------------------\n\n          The Company shall not, nor shall the Company cause or permit any of\nits Subsidiaries to, directly or indirectly, engage in or operate any business\nother than the Cable System or a Related Business Investment.\n\n          4.12 Amendments or Waivers of Certain Documents\n               ------------------------------------------\n\n          The Company shall not, nor shall it cause or permit any of its\nSubsidiaries to, except to the extent permitted in accordance with the terms of\nthe Senior Credit Facilities, directly or indirectly, enter into any amendment,\nmodification, supplement or waiver with respect to any of the Transaction\nDocuments as in effect on the Closing Date, that would modify any of the\nprovisions thereof or any of the definitions relating to the provisions thereof\nin a manner materially adverse to the Holders and which would have a Material\nAdverse Effect on the value of the Notes.\n\n          4.13   Amendments to Charter Documents\n                 -------------------------------\n\n          The Company shall not, nor shall it cause or permit any of its\nSubsidiaries to, amend its certificate of incorporation or bylaws in any respect\nwhich is materially adverse to the interests of the Holders.\n\n          4.14 Refinancing of the Notes in Part\n               --------------------------------\n\n          The Company shall not, nor shall the Company cause or permit any of\nits Subsidiaries to, Incur any Indebtedness to\n\n \n                                                                              48\n\nRefinance (other than any extension or amendment or other restructuring of the\nIndebtedness under the Senior Credit Facilities) the Notes in part unless the\nterms, conditions, covenants, events of default and other provisions in respect\nof the instruments evidencing the Indebtedness Incurred to Refinance the Notes\nin part shall be the same or better terms; and provided that no Refinancing in\n                                               --------                       \npart shall result in the amount of the Notes outstanding being less than $50\nmillion.\n\n\n     4.15  Asset Sales\n           -----------\n\n     The Company shall not, nor shall it cause or permit any of its Subsidiaries\nto, except to the extent permitted in accordance with the terms of the Senior\nCredit Facilities, directly or indirectly, consummate any Asset Sale unless all\nof the Asset Sale Proceeds in respect thereof are applied by the Company or a\nSubsidiary of the Company in accordance with Section 2.4C(i).\n\n     4.16 Transfer of Assets to Subsidiaries\n          ----------------------------------\n\n          (a) The Company shall not, nor shall the Company cause or permit any\nof its Subsidiaries to, except to the extent permitted in accordance with the\nterms and conditions of the Senior Credit Facilities, directly or indirectly,\ntransfer (or in the ordinary course of business or pursuant to a Permitted\nInvestment) any assets or property to any Subsidiary of the Company unless such\nSubsidiary pays fair market value therefor to the Company or to a wholly-owned\nSubsidiary of the Company and except as provided in Sections 4.8 and 4.10.\n\n          (b)  The Company shall not, nor shall the Company cause or permit any\nof its Subsidiaries to, directly or indirectly, transfer to any Subsidiary of\nHoldco, other than any Subsidiary of the Company, assets or property of the\nCompany or its Subsidiaries constituting in any individual transfer at least\n10%, or in the aggregate at least 20%, of the assets and property of the Company\nand its Subsidiaries, taken as a whole, unless each such transferee executes and\ndelivers in favor of the Holders a guarantee of all of the Company's obligations\nwith respect to the Notes, which guarantee shall be subordinated to Senior\nIndebtedness of such transferee to the same extent as the Notes are subordinated\nto Senior Indebtedness of the Company and which is otherwise in form and\nsubstance reasonably satisfactory to the Required Holders.  In the event any\nsuch transfer occurs prior to the initial issuance of the Notes, the transferee\nshall execute and deliver such guarantee simultaneous with the issuance of the\nNotes.\n\nSECTION 5  EVENTS OF DEFAULT\n\n          If any of the following conditions or events (\"Events of Default\")\nshall occur and be continuing:\n\n \n                                                                              49\n\n          5.1  Failure To Make Payments When Due\n               ---------------------------------\n\n          Failure to pay any installment of principal of the Notes when due,\nwhether at stated maturity, by acceleration, by notice of prepayment or\notherwise; or failure to pay any interest on the Notes or any other amount due\nunder this Note within five days or more after the date due; or\n\n          5.2  Default in Other Agreements\n               ---------------------------\n\n          Failure of the Company or any of its Subsidiaries to pay at final\nmaturity any principal on one or more issues of Indebtedness or Contingent\nObligations of the Company or of any of its Subsidiaries (other than\nIndebtedness referred to in Section 5.1) or breach or default by the Company or\nany of its Subsidiaries with respect to any other term of any one or more issues\nof Indebtedness or Contingent Obligations of the Company or of any of its\nSubsidiaries or any agreement or instrument evidencing or securing such\nIndebtedness or Contingent Obligations and such default or breach results in the\nacceleration of that Indebtedness or Contingent Obligation prior to its stated\nmaturity and, in either case, the principal amount of such Indebtedness or\nContingent Obligation and all other such Indebtedness or Contingent Obligations\nof the Company and its Subsidiaries in respect of which there is a failure to\npay principal or interest or which has been so accelerated equals $5,000,000 or\nmore; or\n\n          5.3  Breach of Certain Covenants\n               ---------------------------\n\n          Failure of the Company to perform or comply with any covenant, term or\ncondition contained in Section 2.2C(ii) or 3.2; or\n\n          5.4  Breach of Warranty\n               ------------------\n\n          Any representation, warranty or certification made by Global in the\nPurchase Agreement or in any statement or certificate at any time given by\nGlobal in writing pursuant hereto or thereto or in connection herewith or\ntherewith shall be false or incorrect in any material respect on the date as of\nwhich made or deemed made and shall not have been cured within 30 days;\nprovided, however, if (A) such failure cannot be cured within such 30-day period\n--------  -------                                                               \ndespite the Company's best efforts to do so, (B) such failure is susceptible of\ncure, (C) the Company is continuously proceeding with diligence and in good\nfaith to cure such failure and (D) the existence of such failure has not had and\ncould not reasonably be expected to have a Material Adverse Effect, then such\n30-day cure period shall be extended to such date, not to exceed a total 90-day\ncure period; or\n\n \n                                                                              50\n\n          5.5  Other Defaults Under Note\n               -------------------------\n\n          The Company shall default in the performance of or compliance with any\ncovenant, term or condition contained in this Note and such default shall not\nhave been remedied or waived in accordance with this Note within 30 days after\nthe date of written notice from the holder or holders of not less than 25% in\naggregate principal amount of the Notes then outstanding of such default;\nprovided, however, if (A) such failure cannot be cured within such 30-day period\n--------  -------                                                               \ndespite the Company's best efforts to do so, (B) such failure is susceptible of\ncure, (C) the Company is continuously proceeding with diligence and in good\nfaith to cure such failure and (D) the existence of such failure has not had and\ncould not reasonably be expected to have a Material Adverse Effect, then such\n30-day cure period shall be extended to such date, not to exceed a total 90-day\ncure period; or\n\n          5.6  Defaults Under Other Agreements\n               -------------------------------\n\n          Prior to the Commercial Operation Date, an \"event of default\" (as\ndefined therein) shall have occurred under the Supply Contract, and could\nreasonably be expected to have a Material Adverse Effect unless AT&amp;T Corp. is\nperforming under its Guaranty or the Supply Contract has been replaced following\nsuch termination or default; or\n\n          5.7  Involuntary Bankruptcy;\n               Appointment of Custodian, Etc.\n               ------------------------------\n\n          A court of competent jurisdiction enters a Bankruptcy Order under any\nBankruptcy Law that:\n\n               (A) is for relief against the Company or any Subsidiary in an\n          involuntary case or proceeding, or\n\n               (B) appoints a Custodian of the Company or any Subsidiary for all\n          or substantially all of its properties, or\n\n               (C)  orders the liquidation of the Company or any Subsidiary,\n\nand in each case the order or decree remains unstayed and in effect for 60 days;\nor\n\n          5.8  Voluntary Bankruptcy;\n               Appointment of Custodian, Etc.\n               ------------------------------\n\n     The Company or any Subsidiary pursuant to or within the meaning of any\nBankruptcy Law:\n\n               (A) commences a voluntary case or proceeding, or\n\n \n                                                                              51\n\n                    (B) consents to the entry of a Bankruptcy Order for relief\n          against it in an involuntary case or proceeding, or\n\n               (C) consents to the appointment of a Custodian; or\n\n          5.9  Judgments and Attachments\n               -------------------------\n\n          Any money judgment, writ or warrant of attachment, or similar process\ninvolving in any individual case or in the aggregate at any time an amount in\nexcess of $5,000,000 (to the extent not covered by third-party insurance as to\nwhich the insurance company has acknowledged coverage) shall be entered or filed\nagainst the Company or any of its Subsidiaries or any of their respective\nproperties or assets and shall remain undischarged, unvacated, unbonded or\nunstayed for a period of 60 days or in any event later than five days prior to\nthe date of any proposed sale thereunder; or\n\n          5.10   Dissolution\n                 -----------\n\n          Any order, judgment or decree shall be entered against the Company or\nany Subsidiary decreeing the dissolution or split-up of the Company or that\nSubsidiary and such order shall remain undischarged or unstayed for a period in\nexcess of 60 days; or\n\n          5.11 Foreclosure\n               -----------\n\n          The agent under the Senior Credit Facilities or any other party\nentitled to act thereunder commences judicial proceedings to foreclose on the\ncollateral securing the Bank Indebtedness or exercises any right under\napplicable law or any instrument evidencing a security interest or other\nencumbrance in respect of such collateral to take ownership or effect the\ntransfer of such collateral in lieu of foreclosure;\n\n     THEN (i) upon the occurrence of any Event of Default described in the\nforegoing Sections 5.7 or 5.8, all of the unpaid principal amount of and accrued\ninterest on the Notes and all other outstanding obligations shall automatically\nbecome immediately due and payable, without presentment, demand, protest or\nother requirements of any kind, all of which are hereby expressly waived by the\nCompany, and (ii) upon written notice of the holder or holders of 25% in\naggregate principal amount of the Notes then outstanding, by