AGREEMENT TO EXCHANGE AND CONSENT
AGREEMENT TO EXCHANGE AND CONSENT (the "Agreement"), dated as of May
18, 1999 by and among Metromedia International Group, Inc., a Delaware
corporation (the "Company"), PLD Telekom Inc., a Delaware corporation ("PLD"),
and each of the Noteholders listed on Schedule I hereto (the "Noteholders").
WITNESSETH
WHEREAS, PLD and the Company are concurrently herewith entering into an
Agreement and Plan of Merger (the "Merger Agreement"), dated the date hereof,
which provides for, among other things, the merger of a wholly owned subsidiary
of the Company with and into PLD with PLD as the surviving corporation (the
"Merger").
WHEREAS, in connection with the Merger and as a condition to the
consummation thereof, the Company proposes (i) to exchange (A) $1,000 accreted
amount of its 10.5% Senior Discount Notes due 2007 (the "New Notes") having
terms substantially as set forth in the Summary of Principal Terms attached as
Exhibit A hereto (the "Summary of Terms"), for each $1,000 principal amount of
PLD's outstanding 14.5% Senior Discount Notes due 2004 (the "Senior Notes"),
plus an additional accreted amount of New Notes equal to the amount of all
accrued but unpaid interest on such Senior Notes to the date of exchange, and
(B) $900 accreted amount of New Notes for each $1,000 principal amount of PLD's
outstanding 9% Convertible Subordinated Notes due 2006 (the "Convertible Notes"
and, together with the Senior Notes, the "Old Notes"), plus an additional
accreted amount of New Notes equal to the amount of all accrued but unpaid
interest on such Convertible Notes to the date of exchange, and (ii) to seek the
consent of each of the holders of the Old Notes to (x) certain amendments to the
Indentures (as defined below) pursuant to which the Old Notes were issued and
(y) waivers of certain defaults under the Indentures (clauses (x) and (y) being
collectively referred to as the "Amendments") pursuant to a Second Supplemental
Indenture, Amendment, Consent and Waiver to each of the Indentures, which will
have substantially the terms and provisions specified in the term sheets
attached hereto as Exhibit B (the "Second Supplemental Indentures") (clauses (i)
and (ii) being collectively referred to as the "Exchange Offers");
WHEREAS, it is a condition to the consummation of the Exchange Offers
and the Merger that the holders of at least 95% of each of the Senior Notes and
the Convertible Notes validly tender and not withdraw their Old Notes and
consent to the Amendments, in each case, pursuant to the Exchange Offers;
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WHEREAS, as a condition and inducement to its willingness to enter into
the Merger Agreement, the Company has requested that the Noteholders agree, and
each of the Noteholders has agreed to enter into this Agreement; and
WHEREAS, each of the Noteholders has agreed to direct its respective
nominee to exchange its Old Notes and consent to the Amendments pursuant to the
Exchange Offers.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants and conditions hereinafter contained, the parties agree as
follows:
1. Agreement to Exchange.
(a) At the Closing (as defined in the Merger Agreement) and
subject only to (i) the simultaneous consummation of the Merger and of the
transactions contemplated by the Note and Warrant Modification Agreement, the
Elite Option Modification Agreement, the Plicom Option Modification Agreement
and the News Letter Agreement (each, as defined in the Merger Agreement)
(collectively, the "Transactions"), each on the economic terms contemplated by
the forms of such agreements attached as exhibits to the Merger Agreement and
(ii) the declaration by the Securities and Exchange Commission (the "SEC") of
the effectiveness of the Exchange Offer Registration Statement (as defined
below) or, alternatively, of the Shelf Registration Statement (as defined below)
if the Company determined under Section 8.1 that the Registered Exchange Offer
(as defined below) is not available or may not be consummated, each Noteholder
hereby agrees to, and to direct its nominee to, exchange all of such
Noteholder's Old Notes listed on Schedule I hereto, together with any other Old
Notes the beneficial ownership (as defined below) of which is acquired by such
Noteholder during the period from and including the date hereof through and
including the date on which this Agreement is terminated pursuant to Section
10.9 hereof (collectively, the "Subject Debentures"), for New Notes with the
terms and provisions specified in the Summary of Terms. For purposes of this
Agreement, "beneficial ownership" or "beneficially owned" shall have the meaning
ascribed to those terms by Section 13 under the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder (the "Exchange
Act"). The New Notes will be issued pursuant to an indenture between the Company
and a Trustee reasonably satisfactory to the Noteholders and will set forth the
Summary of Terms and such other terms and conditions as are reasonably agreed to
by the Company and the Noteholders.
(b) Delivery of the New Notes to each Noteholder under this
Agreement shall be made on the Closing Date (as defined in the Merger
Agreement).
2. Consent. At the Closing and subject only to the simultaneous
consummation of the Merger and of the Transactions, each substantially as
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contemplated by the forms of agreements for such Transactions attached as
exhibits to the Merger Agreement, each Noteholder hereby agrees to consent, and
agrees to cause its nominee as record holder of all Subject Debenture
beneficially owned by it to consent, to the Amendments and to direct each of the
Trustee for the Senior Notes and the Trustee for the Convertible Notes, as the
case may be, to execute and deliver on behalf of the holders of Old Notes each
of the Second Supplemental Indentures pursuant (i) to Section 9.2 of the
Indenture for the Senior Notes, dated as of May 31, 1996, among PLD as issuer,
the Subsidiary Guarantors named therein and The Bank of New York as trustee, as
amended (the "Senior Notes Indenture"), and (ii) Section 9.2 of the Indenture
for the Convertible Notes, dated as of May 31, 1996, among PLD as issuer, the
Subsidiary Guarantors named therein and The Bank of New York as trustee, as
amended (the "Convertible Notes Indenture" and, together with the Senior Notes
Indenture, the "Indentures"), which agreement to consent shall be effective with
respect to all Subject Debentures during the period from and including the date
hereof through and including the date on which this Agreement is terminated
pursuant to Section 10.9 hereof, after which such consent shall expire and no
longer be effective. In addition, each of the Noteholders hereby consents to the
execution by PLD of the Bridge Loan Agreement dated as of the date hereof (the
"Bridge Loan Agreement") between the Company and PLD providing for certain loans
to be made to PLD and to the grant of the security interest to the Company by
PLD contemplated by the Security Agreement dated the date hereof made by PLD in
favor of the Company to secure the advances made under the Bridge Loan
Agreement.
3. Waiver. Pursuant to the Indentures, each Noteholder hereby waives and
agrees to cause its nominee as record holder of all Subject Debentures
beneficially owned by it to waive its right to (i) receive the payment of
interest in cash on the Subject Debentures (including Additional Amounts, if
any, and Special Interest, if any (each as defined in the Indentures)) or demand
the payment of such interest from amounts deposited in the Company Senior Note
Escrow Account (as defined in the Senior Notes Indenture) or the Company
Convertible Note Escrow Account (as defined in the Convertible Notes Indenture)
and (ii) declare or instruct the respective Trustee for each of the Senior Notes
and the Convertible Notes, as the case may be, to declare the occurrence of an
Event of Default (as defined under each of the Indentures), to demand or take
any other action to cause the acceleration of the entire principal amount
represented by the Subject Debentures or take any other action as a result of
such non-payment, in each of (i) and (ii) above, from the date hereof until the
earlier of (x) the termination of this Agreement or (y) the consummation of the
Exchange Offers. The parties hereby agree that this waiver constitutes a waiver
of the time of payment of the interest under the Subject Debentures only and
does not constitute a foreclosure on the right of each Noteholder to receive the
payment when due of interest and principal and other amounts owed to it under
the Subject Debentures at maturity or otherwise.
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4. Representations and Warranties of the Noteholder. Each Noteholder
hereby represents and warrants to the Company that:
4.1 Authority. The Noteholder has all necessary power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Noteholder and the consummation by such
Noteholder of the transactions contemplated hereby have been duly and validly
authorized by its board of directors or other governing body, and no other
proceedings on its part are necessary to authorize this Agreement or to
consummate such transactions. This Agreement has been duly and validly executed
and delivered by the Noteholder and, assuming the due authorization, execution
and delivery by the other parties hereto, constitutes its legal, valid and
binding obligation, enforceable against such Noteholder in accordance with its
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting creditors' rights
generally or by general principles governing the availability of equitable
remedies.
4.2 No Conflict.
(a) The execution and delivery of this Agreement by
the Noteholder do not, and the performance of this Agreement by such Noteholder
shall not, (i) conflict with or violate its organizational documents, (ii)
conflict with or violate any agreement, arrangement, law, rule, regulation,
order, judgment or decree to which it is a party or by which it is (or the
Subject Debentures held of record or beneficially owned by it are) bound or
affected or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a lien or encumbrance on any of the Subject
Debentures held of record or beneficially owned by such Noteholder pursuant to
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which it is a party or by
which it (or the Subject Debentures held of record or beneficially owned by it)
is bound or affected, except, in the case of clauses (ii) and (iii) of this
Section 4.2, for any such conflicts, violations, breaches, defaults or other
occurrences which would not prevent or delay the performance by the Noteholder
of its obligations under this Agreement.
(b) The execution and delivery of this Agreement by
the Noteholder do not, and the performance of this Agreement by such Noteholder
shall not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental entity except for applicable
requirements, if any, of the Exchange Act and except where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay the performance by the Noteholder of
its obligations under this Agreement.
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4.3 Title to the Old Notes. As of the date hereof, the
Noteholder is the record or beneficial owner of the Old Notes listed on Schedule
I hereto. The Old Notes listed on Schedule I hereto are all the securities of
the Company either held of record or beneficially owned by the Noteholder. The
Noteholder has not appointed or granted any proxy, which appointment or grant is
still effective, with respect to the Old Notes held of record or beneficially
owned by such Noteholder. The Old Notes listed on Schedule I hereto are owned
and all other Subject Debentures will be owned by the Noteholder free and clear
of all security interests, liens, claims, pledges, options, rights of first
refusal, agreement, limitations on the Noteholders voting rights, charges and
other encumbrances of any nature whatsoever (collectively, "Liens"), other than
Liens arising as a result of this Agreement.
