EXHIBIT 4.1
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UIH AUSTRALIA/PACIFIC, INC.,
as Issuer
and
FIRSTAR BANK OF MINNESOTA, N.A.
as Trustee
---------------------
INDENTURE
Dated as of September 23, 1997
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$45,000,000
14% Senior Discount Notes due 2006
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CROSS-REFERENCE TABLE
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TIA Section Indenture Section
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(S) 310(a)(1)............................................... 7.10
(a)(2)............................................... 7.10
(a)(3)............................................... N.A.
(a)(4)............................................... N.A.
(a)(5)............................................... 7.10
(b).................................................. 7.8; 7.10; 10.2
(c).................................................. N.A.
(S) 311(a).................................................. 7.11
(b).................................................. 7.11
(c).................................................. N.A.
(S) 312(a).................................................. 2.5
(c).................................................. 10.3
(S) 313(a).................................................. 7.6
(b)(1)............................................... 7.6
(b)(2)............................................... 7.6; 7.7
(c).................................................. 7.5; 7.6;10.2
(d).................................................. 7.6
(S) 314(a).................................................. 4.6; 4.7; 10.2
(b).................................................. N.A.
(c)(1)............................................... 10.4
(c)(2)............................................... 10.4
(c)(3)............................................... 10.4(c)
(d).................................................. N.A.
(e).................................................. 10.5
(f).................................................. N.A.
(S) 315(a).................................................. 7.1(b)
(b).................................................. 7.5; 10.2
(c).................................................. 7.1(a)
(d).................................................. 7.1(c)
(e).................................................. 6.11
(S) 316(a) (last sentence).................................. 2.9
(a)(1)(A)............................................ 6.5
(a)(1)(B)............................................ 6.4
(a)(2)............................................... N.A.
(b).................................................. 6.7; 9.4
(c).................................................. 9.4
(S) 317(a)(1)............................................... 6.8
(a)(2)............................................... 6.9
(b).................................................. 2.4
(S) 318(a).................................................. 10.1
(c).................................................. 10.1
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N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
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TABLE OF CONTENTS
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Section Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.....................1
SECTION 1.1 Definitions.................................................1
SECTION 1.2 Incorporation by Reference of Trust Indenture Act..........15
SECTION 1.3 Rules of Construction......................................15
ARTICLE II THE SECURITIES................................................16
SECTION 2.1 Form and Dating............................................16
SECTION 2.2 Execution and Authentication...............................16
SECTION 2.3 Registrar and Paying Agent.................................17
SECTION 2.4 Paying Agent To Hold Money in Trust........................17
SECTION 2.5 Securityholder Lists.......................................17
SECTION 2.6 Transfer and Exchange......................................18
SECTION 2.7 Replacement Securities.....................................18
SECTION 2.8 Outstanding Securities.....................................18
SECTION 2.9 Treasury Securities........................................18
SECTION 2.10 Temporary Securities.......................................19
SECTION 2.11 Cancellation...............................................19
SECTION 2.12 Defaulted Interest.........................................19
SECTION 2.13 CUSIP Number...............................................19
SECTION 2.14 Book-Entry Provisions for Global Securities................19
SECTION 2.15 Special Transfer Provisions................................20
SECTION 2.16 Designation................................................21
ARTICLE III REDEMPTION....................................................22
SECTION 3.1 Notices to Trustee.........................................22
SECTION 3.2 Selection of Securities To Be Redeemed.....................22
SECTION 3.3 Notice of Redemption.......................................22
SECTION 3.4 Effect of Notice of Redemption.............................23
SECTION 3.5 Deposit of Redemption Price................................23
SECTION 3.6 Securities Redeemed in Part................................23
ARTICLE IV COVENANTS.....................................................24
SECTION 4.1 Payment of Securities......................................24
SECTION 4.2 Maintenance of Office or Agency............................24
SECTION 4.3 Corporate Existence........................................24
SECTION 4.4 Payment of Taxes and Other Claims..........................24
SECTION 4.5 Maintenance of Properties; Books and Records;
Compliance with Law........................................25
SECTION 4.6 Compliance Certificates; Notice of Default.................25
SECTION 4.7 Reports....................................................26
SECTION 4.8 Limitation on Restricted Payments..........................26
SECTION 4.9 Limitation on Additional Indebtedness and
Preferred Stock of Restricted Subsidiaries.................28
SECTION 4.10 Business of the Company....................................28
SECTION 4.11 Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries.............28
SECTION 4.12 Limitation on Liens........................................29
SECTION 4.13 Disposition of Proceeds of Asset Sales.....................29
SECTION 4.14 Limitation on Transactions with Affiliates.................31
SECTION 4.15 Change of Control..........................................32
SECTION 4.16 Waiver of Stay; Extension of Usury Laws....................33
SECTION 4.17 Maintenance of Insurance...................................33
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SECTION 4.18 Limitation on Unrestricted Subsidiaries
and Unrestricted Affiliates................................33
SECTION 4.19 Limitation on Status as Investment Company.................34
SECTION 4.20 Internal Revenue Service Filing............................34
SECTION 4.21 Issuance of Contingent Warrants............................34
ARTICLE V SUCCESSOR CORPORATION.........................................35
SECTION 5.1 Limitation on Mergers, Consolidations or
Sales of Assets............................................35
SECTION 5.2 Successor Entity Substituted...............................36
ARTICLE VI DEFAULT AND REMEDIES..........................................36
SECTION 6.1 Events of Default..........................................36
SECTION 6.2 Acceleration...............................................37
SECTION 6.3 Other Remedies.............................................38
SECTION 6.5 Control by Majority........................................38
SECTION 6.6 Limitation on Suits........................................39
SECTION 6.7 Rights of Holders To Receive Payment.......................39
SECTION 6.8 Collection Suit by Trustee.................................39
SECTION 6.9 Trustee May File Proofs of Claim...........................39
SECTION 6.10 Priorities.................................................40
SECTION 6.11 Undertaking for Costs......................................40
SECTION 6.12 Rights and Remedies Cumulative.............................40
SECTION 6.13 Delay or Omission Not Waiver...............................40
ARTICLE VII TRUSTEE.......................................................40
SECTION 7.1 Duties of Trustee..........................................40
SECTION 7.2 Rights of Trustee..........................................41
SECTION 7.3 Individual Rights of Trustee...............................42
SECTION 7.4 Trustee's Disclaimer.......................................42
SECTION 7.5 Notice of Defaults.........................................42
SECTION 7.6 Reports by Trustee to Holders..............................42
SECTION 7.7 Compensation and Indemnity.................................42
SECTION 7.8 Replacement of Trustee.....................................43
SECTION 7.9 Successor Trustee By Merger, Etc...........................44
SECTION 7.10 Eligibility; Disqualification..............................44
SECTION 7.11 Preferential Collection of Claims Against Company..........44
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE............................44
SECTION 8.1 Termination of Obligations; Legal and
Covenant Defeasance........................................44
SECTION 8.2 Application of Trust Money.................................46
SECTION 8.3 Repayment to the Company...................................46
SECTION 8.4 Reinstatement..............................................46
SECTION 8.5 Acknowledgment of Discharge by Trustee.....................46
ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS...........................47
SECTION 9.1 Without Consent of Holders.................................47
SECTION 9.2 With Consent of Holders....................................47
SECTION 9.3 Compliance with Trust Indenture Act........................48
SECTION 9.4 Revocation and Effect of Consents..........................48
SECTION 9.5 Notation on or Exchange of Securities......................49
SECTION 9.6 Trustee To Sign Amendments, Etc............................49
ARTICLE X MISCELLANEOUS.................................................49
SECTION 10.1 Trust Indenture Act Controls...............................49
SECTION 10.2 Notices....................................................49
SECTION 10.3 Communications by Holders with Other Holders...............50
SECTION 10.4 Certificate and Opinion of Counsel as to
Conditions-Precedent.......................................50
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SECTION 10.5 Statements Required in Certificate and
Opinion of Counsel.........................................50
SECTION 10.6 Rules by Trustee, Paying Agent, Registrar..................51
SECTION 10.7 Legal Holidays.............................................51
SECTION 10.8 Governing Law..............................................51
SECTION 10.9 No Recourse Against Others.................................51
SECTION 10.10 Successors.................................................51
SECTION 10.11 Counterparts...............................................51
SECTION 10.12 Severability...............................................51
SECTION 10.13 Table of Contents, Headings, Etc...........................52
SECTION 10.14 No Adverse Interpretation of Other Agreements..............52
SECTION 10.15 Benefits of Indenture......................................52
SECTION 10.16 Independence of Covenants..................................52
EXHIBIT A-1.............................................................A-1(1)
EXHIBIT A-2.............................................................A-2(1)
EXHIBIT B..................................................................B-1
EXHIBIT C..................................................................C-1
EXHIBIT D..................................................................D-1
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of the Indenture.
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INDENTURE
INDENTURE dated as of September 23, 1997, between UIH AUSTRALIA/PACIFIC,
INC., a Colorado corporation, as Issuer (the "Company"), and FIRSTAR BANK OF
MINNESOTA, N.A., as Trustee (the "Trustee").
The parties hereto agree as follows for the benefit of each other and for
the equal and ratable benefit of the Holders:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.1 Definitions.
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"Accreted Value" means, as of any date of determination prior to May 15,
2001, the sum (rounded to the nearest whole dollar) of (a) $610.70 for each
$1,000 principal amount at maturity of Securities and (b) the portion of the
excess of the principal amount of Securities over $610.70 which shall have been
accreted thereon through such date, such amount to be so accreted on a daily
basis at the Interest Rate then in effect, compounded semi-annually on each May
15 and November 15 from the date of issuance of the Securities through the date
of determination. It is understood that in the event the Interest Rate
increases as provided in the proviso to the definition thereof, the principal
amount of the Securities will exceed $1,000 at some point prior to May 15, 2001,
and that the principal amount at maturity will exceed $1,000.
"Acquired Indebtedness" means Indebtedness of a person existing at the time
such person becomes a Restricted Subsidiary or assumed in connection with an
Asset Acquisition by such person and not incurred in connection with, or in
anticipation of, such person becoming a Restricted Subsidiary or such Asset
Acquisition.
"Affiliate" of any specified person means any other person which, directly
or indirectly, controls, is controlled by or is under direct or indirect common
control with, such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" has the meaning provided in Section 2.14.
"Annualized Pro Forma Consolidated Operating Cash Flow" means Consolidated
Operating Cash Flow for the latest fiscal quarter for which consolidated
financial statements of the Company are available multiplied by four. For
purposes of calculating "Consolidated Operating Cash Flow" for any fiscal
quarter for purposes of this definition, (i) any Subsidiary of the Company that
is a Restricted Subsidiary on the date of the transaction giving rise to the
need to calculate "Annualized Pro Forma Consolidated Operating Cash Flow" (the
"Transaction Date") shall be deemed to have been a Restricted Subsidiary at all
times during such fiscal quarter and (ii) any Subsidiary of the Company that is
not a Restricted Subsidiary on the Transaction Date shall be deemed not to have
been a Restricted Subsidiary at any time during such fiscal quarter. In
addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated Operating Cash Flow" shall be calculated after giving
effect on a pro forma basis for the applicable fiscal quarter to, without
duplication, any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of the Company's or one of the Restricted Subsidiaries'
(including any person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition) incurring, assuming or otherwise being liable for Acquired
Indebtedness) occurring during the period commencing on the first day of such
fiscal quarter to and including the Transaction Date (the "Reference Period"),
as if such Asset Sale or Asset Acquisition occurred on the first day of the
Reference Period.
"Asset Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Restricted Subsidiary in any other person, or any acquisition or purchase of
Capital Stock of any other person by the Company or any Restricted Subsidiary,
in either case pursuant to which such person shall become a Restricted
Subsidiary or shall be merged with or into the Company or any Restricted
Subsidiary, or (ii) any acquisition by the Company or any Restricted Subsidiary
of the assets of any person which constitute substantially all of an operating
unit or line of business of such person or which is otherwise outside of the
ordinary course of business.
"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease
(that has the effect of a disposition and is not for security purposes) or other
disposition (that is not for security purposes) to any person other than the
Company or a Restricted Subsidiary, in one transaction or a series of related
transactions, of (i) any Capital Stock of any Restricted Subsidiary (whether
through the sale of outstanding Capital Stock or the issuance of additional
Capital Stock), (ii) any transmission or broadcast license of the Company or any
Restricted Subsidiary pertaining to a Related Business (whether by the sale of
Capital Stock or otherwise), (iii) any assets of the Company or any Restricted
Subsidiary which constitute substantially all of an operating unit or line of
business of the Company and the Restricted Subsidiaries, (iv) any other property
or asset of the Company or any Restricted Subsidiary outside of the ordinary
course of business or (v) any direct or indirect interests of the Company in XYZ
Entertainment. For the purposes of this definition, the term "Asset Sale" shall
not include (i) any disposition of properties or assets of the Company or one or
more of the Restricted Subsidiaries that is governed under Article V hereof or
(ii) sales of property or equipment that have become worn out, obsolete or
damaged or otherwise unsuitable for use in connection with the business of the
Company or any Restricted Subsidiary, as the case may be. For purposes of
Section 4.13 hereof the term "Asset Sale" shall not include (i) any sale,
conveyance, transfer, lease or other disposition of any property or asset,
whether in one transaction or a series of related transactions, either (x)
involving assets with a Fair Market Value not in excess of $250,000 (or, to the
extent non-U.S. dollar denominated, the U.S. Dollar Equivalent thereof) or (y)
as part of a Capitalized Lease Obligation, or (ii) any sale and leaseback of an
asset within 180 days after the completion of construction or acquisition of
such asset; provided the lease constitutes a Capitalized Lease Obligation of the
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Company or any Restricted Subsidiary.
"Asset Sale Offer" has the meaning provided in Section 4.13.
"Asset Sale Offer Payment Date" has the meaning provided in Section 4.13.
"Australis" means Australis Media Limited.
"Australis Guarantee" means the guarantee by UIH AML of the obligations of
Australis Holdings Pty Limited under its bank facility pursuant to the Guarantee
Facility dated as of May 9, 1996, among Publishing and Broadcasting Limited,
Publishing and Broadcasting (Finance) Limited, Xxxxxxx Communications, Inc.,
Guinness Peat Group PLC, UIH AML and Toronto Dominion Australia Limited,
substantially as such Guarantee Facility is in effect on the Issue Date.
"Australis Warrants" means the options to purchase capital stock of
Australis issued to UIH AML by Australis in connection with the making of the
Australis Guarantee.
"Average Life to Stated Maturity" means, with respect to any Indebtedness
or Preferred Stock, as at any date of determination, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from such date
to the date or dates of each successive scheduled principal or other return of
capital (including, without limitation, any sinking fund requirements) of such
Indebtedness or Preferred Stock multiplied by (b) the amount of each such
principal or other payment by (ii) the sum of all such principal or other
payments.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar federal,
state or foreign law for the relief of debtors.
"Board" means the Board of Directors of the Company.
"Board of Directors" means with respect to any Person, the Board of
Directors of such Person or any committee of such Board of Directors authorized
to act for it hereunder.
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"Board Resolution" means with respect to any Person, a copy of a resolution
certified by the Secretary or an Assistant Secretary of such Person to have been
duly adopted by the Board of Directors of such Person and to be in full force
and effect on the date of such certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, a Sunday or any day on
which banking institutions in New York, New York are required or authorized by
law or other governmental action to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) (including share appreciation rights) of, such
Person's capital stock or shares, whether outstanding on the Issue Date or
issued after the Issue Date, and any and all rights, warrants or options
exchangeable for or convertible into such capital stock or shares. "Capital
Stock" shall include any convertible notes or debentures or similar instruments
constituting a part of a person's consolidated shareholders' equity in
accordance with U.S. GAAP.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) any
property (whether real, personal or mixed, immovable or movable) that is
required to be classified and accounted for as a finance lease under U.S. GAAP
and, for the purpose of this Indenture, the amount of such obligation at any
date shall be the capitalized amount thereof at such date, determined in
accordance with U.S. GAAP.