written notice to\nthe Company, declare all of the unpaid principal amount of and accrued interest\non the Notes and all other outstanding obligations to be, and the same shall\nforthwith become, due and payable, and the obligations of the Holders hereunder\nshall thereupon terminate or if there are any amounts outstanding under the\nSenior Credit Facilities, such amounts shall become due and payable upon the\nfirst to occur of an acceleration under the Senior Credit Facilities or five\n\n \n                                                                              52\n\nBusiness Days after receipt by the Company of notice of the acceleration of the\nNotes; provided, however, that if any declaration of acceleration under the\nNotes occurs solely because an Event of Default set forth in Section 5.2 has\noccurred and is continuing, such declaration of acceleration shall be\nautomatically annulled if the holders of the Indebtedness or Contingent\nObligations which are the subject of such Event of Default have rescinded their\ndeclaration of acceleration in respect of such Indebtedness or Contingent\nObligations within thirty days of such acceleration of such Indebtedness or\nContingent Obligations and the Holders have received written notice thereof\nwithin such time and if no other Event of Default has occurred during such\nthirty-day period which has not been cured or waived in accordance with this\nNote.  Nevertheless, if at any time after acceleration of the maturity of the\nNotes, the Company shall pay all arrears of interest and all payments on account\nof the principal thereof which shall have become due otherwise than by\nacceleration (with interest on principal and, to the extent permitted by law, on\noverdue interest, at the rates specified in this Note) and all Events of Default\nand Potential Events of Default (other than non-payment of principal of and\naccrued interest on the Notes due and payable solely by virtue of acceleration)\nshall be remedied or waived, then the holders of a majority in aggregate\nprincipal amount of the Notes then outstanding, by written notice to the Company\nmay rescind and annul the acceleration and its consequences; but such action\nshall not affect any subsequent Event of Default or Potential Event of Default\nor impair any right consequent thereon.\n\nSECTION 6 SUBORDINATION\n\n          6.1  Notes Subordinated to Senior\n               Indebtedness of the Company\n               ---------------------------\n\n          Payments of principal and interest due on the Notes by the Company\nshall be subordinated in accordance with the provisions of this Section 6 to the\nprior payment in full, in cash or Cash Equivalents, of all amounts payable in\nrespect of Senior Indebtedness of the Company, whether now outstanding or\nhereafter created (including any interest accruing subsequent to an event\nspecified in Section 5.7 or 5.8 whether or not such interest is an allowed claim\nagainst the Company), that the subordination is for the benefit of the holders\nof Senior Indebtedness of the Company, and that each holder of Senior\nIndebtedness of the Company whether now outstanding or hereafter created,\nincurred, assumed or guaranteed shall be deemed to have acquired Senior\nIndebtedness of the Company in reliance upon the covenants and provisions\ncontained in this Note.\n\n          6.2  Priority and Payment Over\n               of Proceeds in Certain Events\n               -----------------------------\n\n          (a)  Subordination on Dissolution, Liquidation or Reorganization of\n               --------------------------------------------------------------\nthe Company. Upon any payment or distribution\n-----------                                  \n\n \n                                                                              53\n\nof assets or securities of the Company of any kind or character, whether in\ncash, property or securities, upon any dissolution or winding up or total or\npartial liquidation or reorganization of the Company, whether voluntary or\ninvoluntary or in bankruptcy, insolvency, receivership or other proceedings, all\nSenior Indebtedness of the Company (including any interest accruing subsequent\nto an event specified in Section 5.7 or 5.8 whether or not such interest is an\nallowed claim enforceable against the Company) shall first be paid in full in\ncash or Cash Equivalents, before the Holders shall be entitled to receive any\npayment by the Company of any principal or interest on the Notes and upon any\nsuch dissolution or winding up or liquidation or reorganization, any payment or\ndistribution of assets or securities of the Company of any kind or character,\nwhether in cash, property or securities, to which the Holders would be entitled\nexcept for the provisions of this Section 6 shall be made by the Company or by\nany receiver, trustee in bankruptcy, liquidating trustee, agent or other Person\nmaking such payment or distribution, directly to the holders of the Senior\nIndebtedness of the Company or their representatives to the extent necessary to\npay all of the Senior Indebtedness of the Company to the holders of such Senior\nIndebtedness of the Company.\n\n          (b) Subordination on Default on Designated Senior Indebtedness.  (i)\nUnless Section 6.3(a) hereof shall be applicable, after the occurrence of a\nPayment Default no payment or distribution of any assets or securities of the\nCompany or any Subsidiary of any kind or character (including, without\nlimitation, cash, property and any payment or distribution which may be payable\nor deliverable by reason of the payment of any other Indebtedness of the Company\nbeing subordinated to the payment of the Notes by the Company) may be made by or\non behalf of the Company or any Subsidiary, including, without limitation, by\nway of set-off or otherwise, for or on account of principal of, premium, if any,\nor interest on the Notes, or for or on account of the purchase, redemption or\nother acquisition of the Notes, and no holder or owner of any Notes shall take\nor receive from the Company or any Subsidiary, directly or indirectly in any\nmanner, payment in respect of all or any portion of Notes following the delivery\nby the representative of the holders of Designated Senior Indebtedness (the\n\"Representative\") to the Holders of written notice of the occurrence of a\nPayment Default, and in any such event, such prohibition shall continue until\nsuch Payment Default is cured, waived in writing or ceases to exist.  