4.4 Investment Purpose; QIB Status. The Noteholder is agreeing
to exchange its Subject Debentures and shall receive New Notes under this
Agreement and pursuant to the Exchange Offers for its own account solely for the
purpose of investment and not with a view to, or for offer or sale in connection
with, any distribution of the New Notes in violation of the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
"Securities Act"). The Noteholder has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of an
investment in the New Notes and is able to bear the economic risk of such
investment. The Noteholder acknowledges that none of the New Notes has been
registered under the Securities Act and that such securities may be sold or
disposed of in the absence of such registration only pursuant to an exemption
from such registration. The Noteholder is a qualified institutional buyer as
defined in Rule 144A under the Securities Act.
5. Representations and Warranties of PLD and the Company. Each of PLD
and the Company hereby represents and warrants to each of the Noteholders that:
5.1 Authority. Each of PLD and the Company has all necessary
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by each of PLD and the Company and
the consummation by each of PLD and the Company of the transactions contemplated
hereby have been duly and validly authorized by the board of directors or other
governing body of each of PLD and the Company and no other proceedings on its
part are necessary to authorize this Agreement or to consummate such
transactions. This Agreement has been duly and validly executed and delivered by
each of PLD and the Company and, assuming the due authorization, execution and
delivery by the other parties hereto, constitutes its legal, valid and binding
obligation, enforceable against each of PLD and the Company in accordance with
its terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting creditors' rights
generally or by general principles governing the availability of equitable
remedies.
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5.2 No Conflict.
(a) The execution and delivery of this Agreement by
each of PLD and the Company do not, and the performance of this Agreement by
each of PLD and the Company shall not, (i) conflict with or violate its
organizational documents, (ii) conflict with or violate any agreement,
arrangement, law, rule, regulation, order, judgment or decree to which it is a
party or by which it is bound or affected, except, in the case of clause (ii) of
this Section 5.2, for any such conflicts, violations, breaches, defaults or
other occurrences which would not prevent or delay the performance by each of
PLD and the Company of its obligations under this Agreement.
(b) The execution and delivery of this Agreement by
each of PLD and the Company do not, and the performance of this Agreement by
each of PLD and the Company shall not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
entity except for applicable requirements, if any, of the Exchange Act and
except where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or delay
the performance by each of PLD and the Company of its obligations under this
Agreement.
(c) The execution and delivery of this Agreement by
PLD does not, and the performance of this Agreement by PLD shall not result in
any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which it is a party or by which its assets or properties are bound
or affected, except for any such conflicts, violations, breaches, defaults or
other occurrences which would not prevent or delay the performance by PLD of its
obligations under this Agreement.
6. Transfer of Title. Each Noteholder hereby covenants and agrees that
it will not, prior to the termination of this Agreement, either directly or
indirectly, offer or otherwise agree to sell, assign, pledge, hypothecate,
transfer, exchange, or dispose of any Subject Debentures, owned either directly
or indirectly by it or with respect to which each such Noteholder has the power
of disposition, whether now or hereafter acquired, without the prior written
consent of the Company, unless the person or entity to whom Subject Debentures
have been sold, assigned, pledged, hypothecated, transferred, exchanged or
disposed agrees to be bound by this Agreement as if a party hereto. Each
Noteholder hereby agrees and consents to the entry of stop transfer instructions
by the Company or the Trustee, as the case may be, against the transfer of any
Subject Debentures inconsistent with the terms of this Section 6.
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7. Legend. (a) Each Noteholder agrees to the placement on certificates
representing the New Notes to be received by such Noteholder under this
Agreement, of a legend substantially as set forth below, unless the Company
determines otherwise in accordance with an opinion of counsel:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR NON-U.S. JURISDICTION AND MAY NOT BE OFFERED, SOLD, PLEDGED,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF SUCH OTHER STATE
OR NON-U.S. JURISDICTIONS. THE HOLDER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS."
(b) In addition to any other legend on certificates
representing the Old Notes, each Noteholder agrees to the placement on
certificates representing the Old Notes of a legend substantially as set forth
below:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF AN AGREEMENT TO EXCHANGE AND CONSENT, DATED AS OF MAY 18,
1999, AMONG METROMEDIA INTERNATIONAL GROUP, INC. (THE "COMPANY") AND
CERTAIN NOTEHOLDERS LISTED ON SCHEDULE I THERETO COPIES OF WHICH ARE ON
FILE AT THE OFFICES OF THE SECRETARY OF THE COMPANY."
8. Registered Exchange Offer.
8.1 Registration Statement. The Company agrees that on or
prior to the Closing Date (as defined in the Merger Agreement) the Company's
Registration Statement on Form S-4 (or another appropriate form under the
Securities Act) (the "Exchange Offer Registration Statement") with respect to
the proposed offer to the Noteholders (the "Registered Exchange Offer") to issue
and deliver to such Noteholders, in exchange for New Notes received in the
Exchange Offers, a like aggregate principal amount of debt securities of the
Company (such debt securities referred to as the "Exchange Notes") that are
identical in all respects to the New Notes, except for transfer restrictions
relating to the Securities Act, will be declared
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effective by the SEC; provided, however, in the event that the Company
determines that the Registered Exchange Offer is not available or may not be
consummated because it would violate applicable law or applicable
interpretations of the Staff of the SEC, the Company will use its best efforts
to cause to be filed as soon as practicable after such determination a shelf
registration statement (the "Shelf Registration Statement") providing for the
sale by the Noteholders of all of the New Notes and to have such Shelf
Registration Statement declared effective by the SEC; provided further, however,
that no Noteholder shall be entitled to have the New Notes held by it covered by
such Shelf Registration Statement unless such Noteholder furnishes to the
Company in writing the information specified in Items 507 and 508 of
Registration S-K. In the event the Company makes the determination specified in
the preceding sentence, the Company agrees that it shall enter into a
registration rights agreement with the Noteholders, which agreement shall be
reasonably satisfactory in form and substance to such Noteholders and shall
contain representations, covenants and indemnities that shall be no less
favorable to the Noteholders than those currently contained in the Company's
Registration Rights Agreement, dated as of May 18, 1999, with News America
Incorporated and News PLD LLC. The Company further agrees that if the Exchange
Offer Registration Statement is declared effective, it will keep the Exchange
Offer Registration Statement effective for not less than 30 days (or longer if
required by applicable law) after the date on which notice of the Registered
Exchange Offer is mailed to the Noteholders, it being the objective of the
Registered Exchange Offer that each Noteholder electing to exchange New Notes
for Exchange Notes (assuming, among other things, that such Noteholder (i) is
not an affiliate of the Company, (ii) acquires the Exchange Notes during the
ordinary course of such Noteholder's business and (iii) has no arrangements or
understandings with any person to participate in and does not participate in,
and does not intend to participate in, the distribution of the Exchange Notes)
be permitted to trade such Exchange Notes from and after their receipt without
any limitation or restrictions under the Securities Act. The Exchange Notes will
be issued pursuant to an indenture between the Company and a trustee that is
reasonably satisfactory to the holders of Notes, which indenture will be
identical to (or will be the same indenture as) the indenture for the New Notes,
except for the transfer restrictions under the Securities Act relating to the
New Notes.
8.2 Registered Exchange Offer. In connection with the
Registered Exchange Offer, the Company will:
(a) mail to each Noteholder a copy of the prospectus
forming part of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not
less than 30 days (or longer, if required by applicable law) after the date on
which notice of the Registered Exchange Offer is mailed to the Noteholders;
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(c) utilize the services of a depositary for the
Registered Exchange Offer with an address in the Borough of Manhattan, The City
of New York;
(d) permit Noteholders to withdraw tendered New Notes
at any time prior to the close of business, New York City time, on the last
business day on which the Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws
that are applicable to the Registered Exchange Offer.
As soon as practicable after the close of the Registered
Exchange Offer, the Company shall:
(a) accept for exchange all New Notes tendered and
not validly withdrawn pursuant to the Registered Exchange Offer;
(b) deliver to or deposit with the Trustee for the
New Notes for cancellation all New Notes so accepted for exchange; and
(c) cause the Trustee for the New Notes, promptly to
authenticate and deliver to each Noteholder, Exchange Notes with an equal
principal amount to the New Notes of such Noteholder so accepted for exchange.
8.3 Effectiveness. If the Company is required to file a Shelf
Registration Statement in accordance with Section 8.1, the Company shall use its
reasonable best efforts to keep the Shelf Registration Statement effective and
to amend and supplement the prospectus contained therein in order to permit such
prospectus to be used by all persons subject to the prospectus delivery
requirements of the Securities Act for the period of time specified in Rule
144(k) or such shorter period of time as all New Notes covered thereby shall
have been sold thereunder.
8.4 Indenture. The indenture for the New Notes or the
indenture for the Exchange Notes, as the case may be, shall provide that the New
Notes and the Exchange Notes shall vote and consent together on all matters as
one class and that none of the New Notes or the Exchange Notes will have the
right to vote or consent as a separate class on any matter.
8.5 Additional Representations. Each Noteholder participating
in the Registered Exchange Offer shall be required to represent to the Company
that at the time of the consummation of the Registered Exchange Offer (i) any
Exchange Notes received by such Noteholder will be acquired in the ordinary
course of such Noteholder's business, (ii) such Noteholder will have no
arrangements or understanding with any person to participate in and is not
participating in, and does not intend to participate in, the distribution of the
New Notes or the Exchange Notes
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within the meaning of the Securities Act and (iii) such Noteholder is not an
affiliate (as defined in Rule 405 under the Securities Act) of the Company.
8.6 Certain Information. The Company may require each
Noteholder to furnish to the Company such information regarding the distribution
of such securities and other matters as may be required to be included in the
Exchange Offer Registration Statement or Shelf Registration Statement and each
such Noteholder shall be obligated to provide any such information for inclusion
in the Exchange Offer Registration Statement or Shelf Registration Statement as
the Company shall reasonably request.