"Cash Equivalents" means (i) any evidence of Indebtedness with a maturity
of 365 days or less issued or directly and fully guaranteed or insured by the
Commonwealth of Australia or the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
Commonwealth of Australia or the United States of America, as the case may be,
is pledged in support thereof or such Indebtedness constitutes a general
obligation of it); (ii) deposits, certificates of deposit or acceptances with a
maturity of 365 days or less of any institution which is a bank authorized under
the Banking Xxx 0000 to carry on banking business in Australia or any financial
institution that is a member of the Federal Reserve System, in each case having
combined capital and surplus and undivided profits (or any similar capital
concept) of not less than $250,000,000 or, to the extent non-U.S. Dollar
denominated, the U.S. Dollar Equivalent thereof; (iii) commercial paper with a
maturity of 365 days or less issued by a corporation (other than an Affiliate of
the Company) incorporated or organized under the laws of the Commonwealth of
Australia or any jurisdiction thereof or the United States or any state thereof
or the District of Columbia and rated at least "A-1" by S&P or "P-1" by Xxxxx'x
or their respective Australian affiliates; and (iv) repurchase agreements and
reverse repurchase agreements relating to marketable direct obligations issued
or unconditionally guaranteed by the Commonwealth of Australia or the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the Australian Federal Government or the United States Government,
respectively, in each case maturing within one year from the date of
acquisition.
"Change of Control" is defined to mean the occurrence of any of the
following events: (a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than the Permitted Holders,
is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total Voting Stock of the
Company; or (b) the Company consolidates with, or merges with or into, another
person or sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any person, or any person consolidates
with, or merges with or into, the Company, in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company is converted
into or exchanged for cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Stock of the Company is converted
into or exchanged for (1) Voting Stock (other than Disqualified Stock) of the
surviving or transferee corporation and/or (2) cash, securities and other
property in an amount which could be paid by the Company as a Restricted Payment
under this Indenture and (ii) no "person" or "group" (excluding Permitted
Holders) owns more than 50% of the total Voting Stock of the Company; or (c)
during any consecutive two-year period, individuals who at the beginning of such
period constituted the Board of the Company (together with any new directors
whose election by the Board of the Company or whose nomination for election by
the stockholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason (other than by action of the Permitted Holders)
to constitute a majority of the Board of
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the Company then in office; provided that to the extent that one or more
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regulatory approvals are required for one or more of the events or circumstances
described above to become effective under applicable law, such events or
circumstances shall be deemed to have occurred at the time such approvals have
been obtained and become effective under applicable law.
"Change of Control Date" has the meaning provided in Section 4.15.
"Change of Control Offer" has the meaning provided in Section 4.15.
"Change of Control Payment" has the meaning provided in Section 4.15.
"Change of Control Payment Date" has the meaning provided in Section 4.15.
"Common Stock" means any Capital Stock other than Preferred Stock.
"Company" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and, thereafter,
means the successor.
"Consolidated Income Tax Expense" means, with respect to any period, the
provision for corporation, local, foreign and other income taxes of the Company
and the Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with U.S. GAAP.
"Consolidated Interest Expense" means, with respect to any period, without
duplication, the sum of (i) the interest expense of the Company and the
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with U.S. GAAP, including, without limitation, (a) any amortization
of debt discount, (b) the net cost under any Currency Agreements and Interest
Rate Protection Obligations (including any amortization of discounts), (c) the
interest portion of any deferred payment obligation, (d) all commissions,
discounts and other fees and charges owed with respect to letters of credit,
bills of exchange, promissory notes and bankers' acceptance financing and (e)
all accrued interest and (ii) all but the principal component of Capitalized
Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such
person during such period as determined on a consolidated basis in accordance
with U.S. GAAP.
"Consolidated Net Income" means, with respect to any period, the
consolidated net income of the Company and the Restricted Subsidiaries for such
period, adjusted, to the extent included in calculating such net income, by
excluding, without duplication, (i) all extraordinary gains or losses (on an
after-tax basis) of such person (net of fees and expenses relating to the
transaction giving rise thereto) for such period, (ii) except to the extent
dividended or otherwise distributed to the Company or any Restricted Subsidiary,
income of the Company and the Restricted Subsidiaries derived from or in respect
of all Investments in persons other than any Restricted Subsidiary, (iii) the
portion of net income (or loss) of such person allocable to minority interests
in unconsolidated persons for such period, except to the extent actually
received by the Company or any Restricted Subsidiary, (iv) net income (or loss)
of any other person combined with such person on a "pooling of interests" basis
attributable to any period prior to the date of combination, (v) any gain or
loss, net of taxes, realized by such person upon the termination of any employee
pension benefit plan during such period, (vi) gains or losses in respect of any
Asset Sales (on an after-tax basis and net of fees and expenses relating to the
transaction giving rise thereto) during such period and (vii) the net income of
any Restricted Subsidiary for such period to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary to the Company
or any Restricted Subsidiary of that income is not at the time permitted,
directly or indirectly, by operation of the terms of its charter or constituent
documents or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulations applicable to that Restricted Subsidiary.
"Consolidated Operating Cash Flow" means, with respect to any period, the
Consolidated Net Income of the Company and the Restricted Subsidiaries for such
period (a) increased by (to the extent included in computing such Consolidated
Net Income) the sum of (i) the Consolidated Income Tax Expense of the Company
and the Restricted Subsidiaries for such period (other than taxes attributable
to extraordinary, unusual or non-recurring gains or losses); (ii) Consolidated
Interest Expense for such period; (iii) depreciation of the Company and the
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with U.S. GAAP; (iv) amortization of
4
the Company and the Restricted Subsidiaries for such period, including, without
limitation and without duplication, amortization of capitalized debt issuance
costs for such period, all determined on a consolidated basis in accordance with
U.S. GAAP; and (v) any other non-cash charges that were deducted in computing
Consolidated Net Income (excluding any non-cash charge which requires an accrual
or reserve for cash charges for any future period) of the Company and the
Restricted Subsidiaries for such period in accordance with U.S. GAAP and (b)
decreased by any non-cash gains that were included in computing Consolidated Net
Income; provided that the amounts described in clause (a) above with respect to
any Restricted Subsidiary shall be added to, and the amounts described in clause
(b) above with respect to any Restricted Subsidiary shall be deducted from such
Consolidated Net Income in computing Operating Consolidated Cash Flow only to
the extent (and in the same proportion) that the net income of such Restricted
Subsidiary was included in calculating the Consolidated Net Income of the
Company and the Restricted Subsidiaries.
"consolidation" means, with respect to the Company, the consolidation of
the accounts of the Restricted Subsidiaries with those of the Company, all in
accordance with U.S. GAAP; provided that "consolidation" will not include
consolidation of the accounts of any Unrestricted Subsidiary or Unrestricted
Affiliate with the accounts of the Company. The term "consolidated" has a
correlative meaning to the foregoing.
"Cumulative Consolidated Operating Cash Flow" means, as at any date of
determination, the positive cumulative Consolidated Operating Cash Flow realized
during the period commencing on the Issue Date and ending on the last day of the
most recent fiscal quarter immediately preceding the date of determination for
which consolidated financial information of the Company is available or, if such
cumulative Consolidated Operating Cash Flow for such period is negative, the
negative amount by which cumulative Consolidated Operating Cash Flow is less
than zero.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any of its Restricted Subsidiaries against fluctuations in currency
values.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official charged with maintaining possession or control over property
for one or more creditors.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Default Amount" means (i) as of any date prior to May 15, 2001, the
Accreted Value of the Securities (plus any applicable premium thereon) as of
such date and (ii) as of any date on or after May 15, 2001, 100% of the
principal amount at maturity of the Securities (plus any applicable premium
thereon).
"Depository" means The Depository Trust Company, its nominees and
successors.
"Designation" has the meaning provided in Section 4.18.
"Disinterested Director" means, with respect to any transaction or series
of transactions, a member of the Board of the Company other than a director who
has any material direct or indirect financial interest in or with respect to
such transaction or series of transactions.
"Disqualified 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, except to the extent exchangeable
at the option of such person subject to the terms of any debt instrument to
which such person is a party), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is exchangeable for Indebtedness, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the final maturity date of the
Securities.
"Equity Sale" means the sale or sales by the Company subsequent to the
Issue Date of its Capital Stock (other than Disqualified Stock) for aggregate
gross cash proceeds of at least $70 million.
"Event of Default" has the meaning provided in Section 6.1.
5
"Excess Proceeds" has the meaning provided in Section 4.13.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Company's 14% Series B Senior Discount Notes due
2006 (the terms of which are identical to the Series A Securities except that
the Exchange Notes shall be registered under the Securities Act, and shall not
contain the restrictive legend on the face of the form of Series A Securities)
issued pursuant to this Indenture.
"Exchange Offer" means the exchange offer to be filed with the SEC relating
to the Exchange Notes pursuant to the Registration Rights Agreement.
"Exercise Price" means the number of dollars equal to (x) 4,500,000 divided
by (x) the number of Warrants of the Company or Warrants or Parent, as the case
may be, issued pursuant to Section 4.21 hereof.
"Existing Business" means, with respect to any Restricted Subsidiary, (i)
the MMDS, cable television, satellite direct to home or telecommunications
business, as the case may be, of such Restricted Subsidiary existing on the
Issue Date and (ii) any MMDS, cable television, satellite direct to home or
telecommunications business constituting a Replacement Asset received by a
Restricted Subsidiary in consideration for a MMDS, cable television, satellite
direct to home or telecommunications business of such Restricted Subsidiary
constituting a portion of the Existing Business of such Restricted Subsidiary.
"Fair Market Value" means, with respect to any asset or property, the price
that could be negotiated in an arms-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under pressure
or compulsion to complete the transaction. Unless otherwise specified in this
Indenture, Fair Market Value shall be determined by the Board acting in good
faith and shall be evidenced by a Board Resolution of the Company delivered to
the Trustee; provided that, for purposes of Section 4.14 and for purposes of the
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third paragraph of Section 4.13, in the case of any transaction or series of
related transactions which involve aggregate consideration of $10,000,000 (or,
to the extent non-U.S. dollar denominated, the U.S. Dollar Equivalent thereof)
or more, Fair Market Value shall also be determined by an Independent Financial
Advisor.
"Final Maturity Date" means May 15, 2006.
"Global Security" has the meaning provided in Section 2.2.
"Guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Holder" or "Securityholder" means a Person in whose name a Security is
registered. The Holder of a Security will be treated as the owner of such
Security for all purposes.
"Indebtedness" means, with respect to any person, without duplication, (i)
any liability, contingent or otherwise, of such person (A) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
person or only to a portion thereof), whether as a cash advance, xxxx, overdraft
or money market facility loan or (B) evidenced by a note, debenture or similar
instrument or letters of credit (including a purchase money obligation) or by
any book-entry mechanism or (C) for the payment of money relating to a
Capitalized Lease Obligation or other obligation relating to the deferred
purchase price of property, to the extent, in each of clauses (A), (B) and (C),
such liability would appear on a balance sheet of such person prepared in
accordance with U.S. GAAP or (D) in respect of an Interest Rate Protection
Obligation or any foreign exchange contract, currency swap agreement or other
similar agreement; (ii) any liability of others of the kind described in the
preceding clause (i) which the person has guaranteed or which is otherwise its
legal liability; (iii) any obligation secured by a Lien (other than a Lien on
Indebtedness or Capital Stock of an Unrestricted Subsidiary or Unrestricted
Affiliate which represents the sole recourse of the secured party for any
default
6
in respect of the secured obligation) to which the property or assets of such
person are subject, whether or not the obligations secured thereby shall have
been assumed by or shall otherwise be such person's legal liability; (iv) any
and all deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any liability of the kind described in any of
the preceding clauses (i), (ii) or (iii); and (v) the maximum repurchase or
redemption price of any Disqualified Stock. In no event shall "Indebtedness"
include trade payables incurred in the ordinary course of business or
convertible debentures or similar instruments of any Restricted Subsidiary of
the Company constituting Capital Stock (other than Disqualified Stock);
provided, however, that such convertible debentures or similar instruments, (x)
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provide that payments thereon are subordinated in right of payment to all
liabilities of such Restricted Subsidiary, (y) provide that upon a winding-up or
liquidation of such Restricted Subsidiary such convertible debentures or similar
instruments shall only entitle the holder thereof to a pro rata portion of the
--- ----
distributions available to holders of Common Stock of such Restricted Subsidiary
upon such liquidation or winding-up and (z) provide that interest thereon shall
only be paid if a distribution is made to holders of the Common Stock of such
Restricted Subsidiary and such interest shall be in an amount that the holder of
such convertible debentures or similar instruments would have received if all of
the convertible debentures or similar instruments of such Restricted Subsidiary
had been converted into shares of Common Stock of such Restricted Subsidiary in
accordance with the terms thereof. For purposes of Section 4.9 in determining
the principal amount of any Indebtedness (1) to be incurred by the Company or a
Restricted Subsidiary or which is outstanding at any date, (x) the principal
amount of any Indebtedness which provides that an amount less than the principal
amount at maturity thereof shall be due upon any declaration of acceleration
thereof shall be the accreted value thereof at the date of determination and (y)
effect shall be given to the impact of any Currency Agreements with respect to
such Indebtedness and (2) outstanding at any time under any Currency Agreement
of the Company or any Restricted Subsidiary shall be the net payment obligation
under such Currency Agreement at such time.
"Indenture" means this Indenture as amended or supplemented from time to
time pursuant to the terms hereof.
"Independent Financial Advisor" means a United States investment or
merchant banking firm or public accounting firm of national standing in the
United States (i) which does not, and whose directors and executive officers and
Affiliates do not, have an investment in the Company or any of its Affiliates
and (ii) which, in the judgment of the Board of the Company is otherwise
independent with respect to the Company and its Affiliates and qualified to
perform the task for which it is to be engaged. A trustee or nominee for the
true parties in interest shall not be excluded from the definition of
"Independent Financial Advisor" solely as a result of such trustee or nominee
status.
"Initial Purchaser" means Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest," when used with respect to any Security, means (x) the amount of
all interest accruing on such Security, including all interest accruing
subsequent to the occurrence of any events specified in Sections 6.1(h) and (i)
or which would have accrued but for any such event plus (y) from and after any
date on which Liquidated Damages become payable pursuant to the Registration
Rights Agreements, such Liquidated Damages.
"Interest Payment Date," when used with respect to any Security, means the
stated maturity of an installment of interest specified in such Security.
"Interest Rate" means, at any time, 14.00% per annum; provided, that if an
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Equity Sale has not been consummated on or prior to May 15, 1997, then from (and
including) such date through (but excluding) the date of an Equity Sale, the
"Interest Rate" shall be increased by 0.75% per annum.
"Interest Rate Protection Obligations" means the obligations of any person
pursuant to any arrangement with any other person whereby, directly or
indirectly, such person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such person
calculated by applying a fixed or a floating rate of interest on the same
notional amount
7
and shall include without limitation, interest rate swaps, caps, floors,
collars, forward interest rate agreements and similar agreements.
"Investment" means, with respect to any person, any advance, loan, account
receivable (other than an account receivable arising in the ordinary course of
business), or other extension of credit (including, without limitation, by means
of any guarantee) or any capital contribution to (by means of transfers of
property to others, payments for property or services for the account or use of
others, or otherwise), or any purchase of any shares, stocks, bonds, notes,
debentures or other securities of, any other person. In addition, any foreign
exchange contract, currency-swap agreement or other similar agreement made or
entered into by any person shall constitute an Investment by such person.
"Issue Date" means the date on which the Series C Securities are originally
issued.
"Legal Holiday" means any day other than a Business Day.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim, or preference
or priority or other encumbrance upon or with respect to any property of any
kind. A person shall be deemed to own subject to a Lien any property which
such person has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement.
"Liquidated Damages" has the meaning assigned to such term pursuant to the
Registration Rights Agreement.