At such\ntime as the prohibition set forth in the preceding sentence shall no longer be\nin effect, subject to the provisions of the following paragraph (ii), the\nCompany the Notes, including any missed payments.\n\n          (ii) Unless Section 6.3(a) hereof shall be applicable, upon the\noccurrence of a Non-Payment Event of Default on Designated Senior Indebtedness,\nno payment or distribution of any assets of the Company of any kind or character\nshall be made by the Company, including, without limitation, by way of set-off\nor\n\n \n                                                                              54\n\notherwise, on account of any principal of, premium, if any, or interest on the\nNotes or on account of the purchase, redemption, defeasance or other acquisition\nof Notes for a period (\"Payment Blockage Period\") commencing on the date of\nreceipt by the Holders of written notice from the Representative of such Non-\nPayment Event of Default unless and until (subject to any blockage of payments\nthat may then be in effect under the preceding paragraph (a)) the earliest to\noccur of the following events; (w) more than 179 days shall have elapsed since\nthe date of receipt of such written notice by the Holders, (x) such Non-Payment\nEvent of Default shall have been cured or waived in writing or shall have ceased\nto exist, (y) such Designated Senior Indebtedness shall have been discharged or\npaid in full in cash or Cash Equivalents or (z) such Payment Blockage Period\nshall have been terminated by written notice to the Company or the Holders from\nthe Representative initiating such Payment Blockage Period, or the holders of at\nleast a majority in principal amount of such issue of Designated Senior\nIndebtedness, after which, in the case of clause (w), (x), (y) or (z), the\nCompany shall resume making any and all required payments in respect of the\nNotes, including any missed payments.  Notwithstanding any other provisions of\nthis Note, no Non-Payment Event of Default with respect to Designated Senior\nIndebtedness which existed or was continuing on the date of the commencement of\nany Payment Blockage Period initiated by the Representative shall be, or be\nmade, the basis for the commencement of a second Payment Blockage Period\ninitiated by the Representative unless such event of default shall have been\ncured or waived for a period of not less than 90 consecutive days.  In no event\nshall a Payment Blockage Period extend beyond 179 days from the date of the\nreceipt by the Holders of the notice referred to in this Section 6.3(b)(ii) (the\n\"Initial Blockage Period\").  Any number of additional Payment Blockage Periods\nmay be commenced during the Initial Blockage Period; provided, however, that no\nsuch additional Payment Blockage period shall extend beyond the Initial Blockage\nPeriod.  After the expiration of the Initial Blockage period, no Payment\nBlockage Period may be commenced under this Section 6.3(b)(ii) and no Guarantee\nPayment Blockage Period may be commenced under Section 8.2(b) hereof until at\nleast 180 consecutive days have elapsed from the last day of the Initial\nBlockage Period.\n\n          (c) Rights and Obligations of the Holders.  In the event that,\nnotwithstanding the foregoing provisions prohibiting such payment or\ndistribution, the Holders shall have received any payment on account of any\nObligation (other than as permitted by Sections (a) and (b) of this Section 6.2)\nat a time when such payment is prohibited by this Section 6.2, then and in such\nevent such payment or distribution shall be received and held in trust for the\nholders of the Senior Indebtedness of the Company and shall be paid over or\ndelivered to the holders of the Senior Indebtedness of the Company remaining\nunpaid to the extent necessary to pay in full in cash or Cash Equivalents all\nSenior Indebtedness of the Company in accordance with their terms after\n\n \n                                                                              55\n\ngiving effect to any concurrent payment or distribution to the holders of such\nSenior Indebtedness of the Company.\n\n          If payment of the Obligations is accelerated because of an Event of\nDefault, the Company shall promptly notify the agent or other representatives\nfor Senior Indebtedness of the Company of the acceleration.\n\n          Upon any payment or distribution of assets or securities referred to\nin this Section 6, the Holders (notwithstanding any other provision of this\nNote) shall be entitled to rely upon any order or decree of a court of competent\njurisdiction in which such dissolution, winding up, liquidation or\nreorganization proceedings are pending, and upon a certificate of the receiver,\ntrustee in bankruptcy, liquidating trustee, agent or other Person making any\nsuch payment or distribution, delivered to the Holders for the purpose of\nascertaining the Persons entitled to participate in such distribution, the\nholders of Senior Indebtedness of the Company, the amount thereof or payable\nthereon, the amount or amounts paid or distributed thereon and all other facts\npertinent thereto or to this Section 6.\n\n          The Company shall give written notice to each of the Holders of any\ndefault or event of default under any Senior Indebtedness of the Company or\nunder any agreement pursuant to which Senior Indebtedness of the Company may\nhave been issued, and, in the event of any such event of default, shall provide\nto the Holders the names and address of the trustees or other representatives of\nholders of such Senior Indebtedness of the Company.