8.7 Notification. The Company shall, as expeditiously as
possible, notify each Noteholder of the happening of any event as a result of
which the prospectus included in the Exchange Offer Registration Statement or
Shelf Registration Statement contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and prepare and file with the SEC a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Exchange Notes or New Notes, as applicable, such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. Each
Noteholder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in this Section 8.7, it shall
forthwith discontinue disposition of Exchange Notes or New Notes, as applicable,
pursuant to the Exchange Offer Registration Statement or Shelf Registration
Statement, as applicable, covering such notes until its receipt of the copies of
the supplemented or amended prospectus and, if so directed by the Company, each
such Noteholder shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in its possession, of the
prospectus covering such notes current at the time of receipt of such notice. If
the Company shall give any such notice, the Company shall extend the period
during which such Exchange Offer Registration Statement or Shelf Registration
Statement shall be maintained effective pursuant to this Agreement by the number
of days during the period from and including the date of the giving of such
notice pursuant to this Section 8.7 to and including the date when each
Noteholder shall have received the copies of the supplemented or amended
prospectus.
9. Indemnification; Contribution.
9.1 Indemnification by the Company. The Company agrees to
indemnify to the fullest extent permitted by law, each Noteholder, its officers,
directors and agents and each person, if any, who controls each such Noteholder
(within the meaning of the Securities Act), against any and all losses, claims,
damages, liabilities and expenses caused by any untrue or alleged untrue
statement of
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a material fact contained in the Exchange Offer Registration Statement or Shelf
Registration Statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus, in light of the circumstances
under which they were made) not misleading, except to the extent, and only to
the extent, the same are caused by or contained in any information with respect
to a Noteholder furnished in writing to the Company by such Noteholder expressly
for use therein or by a Noteholder's failure to deliver a copy of the prospectus
or any amendments or supplements thereto after the Company has furnished such
Noteholder with a sufficient number of copies of the same or by the delivery of
prospectuses by a Noteholder after the Company notified such Noteholder in
writing to discontinue delivery of prospectuses.
9.2 Indemnification by the Noteholder. Each Noteholder shall
furnish to the Company in writing such information and affidavits with respect
to each such Noteholder as the Company reasonably requests for use in connection
with the Exchange Offer Registration Statement, Shelf Registration Statement or
prospectus included therein and agrees to indemnify, severally and not jointly,
to the fullest extent permitted by law, the Company, its officers, directors and
agents and each person, if any, who controls the Company (within the meaning of
the Securities Act) against any and all losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of a material
fact or any omission or alleged omission of a material fact required to be
stated in the Exchange Offer Registration Statement, Shelf Registration
Statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances under which they were made) not
misleading, to the extent, but only to the extent, that such untrue or alleged
untrue statement or omission is caused by or contained in or improperly omitted
from, as the case may be, any information or affidavit with respect to such
Noteholder so furnished in writing by it or by the delivery of prospectuses by a
Noteholder after the Company notified such Noteholder in writing to discontinue
delivery of prospectuses.
9.3 Contribution. If the indemnification provided for in
Section 9 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then the indemnifying party, to the extent such
indemnification is unavailable, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions that resulted in
such losses, claims, damages, liabilities or expenses. The relative fault of
such indemnifying party and indemnified parties shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged
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untrue statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9.3 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person.
If indemnification is available under this Section 9.3, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Sections 9.1 and 9.2 hereof without regard to the relative fault of
said indemnifying parties or indemnified party.
10. Miscellaneous.
10.1 Permission to Disclose. Each Noteholder hereby agrees and
consents to the disclosure by the Company of this Agreement in connection with
the Exchange Offers or as otherwise required by law (except that such
Noteholders name will not be disclosed in any press release, filing or other
notice or report unless required by law or the SEC).
10.2 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
10.3 Entire Agreement. This Agreement constitutes the entire
agreement between the Company and the Noteholders with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, between the Company and the Noteholders with respect to the
subject matter hereof.
10.4 Amendment. This Agreement may not be amended and no other
actions may be taken under this Agreement except by an instrument in writing
signed by the Company and each of the holders of the Subject Debentures covered
by this Agreement.
13
10.5 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereby shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable law
in a mutually acceptable manner in order that the terms of this Agreement remain
as originally contemplated.
10.6 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made and shall be effective upon receipt, if delivered personally, upon
receipt of a transmission confirmation if sent by facsimile (with a confirming
copy sent by overnight courier) and on the next business day if sent by Federal
Express, United Parcel Service, Express Mail or other reputable overnight
courier to the parties at the following addresses (or at such other address for
a party as shall be specified by notice):
If to the Noteholders, to the addresses specified on Schedule I.
With a copy to:
Xxxxxxx Xxxxxxx, Esq.
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Company, to:
Xxxxxx X. Xxxxxx, Esq.
Metromedia International Group, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
14
with a copy to:
Xxxxxxx X. Xxxx, Esq.
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to PLD, to:
PLD Telekom Inc.
000 Xxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
10.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such state.
10.8 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be an original and all of which, when
taken together, shall constitute one and the same instrument.
10.9 Termination. This Agreement shall terminate on the first
to occur of (x) written agreement to terminate of the Company and a majority in
principal amount of the Noteholders (determined as a single class), (y)
termination of the Merger Agreement in accordance with its terms or (z) October
31, 1999, unless in any such case it is extended by the Company and each of the
Noteholders. Upon termination, this Agreement shall be of no further force and
effect among the parties except for the provisions of Section 10.10 which shall
survive the termination of this Agreement.
10.10 Fees and Expenses. Except as otherwise provided in this
Agreement, each party shall bear its own expenses, including the fees and
expenses of accountants, financial or other advisors or representatives engaged
by it, incurred in connection with this Agreement and the transactions
contemplated hereby; provided, however, that the Company shall pay the
reasonable fees and disbursements of one firm of attorneys for all of the
Noteholders.
10.11 Survival of Representations, Warranties, Consents and
Covenants. The consent, representations and warranties contained in or made
pursuant to this Agreement shall survive the Closing without limitation and the
covenants and agreements contained in or made pursuant to this Agreement which
by
15
their terms are to survive after the Closing shall survive for the period
specified herein, provided, that if a claim or notice is given with respect to
any representation, warranty, covenant or agreement prior to any such expiration
date, the claim with respect to such representation, warranty, covenant or
agreement shall continue indefinitely until such claim is finally resolved.
10.12 Successors and Assigns. The provisions of this Agreement
shall inure to the benefit of, and be binding upon, the parties hereto and their
respective successors or assigns.
16
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed by its respective officers thereunto duly authorized all
as of the date first above written.
METROMEDIA INTERNATIONAL GROUP, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------
Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer,
Executive Vice President,
Treasurer and Director
PLD TELEKOM INC.
By: /s/ Xxxxx X.X. Xxxx
-------------------
Name: Xxxxx X.X. Xxxx
Title: Chairman, President and Chief
Executive Officer
XXXXXXX XXXXX GLOBAL ALLOCATION
FUND, INC.
By: /s/ Xxxx Xxx X'Xxxxxxx
----------------------
Name: Xxxx Xxx X'Xxxxxxx
Title: VP MLAM, Authorized Signatory
XXXXXXX XXXXX EQUITY/CONVERTIBLE
SERIES-GLOBAL ALLOCATION PORTFOLIO
By: XXXXXXX XXXXX ASSET MANAGEMENT,
L.P., AS INVESTMENT ADVISER
By: /s/ Xxxx Xxx X'Xxxxxxx
----------------------
Name: Xxxx Xxx X'Xxxxxxx
Title: VP MLAM, Authorized Signatory
17
XXXXXXXXXXX FUNDS, INC. AS INVESTMENT
SUB-ADVISER FOR ATLAS STRATEGIC INCOME
FUND
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
XXXXXXXXXXX CHAMPION INCOME FUND
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
XXXXXXXXXXX HIGH INCOME FUND
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
XXXXXXXXXXX STRATEGIC INCOME FUND
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS
FOR THE ACCOUNT OF XXXXXXXXXXX
STRATEGIC BOND FUND
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
18
XXXXXXXXXXX HIGH YIELD FUND
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
NORTHSTAR HIGH TOTAL RETURN FUND
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
NORTHSTAR HIGH TOTAL RETURN FUND II
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
HIGH YIELD PORTFOLIO
By: /s/
Name:
Title:
TOTAL RETURN PORTFOLIO
By: /s/
Name:
Title:
19
IDS LIFE SPECIAL INCOME FUND
By: /s/
Name:
Title:
IDS LIFE INCOME ADVANTAGE FUND
By: /s/
Name:
Title:
GENERAL RETIREMENT SYSTEM OF THE
CITY OF DETROIT
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
BEA INCOME FUND, INC. HIGH YIELD
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
BEA STRATEGIC GLOBAL INCOME FUND,
HIGHYIELD
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
20
OMAHA PUBLIC SCHOOL EMPLOYEE
RETIREMENT SYSTEM
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
WARBURG PINCUS HIGH YIELD FUND
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
RJR NABISCO DOMESTIC HIGH YIELD
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
SEI INSTITUTIONAL MANAGED TRUST
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
VAIL
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
21
THE COMMON FUND
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
NORTHWESTERN UNIVERSITY
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
XXXXXX XXXXX CORP EMPLOYEE
PENSION & SAVINGS PLAN
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
TEXACO INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
PHOENIX EMERGING MARKET FUND
By: /s/ Xxxxxx Xxxxxxx
------------------
Name: Xxxxxx Xxxxxxx
Title: Director
22
PHOENIX MULTI-SECTOR FIXED INCOME FUND
By: /s/ Xxxxxx Xxxxxxx
------------------
Name: Xxxxxx Xxxxxxx
Title: Director
PHOENIX EDGE MULTI-SECTOR FIXED INCOME
FUND
By: /s/ Xxxxxx Xxxxxxx
------------------
Name: Xxxxxx Xxxxxxx
Title: Director
23
SCHEDULE I
1. Xxxxxxx Xxxxx Global Allocation Fund, Inc.
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $74,500,000
Beneficial ownership of Convertible Notes:
Principal amount: $18,700,000
2. Xxxxxxx Xxxxx Equity/Convertible Series: Global Allocation Portfolio
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $1,900,000
Beneficial ownership of Convertible Notes:
Principal amount: $500,000
3. Xxxxxxxxxxx Champion Income Fund
Xxxxx Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $3,500,000
Beneficial ownership of Convertible Notes:
Principal amount: $200,000
4. Xxxxxxxxxxx Strategic Income Fund
Xxxxx Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $16,650,000
Beneficial ownership of Convertible Notes:
Principal amount: $1,500,000
5. Xxxxxxxxxxx High Yield Fund
Xxxxx Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $--
Beneficial ownership of Convertible Notes:
Principal amount: $630,000
24
6. Xxxxxxxxxxx High Income Fund
Xxxxx Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $--
Beneficial ownership of Convertible Notes:
Principal amount: $170,000
7. Atlas Strategic Income Fund
Xxxxx Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $50,000
Beneficial ownership of Convertible Notes:
Principal amount: $--
8. Xxxxxxxxxxx Strategic Bond Fund
Xxxxx Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $300,000
Beneficial ownership of Convertible Notes:
Principal amount: $--
9. Northstar High Total Return Fund
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $7,000,000
Beneficial ownership of Convertible Notes:
Principal amount: $--
10. Northstar High Total Return Fund II
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $--
Beneficial ownership of Convertible Notes:
Principal amount: $2,000,000
25
11. High Yield Portfolio
IDS Tower 10, X00-000
Xxxxxxxxxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $4,000,000
Beneficial ownership of Convertible Notes:
Principal amount: $--
12. Total Return Portfolio
IDS Tower 10, X00-000
Xxxxxxxxxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $3,000,000
Beneficial ownership of Convertible Notes:
Principal amount: $--
13. IDS Life Special Income Fund
IDS Tower 10, X00-000
Xxxxxxxxxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $5,000,000
Beneficial ownership of Convertible Notes:
Principal amount: $--
14. IDS Life Income Advantage Fund
IDS Tower 10, X00-000
Xxxxxxxxxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $100,000
Beneficial ownership of Convertible Notes:
Principal amount: $--
15. General Ret System of the City of Detroit
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $490,000
Beneficial ownership of Convertible Notes:
Principal amount: $70,000
26
16. BEA Income Fund, Inc.
High Yield
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $1,610,000
Beneficial ownership of Convertible Notes:
Principal amount: $230,000
17. BEA Strategic Global Income Fund High Yield
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $560,000
Beneficial ownership of Convertible Notes:
Principal amount: $80,000
18. Omaha Public School Employee Ret. System
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $210,000
Beneficial ownership of Convertible Notes:
Principal amount: $30,000
19. Warburg Pincus High Yield Fund
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $1,010,000
Beneficial ownership of Convertible Notes:
Principal amount: $230,000
20. RJR Nabisco Domestic High Yield
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $350,000
Beneficial ownership of Convertible Notes:
Principal amount: $50,000
27
21. SEI Institutional Managed Trust
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $830,000
Beneficial ownership of Convertible Notes:
Principal amount: $90,000
22. VAIL
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $1,140,000
Beneficial ownership of Convertible Notes:
Principal amount: $220,000
23. The Common Fund
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $30,000
Beneficial ownership of Convertible Notes:
Principal amount: $--
24. Northwestern University
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $150,000
Beneficial ownership of Convertible Notes:
Principal amount: $--
25. Xxxxxx Xxxxx Corp. Emp. Pen & Savings Plan
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $150,000
Beneficial ownership of Convertible Notes:
Principal amount: $--
28
26. Texaco Inc.
000 X. 00xx Xxxxxx - 00xx Xxxxxx
Xxx Xxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $200,000
Beneficial ownership of Convertible Notes:
Principal amount: $--
27. Phoenix Emerging Market Fund
00 Xxxxxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $--
Beneficial ownership of Convertible Notes:
Principal amount: $600,000
28. Phoenix Multi-Sector Fixed Income Fund
00 Xxxxxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $--
Beneficial ownership of Convertible Notes:
Principal amount: $600,000
29. Phoenix Edge Multi-Sector Fixed Income Fund
00 Xxxxxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxx, XX 00000
Beneficial ownership of Senior Notes:
Principal amount: $--
Beneficial ownership of Convertible Notes:
Principal amount: $600,000
29
EXHIBIT A
Term Sheet for New Notes will be attached as Exhibit A.
30
EXHIBIT B
The following is a summary of the material provisions of the proposed
amendments and waivers to the Senior Notes Indenture and the Convertible Notes
Indenture. Additional technical or conforming changes will be made to the
Indentures.
I. PROPOSED AMENDMENTS TO THE SENIOR NOTES INDENTURE.
1. Elimination in their entirety of the following Sections from the
Senior Notes Indenture:
o Section 4.4: Corporate existence covenant.
o Section 4.5: Maintenance of property covenant.
o Section 4.9: Limitation on indebtedness covenant.
o Section 4.10: Limitation on issuances of guarantees by
restricted subsidiaries covenant.
o Section 4.11: Limitation on liens covenant.
o Section 4.12: Limitation on sale and leaseback
transactions covenant.
o Section 4.13: Restricted payments covenant.
o Section 4.14: Limitations on dividends and other payment
restrictions affecting restricted subsidiaries covenant.
o Section 4.15: Limitation on issuance and sale of preferred
stock of restricted subsidiaries covenant.
o Section 4.16: Transactions with affiliates covenant.
o Section 4.17: Restricted and unrestricted subsidiaries
covenant.
o Section 4.18: Limitations on line of business covenant.
o Section 4.19: Limitation on sales of telecommunications
assets agreements or qualified investments covenant.
31
o Section 4.20: Reports covenant.
o Section 4.21: Compliance certificate; notice of default or
event of default covenant.
o Sections 4.24 and 4.26: Certain subsidiaries covenants.
o Article V: Consolidation, merger, conveyance, lease or
transfer covenant.
2. Amendments to Article XI of the Senior Notes Indenture to
authorize the release of all of the collateral including all cash
held in escrow from the security interest, liens, pledge and
escrow agreements of the Senior Notes Indenture.
3. Waiver of all past defaults arising from the failure to pay
interest on the notes or otherwise.
II. PROPOSED AMENDMENTS TO THE CONVERTIBLE NOTES INDENTURE
1. Elimination in their entirety of the following Sections from the
Convertible Notes Indenture:
o Section 4.4: Corporate existence covenant.
o Section 4.5: Maintenance of property covenant.
o Section 4.9: Limitation on issuances of guarantees by
restricted subsidiaries covenant.
o Section 4.10: Restricted and unrestricted subsidiaries
covenant
o Section 4.11: Reports covenant.
o Section 4.12: Compliance certificate; notice of default or
event of default covenant.
o Sections 4.16 and 4.18: Certain subsidiaries covenants.
o Article V: Consolidation, merger, conveyance, lease or
transfer covenant.
2. Amendments to Article XI of the Convertible Notes Indenture to
authorize the release of all of the collateral including all cash
held in
32
escrow from the security interest, liens, pledge and escrow
agreements of the Convertible Notes Indenture.
3. Waiver of all past defaults arising from the failure to pay
interest on the notes or otherwise.
SUMMARY OF PRINCIPAL TERMS
ISSUER Metromedia International Group, Inc. (the
"Company")
EXCHANGE OFFER The Company will offer to exchange (i) $1,000
accreted value ($1,291.55 face value) of 10.5%
Senior Discount Notes, due 2007 (the "Notes") for
each $1,000 principal amount of the existing 14.5%
Senior Discount Notes due 2004 (the "PLD Senior
Notes") of PLD Telekom Inc. ("PLD"); and $900
Accreted Value of the Notes for each $1,000
principal amount of the existing PLD's 9%
Convertible Subordinated Notes due 2006 (the "PLD
Convertible Notes"; and together with the PLD
Senior Notes, the "PLD Notes"). The exchange
offers described in the preceding sentence will be
consummated simultaneously with the consummation
of the merger of a wholly owned subsidiary of the
Company with and into PLD pursuant to a Merger
Agreement dated as of the date hereof among the
Company, PLD and Moscow Communications, Inc.
Accrued interest on the PLD Notes through the date
of consummation of the exchange offers will be
paid through the issuance of additional Notes with
an accreted value equal to 100% of the outstanding
amount of such accrued, but unpaid, interest.
MATURITY 8 years.
YIELD & INTEREST The Notes will be issued at a discount and will
accrete, but will not pay interest in cash, at a
rate of 10 1/2% per annum, compounded
semi-annually, to a principal amount of $1,291.55
per Note at the end of 2 1/2 years. Cash interest
will not accrue on the Notes for 5 semi-annual
periods (2 1/2 years). Thereafter, cash interest
on the Notes will be payable semi-annually at 10
1/2% per annum.
OPTIONAL REDEMPTION The Notes will not be redeemable prior to 2 1/2
years following the Issue Date. The Notes will be
redeemable at any time thereafter, at the option
of the Company, in whole or in part, at a
redemption price equal to the principal amount of
the Notes, plus accrued and unpaid interest, if
any, to but excluding the date of redemption.
RANKING The Notes will be senior unsecured obligations of
the
Company. The Notes will rank pari passu in right
of payment with all senior indebtedness of the
Company and will rank senior in right of all
payments to all subordinated indebtedness of the
Company. The Notes will not be guaranteed by any
of the Company's Subsidiaries.
CHANGE OF CONTROL Upon the occurrence of a Change of Control, the
Company will be required to make an offer to
repurchase the Notes at an offer price in cash
equal to 101% of the accreted value of the Notes,
plus accrued and unpaid interest, if any, to the
date of purchase.