"Maturity Date" means, when used with respect to any Security, the date
specified in such Security as the fixed date on which the final installment of
principal of such Security is due and payable (in the absence of any
acceleration thereof pursuant to Section 6.2 or any Asset Sale Offer or Change
of Control Offer).
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of legal counsel and investment bankers) related to
such Asset Sale, (ii) provisions for all Taxes payable as a result of such Asset
Sale, (iii) amounts required to be paid to any person (other than the Company or
any Restricted Subsidiary) owning a beneficial interest in or having a Lien on
the assets subject to the Asset Sale, (iv) other amounts required to be treated
as Net Cash Proceeds pursuant to Section 4.13 and (v) appropriate amounts to be
provided by the Company or any Restricted Subsidiary, as the case may be, as a
reserve required in accordance with U.S. GAAP against any liabilities associated
with such Asset Sale and retained by the Company or any Restricted Subsidiary,
as the case may be, after such Asset Sale, including, without limitation,
pension, superannuation and other post-employment benefit liabilities,
liabilities under any indemnification obligations associated with such Asset
Sale, all as reflected in an Officers' Certificate of the Company delivered to
the Trustee.
"Offering Memorandum" means the Offering Memorandum dated September 16,
1997 pursuant to which the Securities were offered, and any supplement thereto.
"Officer" means the Chairman, the President, any Vice President, the Chief
Financial Officer, the Chief Executive Officer, the Chief Operating Officer, the
Treasurer, the Secretary or the Controller of the Company.
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee, which may include counsel to the Company.
"Pari Passu Indebtedness" means any Indebtedness of the Company which ranks
pari passu in right of payment with the Securities.
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"Paying Agent" has the meaning provided in Section 2.3.
8
"Permitted Holders" means (i) any of United International Holdings, Inc.,
Apollo Cable Partners, L.P., Apollo Advisors, L.P., Xxxxxx X. Xxxxxxx, Xxxxxxxx
X. XxXxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxxx Xxxxx, Xx., X. Xxxxx Xx. Family
Partnership-I (so long as it is controlled by Xxxxxxxx Xxxxx, Xx.), Xxxxxx X.
Xxxxxxxxx, Xxxxxxx X. Xxxxxxxxx, Xxxxxxxxx Investments, Ltd. (so long as it is
controlled by Xxxxxx X. or Xxxxxxx X. Xxxxxxxxx), Xxxxxx Xxxxxxxx, Xxxxxx
Xxxxxxxx, Xxxxxxxx Investments, Ltd. (so long as it is controlled by Xxxxxx or
Xxxxxx Xxxxxxxx), Xxxx X. Xxxxxxxxx, X. Xxxxxxxxx Holdings, Co. (so long as it
is controlled by Xxxx X. Xxxxxxxxx), Xxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxxxx
and (ii) any Affiliate of the foregoing.
"Permitted Indebtedness and Preferred Stock" means the Indebtedness set
forth in the following clauses (each of which shall be given independent
effect):
(a) Indebtedness under the Securities and this Indenture;
(b) Indebtedness of the Company and/or of any Restricted Subsidiary
outstanding on the Issue Date;
(c) Indebtedness of any Restricted Subsidiary to the extent the
proceeds of such Indebtedness are utilized to finance the construction of the
networks for the Existing Business of such Restricted Subsidiary (including the
purchase of equipment for use in and the installation and construction costs
related to the construction of such networks), in the licensed service areas of
such Restricted Subsidiary existing on the Issue Date or to support the
operations or working capital requirements related to any such Existing
Business; provided that the aggregate principal amount of Indebtedness incurred
after the May 14, 1996 pursuant to this clause (c) and clause (d) below shall
not exceed the sum of (x) $85,000,000 plus (y) 200% of the sum of (A) cash
proceeds of capital contributions to the Company after the Issue Date invested
in such Existing Business and (B) cash proceeds of the issuance of Capital Stock
(other than Disqualified Capital Stock) of Company after the Issue Date invested
in such Existing Business;
(d) Indebtedness of the Company to the extent the proceeds of such
Indebtedness are utilized to finance the construction of the networks for the
Existing Business of a Restricted Subsidiary (including the purchase of
equipment for use in and the installation and construction costs related to the
construction of such networks) in the licensed service areas of such Restricted
Subsidiary existing on the Issue Date or to support the operations or working
capital requirements related to any such Existing Business; provided, however,
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that any such Indebtedness (i) shall not provide for any required payment of
principal prior to the Final Maturity Date, (ii) shall not provide for any
required payment of interest prior to May 15, 2001 and (iii) shall not be
guaranteed by any Restricted Subsidiary; provided that the aggregate principal
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amount of Indebtedness incurred after the May 14, 1996 pursuant to this clause
(d) and clause (c) above shall not exceed the sum of (x) $85,000,000 plus (y)
200% of the sum of (A) cash proceeds of capital contributions to the Company
after the Issue Date invested in such Existing Business and (B) cash proceeds of
the issuance of Capital Stock (other than Disqualified Capital Stock) of Company
after the Issue Date invested in such Existing Business;
(e) Indebtedness of the Company the proceeds of which are utilized to
finance an Asset Acquisition of a Related Business and Indebtedness of the
Restricted Subsidiary acquired in such Asset Acquisition or which acquired such
Related Business pursuant to such Asset Acquisition the proceeds of which are
utilized to finance the construction of the networks for the Related Business
acquired in such Asset Acquisition(including the purchase of equipment for use
in and the installation and construction costs related to the construction of
such networks) in the licensed service areas of such Related Business or to
support the working capital requirements relating to any such Related Business;
provided, however, that in no event will the aggregate principal amount of
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Indebtedness incurred by the Company or any Restricted Subsidiary with respect
to any Asset Acquisition of a Related Business exceed 125% of the sum of (x)
cash proceeds of capital contributions to the Company invested in such Related
Business and (y) cash proceeds of issuances of Capital stock (other than
Disqualified Capital Stock) of the Company invested in such Related Business.
(f) (i) Indebtedness or Preferred Stock of any Restricted Subsidiary
owed or issued to and held by the Company or a Restricted Subsidiary and (ii)
Indebtedness of the Company owed to and held by any Restricted
9
Subsidiary; provided that a new incurrence of Indebtedness or issuance of
--------
Preferred Stock shall be deemed to have occurred upon (x) any sale or other
disposition of any Indebtedness of the Company or a Restricted Subsidiary
referred to in this clause (f) to any person other than the Company or a
Restricted Subsidiary, (y) any sale or other disposition of Capital Stock of a
Restricted Subsidiary, or Designation of a Restricted Subsidiary as an
Unrestricted Subsidiary or Unrestricted Affiliate, which holds Indebtedness of
the Company or Indebtedness or Preferred Stock of another Restricted Subsidiary
such that such Restricted Subsidiary, in any such case, ceases to be a
Restricted Subsidiary or (z) any Restricted Affiliate which holds Indebtedness
of the Company or Indebtedness or Preferred Stock of another Restricted
Subsidiary ceases, for any reason, to constitute a Restricted Affiliate;
(g) Interest Rate Protection Obligations of the Company and/or any
Restricted Subsidiary relating to (i) Indebtedness of the Company or any
Restricted Subsidiary (which Indebtedness (x) bears interest at fluctuating
interest rates and (y) is otherwise permitted to be incurred under Section 4.9)
and/or (ii) Indebtedness for which a lender has provided a commitment in an
amount reasonably anticipated to be incurred by the Company or a Restricted
Subsidiary in the following 90 days after such Interest Rate Protection
Obligation has been incurred, but only to the extent that the notional principal
amount of such Interest Rate Protection Obligations does not exceed the
principal amount of the Indebtedness (and/or Indebtedness subject to
commitments) to which such Interest Rate Protection Obligations relate; provided
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in no event shall any Restricted Subsidiary incur Indebtedness under an Interest
Rate Protection Obligation under this clause (g) relating to Indebtedness of the
Company;
(h) Indebtedness of the Company and/or any Restricted Subsidiary under
Currency Agreements relating to (i) Indebtedness of the Company or a Restricted
Subsidiary and/or (ii) obligations to purchase or sell assets, properties or
services or license programming rights, in each case, incurred in the ordinary
course of business of the Company or any Restricted Subsidiary; provided that
--------
such Currency Agreements do not increase the Indebtedness or other obligations
of the Company and the Restricted Subsidiaries outstanding other than as a
result of fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder; provided, further, in no event
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shall any Restricted Subsidiary incur Indebtedness under any Currency Agreement
under this clause (h) relating to Indebtedness or obligations of the Company;
(i) Indebtedness of the Company and/or any Restricted Subsidiary in
respect of performance bonds of the Company or any Restricted Subsidiary or
surety bonds provided by the Company or any Restricted Subsidiary incurred in
the ordinary course of business in connection with the construction or operation
of a Related Business (other than with respect to the production or acquisition
of programming);
(j) issuances of Preferred Stock or Indebtedness by a Restricted
Subsidiary (which Indebtedness constitutes Capital Stock of such Restricted
Subsidiary) to the holders (or, other than in the case of the Company or any
Restricted Subsidiary that is a holder, the Affiliates) of the common equity of
such Restricted Subsidiary (determined on an economic basis) on a basis that is
substantially proportionate to their common equity interests to the equivalent
thereof (disregarding for this purpose any disproportionately greater interest
issued to the Company or any Restricted Subsidiary); provided, however, that
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such Indebtedness, (x) provides that payments thereon are subordinated in right
of payment to all liabilities of such Restricted Subsidiary, (y) provides that
upon a winding up or liquidation of such Restricted Subsidiary such
Indebtedness shall only entitle the holder thereof to a pro rata portion of the
distributions available to holders of Common Stock of such Restricted Subsidiary
upon such liquidation or winding-up and (z) provides that interest thereon shall
only be paid if a distribution is made to holders of the Common Stock of such
Restricted Subsidiary and such interest shall be in an amount that the holder of
such Indebtedness would have received if all of the Indebtedness of such
Restricted Subsidiary issued pursuant to this clause (j) had been converted into
shares of Common Stock of such Restricted Subsidiary in accordance with the
terms thereof;
(k) Indebtedness of the Company and/or any Restricted Subsidiary to
the extent it represents a replacement, renewal, refinancing or extension of
outstanding Indebtedness of the Company or any Restricted Subsidiary incurred
pursuant to the proviso of Section 4.9(a) or clause (a), (b) (other than
Indebtedness which is to be repaid from the net proceeds from the sale of the
Securities as described under "Use of Proceeds" in the Offering Memorandum) or
(c), (d) or (e) of this definition; provided that (i) Indebtedness of the
--------
Company may not be replaced, renewed, refinanced or extended under this clause
(k) with Indebtedness of any Restricted Subsidiary and Indebtedness of a
Restricted Subsidiary may not be replaced, renewed, refinanced or extended under
this clause (k) with Indebtedness of any other Restricted Subsidiary and (ii)
any such replacement, renewal, refinancing or extension (x) shall not, in the
case of
10
Indebtedness of the Company, provide for any payments of principal prior to the
Final Maturity Date and (y) shall not exceed the sum of the principal amount
(or, if such Indebtedness provides for a lesser amount to be due and payable
upon a declaration of acceleration thereof, an amount no greater than such
lesser amount) of the Indebtedness being replaced, renewed, refinanced or
extended plus the amount of accrued interest thereon and the amount of any
reasonably determined prepayment premium necessary to accomplish such
replacement, renewal, refinancing or extension and such reasonable fees and
expenses incurred in connection therewith; and
(l) Indebtedness of the Company and the Restricted Subsidiaries in
addition to that described in clauses (a) through (k) above so long as the
aggregate principal amount of all such Indebtedness incurred pursuant to this
clause (l) does not exceed $25,000,000 at any time outstanding.
"Permitted Investments" means (a) Cash Equivalents; (b) Investments in
prepaid expenses, negotiable instruments held for collection and lease, utility
and workers' compensation, performance and other similar deposits; (c) Interest
Rate Protection Obligations and Currency Agreements; (d) bonds, notes,
debentures or other securities received as a result of Asset Sales permitted
under Section 4.13; (e) any Investment in another person in exchange for Capital
Stock (other than Disqualified Stock) of the Company; (f) loans and advances to
employees of the Company or any of the Restricted Subsidiaries in the ordinary
course of business in an aggregate amount not to exceed $1,000,000 (or, to the
extent non-U.S. dollar denominated, the U.S. Dollar Equivalent thereof) at any
time outstanding; (g) any Investment in Capital Stock or obligations of any
person made in settlement of claims by the Company or any Restricted Subsidiary
against such person; and (h) any investments in (i) the Australis Warrants or
any securities of Australis received by UIH AML or the Company upon exercise of
the Australis Warrants for aggregate consideration not exceeding the aggregate
exercise price of the Australis Warrants as in effect on the Issue Date, and
(ii) securities of Australis received by UIH AML upon the refinancing or
conversion of the Australis Guarantee in accordance with the terms thereof.
"Permitted Liens" means (a) Liens on assets of a Restricted Subsidiary
securing Indebtedness of such Restricted Subsidiary, which Indebtedness is
incurred pursuant to clause (c), (e), (k) or (l) of the definition of "Permitted
Indebtedness and Preferred Stock"; (b) Liens in favor of the Company or a
Restricted Subsidiary; (c) Liens on property of a person existing at the time
such person is merged into or consolidated with the Company or any Restricted
Subsidiary; provided that such Liens were in existence prior to the
--------
contemplation by the Company of such merger or consolidation and do not extend
to any assets other than those of the person merged into or consolidated with
the Company; (d) Liens on property existing at the time of acquisition thereof
by the Company or any Restricted Subsidiary provided that such Liens were in
--------
existence prior to the contemplation by the Company of such acquisition; (e)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (f) Liens existing on the Issue Date; (g) Liens for
taxes, assessments or governmental charges or claims that are not yet delinquent
or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided that any reserve or other
--------
appropriate provision as shall be required in conformity with U.S. GAAP shall
have been made therefor; and (h) Liens incurred in the ordinary course of
business of the Company or any Restricted Subsidiary with respect to obligations
that do not exceed $2,000,000 at any one time outstanding and that (A) are not
incurred in connection with the borrowing of money or the obtaining of advances
of credit (other than trade credit in the ordinary course of business) and (B)
do not in the aggregate materially detract from the value of the property or
materially impair the use thereof in the operation of business by the Company or
such Restricted Subsidiary.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity, including
any predecessor of any such entity.
"Physical Security" has the meaning provided in Section 2.2.
"Preferred Stock" means, with respect to any person, any and all shares,
interests, participations or other equivalents (however designated) of such
person's preferred or preference stock or shares whether now outstanding, or
issued after the Issue Date.
"Private Placement Legend" means the first paragraph of the legend
initially set forth on the Securities in the form set forth on Exhibit A-1.
11
"Pro Rata Share" means a fraction, (i) the numerator of which is the
Accreted Value of Securities outstanding on the applicable purchase date and
(ii) the denominator of which is the sum of (x) the aggregate Accreted Value or
of Securities outstanding on such date and (y) if there is Pari Passu
Indebtedness which require that Net Cash Proceeds be used to offer to purchase
such Pari Passu Indebtedness, the outstanding principal amount of such Pari
Passu Indebtedness on such date.
"Public Equity Offering" means an underwritten public offering of Capital
Stock (other than Disqualified Capital Stock) of the Company (or any person of
which the Company is a direct subsidiary) which has been registered under the
Securities Act.
"Purchase Agreement" means the Purchase Agreement dated as of September 16,
1997 by and among the Company and the Initial Purchaser.
"Purchase Money Financing" means Indebtedness of the Company or any
Restricted Subsidiary incurred to finance the purchase (other than pursuant to
an Asset Acquisition) of any assets by Company (or incurred within 60 days after
such purchase and secured by the assets so purchased) or any Restricted
Subsidiary that will be used in a Related Business to the extent the purchase
cost for such assets is or should be included in "additions to property, plant
and equipment" in accordance with U.S. GAAP.