\n\n          With respect to the holders and owners of Senior Indebtedness of the\nCompany, by acceptance of this Note, each Holder undertakes to perform only such\nobligations on the part of such Holder as are specifically set forth in this\nSection 6, and no implied covenants or obligations with respect to the holders\nor owners of Senior Indebtedness of the Company shall be read into this Note\nagainst the Holders.  The Holders shall not be deemed to owe any fiduciary duty\nto the holders or owners of Senior Indebtedness of the Company or to the agent\nunder the Senior Credit Facilities or any other representative of the holders of\nthe Senior Indebtedness of the Company.\n\n          6.3  Payments May Be Paid Prior to Dissolution\n               -----------------------------------------\n\n          Nothing contained in this Section 6 or elsewhere in this Note shall\nprevent or delay the Company, except under the conditions described in Section\n6.2, from making payments at any time for the purpose of paying Obligations.\n\n \n                                                                              56\n\n          6.4  Rights of Holders of Senior Indebtedness\n               of the Company Not To Be Impaired\n               ----------------------------------------\n\n          No right of any present or future holder of any Senior Indebtedness of\nthe Company to enforce subordination as provided in this Section 6 shall at any\ntime in any way be prejudiced or impaired by any act or failure to act by any\nsuch holder, or by any noncompliance by the Company with the terms and\nprovisions and covenants herein, regardless of any knowledge thereof any such\nholder may have or otherwise be charged with.  Without in any way limiting the\ngenerality of the foregoing Section, such holders of Senior Indebtedness of the\nCompany may, at any time and from time to time without impairing or releasing\nthe subordination provided in this Section 6 or the obligations of the Holders\nhereunder to the holders of Senior Indebtedness of the Company, do any one or\nmore of the following:  (i) change the manner, place, terms or time of payment\nof, or renew or alter, Senior Indebtedness of the Company or otherwise amend or\nsupplement in any manner Senior Indebtedness of the Company or any instrument\nevidencing the same or any agreement under which any Senior Indebtedness of the\nCompany is outstanding; (ii) sell, exchange, release, or otherwise deal with any\nproperty pledged, mortgaged, or otherwise securing Senior Indebtedness of the\nCompany or fail to perfect or delay in the perfection of the security interest\nin such property; (iii) release any Person liable in any manner for the\ncollection of Senior Indebtedness of the Company; and (iv) exercise or refrain\nfrom exercising any rights against the Company and any other Person.  Each\nHolder by purchasing or accepting a Note waives any and all notice of the\ncreation, modification, renewal, extension or accrual of any Senior Indebtedness\nof the Company and notice of or proof of reliance by any holder or owner of\nSenior Indebtedness of the Company upon this Section 6 and the Senior\nIndebtedness of the Company shall conclusively be deemed to have been created,\ncontracted or incurred in reliance upon this Section 6, and all dealings between\nthe Company and the holders and owners of the Senior Indebtedness of the Company\nshall be deemed to have been consummated in reliance upon this Section 6.\n\n          The provisions of this Section 6 are intended to be for the benefit\nof, and shall be enforceable directly by, the holders of the Senior Indebtedness\nof the Company.\n\n          6.5  Subrogation\n               -----------\n\n          Upon the payment in full in accordance with the terms of Section 6.2\nof all amounts payable under or in respect of the Senior Indebtedness of the\nCompany, the Holders shall be subrogated to the rights of the holders of such\nSenior Indebtedness of the Company to receive payments or distributions of\nassets of Company made on such Senior Indebtedness of the Company until the\nObligations shall be paid in full in cash or Cash Equivalents; and for purposes\nof such subrogation no payments or distributions to holders of such Senior\nIndebtedness\n\n \n                                                                              57\n\nof the Company of any cash, property or securities to which the Holders would be\nentitled except for the provisions of this Section 6, and no payment over\npursuant to the provisions of this Section 6 to holders of such Senior\nIndebtedness of the Company by the Holders, shall, as between the Company, its\ncreditors other than holders of such Senior Indebtedness of the Company and the\nHolders, be deemed to be a payment by the Company to or on account of such\nSenior Indebtedness of the Company, it being understood that the provisions of\nthis Section 6 are solely for the purpose of defining the relative rights of the\nholders of such Senior Indebtedness of the Company, on the one hand, and the\nHolders, on the other hand.  A release of any claim by any holder of Senior\nIndebtedness of the Company shall not limit the Holders' rights of subrogation\nunder this Section 6.5.\n\n          If any payment or distribution to which the Holders would otherwise\nhave been entitled but for the provisions of this Section 6 shall have been\napplied, pursuant to the provisions of this Section 6, to the payment of all\namounts payable under the Senior Indebtedness of the Company, then and in such\ncase, the Holders shall be entitled to receive from the holders of such Senior\nIndebtedness of the Company at the time outstanding the full amount of any such\npayments or distributions received by such holders of Senior Indebtedness of the\nCompany in excess of the amount sufficient to pay all Senior Indebtedness of the\nCompany payable under or in respect of the Senior Indebtedness of the Company in\nfull in cash or Cash Equivalents in accordance with the terms of Section 6.2.