CHANGE OF CONTROL means the occurrence of any of
the following: (i) the sale, lease, exchange or
other transfer by the Company of all or
substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole to
any person other than a Wholly Owned Restricted
Subsidiary of the Company; (ii) a merger or
consolidation in which the shareholders of the
Company immediately prior to the merger or
consolidation do not hold a majority of the voting
power of the Company immediately after the merger
or consolidation, (iii) any person other than a
Permitted Holder becomes the beneficial owner of
>50% of the total voting power of all classes of
the voting stock of the Company; or (iv) the first
day on which a majority of the members of the
Board of Directors of the Company are not
continuing directors; or (v) the Company is
liquidated or dissolved or adopts a plan of
liquidation or dissolution other than in a
transaction which complies with the provisions set
forth in "Limitations on Merger, Consolidation or
Sale of Assets"; PROVIDED, however, that the sale
or disposition of (x) all or substantially all of
the assets or voting stock of Snapper, Inc.
("Snapper") or (y) all or any portion of the PLD
Assets (as defined below) will not be deemed to be
a Change of Control. The sale of any of the PLD
Assets shall be governed by the provisions set
forth in "Limitation on Asset Sales".
PERMITTED HOLDER means Metromedia Company, its
Related Parties, and any Person controlling,
controlled by, or under common control of,
Metromedia Company.
2
PLD ASSETS will mean all of the assets (including
shares of capital stock of any Subsidiary) owned
by PLD Telekom Inc. ("PLD") or any direct or
indirect Subsidiary of PLD on the Issue Date,
accounts receivable generated by such assets, and
the Additional PLD Assets.
SUBSIDIARY means, with respect to any Person, any
corporation, association or other business entity
of which more than 50% of the total voting power
of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to
vote in the election of directors, managers,
trustees or similar governing body thereof is at
the time owned or controlled, directly or
indirectly, by such Person or one or more of the
other Subsidiaries of that Person (or a
combination thereof).
LIMITATIONS ON INDEBTEDNESS The Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or
indirectly, create, incur or assume any additional
Indebtedness or to issue Disqualified Capital
Stock and the Company will not permit any of its
Restricted Subsidiaries to issue any shares of
Preferred Stock, unless the Consolidated Leverage
Ratio at the end of the Company's most recently
completed quarter is less than or equal to 5.5 to
1.0 prior to June 30, 2002, or less than 5.0 to
1.0 on or after June 30, 2002, determined on a pro
forma basis (including the application of the
proceeds therefrom), as if the additional
Indebtedness or Preferred Stock had been incurred
or issued at the beginning of the Reference
Period.
Except with respect to the PLD Companies, the
foregoing limitations will not prohibit:
(a) Existing Indebtedness of the Company or any of
its Restricted Subsidiaries;
(b) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness consisting
of Capital Lease Obligations, Purchase Money
Obligations, or other obligations incurred for the
purpose of financing all or any part of the
purchase price, development, acquisition,
construction or improvement of real or personal
property, tangible or intangible, used or to be
used in a Related Business (including capital
stock of a
3
Person engaged in a Related Business) or a credit
facility or debt securities entered into for the
purpose of providing such financing, PROVIDED that
such Indebtedness (inclusive of the interest
portion thereof and reasonable costs of financing)
does not exceed the lesser of Fair Market Value or
the purchase price and related costs of design,
development, acquisition, construction or
improvement of such assets or property at the time
of such incurrence;
(c) the incurrence by the Company of Indebtedness
in an aggregate principal amount not to exceed two
(2) times the sum of the Net Cash Proceeds
received by the Company after the date of the
Indenture in connection with any Public Equity
Offerings or sale of Capital Stock (other than
Disqualified Capital Stock) to any Strategic
Investor to the extent that such Net Cash Proceeds
have not been used to make Restricted Payments
pursuant to paragraphs (c)(ii) and (c)(2) of the
"Limitations on Restricted Payments" covenant,
provided that such Indebtedness does not mature
prior to six (6) months following the Stated
Maturity of the Notes;
(d) the incurrence by the Company or any
Subsidiary of any Indebtedness entered into in the
ordinary course of business (i) pursuant to
interest rate agreements entered into to protect
the Company or any Subsidiary against fluctuations
in interest rates in respect of Indebtedness of
the Company or any Subsidiary so long as the
notional principal amount of such interest rate
agreements does not exceed the aggregate principal
amount of such Indebtedness then outstanding or
(ii) under any currency hedging arrangements
entered into to protect the Company or any
Subsidiary against fluctuations in the value of
any currency and not for speculative purposes;
(e) ordinary course performance bonds, letters of
credit and appeal and surety bonds entered into
not in connection with borrowed money;
4
(f) inter-company indebtedness owed to the Company
or any Restricted Subsidiary or any guarantee by
the Company or any Restricted Subsidiary of any
Indebtedness permitted to be incurred hereunder;
(g) the incurrence by the Company or any of its
Restricted Subsidiaries of additional
Indebtedness, so long as the aggregate principal
amount of such Indebtedness does not exceed $200
million at any one time outstanding; and
(h) Permitted Refinancing Indebtedness of any of
the Indebtedness permitted by clauses (a-g) above.
"INDEBTEDNESS" will mean at any time (without
duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of
such Person, and whether or not contingent, (i)
any obligation of such Person for money borrowed,
(ii) any obligation of such Person evidenced by
bonds, debentures, notes, guarantees or other
similar instruments, including, without
limitation, any such obligations incurred in
connection with acquisition of property, assets or
businesses, excluding trade accounts payable made
in the ordinary course of business, (iii) any
reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances
or similar facilities issued for the account of
such Person, (iv) any obligation of such Person
issued or assumed as the deferred purchase price
of property or services (but excluding trade
accounts payable or accrued liabilities arising in
the ordinary course of business, which in either
case are not more than 60 days overdue or which
are being contested in good faith), (v) any
Capital Lease Obligation of such Person, (vi) the
maximum fixed redemption or repurchase price of
Disqualified Capital Stock of such Person and, to
the extent held by other Persons, the maximum
fixed redemption or repurchase price of
Disqualified Capital Stock of such Person's
Restricted Subsidiaries at the time of
determination, (vii) the notional amount of any
interest hedging obligations or exchange rate
obligations of such Person at the time of
determination, (viii) any Attributable
Indebtedness with respect to any Sale and
Leaseback Transaction to which such Person is a
party and (ix) any obligation of the type referred
to in clauses (i) through (viii) of this
definition of
5
another Person and all dividends and distributions
of another Person the payment of which, in either
case, such Person has guaranteed or is responsible
or liable, directly or indirectly, as obligor,
guarantor or otherwise. For purposes of the
preceding sentence, the maximum fixed repurchase
price of any Disqualified Capital Stock that does
not have a fixed repurchase price shall be
calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified
Capital Stock were repurchased on any date on
which Indebtedness shall be required to be
determined pursuant hereto; PROVIDED that if such
Disqualified Capital Stock is not then permitted
to be repurchased, the repurchase price shall be
the book value of such Disqualified Capital Stock.
The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date
of all unconditional obligations as described
above and the maximum liability of any guarantees
at such date; PROVIDED that for purposes of
calculating the amount of the Notes outstanding at
any date, such amount shall be the accreted value
thereof as of such date unless cash interest has
commenced to accrue pursuant to the terms of the
Notes, in which case the amount of the Notes
outstanding will be determined pursuant to the
terms of the Notes.
"ATTRIBUTABLE INDEBTEDNESS" will mean, with
respect to any Sale and Leaseback Transaction of
any Person, as at the time of determination, the
greater of (i) the capitalized amount in respect
of such transaction that would appear on the
balance sheet of such Person in accordance with
GAAP and (ii) the present value (discounted at a
rate consistent with accounting guidelines, as
determined in good faith by such Person) of the
payments during the remaining term of the lease
(including any period for which such lease has
been extended or may, at the option of the lessor,
be extended) or until the earliest date on which
the lessee may terminate such lease without
penalty or upon payment of a penalty (in which
case the rental payments shall include such
penalty).
"SALE AND LEASEBACK TRANSACTION" means, with
respect to any Person, any direct or indirect
arrangement pursuant to which property is sold or
transferred by such Person or a Restricted
Subsidiary of such Person and is thereafter
6
leased back from the purchaser or transferee
thereof by such Person or one of its Restricted
Subsidiaries.
LIMITATION ON PLD Notwithstanding the foregoing, neither PLD nor any
INDEBTEDNESS of its direct or indirect Subsidiaries (including,
without limitation, PeterStar Company Limited,
Baltic Communications Limited, Technocom Limited,
ALTEL and CPY Yellow Pages Limited) (collectively,
the "PLD Companies") will directly or indirectly,
create, incur, assume or suffer to exist any
additional Indebtedness or any guarantees of any
Indebtedness.
The foregoing limitations will not prohibit:
(a) Existing Indebtedness of the PLD Companies;
(b) the incurrence by the PLD Companies of
Indebtedness consisting of Capital Lease
Obligations, Purchase Money Obligations, or other
obligations incurred for the purpose of financing
all or any part of the purchase price,
development, acquisition, construction or
improvement of real or personal property, tangible
or intangible, used or to be used in a Related
Business (other than any business specified in
clause (v) of the definition of Related Business)
or a credit facility or debt securities entered
into for the purpose of providing such financing,
PROVIDED that such Indebtedness (inclusive of the
interest portion thereof and reasonable costs of
financing) does not exceed the lesser of Fair
Market Value or the purchase price and related
costs of design, development, acquisition,
construction or improvement of such assets or
property at the time of such incurrence;
(c) the incurrence by the PLD Companies of any
Indebtedness entered into in the ordinary course
of business (i) pursuant to interest rate
agreements entered into to protect the PLD
Companies against fluctuations in interest rates
in respect to Indebtedness of any of the PLD
Companies so long as the notional principal amount
of such interest rate agreements does not exceed
the
7
aggregate principal amount of such Indebtedness
then outstanding or (ii) under any currency
hedging arrangements entered into to protect the
PLD Companies against fluctuations in the value of
any currency and not for speculative purposes;
(d) ordinary course performance bonds, letters of
credit and appeal and surety bonds entered into
not in connection with borrowed money;
(e) Indebtedness between any of the PLD Companies
or any guarantee by any PLD Company of any
Indebtedness permitted to be incurred by any other
PLD Company hereunder;
(f) the incurrence by the PLD Companies of
additional Indebtedness, so long as the aggregate
principal amount of such Indebtedness does not
exceed $25.0 million at any one time outstanding;
and
(g) Permitted Refinancing Indebtedness of any of
the Indebtedness permitted by clauses (a-f) above.