"Qualified Institutional Buyer" or "QIB" shall have the meaning specified
in Rule 144A under the Securities Act.
"Redemption Date" means, with respect to any Security, the Maturity Date of
such Security or the date on which such Security is to be redeemed by the
Company pursuant to the terms of the Securities.
"Registered Exchange Offer" means the offer to exchange the Exchange Notes
for all of the outstanding Series A Securities in accordance with the
Registration Rights Agreement.
"Registrar" has the meaning provided in Section 2.3.
"Registration Rights Agreement" means that certain Registration Rights
Agreement dated the Issue Date between the Company and the Initial Purchaser.
"Regulation S" means Regulation S under the Securities Act.
"Related Business" means any business in which the Company or its
Restricted Subsidiaries are engaged, directly or indirectly, (i) that consists
primarily of, or is related to, operating, acquiring, developing and
constructing multi-channel television systems, programming services, wire-based
or "wireless" telephony services and related services, (ii) that uses existing
or future technology for the transmission and delivery of programming, voice or
other data or (iii) that supports or is incidental to any business listed in
clause (i) or (ii).
"Replacement Asset" has the meaning provided in Section 4.13.
"Restricted Affiliate" means, with respect to the Company, any other person
(i) of which at least 40% of the outstanding Voting Stock shall at the time be
owned, directly or indirectly, by the Company, and (ii) which has been
designated in a Board Resolution as a Restricted Affiliate based on a
determination by the Board that the Company has, directly or indirectly, the
requisite control over such other person to prevent it from taking any action at
any time in contravention of any of the provisions of this Indenture that are
applicable to Restricted Subsidiaries. The Company will be required to deliver
an Officers' Certificate to the Trustee, including a copy of the Board
Resolution, upon designating any person as a Restricted Affiliate.
"Restricted Payment" means any of the following: (i) the declaration or
payment of any dividend or any other distribution on Capital Stock of the
Company or any payment made to the direct or indirect holders (in their
capacities as such) of Capital Stock of the Company (other than dividends or
distributions payable solely in Capital Stock (other than
12
Disqualified Stock) of the Company or in options, warrants or other rights to
purchase Capital Stock (other than Disqualified Stock) of the Company); (ii) the
purchase, redemption or other acquisition or retirement for value of any Capital
Stock of the Company (other than any such Capital Stock owned by the Company or
a Restricted Subsidiary); (iii) the making of any principal payment on, or the
purchase, redemption, defeasance or other acquisition or retirement for value,
prior to any scheduled maturity, scheduled repayment or scheduled sinking fund
payment, of any Subordinated Indebtedness (other than any Subordinated
Indebtedness held by a Restricted Subsidiary); or (iv) the making of any
Investment (other than a Permitted Investment) in any person (other than an
Investment by a Restricted Subsidiary in the Company or an Investment by the
Company or a Restricted Subsidiary in either (x) a Restricted Subsidiary other
than Saturn or United Wireless or (y) a person that becomes a Restricted
Subsidiary as a result of such Investment).
"Restricted Security" has the meaning set forth in Rule 144(a)(3) under the
Securities Act; provided that the Trustee shall be entitled to request and
--------
conclusively rely upon an Opinion of Counsel with respect to whether any
Security is a Restricted Security.
"Restricted Subsidiary" means (i) any Subsidiary of the Company that has
not been designated by the Board of the Company, by a Board Resolution delivered
to the Trustee, as an Unrestricted Subsidiary pursuant to and in compliance with
Section 4.18, and (ii) any Restricted Affiliate.
"Revocation" has the meaning set forth under Section 4.18.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Series C Securities and the Exchange Notes, as
amended or supplemented from time to time in accordance with the terms hereof
that are issued pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Bank Financing" means (i) any one or more agreements evidencing one
or more senior credit facilities providing for (A) the issuance of letters of
credit on behalf of the Company and/or any Restricted Subsidiary, (B) term loans
(including term loans provided by way of bankers' acceptances, bills of exchange
or endorsements) to the Company and/or any Restricted Subsidiary, (C) revolving
loans to the Company and/or any Restricted Subsidiary, (D) Currency Agreements
and/or (E) Interest Rate Protection Obligations and (ii) any agreement
evidencing the refinancing, modification, replacement, renewal, restatement,
deferral, extension, substitution, supplement or reissuance thereof.
"Series C Securities" means the Company's 14% Series C Senior Discount
Notes due 2006, issued pursuant to this Indenture, as amended or supplemented
from time to time pursuant to the terms of this Indenture.
"Specified Indebtedness" means any Indebtedness of any Restricted
Subsidiary which is not expressly subordinated to any other Indebtedness of such
Restricted Subsidiary.
"Strategic Equity Investor" means any company which is, or a controlled
Affiliate of any company which is, engaged principally in a cable or
telecommunications business; provided, however, that Strategic Equity Investor
-------- -------
shall not include (x) any Subsidiary of the Company, (y) any Permitted Holder or
(z) any Person that is an Affiliate of the Company.
"Subordinated Indebtedness" means any Indebtedness of the Company which is
expressly subordinated in right of payment to the Securities.
"Subsidiary" means, with respect to any person, (i) any corporation of
which the outstanding Voting Stock having at least a majority of the votes
entitled to be cast in the election of directors shall at the time be owned,
directly or indirectly, by such person, or (ii) any other person of which at
least a majority of Voting Stock or Common Stock is at the time, directly or
indirectly, owned by such person.
13
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-
77bbbb) as in effect on the date of this Indenture; provided, however, that in
--------- --------
the event the Trust Indenture Act of 1939 is amended after such date, "TIA"
means, to the extent required by such amendment, the Trust Indenture Act of 1939
as so amended.
"Total Consolidated Indebtedness and Subsidiary Preferred Stock" means, at
any date of determination, an amount equal to the aggregate principal amount of
(i) all Indebtedness of the Company and the Restricted Subsidiaries outstanding
as of the date of determination and (ii) the aggregate liquidation preference of
all Preferred Stock of Restricted Subsidiaries issued and outstanding as of the
date of determination (other than Indebtedness owing to and Preferred Stock
issued to and held by the Company or a Restricted Subsidiary).
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"Trust Officer" means an officer or assistant officer of the Trustee
assigned to the Corporate Trustee Administration Department or similar
department performing corporate trust work, or any successor to such department
or, in the case of a successor trustee, an officer assigned to the department,
division or group performing the corporate trust work of such successor.
"UIH" means United International Holdings, Inc. and its subsidiaries other
than the Company and the Company's subsidiaries.
"UIH AML" means UIH AML, Inc., a Colorado corporation, that is a wholly
owned, indirect subsidiary of the Company.
"Unrestricted Affiliate" means any controlled Affiliate of the Company
other than a Restricted Affiliate.
"Unrestricted Subsidiary" means any Subsidiary of the Company designated as
such pursuant to and in compliance with Section 4.18. Any such designation may
be revoked by a Board Resolution of the Company delivered to the Trustee,
subject to the provisions of Section 4.18. Saturn and United Wireless and the
Subsidiaries of the Company that hold the Company's interest in Saturn and
United Wireless, shall initially be Unrestricted Subsidiaries under this
Indenture. The Company's interest in XYZ Entertainment will be transferred to a
Subsidiary to be designated as an Unrestricted Subsidiary after such transfer.
"U.S. Dollar Equivalent" means, with respect to any monetary amount in a
currency other than the U.S. dollar, at any time for the determination thereof,
the amount of U.S. dollars obtained by converting such foreign currency involved
in such computation into U.S. dollars at the spot rate for the purchase of U.S.
dollars with the applicable foreign currency as quoted by Reuters at
approximately 11:00 a.m. (New York time) on the date not more than two business
days prior to such determination. For purposes of determining whether any
Indebtedness can be incurred (including Permitted Indebtedness), any Investment
can be made and any Affiliate Transaction can be undertaken (a "Tested
Transaction"), the "U.S. Dollar Equivalent" of such Indebtedness, Investment or
Affiliate Transaction shall be determined on the date incurred, made or
undertaken and no subsequent change in the U.S. Dollar Equivalent shall cause
such Tested Transaction to have been incurred, made or undertaken in violation
of this Indenture.
"U.S. GAAP" means generally accepted accounting principles and practices in
the United States consistently applied by a corporation or as between
corporations and over time, as in effect from time to time; provided that, for
--------
purposes of determining compliance with Section 4.8 and Section 4.9, U.S. GAAP
shall mean such generally accepted accounting principles and practices as
adopted by the Company on the Issue Date and as are consistent with those set
forth in the Offering Memorandum.
"U.S. Government Obligations" means direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which guarantee or obligation the full faith and credit of the United
States is pledged.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
14
"Voting Stock" means, with respect to any person, the Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors
or other members of the governing body of such person.
"Warrant" means a warrant of the Company issued by the Company pursuant to
the terms of the Warrant Agreement.
"Warrant Agent" means Firstar Bank of Minnesota, N.A. until a successor
replaces it in accordance with the Warrant Agreement and thereafter means such
successor.
"Warrant Agreement" means the warrant agreement to be entered into by and
between the Company and the Warrant Agent pursuant to Section 4.21 in the form
attached hereto as Exhibit E.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary of
which 100% of the outstanding Capital Stock is owned by the Company or another
Wholly Owned Restricted Subsidiary. For purposes of this definition, any
directors' qualifying shares or investments by foreign nationals mandated by
applicable law shall be disregarded in determining the ownership of an
Unrestricted Subsidiary.
"Wholly Owned Unrestricted Subsidiary" means any Unrestricted Subsidiary of
which 100% of the outstanding Capital Stock is owned by the Company, a Wholly
Owned Restricted Subsidiary or another Wholly Owned Unrestricted Subsidiary.
For purposes of this definition, any directors' qualifying shares or investments
by foreign nationals mandated by applicable law shall be disregarded in
determining the ownership of an Unrestricted Subsidiary.
"XYZ Distribution Amount" means, with respect to an Asset Sale of the
direct or indirect interest of the Company in XYZ Entertainment, the Net Cash
Proceeds of which have been distributed to the Company, the sum of (i) with
respect to the first $70,000,000 of such Net Cash Proceeds 100% of the amount by
which the aggregate amount of such Net Cash Proceeds exceeds $35,000,000 and
(ii) 75% of the amount by which the aggregate amount of such Net Cash Proceeds
exceeds $70,000,000.
"XYZ Entertainment" means (i) XYZ Entertainment Limited and (ii) any
Replacement Asset received in consideration for the Company's direct or indirect
interest in XYZ Entertainment Limited upon an Asset Sale of such interest and
(iii) any Replacement Asset received in consideration of any Replacement Asset
described in the preceding clause (ii) or this clause (iii) upon an Asset Sale
of such Replacement Asset.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision
shall be deemed incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
(a) "Commission" means the SEC;
(b) "indenture securities" means the Securities;
(c) "indenture security holder" means a Securityholder;
(d) "indenture to be qualified" means this Indenture;
(e) "indenture trustee" or "institutional trustee" means the
Trustee; and
(f) "obligor" on the indenture securities means the Company or
any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings so assigned to them therein.
15
SECTION 1.3 Rules of Construction.
---------------------
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) "or" is exclusive;
(c) words in the singular include the plural, and words in the
plural include the singular;
(d) provisions apply to successive events and transactions;
(e) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
Subdivision; an d
(f) unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared in accordance with U.S. GAAP as in effect from time to time, applied on
a basis consistent with the most recent audited consolidated financial
statements of the Company.
(g) "$" means United States dollars.
ARTICLE II
THE SECURITIES
--------------
SECTION 2.1 Form and Dating.
---------------
The Series C Securities and the Exchange Notes and the Trustee's
certificate of authentication with respect thereto shall be substantially in the
form set forth in Exhibits A-1 and A-2 annexed hereto, respectively, which are
hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, rule,
usage or agreement to which the Company is subject. Each Security shall be
dated the date of its issuance and shall show the date of its authentication.
The terms and provisions contained in the Securities shall constitute, and are
expressly made, a part of this Indenture.
SECTION 2.2 Execution and Authentication.
----------------------------
Two Officers shall execute the Securities on behalf of the Company by
either manual or facsimile signature. The Company's seal shall be impressed,
affixed, imprinted or reproduced on the Securities and may be in facsimile form.
If a Person whose signature is on a Security as an Officer no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Series C Securities for original issue in an
aggregate principal amount at maturity not to exceed $45,000,000, upon receipt
of an Officers' Certificate of the Company. In addition, on or prior to the
date of the Registered Exchange Offer, the Trustee or an authenticating agent
shall authenticate Exchange Notes (including any Private Exchange Notes (as
defined in the Registration Rights Agreement) which will be in the form of
Exhibit A-2 but which shall have the restrictive legend contained in Exhibit A-
1) to be issued at the time of the Registered Exchange Offer in the aggregate
principal amount at maturity of up to $45,000,000 upon receipt of an Officer's
Certificate of the Company. In each case, the Officers' Certificate shall
specify the amount of
16
Securities to be authenticated, the names of the Persons in which such
Securities shall be registered and the date on which such Securities are to be
authenticated and shall be signed by two Officers directing the Trustee to
authenticate such Securities and certifying that all conditions precedent to the
issuance of such Securities contained herein have been complied with. The
aggregate principal amount at maturity of Securities outstanding at any time may
not exceed $45,000,000 except (x) as provided in Section 2.7 or (y) as required
by Section 2.17 to give effect to an increase in the Interest Rate in an Equity
Sale has not been consummated on or prior to May 15, 1997.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. Such authenticating agent shall have the same
authenticating rights and duties as the Trustee in any dealings hereunder with
the Company or with any Affiliate of the Company.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global securities in registered
form, substantially in the form set forth in Exhibit A-1, deposited with the
Trustee, as custodian for the Depository, and shall bear the legend set forth on
Exhibit B ("Global Securities"). The aggregate principal amount of any Global
Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Securities offered and sold in reliance on any exemption from registration
under the Securities Act other than as described in the preceding paragraph
shall be issued, and Securities offered and sold in reliance on Rule 144A may be
issued, in the form of certificated Securities in registered form in
substantially the form set forth in Exhibit A-1 (the "Physical Securities").
SECTION 2.3 Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency (which shall be located in
the Borough of Manhattan in the City of New York, State of New York) where
Securities may be presented for registration of transfer or for exchange (the
"Registrar"), an office or agency (which shall be located in the Borough of
Manhattan, City of New York, State of New York) where Securities may be
presented for payment (the "Paying Agent") and an office or agency where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Registrar shall keep a register of the Securities
and of their transfer and exchange. The Company may have one or more co-
registrars and one or more additional paying agents. The term "Paying Agent"
includes any additional paying agent. The Company may act as its own Paying
Agent, except that for the purposes of payments on account of principal on the
Securities pursuant to Sections 4.13 and 4.15, neither the Company nor any
Affiliate of the Company may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, which shall incorporate the provisions of the
TIA. The agreement shall implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
or fails to give the foregoing notice, the Trustee shall act as such and shall
be entitled to appropriate compensation in accordance with Section 7.7.
The Company initially appoints the Trustee as Registrar and Paying Agent
and agent for service of notices and demands in connection with the Securities.
SECTION 2.4 Paying Agent To Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit of the
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company in making any such payment. Money held in
trust by the Paying Agent need not be segregated except as required by law and
in no event shall the Paying Agent be liable for any interest on any money
received by it
17
hereunder. The Company at any time may require the Paying Agent to pay all money
held by it to the Trustee and account for any funds disbursed and the Trustee
may at any time during the continuance of any Event of Default, upon written
request to the Paying Agent, require such Paying Agent to pay forthwith all
money so held by it to the Trustee and to account for any funds disbursed. Upon
making such payment, the Paying Agent shall have no further liability for the
money delivered to the Trustee.
SECTION 2.5 Securityholder Lists.
--------------------
The Trustee shall preserve the names and addresses of the Securityholders
and otherwise comply with TIA (S)312(a). If the Trustee is not the Registrar,
the Company shall furnish or cause the Registrar to furnish to the Trustee
before each Interest Payment Date, and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Securityholders.