\n\n          6.6  Obligations of the Company Unconditional\n               ----------------------------------------\n\n          Nothing contained in this Section 6 or elsewhere in this Note is\nintended to or shall impair as between the Company and the Holders the\nobligations of the Company, which are absolute and unconditional, to pay to the\nHolders Obligations as and when the same shall become due and payable in\naccordance with their terms, or is intended to or shall affect the relative\nrights of the Holders and creditors of the Company other than the holders of the\nSenior Indebtedness of the Company, nor shall anything herein or therein prevent\nthe Holders from exercising all remedies otherwise permitted by applicable law\nupon default under this Note, subject to the rights, if any, under this Section\n6 of the holders of such Senior Indebtedness of the Company in respect of cash,\nproperty or securities of the Company received upon the exercise of any such\nremedy.\n\n          The failure to make a payment on account of Obligations by reason of\nany provision of this Section 6 shall not prevent the occurrence of an Event of\nDefault under Section 5.\n\n \n                                                                              58\n\nSECTION 7 MISCELLANEOUS\n\n          7.1  Amendments and Waivers\n               ----------------------\n\n          No amendment, modification, termination or waiver of any term or\nprovision of the Notes or consent to any departure by the Company therefrom\nshall in any event be effective without the prior written concurrence of the\nCompany and the Required Holders; provided, however, that, without the prior\n                                  --------  -------                         \nwritten consent of each Holder affected, an amendment, modification, termination\nor waiver of this Note or consent to departure from a term or provision hereof\nmay not:  (i) reduce the principal amount of Notes whose holders must consent to\nany such amendment, modification, termination, waiver or consent; (ii) reduce\nthe rate of or extend the time for payment of principal, premium or interest on\nany Note; (iii) reduce the principal amount of any Note; (iv) make any Note\npayable in money other than that stated in the Note; (v) make any change in\nSection 2.4 or in the definition of Change of Control, in the last paragraph of\nSection 5 or this Section 7.1; (vi) reduce the rate or extend the time of\npayment of fees or other compensation payable to the Holders hereunder; (vii)\nmodify the provisions of Section 6 or any of the defined terms related thereto\nin any manner adverse to the Holders.  Any waiver or consent shall be effective\nonly in the specific instance and for the specific purpose for which it was\ngiven.  No notice to or demand on the Company in any case shall entitle the\nCompany to any further notice or demand in similar or other circumstances.  Any\namendment, modification, termination, waiver or consent effected in accordance\nwith this Section 7.1 shall be binding upon each holder of the Notes at the time\noutstanding, each further holder of the Notes and, if signed by the Company, on\nthe Company.\n\n          7.2  Independence of Covenants\n               -------------------------\n\n          All covenants hereunder shall be given independent effect so that if a\nparticular action or condition is not permitted by any of such covenants, the\nfact that it would be permitted by an exception to, or be otherwise within the\nlimitation of, another covenant shall not avoid the occurrence of an Event of\nDefault or Potential Event of Default if such action is taken or condition\nexists.\n\n          7.3  Notices\n               -------\n\n          Unless otherwise provided herein, any notice or other communications\nherein required or permitted to be given shall be in writing and may be\npersonally served, telecopied, telexed or sent by mail and shall be deemed to\nhave been given when delivered in person, upon receipt of telecopy or telex\nagainst receipt of answer back or four Business Days after depositing it in the\nmail, registered or certified, with postage prepaid and properly addressed;\nprovided, however, that notices shall not be effective until received.  For the\npurposes hereof, the addresses\n\n \n                                                                              59\n\nof the parties hereto (until notice of a change thereof is delivered as provided\nin this Section 7.3) shall be set forth under each party's name on the signature\npages hereto.\n\n          7.4  Failure or Indulgence Not Waiver;\n               Remedies Cumulative\n               --------------------------------\n\n          No failure or delay on the part of any Holder of any Note in the\nexercise of any power, right or privilege hereunder shall impair such power,\nright or privilege or be construed to be a waiver of any default or acquiescence\ntherein, nor shall any single or partial exercise of any such power, right or\nprivilege preclude other or further exercise thereof or of any other right,\npower or privilege.  All rights and remedies existing under this Note are\ncumulative to and not exclusive of any rights or remedies otherwise available.\n\n          7.5  Severability\n               ------------\n\n          In case any provision in or obligation under this Note shall be\ninvalid, illegal or unenforceable in any jurisdiction, the validity, legality\nand enforceability of the remaining provisions or obligations, or of such\nprovision or obligation in any other jurisdiction, shall not in any way be\naffected or impaired thereby.\n\n          7.6  Headings\n               --------\n\n          Sections and Section headings in this Note are included herein for\nconvenience of reference only and shall not constitute a part of this Note for\nany other purpose or be given any substantive effect.\n\n          7.7  Applicable Law\n               --------------\n\n          THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN\nACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE\nPRINCIPLES OF CONFLICTS OF LAW.