RESTRICTED SUBSIDIARIES will mean (x) Metromedia
International Telecommunications, Inc., Snapper
and all other direct or indirect wholly-owned
subsidiaries of the Company that are incorporated
in any state in the United States, (y) Paging One
Services, GmbH (Austria), Romsat Cable TV & Radio,
SA (Romania) and Radio Balalon Juventus Kft.
(Hungary), to the extent each of the foregoing
constitutes Subsidiaries, and (z) each of the PLD
Companies, to the extent each of them constitutes
Subsidiaries.
DISQUALIFIED CAPITAL STOCK means, with respect to
any person, any Capital Stock which, by its terms
(or by the terms of any security into which it is
convertible or for which it is exchangeable), or
upon the happening of any event or the passage of
time, matures or becomes mandatorily redeemable,
pursuant to a sinking fund obligation or
otherwise, or becomes exchangeable for
Indebtedness at the option of the holder thereof,
or becomes redeemable at the option of the holder
thereof, in whole or in part, on or prior to the
Stated Maturity of
8
the Notes; PROVIDED such Capital Stock shall only
constitute Disqualified Capital Stock to the
extent it so matures or becomes so redeemable or
exchangeable on or prior to the Stated Maturity of
the Notes; PROVIDED, FURTHER, that any Capital
Stock that would not constitute Disqualified
Capital Stock but for provisions thereof giving
holders thereof the right to require such person
to repurchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of
control" occurring prior to the Stated Maturity of
the Notes shall not constitute Disqualified
Capital Stock if the "asset sale" or "change of
control" provisions applicable to such Capital
Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in
"Limitation on Asset Sales" and "Change of
Control" described herein and such Capital Stock
specifically provides that such person will not
repurchase or redeem any such stock pursuant to
such provision prior to the Company's repurchase
of such Notes as are required to be repurchased
pursuant to the "Limitation on Asset Sales" and
"Change of Control" provisions described herein.
CONSOLIDATED LEVERAGE RATIO will mean the ratio of
(a) the total consolidated Indebtedness of the
Company and its consolidated Subsidiaries as of
the date of calculation (the "Determination Date")
to (b) two times the Consolidated Operating Cash
Flow of the Company and its consolidated
Subsidiaries for the most recent two fiscal
quarters for which financial information is
available (the "Reference Period") immediately
preceding such Determination Date, calculated in
accordance with GAAP and on a pro forma basis to
(i) include the results of any Person that is a
consolidated Subsidiary on such Determination Date
(or would become a consolidated Subsidiary in
connection with the transaction that requires the
determination of such Consolidated Operating Cash
Flow), (ii) exclude any Person that is not a
consolidated Subsidiary on such Determination Date
(or would cease to be a consolidated Subsidiary in
connection with the transaction that requires the
determination of such Consolidated Operating Cash
Flow ) and (iii) include or exclude, as the case
may be, the results of any operating business
acquired or disposed of by the Company or a
consolidated Subsidiary in such Reference Period.
9
CONSOLIDATED OPERATING CASH FLOW will mean, with
respect to any period, Consolidated Net Income for
such period increased (without duplication), to
the extent deducted in calculating such
Consolidated Net Income by,
(a) Consolidated Income Tax Expense for such
period,
(b) Consolidated Interest Expense for such period,
and
(c) depreciation, amortization, minority interest
and any other non-cash items for such period
(other than any non-cash item which requires the
accrual of, or reserve for, cash charges for any
future period) of the Company and any consolidated
Subsidiary.
RELATED BUSINESS will mean, when used in reference
to any Person, that such Person is engaged
primarily in the business of, or providing
services related to the business of, (i) the
transmission of voice, video or data, including,
but not limited to, local and long-distance
wireline and wireless telephone services and
internet services, (ii) multi-channel television
services including wireline and wireless cable
television service, (iii) broadcast radio, (iv)
paging, (v) lawn and garden products and related
services and (vi) in the case of each of (i)
through (v) above, the construction of any
facilities related thereto or any businesses
reasonably related thereto, which determination
shall be made in good faith by the Board of
Directors.
PUBLIC EQUITY OFFERING will mean an underwritten
sale of Capital Stock (excluding Disqualified
Capital Stock) of the Company with gross proceeds
to the Company of at least $25 million.
STRATEGIC INVESTOR will mean any Person that is
(or a controlled Affiliate of any Person that is)
engaged principally in a Related Business.
AFFILIATE of any specified Person means any other
Person directly or indirectly controlling,
controlled by or under direct or indirect common
control with such specified Person. For purposes
of this definition, "control" (including, with
correlative meanings, the terms "controlling,"
"controlled by" and "under common
10
control with"), as used with respect to any
Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the
direction of the management or policies of such
Person, whether through the ownership of voting
securities, by agreement or otherwise, provided
that the ability to vote 10% or more of the voting
securities of such Person shall constitute
control.
PERMITTED REFINANCING INDEBTEDNESS will mean any
amendments, supplements, modifications, deferrals,
renewals, extensions, substitutions, refundings,
defeasance, refinancings or replacements
(collectively, a "refinancing") of any
Indebtedness, including successive refinancings so
long as (i) the borrower under such refinancing is
the Company or, if not the Company, the same as
the borrower (or its successor) of the
Indebtedness being refinanced, (ii) the aggregate
principal amount (or accreted value) of the new
Indebtedness does not exceed the sum of (a) the
aggregate principal amount (or accreted value)
being refinanced, (b) the accrued interest
represented thereby, (c) the amount of expenses of
the Company or such borrower incurred in
connection with such refinancing, and (d) the
lesser of (x) the stated amount of any premium or
other payment required to be paid in connection
with such refinancing pursuant to the terms of the
Indebtedness being refinanced and (y) the amount
of premium actually paid at such time to refinance
the Indebtedness and (iii) in the case of any
refinancing of Subordinated Indebtedness, such new
Indebtedness is made subordinated to the Notes at
least to the same extent as the Indebtedness being
refinanced and such refinancing does not reduce
the Average Life to Stated Maturity or the Stated
Maturity of such Subordinated Indebtedness.
EXISTING INDEBTEDNESS of a Person means
Indebtedness of such Person in existence on the
Issue Date, until such amounts are repaid.
CAPITAL LEASE OBLIGATION means any obligation of a
Person and its subsidiaries on a consolidated
basis under any capital lease of real or personal
property which, in accordance with GAAP, has been
recorded as a capital lease obligation.
11
PURCHASE MONEY OBLIGATION of any Person means any
Indebtedness secured by a Lien on assets related
to the business of such Person and any additions,
replacements, modifications and accessions
thereto, which are purchased by such Person at any
time after the Notes are issued; PROVIDED that (i)
the security agreement or conditional sales or
other title retention contract pursuant to which
the Lien on such assets is created (collectively a
"Purchase Money Security Agreement") shall be
entered into within 180 days after the purchase or
substantial completion of the construction of such
assets and shall at all times be confined solely
to the assets so purchased or acquired, any
additions, replacements, modifications and
accessions thereto and any proceeds and products
therefrom, (ii) at no time shall the aggregate
principal amount of the outstanding Indebtedness
secured thereby be increased except in connection
with the purchase of additions and accessions
thereto and except in respect of commitment or
facility fees or other similar fees and other
similar obligations in respect of the incurrence
of such Indebtedness, and (iii) (A) the aggregate
outstanding principal amount of Indebtedness
secured thereby (determined on a per asset basis
in the case of any additions and accessions) shall
not at the time such Purchase Money Security
Agreement is entered into exceed 90% of the
purchase price to such Person of the assets
subject thereto or (B) the Indebtedness secured
thereby shall be with recourse solely to the
assets so purchased or acquired, any additions,
replacements, modifications and accessions thereto
and any proceeds and products therefrom.
FAIR MARKET VALUE means, with respect to any asset
or property, the sale value that would be
reasonably expected to be obtained in an arm's
length transaction between an informed and willing
seller under no compulsion to sell and an informed
and willing buyer under no compulsion to buy. Fair
Market Value shall be determined by the Board of
Directors of the Company acting in good faith and
shall be evidenced by a resolution of the Board of
Directors.
LIMITATIONS ON RESTRICTED The Company will not, and will not permit any
PAYMENTS Restricted Subsidiary to, (i) declare or pay any
dividends on, or make any distribution on account
of the Company's or
12
any of its Restricted Subsidiaries' Capital Stock
(other than dividends or distributions solely in
Qualified Capital Stock or options, warrants or
other rights to acquire Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or
retire for value any of the Company's Capital
Stock; (iii) make any principal payment on, or
purchase, redeem, defease, retire or otherwise
acquire for value, prior to any scheduled
principal payment or maturity, any Subordinated
Indebtedness; or (iv) make any Investment in any
Person unless, and after giving effect thereto:
(a) no Default of Event of Default shall have
occurred; and
(b) after such Restricted Payment, the Company
could incur at least $1.00 of additional
indebtedness under the test given in "Limitation
on Indebtedness;"
(c) on a pro forma basis, the aggregate amount of
all Restricted Payments shall not exceed (in each
case without duplication) the sum of:
(i) the Cumulative Consolidated Operating
Cash Flow LESS a minority equity interest in
such Consolidated Operating Cash Flow in the
event a minority interest has not already
been deducted from Consolidated Operating
Cash Flow, LESS 150% of the Cumulative
Consolidated Interest Expense; PLUS
(ii) the Net Cash Proceeds received upon the
sale of Qualified Capital Stock or any
options, warrants or rights to purchase such
Qualified Capital Stock from the Company to
the extent not utilized to incur
Indebtedness under paragraph (c) of
"Limitations on Indebtedness" above; PLUS
(iii) the Net Cash Proceeds upon the
exercise of any options, warrants or rights
to purchase Qualified Capital Stock of the
Company; PLUS
13
(iv) Net Cash Proceeds received from the
conversion or exchange of debt securities or
Redeemable Capital Stock into Qualified
Capital Stock of the Company plus, to the
extent such debt securities or Redeemable
Capital Stock were issued after the issue
date the Net Cash Proceeds from their
original issuance; PLUS
(v) In the case of the disposition or
repayment of any Investment constituting a
Restricted Payment, an amount equal to the
lesser of (x) the cash return of capital
resulting from sale proceeds, dividends,
distributions, interest payments, return of
capital or principal, management fees or
other transfers of assets to the Company or
any Restricted Subsidiary or (y) the initial
amount of such Investment; LESS
(vi) amounts paid or payments made pursuant
to any of clauses (2), (3), (5) and (6)
below.