SECTION 2.6 Transfer and Exchange.
---------------------
When Securities are presented to the Registrar or a co-Registrar with a
request from the Holder of such Securities to register the transfer or to
exchange them for an equal principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested; provided that every Security presented or surrendered for
registration of transfer or exchange shall be duly endorsed or be accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Registrar, duly executed by the Holder thereof or his attorneys duly authorized
in writing. To permit registrations of transfers and exchanges, the Company
shall issue and execute and the Trustee shall authenticate new Securities
evidencing such transfer or exchange. No service charge shall be made to the
Securityholder for any registration of transfer or exchange. The Company may
require from the Securityholder payment of a sum sufficient to cover any
transfer taxes or other governmental charge that may be imposed in relation to a
transfer or exchange, but this provision shall not apply to any exchange
pursuant to Section 2.10, 4.13, 4.15 or 9.5 (in which events the Company will be
responsible for the payment of such taxes). The Trustee shall not be required
to exchange or register the transfer of any Security for a period of 15 days
immediately preceding the first mailing of notice of redemption of Securities to
be redeemed or of any Security selected, called or being called for redemption
except, in the case of any Security where public notice has been given that such
Security is to be redeemed in part, the portion thereof not to be redeemed.
SECTION 2.7 Replacement Securities.
----------------------
If a mutilated Security is surrendered to the Registrar or the Trustee or
if the Holder of a Security of any series claims that the Security has been
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Security of the same series if the Holder of
such Security furnishes to the Company and to the Trustee evidence reasonably
acceptable to them of the ownership and the destruction, loss or theft of such
Security. If required by the Trustee or the Company, an indemnity bond shall be
posted, sufficient in the judgment of the Company or the Trustee, as the case
may be, to protect the Company, the Trustee or any Agent from any loss that any
of them may suffer if such Security is replaced. The Company may charge such
Holder for the Company's expenses in replacing such Security and the Trustee may
charge the Company for the Trustee's expenses in replacing such Security. Every
replacement Security shall constitute an additional obligation of the Company
and shall be entitled to the benefits of this Indenture.
SECTION 2.8 Outstanding Securities.
----------------------
The Securities outstanding at any time shall be all Securities that have
been authenticated by the Trustee except for (a) those cancelled by it, (b)
those delivered to it for cancellation, (c) those described in this Section 2.8
as not outstanding. A Security does not cease to be outstanding because the
Company or one of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.7, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser in whose hands such Security is a legal, valid
---- ----
and binding obligation of the Company.
18
If the Paying Agent holds, in its capacity as such, on any Maturity Date or
on any optional redemption date money sufficient to pay all accrued interest and
principal with respect to such Securities payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.9 Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities have concurred in any declaration of acceleration or notice of
default or direction, waiver or consent or any amendment, modification or other
change to this Indenture, Securities owned by the Company or any Subsidiary or
an Affiliate of the Company shall be deemed not to be outstanding, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent or any amendment, modification
or other change to this Indenture, only Securities that a Trust Officer of the
Trustee knows are so owned shall be so disregarded. The Company shall notify
the Trustee, in writing, when it or any of its Affiliates repurchases or
otherwise acquires Securities, of the aggregate principal amount of such
Securities so repurchased or otherwise acquired.
SECTION 2.10 Temporary Securities.
--------------------
Until definitive Securities are prepared and ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company reasonably considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until such exchange, such temporary Securities shall be entitled to
the same rights, benefits and privileges as the definitive Securities.
SECTION 2.11 Cancellation.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Securities surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall (subject to the record-retention requirements of the Exchange Act) dispose
of cancelled Securities unless the Company directs the Trustee to return such
Securities to the Company, and, if so disposed, shall deliver a certificate of
disposition thereof to the Company. The Company may not reissue or resell, or
issue new Securities to replace, Securities that the Company has redeemed or
paid, or that have been delivered to the Trustee for cancellation.
SECTION 2.12 Defaulted Interest.
------------------
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest, plus, to the extent permitted by law, any
interest payable on the defaulted interest, to the Persons who are
Securityholders on a subsequent special record date. Such record date shall be
the fifteenth day next preceding the date fixed by the Company for the payment
of defaulted interest, whether or not such day is a Business Day. At least 15
days before the subsequent special record date, the Company shall mail (or cause
to be mailed) to each Securityholder a notice that states the record date, the
payment date and the amount of defaulted interest to be paid. Notwithstanding
the foregoing, any interest which is paid prior to the expiration of the 30-day
period set forth in Section 6.1(a) shall be paid to Holders of Securities as of
the regular record date for the interest payment date for which interest has not
been paid. Notwithstanding the foregoing, the Company may make payment of any
defaulted interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange.
SECTION 2.13 CUSIP Number.
------------
The Company in issuing the Securities may use a "CUSIP" number, and if so,
such CUSIP number shall be included in notices of redemption or exchange as a
convenience to Holders; provided that any such notice may state that no
--------
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the
19
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company will promptly notify the Trustee
of any change in the CUSIP number.
SECTION 2.14 Book-Entry Provisions for Global Securities.
-------------------------------------------
(a) The Global Securities initially shall (i) be registered in
the name of the Depository or the nominee of such Depository, (ii) be delivered
to the Trustee as custodian for such Depository and (iii) bear legends as set
forth in Exhibit B.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers
in whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.15. In
addition, Physical Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor depositary is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a written request from
the Depository to issue Physical Securities.
(c) In connection with any transfer or exchange of a portion of
the beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Physical Securities of like tenor and amount.
(d) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b), the Global Securities
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Securities, an equal aggregate principal amount of
Physical Securities of authorized denominations.
(e) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(b) or (c) shall, except as otherwise provided by paragraphs (a)(i)(x) and (c)
of Section 2.15, bear the legend regarding transfer restrictions applicable to
the Physical Securities set forth in Exhibit A-1.
(f) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.15 Special Transfer Provisions.
---------------------------
(a) Transfers to Non-QIB Institutional Accredited Investors and
-----------------------------------------------------------
Non-U.S. Persons. The following provisions shall apply with respect to the
-----------------
registration of any proposed transfer of a Security constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
Non-U.S. Person:
20
(i) the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Security bears the
Private Placement Legend, if (x) the requested transfer is after May 15,
1999 or (y) (1) in the case of a transfer to a Person purporting to be an
Institutional Accredited Investor which is not a QIB (excluding Non-U.S.
Persons), the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit C hereto or (2) in the
case of a transfer to a Person purporting to be a Non-U.S. Person, the
proposed transferee has delivered to the Registrar a certificate
substantially in the form of Exhibit D hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in a Global Security, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depository's and the Registrar's
procedures, whereupon (a) the Registrar shall reflect on its books and
records the date and (if the transfer does not involve a transfer of
outstanding Physical Securities) a decrease in the principal amount of a
Global Security in an amount equal to the principal amount of the
beneficial interest in a Global Security to be transferred, and (b) the
Company shall execute and the Trustee shall authenticate and deliver one or
more Physical Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a Person purporting to be a QIB (excluding transfers to
Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided for
on the form of Security stating, or has otherwise advised the Company and
the Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Security for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and aware that the sale
to it is being made in reliance on Rule 144A and is acknowledges that it
has received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the
Securities to be transferred consist of Physical Securities which after
transfer are to be evidenced by an interest in the Global Security, upon
receipt by the Registrar of instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall reflect on
its books and records the date and an increase in the principal amount of
the Global Security in an amount equal to the principal amount of the
Physical Securities to be transferred, and the Trustee shall cancel the
Physical Securities so transferred.
(c) Private Placement Legend. Upon the registration of transfer,
------------------------
exchange or replacement of Securities not bearing the Private Placement Legend,
the Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the registration of transfer, exchange or replacement of
Securities bearing the Private Placement Legend, the Registrar shall deliver
only Securities that bear the Private Placement Legend unless (i) the
circumstances contemplated by paragraph (a)(i)(x) of this Section 2.15 exist,
(ii) there is delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act or (iii) such
Security has been sold pursuant to an effective registration statement under the
Securities Act.
(d) General. By its acceptance of any Security bearing the Private
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Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.14 or this Section 2.15 for a
period of two years at which time such letters, notices and other written
21
communications shall be turned over to the Company. The Company shall have the
right to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
SECTION 2.16 Designation.
-----------
(a) The Indebtedness evidenced by the Securities is hereby
irrevocably designated as "senior indebtedness" or such other term denoting
seniority (i) for all purposes of the provisions defining subordination
contained in agreements that provide that the Indebtedness of the Company issued
pursuant to such agreements is subordinate to Indebtedness designated as senior
indebtedness and (ii) for the purposes of any future Indebtedness of the Company
which the Company expressly makes subordinate to any senior indebtedness or such
other term denoting seniority. In connection with the issuance of any such
future subordinated Indebtedness, the Company shall take all necessary steps to
effectuate the foregoing.
(b) The Exchange Notes, the Private Exchange Notes and the Series
C Securities shall vote and consent together on all matters as one class, and
neither the Exchange Notes, the Private Exchange Notes or the Series C
Securities will have the right to vote or consent as a separate class on any
matter.
SECTION 2.17 Increased Principal Amount.
--------------------------
It is understood that if the Interest Rate on the Securities is at any time
increased pursuant to the proviso of the definition of Interest Rate, at some
time prior to May 15, 2001, the aggregate principal amount at maturity of the
Securities will exceed $45,000,000. In the event that the Interest Rate is at
any time so increased, the Company shall (i) within 30 days of the increase in
the Interest Rate, give notice to the Trustee and Holders of such increase and
(ii) within 60 days after the earlier of (x) the reduction of the Interest Rate
to 14% pursuant to the definition of Interest Rate or (y) May 15, 2001, give
notice to all Holders and within 60 days after such notice issue to Holders new
Securities which shall bear such increased principal amount at maturity, rounded
to the nearest whole dollar. The Company shall comply with the provisions of
Section 2.2 in issuing such new Securities.
ARTICLE III
REDEMPTION
----------
SECTION 3.1 Notices to Trustee.
------------------
If the Company elects to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of Securities to be redeemed.
The Company shall give each notice provided for in this Section 3.1 at
least 45 days before the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee), together with an Officers' Certificate stating
that such redemption will comply with the conditions contained herein and in the
Securities.
SECTION 3.2 Selection of Securities To Be Redeemed.
--------------------------------------
If less than all of the Securities are to be redeemed, the Trustee shall
select Securities to be so redeemed in compliance with the requirements of the
principal national securities exchange, if any, on which the Securities are
listed or, if the Securities are not listed on a national securities exchange,
on a pro rata basis, by lot or in such other fair and reasonable manner chosen
at the discretion of the Trustee; provided that, with respect to redemptions
--------
made pursuant to the second paragraph of Section 5 of each of the Securities,
such redemptions shall be made on a pro rata basis (with such adjustments as may
be deemed appropriate by the Trustee so that only Securities in denominations of
$1,000 in principal amount or integral multiples of $1,000 shall be redeemed).
The Trustee shall make the selection from the Securities outstanding and
not previously called for redemption. Securities in denominations of $1,000 may
only be redeemed in whole. The Trustee may select for redemption portions
22
(equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall promptly notify the
Company in writing of the Securities selected for redemption and, in the case of
any Security selected for partial redemption, the principal amount of each
certificate selected for redemption.
SECTION 3.3 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause the mailing of a notice of redemption by first-
class mail to each Holder of Securities to be redeemed at such Holder's address
as it appears on the Securities register maintained by the Registrar with a copy
to the Trustee and any Paying Agent; provided that, if such notice relates to a
--------
redemption pursuant to paragraph 5 of the Securities with the net proceeds of a
Public Equity Offering or an investment by a Strategic Equity Investor, the
Company shall mail or cause the mailing of such notice not later than 60 days
after the consummation thereof.
The notice shall identify the Securities to be redeemed and shall state:
(a) the Redemption Date;
(b) the redemption price to be paid;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price and accrued interest, if any;
(e) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders of such
Securities is to receive payment of the redemption price upon surrender to the
Paying Agent of the Securities to be redeemed;
(f) If any Security is to be redeemed in part, the portion of the
principal amount (equal to $1,000 or any integral multiple thereof) of such
Security to be redeemed and that, on or after the Redemption Date, upon
surrender of such Security, a new Security or Securities in aggregate principal
amount equal to the unredeemed portion thereof will be issued without charge to
the Securityholder;
(g) if less than all of the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Securities to be redeemed; and
(h) the CUSIP number, if any.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense.
SECTION 3.4 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the Redemption Date and at the redemption price. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price plus accrued interest to the Redemption Date, but interest installments
whose Interest Payment Date is on or prior to such Redemption Date will be
payable on the relevant Interest Payment Dates to the Holders of record at the
close of business on the relevant record dates referred to in the Securities.
SECTION 3.5 Deposit of Redemption Price.
---------------------------
23
On the Business Day prior to the Redemption Date, the Company shall deposit
with the Paying Agent in immediately available funds U.S. Legal Tender
sufficient to pay the redemption price of and accrued interest on all Securities
or portions thereof to be redeemed on that date.
If any Security surrendered for redemption in the manner provided in the
Securities shall not be so paid on the Redemption Date due to the failure of the
Company to deposit sufficient funds with the Paying Agent, interest will
continue to accrue from and including the Redemption Date until such payment is
made on the unpaid principal and, to the extent lawful, on any interest not paid
on such unpaid principal, in each case at the date and in the manner provided in
the Securities.
SECTION 3.6 Securities Redeemed in Part.
---------------------------
Upon surrender to the Paying Agent of a Security that is redeemed in part,
the Company shall execute and the Trustee shall authenticate for the Holder a
new Security equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE IV
COVENANTS
---------
SECTION 4.1 Payment of Securities.
---------------------
The Company shall pay or cause to be paid the principal of and interest and
premium, if any, on the Securities on the dates and in the manner provided in
the Securities. Principal, interest and premium, if any, shall be considered
paid on the date due if the Paying Agent, if other than the Company, holds as of
10:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, interest and premium, if any, then due.
The Company shall pay interest on overdue principal, interest and premium,
if any, at the rate of interest born by the Securities to the extent lawful.
SECTION 4.2 Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Securities may be surrendered
for registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served.
The Company shall give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
--------
however, that no such designation or rescission shall in any manner relieve the
-------
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee set
forth in Section 10.2 as one such office or agency of the Company in accordance
with Section 2.3.
SECTION 4.3 Corporate Existence.
-------------------
24
Subject to Article V hereof, the Company shall do or cause to be done, at
its own cost and expense, all things necessary to, and will cause each of its
Restricted Subsidiaries to, preserve and keep in full force and effect the
corporate existence and rights (charter and statutory), licenses and/or
franchises of the Company and each of its Restricted Subsidiaries; provided that
--------
the Company shall not be required to preserve any such right, license or
franchise, or the corporate existence of any of its Restricted Subsidiaries, if
in the judgment of the Board of Directors of the Company (i) such preservation
or existence is not desirable in the conduct of business of the Company or such
Restricted Subsidiary and (ii) the loss of such right, license or franchise or
the dissolution of such Restricted Subsidiary is not adverse in any material
respect to the Holders.
SECTION 4.4 Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings and
for which adequate U.S. GAAP reserves have been established.
SECTION 4.5 Maintenance of Properties; Books and Records; Compliance
--------------------------------------------------------
with Law.
--------
(a) The Company shall and shall cause each of its Restricted
Subsidiaries to, at all times cause all properties used or useful in the conduct
of its business to be maintained and kept in good condition, repair and working
order (reasonable wear and tear excepted) and supplied with all necessary
equipment, and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereto; provided that nothing in
--------
this Section 4.5 shall prevent the Company or any Restricted Subsidiary from
discontinuing the operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is either (i) in
the ordinary course of business, (ii) in the reasonable and good faith judgment
of the Board of Directors of the Company or the Restricted Subsidiary concerned,
as the case may be, desirable in the conduct of the business of the Company or
such Restricted Subsidiary, as the case may be, or (iii) otherwise permitted by
this Indenture.