\n\n          7.8  Agent for Service; Submission to\n               Jurisdiction; Waiver of Immunities;\n               Judgment Currency\n               -----------------------------------\n\n          By the execution and delivery of this Note, the Company (i)\nacknowledges that it has, by separate written instrument, designated and\nappointed CT Corporation System, 1633 Broadway, New York, New York 10019 (the\n\"Agent\") (and any successor entity) as its authorized agent upon which process\nmay be served in any suit or proceeding arising out of or relating to this Note\nthat may be instituted in any federal or state court in The City of New York,\nBorough of Manhattan, State of New York, or brought under federal or state\nsecurities laws and acknowledges that the Agent has accepted such designation,\n(ii) submits to the jurisdiction of any such court in any such suit or\nproceeding and\n\n \n                                                                              60\n\n(iii) agrees that service of process upon the Agent and written notice of said\nservice to the Company and each Guarantor in accordance with Section 7.3 of this\nNote shall be deemed in every respect effective service of process upon the\nCompany in any such suit or proceeding.  The Company further agrees to take any\nand all action, including the execution and filing of any and all such documents\nand instruments, as may be necessary to continue such designation and\nappointment of the Agent in full force and effect without lapse for so long as\nany of the Notes shall be outstanding; provided that the Company may (and, to\nthe extent the Agent ceases to be able to be served on the basis contemplated\nherein, shall), by written notice to the Holders in accordance with Section 7.3\nof this Note, designate such additional or alternative agent for service of\nprocess under this Section 7.8 that (i) maintains an office located in The City\nof New York, Borough of Manhattan, State of New York and (ii) is a corporate\nservice company which acts as agent for service of process for other persons in\nthe ordinary course of its business.  Such written notice shall identify the\nname of such agent for service of process and the address of the office of such\nagent for service of process in The City of New York, Borough of Manhattan,\nState of New York.\n\n          To the extent that the Company has or hereafter may acquire any\nimmunity from jurisdiction of any court or from any legal process (whether\nthrough service of notice, attachment prior to judgment, attachment in aid of\nexecution, execution or otherwise) with respect to itself or its property, it\nhereby irrevocably waives such immunity in respect of its obligations under this\nNote.  In addition, the Company irrevocably waives and agrees not to assert, by\nway of motion, as a defense, or otherwise in any such suit, action or\nproceeding, any claim that it is not personally subject to the jurisdiction of\nthe above-mentioned courts for any reason whatsoever, that such suit, action or\nproceeding is brought in an inconvenient forum or that the venue for such suit\nis improper, or that this Note or the subject matter hereof may not be enforced\nin such courts.\n\n          The Company and the Holder, by acceptance of this Note, agree that a\nfinal judgment in any such suit, action or proceeding shall be conclusive and\nmay be enforced in other jurisdictions by suit on the judgment or in any other\nmanner provided by law.\n\n          The Company agrees to indemnify the Holders, the officers, directors\nand agents of the Holders and each person, if any, who controls the Holders\nwithin the meaning of Section 15 of the Securities Act or Section 20 of the\nExchange Act against any loss incurred by any of them as a result of any\njudgment or order being given or made for any amount due under this Note and\nsuch judgment or order being expressed and paid in a currency (the \"Judgment\nCurrency\") other than United States dollars and as a result of any variation as\nbetween (i) the rate of exchange at which the United States dollar amount is\nconverted into the\n\n \n                                                                              61\n\nJudgment Currency for the purpose of such judgment or order and (ii) the spot\nrate of exchange in The City of New York at which any such person on the date of\npayment of such judgment or order is able to purchase United States dollars with\nthe amount of the Judgment Currency actually received by such person.  The\nforegoing indemnity shall continue in full force and effect notwithstanding any\nsuch judgment or order as aforesaid.  The term \"spot rate of exchange\" shall\ninclude any premiums and costs of exchange payable in connection with the\npurchase of, or conversion into, United States dollars.\n\n          7.9  Waiver of Stay, Extension or Usury Laws\n               ---------------------------------------\n\n          The Company covenants (to the extent that it may lawfully do so) that\nit will not at any time insist upon, plead, or in any manner whatsoever claim or\ntake the benefit or advantage of, any stay or extension law or any usury law or\nother law that would prohibit or forgive the Company from paying all or any\nportion of the principal of or interest on the Notes as contemplated herein,\nwherever enacted, now or at any time hereafter in force, or which may affect the\ncovenants or the performance of this Note; and (to the extent that it may\nlawfully do so) the Company hereby expressly waives all benefit or advantage of\nany such law, and covenants that it will not hinder, delay or impede the\nexecution of any power herein granted to the Holders, but will suffer and permit\nthe execution of every such power as though no such law had been enacted.