So long as no Default of Event of Default has
occurred and is continuing or would be caused
thereby, the foregoing provisions will not
prohibit:
(1) The payment of any dividend within 60 days
after the date of declaration, if at said date of
declaration such dividend would have complied with
(c) above;
(2) the repurchase, redemption, or other
acquisition or retirement for value of any shares
of any class of Qualified Capital Stock of the
Company in exchange for, or out of the Net Cash
Proceeds of a substantially concurrent sale of
Qualified Capital Stock of the Company;
(3) the repurchase, redemption, defeasance,
retirement, refinancing, acquisition for value or
payment of principal of any Subordinated
Indebtedness in exchange for, or out of the Net
Cash Proceeds of a substantially
14
concurrent sale of Permitted Refinancing
Indebtedness;
(4) the payment of any dividend or other
distribution by a Restricted Subsidiary to holders
of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other
acquisition or retirement for value of any
Qualified Capital Stock of the Company or any of
its Restricted Subsidiaries held by a member of
the Company's or such Restricted Subsidiary's
management, provided that the aggregate amount of
such repurchases in any calendar year shall not
exceed $1 million in any twelve-month period, plus
the aggregate cash proceeds provided to the
Company during such period from any reissuance of
Qualified Capital Stock to management;
(6) Investments in any Person engaged, or to be
engaged, principally in a Related Business on the
date of such investments; and
(7) Investments by Restricted Subsidiaries which
are lessees or buyers of Telecommunications Assets
under Telecommunications Assets Agreements in
transactions in which the monetary consideration
for such Telecommunications Assets is paid
immediately or is payable over time, PROVIDED that
such Investments shall be made as a sublease or
installment sale of the Telecommunications Assets
subject to the Telecommunications Asset Agreement
to which such Restricted Subsidiary is party as
lessee or buyer.
(8) Permitted Payments.
PERMITTED PAYMENTS will include:
15
(a) Payments made under any tax sharing agreement
between or among the Company and its Restricted
Subsidiaries;
(b) The payment of dividends on the Company's
Convertible Preferred Stock in an aggregate amount
not to exceed $15.1 million in any calendar year;
and
(c) payments to Metromedia Company and any of its
Affiliates for reasonable legal, tax, accounting,
financial advisory and other management services
in the ordinary course of business, subject to
approval by disinterested members of the board of
directors of the Company.
QUALIFIED CAPITAL STOCK means any and all Capital
Stock of a Person other than Disqualified Capital
Stock.
CAPITAL STOCK means (i) with respect to any Person
that is a corporation, any and all shares,
interests, participations or other equivalents
(however designated and whether or not voting) of
corporate stock, including each class of common
stock and preferred stock of such Person and (ii)
with respect to any Person that is not a
corporation, any and all partnership, membership
or other equity interest of such Person.
STATED MATURITY means, when used with respect to
any Indebtedness or any installment of interest
thereon, the dates specified in such Indebtedness
as the fixed date on which the principal of such
Indebtedness or such installment of interest, as
the case my be, is due and payable.
CONSOLIDATED INTEREST EXPENSE will mean, without
duplication, for any period, the sum of (a) the
interest expense of such person and its
subsidiaries for such period, on a consolidated
basis in accordance with GAAP, including without
limitation, (i) amortization of debt discount,
(ii) the net costs associated with Interest Rate
Agreements and Currency Hedging Agreements, (iii)
the interest portion of any deferred payment
obligation, and (iv) accrued interest, plus (b)
the interest component
16
of capital lease obligations paid, accrued and/or
scheduled to be paid or accrued by such Person and
its consolidated Subsidiaries, plus (c) the
aggregate amount for such period of cash dividends
paid on any Redeemable Capital Stock or Preferred
Stock of the Company and its consolidated
Subsidiaries, in each case on a consolidated basis
in accordance with GAAP.
CUMULATIVE CONSOLIDATED OPERATING CASH FLOW and
CUMULATIVE CONSOLIDATED INTEREST EXPENSE will
mean, on any date of determination, the cumulative
Consolidated Operating Cash Flow and Consolidated
Interest Expense, as the case may be, realized
during the period commencing on the issue date of
the Notes and ending on the last day of the most
recent fiscal quarter immediately preceding the
date of determination for which consolidated
financial information is available.
TELECOMMUNICATIONS ASSETS means, with respect to
any Person, assets (including, without limitation,
rights of way, trademarks and licenses and
licenses to use copyrighted material), that are
utilized by such Person, directly or indirectly,
in a Telecommunications Business.
Telecommunications Assets shall also include
stock, joint venture or partnership interest in
another Person, provided that substantially all of
the assets of such other Person consist of
Telecommunications Assets. The determination of
what constitutes Telecommunications Assets shall
be made by the Board of Directors of the Company.
TELECOMMUNICATIONS ASSET AGREEMENT means a lease
or installment sale agreement where title is
transferred to the buyer pursuant to which a
Leasing Company leases or sells, in a transaction
in which the monetary consideration therefor is
paid immediately or is payable over time,
Telecommunications Assets that consist of
equipment and rights acquired in connection with
the lease or sale thereof (including, without
limitation, software licenses) to a Restricted
Subsidiary or Qualified Joint Venture in the
Russian Federation and Kazakhstan, which lease or
installment sale agreement will be Collateral,
provided that if the lessor or seller does not
retain title to such Telecommunications Assets
until payment of the full amount of the lease
payments or purchase price due from
17
the lessee or purchaser, such Telecommunications
Assets are subject to all necessary pledges,
assignments, mortgages, trusts, liens or other
security interests which are valid and perfected
so as to create a first priority interest under
Russian or Kazakh law, as applicable.
TELECOMMUNICATIONS BUSINESS means the business of
(i) transmitting, or providing services relating
to the transmission of, voice, video or data
through owned or leased transmission facilities,
(ii) creating, developing or marketing
communications related network equipment, software
and other devices for use in (i) above or (iii)
evaluating, participating or pursuing any other
activity or opportunity that is related to those
specified in (i) or (ii) above and includes,
without limitation, any business which the PLD and
its direct and indirect Subsidiaries are currently
engaged.
LEASING COMPANY means a special purpose Cypriot
corporation which is a wholly-owned Subsidiary
organized for the limited purpose of acquiring
Telecommunications Assets and leasing such
Telecommunications Assets to direct or indirect
Subsidiaries of PLD pursuant to Telecommunications
Asset Leases and/or making investments in a
Telecommunications Company primarily engaged or
proposing to engage in the Telecommunications
Business in the Russian Federation or Kazakhstan.
QUALIFIED JOINT VENTURE means a Joint Venture in
which PLD owns directly or indirectly Voting Stock
thereof and any future Joint Venture in which PLD
owns 20% or more of the Voting Stock thereof.
JOINT VENTURE means a Telecommunications Company
of which less than 50 percent of the Voting Stock
is held by PLD, provided that the
Telecommunications Business of such Person is
principally conducted in the Russian Federation
and/or Kazakhstan.
TELECOMMUNICATIONS COMPANY means any Person
substantially all of the assets of which consist
of Telecommunications Assets.
18
VOTING STOCK means, with respect to any Person,
securities of any class or classes of Capital
Stock in such Person entitling the holders thereof
(whether at all times or at the times that such
class of Capital Stock has voting power by reason
of the happening of any contingency) to vote in
the election of members of the board of directors
or comparable body of such Person.
TRANSACTIONS WITH AFFILIATES The Company will not permit, and will not permit
any of its Restricted Subsidiaries to, engage in
an Affiliate Transaction unless (a) such Affiliate
Transaction is on terms that are not materially
less favorable, in the aggregate, to the Company
or such Restricted Subsidiary, as applicable, than
those that would have been obtained in a
comparable transaction by the Company or such
Restricted Subsidiary, as applicable, on an arms
length basis with a Person that is not an
Affiliate; and (b) the Company delivers to the
Trustee:
(i) for transactions >$5 million, a
resolution of the Board of Directors
certifying that the transaction complies
with (a) above and has been approved by a
majority of the disinterested members of the
Board of Directors; and
(ii) for transactions >$10 million, an
opinion as to the fairness of the
transaction issued by an investment banking
firm.
PROVIDED, however that this covenant does not
apply to:
(i) compensation or employee benefit
arrangements in the ordinary course of
business;
(ii) any transaction solely between or among
the Company and/or any Restricted
Subsidiary;
(iii) transactions with any Persons engaged
in a Related Business that is an Affiliate
solely because the Company has a direct or
indirect equity interest in such Person;
19
(iv) payment of reasonable and customary fees to
directors who are not employees of the Company;
(v) sales of equity interests of the Company
(other than Disqualified Capital Stock) to
Affiliates of the Company;
(vi) any transaction permitted under the covenant
"Limitation on Restricted Payments;"
(vii) advances to employees in the ordinary course
of business in an aggregate amount not to exceed
$2.0 million;
(viii) any transaction with an officer or director
in the ordinary course of business not involving
more than $100,000 in any one case and in an
aggregate amount not to exceed $2.0 million; and
(ix) Affiliate Transactions (and replacements
thereof) in effect or approved by the Board of
Directors at the time of the Issue Date.