(b) The Company shall and shall cause each of its Subsidiaries to keep
proper and true books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Company and each Subsidiary of the Company, and reflect on its financial
statements adequate accruals and appropriations to reserves, all in accordance
with U.S. GAAP consistently applied to the Company and its Subsidiaries taken as
a whole.
(c) The Company shall and shall cause each of its Subsidiaries to
comply with all statutes, laws, ordinances, or government rules and regulations
to which it is subject, non-compliance with which would materially adversely
affect the business, earnings, prospects, properties, assets or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole.
SECTION 4.6 Compliance Certificates; Notice of Default.
------------------------------------------
(a) The Company shall deliver to the Trustee, within 90 days after the
end of its fiscal year, an Officers' Certificate of the Company complying with
Section 314(a)(4) of the TIA stating (i) that a review of the activities of the
Company and the activities of its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture and the Securities and (ii) that, to the best
knowledge of such Officer after due inquiry, the Company has kept, observed,
performed and fulfilled each and every covenant and other obligation contained
in this Indenture and the Securities and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof and has not
failed to comply with any other obligation hereunder (or, if a Default, Event of
Default or failure to comply with any other obligation hereunder shall have
occurred, describing with particularity all such Defaults, Events of Default or
failures to comply with any other obligation hereunder of which such Officer may
have knowledge, including, but not limited to, their status and what action the
Company is taking or proposes to take with respect thereto).
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the Company shall deliver to
the Trustee within 120 days after the end of each fiscal year
25
a written statement by the Company's independent certified public accountants
stating (A) that their audit examination has included a reading of the relevant
provisions of this Indenture and the Securities as they relate to accounting
matters, and (B) whether, in connection with their audit examination, any
Default or Event of Default has come to their attention as they relate to
accounting matters and if such a Default or Event of Default has come to their
attention, specifying the nature and period of existence thereof; provided that,
--------
without any restriction as to the scope of the audit examination, such
independent certified public accountants shall not be liable by reason of any
failure to obtain knowledge of any such Default or Event of Default that would
not be disclosed in the course of an audit examination conducted in accordance
with generally accepted auditing standards.
(c) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.7 Reports.
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(a) From and after the date on which the Exchange Offer Registration
Statement is required to be effective pursuant to the terms of the Registration
Rights Agreement, the Company shall deliver to the Trustee and mail to each
Holder, within 15 days after the filing of the same with the SEC, copies of its
annual report and of the information, documents and other reports, if any, which
the Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act. The Company shall also comply with the other provisions of
TIA Section 314(a).
(b) If the Company ceases to be subject to the requirements of such
Section 13 or 15(d) of the Exchange Act, the Company shall file with the SEC, to
the extent permitted, and distribute to the Trustee and to each Holder copies of
the quarterly and annual financial information that would have been required to
be contained in a filing with the SEC on forms 10-Q and 10-K and all current
reports that would be required to be filed with the SEC on form 8-K had the
Company been subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act. All such financial information shall include consolidated
financial statements (including footnotes) prepared in accordance with U.S.
GAAP. Such annual financial information shall also include an opinion thereon
expressed by an independent accounting firm of established national reputation.
All such consolidated financial statements shall be accompanied by a
"Management's Discussion and Analysis of Financial Condition and Results of
Operation." The financial and other information to be distributed to Holders
shall be filed with the Trustee and mailed to the Holders at their respective
addresses appearing in the register of the Securities maintained by the
Registrar, within 120 days after the end of the Company's fiscal year and within
60 days after the end of each of the first three quarters of each such fiscal
year. Such information shall be made available by the Company to securities
analysts and prospective investors upon request. In addition, the Company shall
furnish to the Holders and to securities analysts and to prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
SECTION 4.8 Limitation on Restricted Payments.
---------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, make, directly or indirectly, any Restricted Payment unless:
(i) no Default shall have occurred and be continuing at the
time of or after giving effect to such Restricted Payment;
(ii) immediately prior to and after giving effect to such
Restricted Payment, the Company would be able to incur $1.00 of
Indebtedness under the proviso of Section 4.9(a); and
(iii) immediately after giving effect to such Restricted
Payment, the aggregate amount of all Restricted Payments declared or made
on or after the May 14, 1996 (including any Designation Amount) does not
exceed an amount equal to the sum of (a)(x) the Cumulative Consolidated
Operating Cash Flow determined at the time of such Restricted Payment minus
(y) 150% of the cumulative Consolidated Interest Expense of the Company
determined for the period commencing on the May 14, 1996 and ending on the
last day of the latest fiscal quarter for which consolidated financial
statements of Company are available preceding the date of such Restricted
Payment plus (b) the aggregate net cash proceeds
26
received by the Company either (x) as capital contributions to the Company
after the May 14, 1996 or (y) from the issue or sale (other than to a
Restricted Subsidiary of the Company) of its Capital Stock (other than
Disqualified Stock) on or after the May 14, 1996 plus (c) the aggregate net
proceeds received by the Company from the issuance (other than to a
Restricted Subsidiary of Company) on or after the May 14, 1996 of its
Capital Stock (other than Disqualified Stock) upon the conversion of, or
exchange for, Indebtedness of the Company or a Restricted Subsidiary plus
(d) in the case of the disposition or repayment of any Investment
constituting a Restricted Payment made after the May 14, 1996 for cash,
(including upon a Revocation after the May 14, 1996 of any Designation made
after the May 14, 1996 but excluding Investments made pursuant to clauses
(v), (vi) and (viii) of the following paragraph), an amount equal to the
lesser of the return of capital with respect to such Investment and the
cost of such Investment, in either case, reduced by the excess, if any, of
the cost of the disposition of such Investment over the gain, if any,
realized by the Company or such Restricted Subsidiary in respect of such
disposition. For purposes of the preceding clauses (b)(y) and (c) and
without duplication, the value of the aggregate net proceeds received by
the Company upon the issuance of Capital Stock either upon the conversion
of convertible Indebtedness or in exchange for outstanding Indebtedness or
upon the exercise of options, warrants or rights will be the net cash
proceeds received upon the issuance of such Indebtedness, options, warrants
or rights plus the incremental amount received by the Company upon the
conversion, exchange or exercise thereof.
For purposes of determining the amount expended for Restricted Payments,
cash distributed shall be valued at the face amount thereof and property other
than cash shall be valued at its Fair Market Value.
(b) The provisions of Section 4.8(a) shall not prohibit (i) the
payment of any dividend within 60 days after the date of declaration thereof if,
at such date of declaration, such payment would comply with the provisions of
Section 4.8(a); (ii) so long as no Default shall have occurred and be
continuing, the purchase, redemption, retirement or other acquisition of any
shares of Capital Stock of the Company (A) in exchange for or conversion into or
(B) out of the net cash proceeds of the substantially concurrent issue and sale
(other than to a Restricted Subsidiary of the Company) of, shares of Capital
Stock of the Company (other than Disqualified Stock) provided that any such net
--------
cash proceeds pursuant to the immediately preceding clause (B) are excluded from
clause (iii)(b) of Section 4.8(a); (iii) so long as no Default shall have
occurred and be continuing, the purchase, redemption, retirement, defeasance or
other acquisition of (A) Preferred Stock of any Restricted Subsidiary made by
exchange for or conversion into, or out of the net cash proceeds of, a
substantially concurrent issue and sale (other than to a Restricted Subsidiary
of the Company) of (x) Capital Stock (other than Disqualified Stock) of the
Company, provided that any such net cash proceeds pursuant to the immediately
--------
preceding clause (x) are excluded from clause (iii)(b) of Section 4.8(a), or (y)
other Preferred Stock of any Restricted Subsidiary having an Average Life to
Stated Maturity equal to or greater than the Average Life to Stated Maturity of
the Preferred Stock being purchased, redeemed, retired, defeased or otherwise
acquired or (B) Subordinated Indebtedness made by exchange for or conversion
into, or out of the net cash proceeds of, a substantially concurrent issue and
sale (other than to a Restricted Subsidiary of the Company) of (x) Capital Stock
(other than Disqualified Stock) of the Company provided that any such net cash
--------
proceeds pursuant to the immediately preceding clause (x) are excluded from
clause (iii)(b) of Section 4.8(a) or (y) other Subordinated Indebtedness having
an Average Life to Stated Maturity equal to or greater than the Average Life to
Stated Maturity of the Subordinated Indebtedness being purchased, redeemed,
retired, defeased or otherwise acquired; (iv) [intentionally omitted]; (v) so
long as no Default shall have occurred and be continuing, Investments in Saturn,
together with all investments in Saturn made by the Company since May 14, 1996,
in an amount not to exceed $15,000,000 (or, to the extent non-U.S. dollar
denominated, the U.S. Dollar Equivalent thereof) plus, to the extent any such
Investment is repaid to the Company or a Restricted Subsidiary in cash, an
amount equal to the lesser of the return of capital with respect to such
Investment and the cost of such Investment, in either case, reduced by the
excess, if any, of the cost of the disposition of such Investment over the gain,
if any, realized by the Company or such Restricted Subsidiary in respect of such
disposition; (vi) so long as no Default shall have occurred and be continuing,
Investments in Unrestricted Subsidiaries and Unrestricted Affiliates that
operate principally or have been formed to operate principally a Related
Business in an amount, together with all investments in Unrestricted
Subsidiaries and
27
Unrestricted Affiliates made by the Company since May 14, 1996, not to exceed
$15,000,000 (or, to the extent non-U.S. dollar denominated, the U.S. Dollar
Equivalent thereof) in the aggregate at any time outstanding, provided that no
--------
more than $8,000,000 in the aggregate of Investments under this clause (vi) (or
to the extent non-U.S. dollar denominated, the U.S. Dollar Equivalent thereof)
shall constitute Investments in persons other than XYZ Entertainment Limited,
plus, in the case of the disposition or repayment of any such Investment for
cash (including upon a Revocation after the Issue Date of a Designation made
after the Issue Date), an amount equal to the lesser of the return of capital
with respect to such Investment and the cost of such Investment, in either case,
reduced by the excess, if any, of the cost of the disposition of such Investment
over the gain, if any, realized by the Company or such Restricted Subsidiary in
respect of such disposition; (vii) [intentionally omitted]; (viii) so long as no
Default shall have occurred and be continuing, any Investments in Unrestricted
Subsidiaries and Unrestricted Affiliates principally engaged in or which will
principally engage in a Related Business which is made with the net cash
proceeds of a (1) capital contribution to the Company or (2) issue or sale of
capital Stock (other than Disqualified Stock) of the Company, but (to avoid
duplication of the use of such net cash proceeds) only to the extent the Company
has not previously made any Restricted Payment either (x) with such net cash
proceeds pursuant to clauses (ii), (iii) or (viii) of this Section 4.8(b) or (y)
which the Company could not have made without including such net cash proceeds
in clause (iii)(b) of Section 4.8(a) plus, in the case of the disposition or
repayment of any such Investment for cash (including upon a Revocation after the
Issue Date of a Designation made after the Issue Date), an amount equal to the
lesser of the return of capital with respect to such Investment and the cost of
such Investment, in either case, reduced by the excess, if any, of the cost of
the disposition of such Investment over the gain, if any, realized by the
Company or such Restricted Subsidiary in respect of such disposition (excluding,
in the case of repayment of any such Investments in XYZ Entertainment, the
portion of such repayment which may be paid as dividends by the Company pursuant
to clause (x) of this paragraph); (ix) so long as no Default shall have occurred
and be continuing, payments of dividends (not constituting a return of capital)
on Disqualified Stock of the Company issued pursuant to and in compliance with
Section 4.9; (x) so long as no Default shall have occurred and be continuing,
following compliance with Section 4.13 with respect to the sale of the Company's
direct or indirect interest in XYZ Entertainment, the payment of dividends by
the Company in an amount up to the XYZ Distribution Amount; (xi) so long as no
Default shall have occurred and be continuing, payments pursuant to the Tax
Sharing Agreement, as such agreement is in effect on the Issue Date; and (xii)
(a) the acquisition by the Company of interests in Saturn not owned (directly or
indirectly) by the Company on the Issue Date, provided that the consideration
--------
paid by the Company in such acquisition shall consist solely of Capital Stock
(other than Disqualified Capital Stock) of the Company and (b) the contribution
of such interests acquired by the Company in accordance with subclause (a) of
this clause (xii) to an Unrestricted Subsidiary. In determining the amount of
Restricted Payments permissible under this Section 4.8, amounts expended
pursuant to clauses (i) (net of the amount of dividends declared and previously
included as Restricted Payments), (v), (vi), (vii) and (viii), in each case, of
the immediately preceding sentence, shall be included as Restricted Payments and
amounts expended pursuant to clauses (ii), (iii), (iv), (ix), (x), (xi) and
(xii) shall not be included as Restricted Payments.
SECTION 4.9 Limitation on Additional Indebtedness and Preferred Stock of
------------------------------------------------------------
Restricted Subsidiaries.
-----------------------
(a) (i) the Company shall not, and shall not permit any Restricted
Subsidiary, to create, incur, assume, issue, guarantee or in any manner become
directly or indirectly liable, contingently or otherwise for or with respect to
(in any such case, to "incur"), any Indebtedness (including any Acquired
Indebtedness) and (ii) the Company shall not permit any Restricted Subsidiary to
issue any Preferred Stock except for, in each case, Permitted Indebtedness and
Preferred Stock; provided that (A) the Company will be permitted to incur
--------
Indebtedness (including any Acquired Indebtedness) and (B) a Restricted
Subsidiary will be permitted to incur Acquired Indebtedness, if, in either case,
after giving pro forma effect to such incurrence (including the application of
the net proceeds therefrom), the ratio of (x) Total Consolidated Indebtedness
and Subsidiary Preferred Stock to (y) Annualized Pro Forma Consolidated
Operating Cash Flow for the latest fiscal quarter for which consolidated
financial statements of the Company are available preceding the
28
date of such incurrence or issuance would be less than or equal to (1) 7.0
to 1.0 if the Indebtedness is incurred prior to May 15, 1998 or (2) 6.5 to 1.0
if the Indebtedness is incurred on or after May 15, 1998.
(b) The Company shall not, directly or indirectly, in any event incur
any Indebtedness which by its terms (or by the terms of any agreement governing
such Indebtedness) is subordinated to any other Indebtedness of the Company
unless such Indebtedness is also by its terms (or by the terms of any agreement
governing such Indebtedness) made expressly subordinated to the Securities to
the same extent and in the same manner as such Indebtedness is subordinated to
such other Indebtedness of the Company.
(c) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, incur any Indebtedness which provides
that the holder thereof may (upon notice, lapse of time or both) declare a
default thereon or cause the payment thereof to be accelerated or payable prior
to its final scheduled maturity upon the occurrence of a default with respect to
any Indebtedness of any Unrestricted Subsidiary (including any right to take
enforcement action against such Unrestricted Subsidiary).
SECTION 4.10 Business of the Company.
-----------------------
The Company shall not, and shall not permit any of its Subsidiaries or
controlled Affiliates to, be principally engaged in any business or activity
other than a Related Business.
SECTION 4.11 Limitation on Dividends and Other Payment Restrictions
------------------------------------------------------
Affecting Restricted Subsidiaries.