\n\n          7.10  Additional Amounts\n                ------------------\n\n          All payments made by the Company under or with respect to the Notes\nwill be made free and clear of and without withholding or deduction for or on\naccount of any present or future Taxes, (including penalties, interest and other\nliabilities related thereto) imposed or levied by or on behalf of the government\nof Bermuda or of any region or territory thereof or by any authority or agency\ntherein or thereof having power to tax, unless the Company is required to\nwithhold or deduct such Taxes by law or by the interpretation or administration\nthereof.  If the Company is required to withhold or deduct any amount for or on\naccount of Taxes from any payment made under or with respect to the Notes, the\nCompany will pay such additional amounts (\"Additional Amounts\") as may be\nnecessary so that the net amount received by each Holder (including Additional\nAmounts) after such withholding or deduction will not be less than the amount\nthe Holder would have received if such Taxes had not been withheld or deducted;\nprovided, however, that no Additional Amounts shall be payable for or on account\nof:\n\n          (1) any Tax which would not have been imposed but for the fact that\nsuch holder of Notes:\n\n               (a) was or is a resident, domiciliary or national of, or engaged\n          in business or maintained a permanent\n\n \n                                                                              62\n\n          establishment or was physically present in, Bermuda or any political\n          subdivision thereof or therein or otherwise had some connection with\n          Bermuda other than the mere ownership of, or receipt of payment under,\n          such Note;\n\n               (b) presented such Note for payment in Bermuda or any political\n          subdivision thereof or therein, unless such Note could not have been\n          presented for payment elsewhere; or\n\n               (c) presented such Note for payment more than 30 days after the\n          date on which the payment in respect of such Note became due and\n          payable or provided for, whichever is later, except to the extent that\n          the holder of such Note would have been entitled to such Additional\n          Amounts if it had presented such Note for payment on any day within\n          such period of 30 days;\n\n          (2) any estate, inheritance, gift, sales, transfer, personal property\nor similar tax, assessment or other governmental charge;\n\n          (3) any Tax imposed on a holder that is not the beneficial owner of a\nNote to the extent that the beneficial owner would not have been entitled to the\npayment of Additional Amounts had the beneficial owner directly held the Note;\n\n          (4) any Tax that is imposed or withheld by reason of the failure of\nsuch holder or other beneficial owner of such Note to comply with a request by\nthe Company addressed to such holder (A) to provide information concerning the\nnationality, residence, or identity of such holder or such beneficial owner or\n(B) to make any declaration or other similar claim or satisfy any information or\nreporting requirement, which, in the case of (A) or (B) is required or imposed\nby Law of the Taxing jurisdiction as a precondition to a partial or complete\nexemption from such Tax; or\n\n          (5) any combination of items (1), (2), (3) or (4).\n\n          The Company will use its best efforts to obtain and furnish to each\nHolder, within 30 calendar days after the date the payment of any Taxes is due\npursuant to applicable law, certified copies of tax receipts evidencing such\npayment by the Company.\n\n          The Company will, upon written request of any Holder, reimburse each\nsuch Holder for the amount of any Taxes so levied or imposed and paid by such\nHolder as a result of payments made under or with respect to the Notes held by\nsuch Holder during the taxable period in respect of which such Taxes were paid;\nprovided, however, that if the imposition of such Taxes is the subject of a good\n--------  -------                                                               \nfaith protest promptly instituted and\n\n \n                                                                              63\n\ndiligently pursued by the Company, such reimbursement shall be deferred until a\nfinal resolution of such protest and the amount of such reimbursement shall be\nno greater than the amount of Taxes determined to be due, in respect of such\nNotes and taxable period, as a result of such protest.\n\n          Each Holder agrees that if any Additional Amounts paid to, or in\nrespect of any payments made to, a Holder results in a tax credit or deduction\nto such Holder, the Holder shall promptly (i) notify the Company and (ii)\nfurnish the Company with a computation of and pay to the Company an amount equal\nto, any tax benefit resulting from such credit or deduction.\n\n \n                                                                              64\n\n\n          IN WITNESS WHEREOF, the undersigned has executed and delivered this\nNote.\n\nCOMPANY:\n\nGLOBAL TELESYSTEMS LTD.\n\n\nBy:  ______________________\n     Name:\n     Title:\n\nNotice Address:\n\n\n\nTelephone:\nTelecopy:\n\n \n                                                                              65\n\n[Holder] hereby acknowledges the provisions of this Note and agrees to be bound\nby the provisions hereof.\n\n[HOLDER]\n\nBy:  ____________________\n     Name:\n     Title:\n\nNotice Address:\n\n\n\nTelephone:\nTelecopy:\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7648],"corporate_contracts_industries":[9519],"corporate_contracts_types":[9573,9574],"class_list":["post-41487","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-global-crossing-ltd","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-formation","corporate_contracts_types-formation__bylaws"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41487","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41487"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41487"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41487"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}