CREATION OF ADDITIONAL The Company agrees that (i) from May 18, 1999
PLD ASSETS through the second anniversary of the Issue Date,
at least $15.0 million of additional PLD Assets
that would be classified as "property and
equipment" on PLD's consolidated balance sheet
will be acquired by one of the PLD Companies (such
assets referred to as the "Additional PLD Assets")
and (ii) to the extent it acquires Pivotel Assets
or properties prior to such date, without using
Purchase Money Obligations, it shall cause such
assets to become Additional PLD Assets.
PIVOTEL ASSETS means the Pivotel
telecommunications switches and nodes located in
New York and London, transatlantic cables,
European cables, upgraded switches in St.
Petersburg and Moscow and related
telecommunications equipment.
LIMITATION ON LIENS The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly,
create, incur, assume or suffer to exist or affirm
any Lien of any kind upon any
20
property or assets of the Company or any
Restricted Subsidiary unless the Notes are
directly secured equally and ratably with the
obligation or liability secured by such Lien
except for any Permitted Liens.
PERMITTED LIENS will include:
(a) Any Lien existing on the date of the
Indenture;
(b) Any Lien arising in connection with court
judgements, taxes, workmen's compensation, zoning
restrictions, easements and rights of way that do
not materially impair operation of the business,
performance bids, contracts, leases, statutory
obligations, surety and appeal bonds, letters of
credit and other obligations incurred in the
ordinary course of business;
(c) any lien securing obligations in connection
with Indebtedness permitted under that Section of
the Indenture described in clauses (b), (d), (e),
(g) and (h) (to the extent the Indebtedness to
which the Permitted Refinancing Indebtedness
relates was secured) of the first paragraph of
"Limitations on Indebtedness" above; and
(d) any PLD Company Permitted Liens.
LIMITATIONS ON LIENS OF PLD In addition to the foregoing, none of the PLD
ASSETS Companies will directly or indirectly create,
incur, assume or suffer to incur or affirm any
Lien of any kind upon any PLD Asset, unless the
Notes are directly secured equally and ratably
with the obligation or liability secured by such
Lien except for any PLD Company Permitted Liens.
PLD COMPANY PERMITTED LIENS will include:
(a) any Lien existing on the date of the
Indenture;
(b) any Lien arising in connection with court
judgments, taxes, workmen's compensation, zoning
restrictions, easements and rights of way that do
not materially impair operation of the business,
performance bids, contracts, leases, statutory
allegations, surety and
21
appeal bonds, letters of credit and other
obligations incurred in the ordinary course of
business; and
(c) any Lien securing obligations in connection
with Indebtedness permitted under that section of
the Indenture described in clauses (b), (c), (d),
(f) and (g) (to the extent the Indebtedness to
which the Permitted Refinancing Indebtedness
relates was secured) of "Limitations on PLD
Indebtedness" above.
LIMITATION ON ASSET The Company and its Restricted Subsidiaries will
SALES not engage in an Asset Sale unless: (a) the
Company receives consideration equal to the Fair
Market Value of the assets sold, and (b) at least
80% of the consideration received is cash paid at
closing of such transaction, marketable securities
or comparable consideration, provided that the
amount of any liabilities of the Company or any
Restricted Subsidiary as shown on the Company's or
such Restricted Subsidiary's most recent balance
sheet or in the notes thereto that are assumed by
the transferee of any such assets shall be deemed
to be cash for the purpose of this paragraph. To
the extent that the Company or any of its
Restricted Subsidiaries receives securities or
other noncash property or assets as proceeds of an
Asset Sale, such securities or other noncash
proceeds will not be treated as Net Proceeds of an
Asset Sale unless and until the Company receives
cash or Cash Equivalents from a sale, repayment,
exchange or other return of capital on, such
securities or other noncash property and then only
to the extent of the cash received.
In the event of an Asset Sale involving PLD Assets
(other than Telecommunications Assets subject to a
Telecommunications Asset Agreement), the Company
will, after applying the net proceeds therefrom to
repay and permanently reduce other Existing
Indebtedness that by its terms requires such
repayment from such Asset Sale, be required to use
50% of the net proceeds of such Asset Sale to make
an offer to purchase Notes at 100% of their
accreted value, provided, however, that the
Company will not be required to make an offer to
purchase the Notes under this provision in an
amount less than $10 million; provided, further,
that to the extent that 50% of the net proceeds of
an Asset Sale of PLD Assets
22
do not exceed $10 million, such amount shall
constitute Excess Proceeds and once such Excess
Proceeds exceed $10 million, the Company will be
required to use such Excess Proceeds to make an
offer to purchase the Notes at 100% of their
accreted value.
The Company or a Restricted Subsidiary will be
permitted to apply the net proceeds from an Asset
Sale or the remaining proceeds from an Asset Sale
of PLD Assets following the offer to purchase
described above to (a) repay the Notes, any
Existing Indebtedness (or any Permitted
Refinancing Indebtedness thereof) or any PARI
PASSU Indebtedness if required by the terms
thereof or (b) reinvest in Assets of a Related
Business, provided that (i) in the case of PLD
Assets, the net proceeds remaining after the offer
to purchase described above, if any, must be
applied within 365 days of such Asset Sale and
(ii) in the case of an Asset Sale of any assets
other than PLD Assets, the net proceeds must be
applied within 2 years of such Asset Sale. To the
extent that the net proceeds from an Asset Sale
are not so applied within such periods, the
remaining net proceeds will constitute Excess
Proceeds. Once Excess Proceeds exceed $10 million,
the Company will be required to use such Excess
Proceeds to make an offer to purchase the Notes at
100% of their accreted value.
ASSET SALE will mean any sale, issuance,
conveyance, transfer, lease or other disposition,
directly or indirectly, in one or a series of
transactions, of (i) any Capital Stock of any
Subsidiary, (ii) all or substantially all of the
properties and assets of any division or line of
business of the Company or its Subsidiaries, or
(iii) any other properties and assets of the
Company or any Subsidiary other than in the
ordinary course of business, provided, however,
that the term "Asset Sale" shall not include any
sale or transfer of properties and assets (A) that
is by the Company to any Restricted Subsidiary or
by any Restricted Subsidiary to the Company or any
other Restricted Subsidiary, (B) that is of
obsolete equipment in the ordinary course of
business, (C) the Fair Market Value of which in
the aggregate does not exceed $10 million in any
transaction or series of related transactions, (D)
that is permitted under the "Limitations on
Restricted Payments" covenant above, (E) which
constitutes the
23
granting of any Permitted Lien or (F) that is
transferred in exchange for Related Assets.
LIMITATION ON SALE AND The Company will not, and will not permit any
LEASEBACK TRANSACTIONS Restricted Subsidiary to, directly or indirectly,
enter into any Sale-Leaseback Transaction with
respect to any property or assets unless:
(a) The consideration received at the time of the
Sale-Leaseback Transaction is at least equal to
the Fair Market Value of the property or asset;
(b) the sale or transfer of such property or
assets to be leased is treated as an Asset Sale
and complies with the "Limitation on Sale of
Assets" covenant;
(c) the Company or such Restricted Subsidiary
would be entitled under the "Limitation on
Indebtedness" covenant to incur any Indebtedness.
The foregoing restriction does not apply to any
Sale-Leaseback Transaction if:
(i) the lease is for a period, including renewal
rights, not in excess of three years;
(ii) the transaction is solely between the Company
and any Restricted Subsidiary or any Restricted
Subsidiary and any other Restricted Subsidiary;
and
(iii) the transaction is consummated within 180
days of the acquisition by the Company or its
Subsidiary of the property or entered into within
180 days after the purchase or substantial
completion of the construction of such property or
assets or 270 days in the event that the only
condition delaying such consummation is the
receipt of applicable regulatory approvals.
DIVIDEND AND OTHER PAYMENT The Company will not, and will not permit any of
RESTRICTIONS AFFECTING its Restricted Subsidiaries to, create or cause or
SUBSIDIARIES suffer to exist or become effective any
encumbrance or restriction on the ability of any
Subsidiary to (a) pay dividends or make any other
distribution to the Company or any of its
Restricted Subsidiaries (i) on its capital stock
or (ii) with
24
respect to any other interests or participation
in, or measured by, its profits, (b) pay any
Indebtedness owed to the Company or any of its
Restricted Subsidiaries (c) sell, lease or
transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions
under:
(i) Existing Indebtedness;
(ii) Applicable law;
(iii) agreements in effect at the time of the
acquisition of any Person by the Company or any of
its Restricted Subsidiaries, which agreements are
not entered into in connection with, as a result
of, or in anticipation of, such acquisition;
(iv) encumbrances or restrictions imposed pursuant
to contracts in connection with Permitted Liens;
(v) any encumbrances or restrictions imposed
pursuant to contracts for the sale of assets;
(vi) any encumbrance or restriction existing under
any agreement that extends, renews, refinances or
replaces the agreements containing the
encumbrances or restrictions in the foregoing
clauses, provided that such provisions are no less
favorable to the Company.
LIMITATIONS ON MERGER, The Company may not consolidate or merge with or
CONSOLIDATION OR SALE OF into or sell, assign, transfer, lease, convey or
ASSETS otherwise dispose of all or substantially all of
its assets unless:
(a) the Company is the surviving corporation, or
the entity surviving such consolidation or merger
is a corporation existing under the laws of the
United States or a state thereof;
(b) the surviving entity expressly assumes all the
obligations of the Company pursuant to a
supplemental indenture;
25
(c) except for a transaction with a Wholly Owned
Subsidiary, the entity formed by such transaction
could incur at least $1.00 of additional
Indebtedness under the covenant "Limitation on
Indebtedness" described above;
(d) the Company shall have delivered to the
Trustee, an Officers' Certificate and an opinion
of counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture
comply with the Indenture; and
(e) before and after giving effect to such
transaction, no Default or Event of Default shall
have occurred and be continuing.