---------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise enter into or cause
to become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to:
(a) pay dividends, in cash or otherwise, or make any other
distributions on its Capital Stock or any other interest or participation in, or
measured by, its profits owned by the Company or any Restricted Subsidiary;
(b) pay any Indebtedness owed to the Company or a Restricted
Subsidiary;
(c) make any Investment in the Company or any Restricted Subsidiary;
or
(d) transfer any of its property or assets to the Company or to any
Restricted Subsidiary, except for:
(i) any such customary encumbrance or restriction contained in
a security document creating a Lien permitted under this Indenture to the
extent relating to the property or asset subject to such Lien following a
default in respect of the applicable secured obligation;
(ii) any such encumbrance or restriction with respect to a
Restricted Subsidiary that is not a Restricted Subsidiary on the Issue Date
which encumbrance or restriction is in existence at the time such person
becomes a Restricted Subsidiary but not created in contemplation thereof;
(iii) any such encumbrance or restriction imposed pursuant to an
agreement which has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Restricted
Subsidiary;
(iv) any encumbrance or restriction existing under any amendment
to, and any agreement which refinances or replaces, an agreement containing
a restriction permitted by clause (ii), provided that any such amendment or
--------
agreement constitutes no greater encumbrance or restriction on the ability
of any Restricted Subsidiary to pay dividends or make distributions, pay
Indebtedness, make Investments or transfer property or assets than those
under or pursuant to the agreement evidencing the Indebtedness or
obligations so amended, refinanced or replaced; and
29
(v) any such encumbrance or restriction imposed in any
agreement governing Senior Bank Financing; provided no such encumbrance or
--------
restriction shall, so long as no default shall exist under such agreement,
prevent the payment of amounts to the Company required for it to meet its
operating expenses (including, without limitation, payments under the
Securities and this Indenture).
SECTION 4.12 Limitation on Liens.
-------------------
The Company will not, and will not permit any Restricted Subsidiary to,
create, incur, assume or suffer to exist any Liens of any kind (other than
Permitted Liens) against or upon any of its property or assets, or any proceeds
therefrom, or upon any income or profits therefrom or assign or convey any right
to receive income therefrom.
SECTION 4.13 Disposition of Proceeds of Asset Sales.
--------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary to,
make any Asset Sale unless (a) the Company or such Restricted Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the shares or assets sold or otherwise
disposed of and (b) at least 85% of such consideration consists of cash or Cash
Equivalents (provided that any notes or other obligations received by the
Company or such Restricted Subsidiary from such transferee or purchaser that are
immediately sold or transferred (on a non-recourse basis) for cash or Cash
Equivalents shall be deemed cash for purposes of this provision and be treated
as Net Cash Proceeds, subject to application as hereinafter provided). The
Company or such Restricted Subsidiary, as the case may be, may either (i) within
365 days of an Asset Sale (other than an Asset Sale of the Company's direct or
indirect interest in XYZ Entertainment, as to which no such limit would exist)
apply the Net Cash Proceeds of such Asset Sale to permanently repay, and
permanently reduce the commitments under, any Specified Indebtedness, or (ii)
apply such Net Cash Proceeds to an investment in properties and assets
("Replacement Assets") that (x) in the case of an Asset Sale of the Company's
direct or indirect interest in XYZ Entertainment will be used in a Related
Business (or in Capital Stock of any person principally engaged in a Related
Business) and (y) in all other cases will be used in a Related Business (or in
Capital Stock of any person that will become a Restricted Subsidiary as a result
of such investment to the extent such person owns properties and assets that
will be used in a Related Business) of the Company or any Restricted Subsidiary
located in the same nation as the assets disposed of in the Asset Sale within
365 days of such Asset Sale (in the case of clause (y)). Pending the final
application of any such Net Cash Proceeds in accordance with the second sentence
of this paragraph or to an Asset Sale Offer, the Company or such Restricted
Subsidiary may invest such Net Cash Proceeds in any manner not prohibited by
this Indenture and may temporarily repay Specified Indebtedness. Any Net Cash
Proceeds from any Asset Sale that are neither used to repay, and permanently
reduce the commitments under, any Specified Indebtedness nor invested in
Replacement Assets in accordance with this paragraph shall constitute "Excess
Proceeds" subject to disposition as provided below.
When the aggregate amount of Excess Proceeds equals or exceeds $10,000,000
(or, to the extent non-U.S. dollar denominated, the U.S. Dollar Equivalent
thereof), the Company shall make an offer to purchase (an "Asset Sale Offer"),
from all Holders of the Securities, Securities having an aggregate purchase
price equal to such Excess Proceeds at a price in cash equal to 100% of the
Accreted Value thereof on any purchase date prior to May 15, 2001 or 100% of the
outstanding principal amount at maturity thereof plus accrued and unpaid
interest, if any, to any purchase date on or after May 15, 2001. Each Asset
Sale Offer shall remain open for a period of 20 business days or such longer
period as may be required by law. Notwithstanding the foregoing, in the event
that any Pari Passu Indebtedness contains provisions requiring that the Company
or a Restricted Subsidiary apply any Excess Proceeds from an Asset Sale made by
it to make an offer to purchase or to permanently repay such Pari Passu
Indebtedness, and thereby reduce the commitments for such Pari Passu
Indebtedness, (i) the Company will only be required to make an offer to purchase
Securities having an aggregate purchase price, determined as set forth above,
equal to the Pro Rata Share of the Excess Proceeds and (ii) the balance of such
Excess Proceeds may be used to offer to purchase or to permanently repay, and
reduce the commitments in respect of, such Pari Passu Indebtedness. To the
extent that the aggregate purchase price for Securities tendered pursuant to an
Asset Sale Offer is less than the Excess Proceeds available for such offer, the
Company and the Restricted Subsidiaries may use such deficiency (the
"Deficiency") for general corporate purposes permitted under this Indenture. If
the aggregate purchase price for the Securities validly tendered and not
withdrawn by holders thereof exceeds the Excess Proceeds available for such
offer, Securities to be purchased will be selected on a pro rata basis. Upon
completion of such Asset Sale Offer, the amount of Excess Proceeds shall be
reset to zero.
30
Notwithstanding the two immediately preceding paragraphs, (a) up to the XYZ
Distribution Amount of the Net Cash Proceeds from any Asset Sale of the
Company's or any Restricted Subsidiary's direct or indirect interest in XYZ
Entertainment need not be applied as provided in the second sentence of the
first paragraph of this Section 4.13 and (b) the Company and the Restricted
Subsidiaries will be permitted to consummate an Asset Sale without complying
with such paragraphs to the extent (i) at least 85% of the consideration for
such Asset Sale constitutes Replacement Assets and (ii) such Asset Sale is for
Fair Market Value (with Fair Market Value being determined by an Independent
Financial Advisor as required by the definition of Fair Market Value); provided
--------
that any Net Cash Proceeds received by the Company or any of the Restricted
Subsidiaries in connection with any Asset Sale permitted to be consummated under
this paragraph shall be subject to the provisions of the two preceding
paragraphs.
At such time as the Company determines to make an Asset Sale Offer, it
shall so notify the Trustee in writing. Within 15 days thereafter, it shall mail
or cause the Trustee to mail (in the Company's name and at its expense) notice
of an Asset Sale Offer to the Holders of the Securities at their last registered
addresses with a copy to the Trustee and the Paying Agent. The Asset Sale Offer
shall remain open from the time of mailing for at least 20 Business Days and
until the close of business on the third Business Day prior to the Asset Sale
Offer Payment Date. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Securities pursuant to the Asset Sale
Offer. The notice, which shall govern the terms of the Asset Sale Offer, shall
state:
(i) that the Asset Sale Offer is being made pursuant to this
Section 4.13;
(ii) the purchase price (including the amount of accrued
interest, if any, or the Accreted Value) for each Security and the Asset
Sale Offer Payment Date;
(iii) that any Security not tendered or accepted for payment
will continue to accumulate Accreted Value or accrue interest, as the case
may be, in accordance with the terms thereof;
(iv) that any Security accepted for payment pursuant to the
Asset Sale Offer shall cease to accrete or accrue interest, as the case may
be, after the Asset Sale Offer Payment Date unless the Company shall fail
to make payment therefor;
(v) that Holders electing to have Securities purchased
pursuant to an Asset Sale Offer will be required to surrender their
Securities to the Paying Agent at the address specified in the notice prior
to 5:00 p.m., New York City time, on the third Business Day immediately
preceding the Asset Sale Offer Payment Date and must complete any form
letter of transmittal proposed by the Company and acceptable to the Trustee
and the Paying Agent;
(vi) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than 5:00 p.m., New York City time,
on the third Business Day immediately preceding the Asset Sale Offer
Payment Date, a telex or facsimile transmission (confirmed by overnight
delivery of the original thereof) or letter setting forth the name of the
Holder, the principal amount of Securities the Holder delivered for
purchase, the Security certificate number (if any) and a statement that
such Holder is withdrawing his election to have such Securities purchased;
(vii) that if Securities in a principal amount in excess of
the Excess Proceeds are tendered pursuant to the Asset Sale Offer, the
Company shall purchase Securities on a pro rata basis among the Securities
--- ----
tendered (with such adjustments as may be deemed appropriate by the Trustee
so that only Securities in denominations of $1,000 in principal amount at
maturity or integral multiples of $1,000 shall be acquired);
(viii) that Holders whose Securities are purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; and
(ix) the instructions that Holders must follow in order to
tender their Securities.
On or before the Asset Sale Offer Payment Date, the Company shall (I)
accept for payment the Securities or portions thereof to be purchased pursuant
to the Asset Sale Offer, (ii) deposit with the Paying Agent money, in
31
immediately available funds, in an amount sufficient to pay the purchase price
of all Securities or portions thereof so tendered and accepted and (iii) deliver
to the Trustee the Securities so accepted together with an Officers' Certificate
setting forth the Securities or portions thereof tendered to and accepted for
payment by the Company. The Paying Agent shall promptly mail or deliver to
Holders of Securities so accepted payment in an amount equal to the purchase
price, and the Trustee shall promptly authenticate and mail or deliver to such
Holders a new Security equal in principal amount to any unpurchased portion of
the Security surrendered. Any Securities not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company will
publicly announce the results of the Asset Sale Offer on the first Business Day
following the Asset Sale Offer Payment Date. To the extent the Asset Sale Offer
is not fully subscribed to by such Holders, the Company may retain such
unutilized portion of the Excess Proceeds. The Paying Agent shall promptly
deliver to the Company the balance of any moneys held by the Paying Agent after
payment to the Holders of Securities as aforesaid.
If the Company is required to make an Asset Sale Offer, the Company will
comply with all applicable tender offer laws and regulations, including, to the
extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act, and any
other applicable United States or foreign securities laws and regulations and
any applicable requirements of any securities exchange on which the Securities
are listed.
SECTION 4.14 Limitation on Transactions with Affiliates.
------------------------------------------
The Company shall not, and shall not permit, cause, or suffer any of its
Subsidiaries or controlled Affiliates to, conduct any business or enter into any
transaction or series of related transactions with or for the benefit of any
Affiliate of the Company or any beneficial holder of 10% or more of any class of
Capital Stock of the Company or any officer or director of the Company or any
Subsidiary (each an "Affiliate Transaction"), except on terms that are fair and
reasonable to the Company, such Subsidiary or such controlled Affiliate, as the
case may be. Each Affiliate Transaction involving aggregate payments or other
Fair Market Value in excess of $1,000,000 (or, to the extent non-U.S. dollar
denominated, the U.S. Dollar Equivalent thereof) shall be approved by the Board
of the Company, such approval to be evidenced by a Board Resolution (delivered
to the Trustee) stating that the Board of the Company (including a majority of
the Disinterested Directors) has determined that such transaction complies with
the foregoing provisions. In addition to the foregoing, with respect to any
Affiliate Transaction involving aggregate consideration of $5,000,000 (or, to
the extent non-U.S. dollar denominated, the U.S. Dollar Equivalent thereof) or
more (other than an Investment in an Unrestricted Subsidiary or Unrestricted
Affiliate permitted by Section 4.8, the Company must obtain a written opinion
(delivered to the Trustee) from an Independent Financial Advisor stating that
the terms of such Affiliate Transaction to the Company, the Subsidiary or such
controlled Affiliate, as the case may be, are fair from a financial point of
view.
Notwithstanding the foregoing, the restrictions set forth in this Section
4.14 shall not apply to (i) transactions between or among the Company and/or any
of the Restricted Subsidiaries, (ii) any dividend permitted by Section 4.8,
(iii) customary directors' fees, indemnification and similar arrangements,
consulting fees, employee salaries and bonuses (or other incentive compensation)
or legal fees in the ordinary course of business, (iv) [intentionally omitted],
(v) [intentionally omitted], (vi) transactions pursuant to the UIH Management
Agreement and the Technical Service Agreements, in each case, as the same may be
amended or supplemented, so long as amounts paid or payable under any amended or
replacement agreement do not exceed the amounts payable under the original
agreement as in effect on the Issue Date; provided, that if a Default shall have
--------
occurred and be continuing, amounts paid and payable under the UIH Management
Agreement and the Technical Service Agreements shall not exceed reimbursement of
the reasonable expenses (including reasonable allocations of salary and
overhead) of UIH incurred pursuant to such agreements and (vii) the issuance of
Capital Stock (other than Disqualified Capital Stock) of the Company.
SECTION 4.15 Change of Control.
-----------------
Upon the occurrence of a Change of Control (the date of such occurrence
being the "Change of Control Date"), the Company shall make and shall keep open
for at least 20 Business Days an offer (a "Change of Control Offer") to each
32
Holder of Securities to repurchase on a Business Day (the "Change of Control
Payment Date") not later than 60 days following the Change of Control Date, all
of such Holder's Securities at a purchase price equal to 101% of the Accreted
Value thereof on the date of purchase (if prior to May 15, 2001) or 101% of the
aggregate principal amount thereof, together with accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase (if on or after
May 15, 2001) (in either case, the "Change of Control Payment"). Not less than
28 days nor more than 45 days before the Change of Control Payment Date, the
Company shall mail a notice to each Holder stating:
(a) that the Change of Control Offer is being made pursuant to
this Section 4.15 and that all Securities tendered will be accepted for payment;
(b) the Change of Control Payment Date and the amount of the
Change of Control Payment;
(c) that any Securities not tendered will continue to accrete or
accrue interest, as the case may be, in accordance with the terms hereof;
(d) that, unless the Company defaults in the payment of the Change
of Control Payment, all Securities accepted for payment pursuant to the Change
of Control Offer shall cease to accrete or accrue interest, as the case may be,
after the Change of Control Payment Date;
(e) that Holders electing to have any Securities purchased
pursuant to a Change of Control Offer will be required to surrender the
Securities, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Securities completed, to the Paying Agent at the address
specified in the notice prior to 5:00 p.m., New York City time, on or prior to
the Change of Control Payment Date;
(f) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than 5:00 p.m., New York City time, on or
prior to the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Securities delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Securities purchased; and
(g) that Holders whose Securities are being purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered, which unpurchased portion must be equal
to $1,000 in principal amount at maturity or an integral multiple thereof.
On the Change of Control Payment Date, the Company shall (i) accept for
payment Securities or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Securities or portions thereof so tendered and accepted
and (iii) deliver to the Trustee the Securities so accepted together with an
Officers' Certificate setting forth the Securities or portions thereof tendered
to and accepted for payment by the Company. The Paying Agent shall promptly
mail or deliver to the Holders of Securities so accepted payment in an amount
equal to the purchase price, and the Trustee shall promptly authenticate and
mail or deliver to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so accepted
shall be promptly mailed or delivered by the Company to the Holder thereof. The
Company will publicly announce the results of the Change of Control Offer not
later than the first Business Day following the Change of Control Payment Date.
If the Company is required to make a Change of Control Offer, the Company
shall comply with all applicable tender offer laws and regulations, including,
to the extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act,
and any other applicable United States or foreign securities laws and
regulations and any applicable requirements of any securities exchange on which
the Securities are listed.
SECTION 4.16 Waiver of Stay; Extension of Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Securities as contemplated herein
or in the Securities, wherever enacted, now or at any time hereafter in force,
or that
33
may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.17 Maintenance of Insurance.
------------------------
The Company shall, and shall cause each of its Subsidiaries to, keep at all
times all of their respective properties and assets which are of an insurable
nature (as determined by reference to industry standards) insured reasonably and
appropriately as prudent business judgment would require against loss or damage
and shall obtain such other reasonable and appropriate insurance as is required
or so appropriate for the nature of the business and other risks encountered by
the Company and its Subsidiaries, in each case with insurers reasonably and in
good faith believed by the Company to be responsible and financially sound, to
the extent that insurance of a similar character and nature is usually so
obtained by corporations similarly situated and that are at any such time
conducting business substantially similar to that of the Company and its
Subsidiaries in accordance with prudent business practices.
SECTION 4.18 Limitation on Unrestricted Subsidiaries and Unrestricted
--------------------------------------------------------
Affiliates.
----------
(a) The Company may designate (i) any Subsidiary of the Company
as an "Unrestricted Subsidiary" hereunder and (ii) any Restricted Affiliate as
an Unrestricted Affiliate (each, a "Designation") only if:
(A) no Default shall have occurred and be continuing after
giving effect to such Designation; and
(B) the Company would be permitted under this Indenture to
make an Investment at the time of Designation (assuming the
effectiveness of such Designation) in an amount (the "Designation
Amount") equal to the Fair Market Value of such Subsidiary or
Restricted Affiliate, as the case may be, on such date.
(b) Subject to Section 4.18(c), in the event of any Designation
permitted under Section 4.18(a), the Company shall be deemed to have made an
Investment constituting a Restricted Payment pursuant to Section 4.8 for all
purposes under this Indenture in the Designation Amount. If at any time a
person designated as a Restricted Affiliate under this Indenture ceases to
constitute a Restricted Affiliate for any reason, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
4.8 for all purposes under this Indenture in an amount equal to the Fair Market
Value of such person at such time.
(c) Notwithstanding Sections 4.18(a) and 4.18(b), the Company
shall be permitted to transfer its indirect interest in XYZ Entertainment to a
Subsidiary and designate such Subsidiary as an "Unrestricted Subsidiary"
hereunder without satisfaction of Section 4.18(a)(B), and such designation shall
not result in the Company having been deemed to have made any Investment
constituting a Restricted Payment hereunder.
(d) (i) The Company shall not and shall not permit any
Restricted Subsidiary to, at any time (x) provide credit support for, or a
guarantee of, any Indebtedness of any Unrestricted Subsidiary or Unrestricted
Affiliate, as the case may be (including any undertaking, agreement or
instrument evidencing such Indebtedness), (y) be directly or indirectly liable
for any Indebtedness of any Unrestricted Subsidiary or Unrestricted Affiliate,
as the case may be, or (z) be directly or indirectly liable for any Indebtedness
which provides that the holder thereof may (upon notice, lapse of time or both)
declare a default thereon or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity upon the occurrence of a default
with respect to any Indebtedness of any Unrestricted Subsidiary or Unrestricted
Affiliate, as the case may be (including any right to take enforcement action
against such Unrestricted Subsidiary or Unrestricted Affiliate, as the case may
be), except in the case of clause (x) or (y) to the extent permitted under
Section 4.8, and (ii) no Unrestricted Subsidiary or Unrestricted Affiliate shall
at any time guarantee or otherwise provide credit support for any obligation of
the Company or any Restricted Subsidiary.
(e) The Company may (i) revoke any Designation of a Subsidiary
as an Unrestricted Subsidiary or (ii) designate any Unrestricted Affiliate as a
Restricted Affiliate (each, a "Revocation") if:
34
(A) no Default shall have occurred and be continuing at the
time of and after giving effect to such Revocation; and
(B) all Liens and Indebtedness of such Unrestricted
Subsidiary or Unrestricted Affiliate, as the case may be, outstanding
immediately following such Revocation would, if incurred at such time,
have been permitted to be incurred for all purposes of this Indenture.
(f) On the Issue Date, each of Saturn, YXZ Entertainment and
United Wireless will be owned, directly or indirectly, through one or more
Unrestricted Subsidiaries. Saturn and United Wireless shall not be designated
Restricted Subsidiaries during the term of this Indenture. After the Issue Date,
all Designations and Revocations under this Section 4.18 must be evidenced by
Board Resolutions of the Company delivered to the Trustee certifying compliance
with this Section 4.18.
SECTION 4.19 Limitation on Status as Investment Company.
------------------------------------------
The Company shall not, and shall not permit any of its Subsidiaries or
controlled Affiliates to, conduct its business in a fashion that would cause the
Company to be required to register as an "investment company" (as that term is
defined in the Investment Company Act of 1940, as amended), or otherwise become
subject to regulation under the Investment Company Act of 1940, as amended.
SECTION 4.20 Internal Revenue Service Filing.
-------------------------------
The Company shall file Internal Revenue Service Form 8281, Information
Return for Publicly Offered Original Issue Discount Instruments, with the
Internal Revenue Service within 30 days of the date of this Indenture and shall
mail a copy of such filing to the Trustee within 15 days after such filing with
the Internal Revenue Service.
SECTION 4.21 Issuance of Contingent Warrants.
-------------------------------
(a) If the Company does not effect an Equity Sale on or prior to
November 15, 1997, the Company shall issue to Holders of the Securities the
Warrants, which shall be exercisable at the Exercise Price for 0.4% of the
Common Stock of the Company (determined on a fully diluted basis as of the date
of such issuance after giving effect to the exercise or conversion of all
securities exercisable or convertible into Common Stock, including the exercise
of such Warrants); provided that the Company shall not be required to issue the
---------
Warrants if the holder of all of the Capital Stock of the Company (x) is a
corporation ("Parent") duly organized and validly existing under the laws of the
State of Colorado or the State of Delaware, (y) has no material assets or
liabilities other than all of the outstanding Capital Stock of the Company and
(z) issues, on or prior to November 15, 1997, warrants exercisable at the
Exercise Price for 0.4% of the Common Stock of Parent to Holders of the
Securities (determined on the same fully diluted basis set forth above).
(b) The Warrants shall be issued pursuant to the Warrant
Agreement or the warrants of Parent shall be issued pursuant to a warrant
agreement substantially identical to the Warrant Agreement (with appropriate
conforming changes), as the case may be.
(c) The Warrants or the warrants of Parent, as the case may be,
shall be issued to Holders of record as of November 1, 1997 pro rata, based upon
the aggregate principal amount of Securities held by such Holders as of November
1, 1997.
(d) The Common Stock of the Company or Parent issued pursuant to
Section 4.21(a) shall conform in all material respects to the description
thereof contained in the Offering Memorandum under the caption "Description of
Capital Stock."
ARTICLE V
35
SUCCESSOR CORPORATION
---------------------
SECTION 5.1 Limitation on Mergers, Consolidations or Sales of Assets.
--------------------------------------------------------
The Company shall not, in a single transaction or through a series of
transactions, consolidate or combine with or merge with or into or, directly or
indirectly, sell, assign, convey, lease, transfer or otherwise dispose of all or
substantially all of its properties and assets to any person or persons, and the
Company shall not permit any of its Subsidiaries to enter into any such
transaction or series of transactions if such transaction or series of
transactions, in the aggregate, would result in the sale, assignment,
conveyance, lease, transfer or disposition of all or substantially all of the
properties and assets of the Company and its Subsidiaries, taken as a whole, to
any person or persons, unless:
(a) the Company shall be the continuing person or the resulting,
surviving or transferee person (in either case, the "surviving entity") shall be
a company organized and existing under the laws of the United States of America,
any State thereof or the District of Columbia;
(b) the surviving entity (if other than the Company) shall
expressly assume all of the obligations of the Company under the Securities and
this Indenture and shall execute a supplemental indenture to effect such
assumption which supplemental indenture shall be delivered to the Trustee and
shall be in form reasonably satisfactory to the Trustee;
(c) immediately after giving effect to such transaction or series
of transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), the Company or the
surviving entity (assuming such surviving entity's assumption of the Company's
obligations under the Securities and this Indenture), as the case may be, would
be able to incur $1.00 of Indebtedness under the proviso of Section 4.9(a);
(d) immediately after giving effect to such transaction or series
of transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), no Default shall have
occurred and be continuing; and
(e) the Company or the surviving entity, as the case may be, shall
have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
stating that such transaction or series of transactions, and, if a supplemental
indenture is required in connection with such transaction or series of
transactions to effectuate such assumption, such supplemental indenture complies
with this Article V and that all conditions precedent in this Indenture relating
to the transaction or series of transactions have been satisfied.
SECTION 5.2 Successor Entity Substituted.
----------------------------
Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of a person subject to, and in accordance with,
Section 5.1, the surviving entity shall succeed to, and be substituted for, and
may exercise every right and power of the Company under this Indenture with the
same effect as if such surviving entity had been named as such; provided that,
--------
solely for purposes of computing Cumulative Adjusted Available Cash Flow for
purposes of clause (iii) of Section 4.8(a), the Cumulative Adjusted Available
Cash Flow of any persons other than the Company and the Restricted Subsidiaries
shall only be included for periods subsequent to the effective time of such
merger, consolidation, combination or transfer of assets.
For all purposes of this Indenture and the Securities (including the
provisions of this Article V and of Section 4.8, Section 4.9 and Section 4.12),
Subsidiaries of any Surviving Entity will, upon such transaction or series of
transactions, become Restricted Subsidiaries or Unrestricted Subsidiaries as
provided pursuant to Section 4.18 and all Indebtedness, and all Liens on
property or assets, of the Company and the Restricted Subsidiaries immediately
prior to such transaction or series of transactions will be deemed to have been
incurred upon such transaction or series of transactions.
36
ARTICLE VI
DEFAULT AND REMEDIES
--------------------
SECTION 6.1 Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of interest on the Securities when it
becomes due and payable and continuance of such default for a period of 30 days
or more;
(b) default in the payment of the principal of, or premium, if
any, on the Securities when due, at maturity, upon redemption or otherwise
(including pursuant to a Change of Control Offer or an Asset Sale Offer);
(c) failure to make a Change of Control Offer or an Asset Sale
Offer within the time periods specified in Sections 4.15 or 4.13, respectively,
or default in the performance, or breach, of any provision of Article V;
(d) default in the performance, or breach, of any covenant in this
Indenture (other than defaults specified in clause (a), (b) or (c) above), and
continuance of such default or breach for a period of 30 days after written
notice to the Company by the Trustee or to the Company and the Trustee by the
holders of at least 25% in aggregate principal amount at maturity of the
outstanding Securities (in each case, when such notice is deemed received in
accordance with this Indenture);
(e) failure to perform any term, covenant, condition, or provision
of one or more classes or issues of other Indebtedness in an aggregate principal
amount of $5,000,000 (or, to the extent non-U.S. dollar denominated, the U.S.
Dollar Equivalent thereof) or more under which the Company or any Restricted
Subsidiary is obligated, and either (a) such Indebtedness is already due and
payable in full or (b) such failure results in the acceleration of the maturity
of such Indebtedness;
(f) any holder or encumbrancer of $5,000,000 (or, to the extent
non-U.S. dollar denominated, the U.S. Dollar Equivalent thereof) or more in
aggregate principal amount of Indebtedness of the Company or any Restricted
Subsidiary shall commence judicial proceedings or take any other action to
foreclose upon, have a receiver appointed with respect to, or dispose of assets
of the Company or any Restricted Subsidiary having an aggregate Fair Market
Value, individually or in the aggregate, of $5,000,000 (or, to the extent non-
U.S. dollar denominated, the U.S. Dollar Equivalent thereof) or more or shall
have exercised any right under applicable law or applicable security documents
to take ownership of any such assets in lieu of foreclosure;
(g) one or more judgments, orders or decrees for the payment of
money in the amount of $5,000,000 (or, to the extent non-U.S. dollar
denominated, the U.S. Dollar Equivalent thereof) or more, either individually or
in the aggregate, shall be entered against the Company or any Restricted
Subsidiary or any of their respective properties and shall not be discharged and
there shall have been a period of 60 days or more during which a stay of
enforcement of such judgment or order, by reason of pending appeal or otherwise,
shall not be in effect;
(h) the Company or any Restricted Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding to wind up or
liquidate;
(ii) consents to the entry of an order for relief against it
in an involuntary case or proceeding;
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property;
37
(iv) makes a general assignment for the benefit of its
creditors or any class thereof or files, enters into or makes a proposal or
scheme of arrangement involving the rescheduling or composition or
compromise of its indebtedness;
(v) files an answer or consent seeking reorganization or
relief; or
(vi) shall generally not pay its debts as such debts become
due or shall admit in writing its inability to pay its debts generally;
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any Restricted
Subsidiary as a debtor in an involuntary case or proceeding;
(ii) appoints a Custodian of the Company or any Restricted
Subsidiary or a Custodian for all or substantially all of their respective
properties; or
(iii) orders the liquidation, winding up or placement in
official management of the Company or any Restricted Subsidiary;
and in each case the order or decree remains unstayed and in effect for 60
days; or
(j) [intentionally omitted]
SECTION 6.2 Acceleration.
------------
If an Event of Default (other than an Event of Default specified in
paragraph (h) or paragraph (i) of Section 6.1 with respect to the Company)
occurs and is continuing, then the Trustee or the Holders of at least 25% in
principal amount at maturity of the outstanding Securities may, by written
notice, and the Trustee upon the request of the Holders of not less than 25% in
principal amount at maturity of the outstanding Securities shall, declare the
Default Amount of, and any accrued and unpaid interest on, all outstanding
Securities to be immediately due and payable and upon any such declaration such
amounts (plus, in the case of an Event of Default that is the result of an
action by the Company or any of its Restricted Subsidiaries intended to avoid
restrictions on or premiums related to redemptions of the Securities contained
in this Indenture or the Securities, an amount of premium that would have been
applicable pursuant to the Securities or as set forth in this Indenture) shall
become immediately due and payable. If an Event of Default specified in
paragraph (h) or paragraph (i) of Section 6.1 with respect to the Company occurs
and is continuing, then the Default Amount of, and any accrued and unpaid
interest on, all outstanding Securities (plus, in the case of an Event of
Default that is the result of an action by the Company or any of its Restricted
Subsidiaries intended to avoid restrictions on or premiums related to
redemptions of the Securities contained in this Indenture or the Securities, an
amount of premium that would have been applicable pursuant to the Securities or
as set forth in this Indenture) shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder. Upon payment of such Default Amount (plus, in the case of an Event
of Default that is the result of an action by the Company or any of its
Restricted Subsidiaries intended to avoid restrictions on or premiums related to
redemptions of the Securities contained in this Indenture or the Securities, an
amount of premium that would have been applicable pursuant to the Securities or
as set forth in this Indenture), all of the Company's obligations under the
Securities and this Indenture, other than obligations under Section 7.7, shall
terminate. The Holders of a majority in principal amount at maturity of the
Securities then outstanding by notice to the Trustee may rescind an acceleration
and its consequences if (i) all existing Events of Default, other than the non-
payment of the principal and interest on the Securities which have become due
solely as a result of such declaration of acceleration, have been cured or
waived, (ii) to the extent the payment of such interest is lawful, interest on
overdue installments of interest and overdue principal, which has become due
otherwise than by such declaration of acceleration, has been paid, (iii) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (iv) prior to such rescission the Company shall have
paid or deposited with the
38
Trustee all sums paid or advanced by the Trustee hereunder and all other amounts
due the Trustee and its agents and counsel under Section 7.7. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.3 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of the
Accreted Value of, principal of or interest or Liquidated Damages on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Securities in respect of which such judgment has been recovered.
SECTION 6.4 Waiver of Past Default.
----------------------
Subject to Sections 6.7 and 9.2, prior to the declaration of acceleration
of the maturity of the Securities, the Holder or Holders of not less than a
majority in principal amount at maturity of the Securities at the time
outstanding by written notice to the Company and the Trustee may waive on behalf
of all the Holders any past Default under this Indenture and its consequence,
except a Default in the payment of the Default Amount of, principal of or
interest on any Security or a Default with respect to any covenant or provision
which cannot be modified or amended without the consent of the Holder of each
outstanding Security affected pursuant to Section 9.2.
SECTION 6.5 Control by Majority.
-------------------
The Holders of a majority in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it, including, without limitation, any remedies provided for in
Section 6.3. However, the Trustee may refuse to follow any direction that
conflicts with law, the Securities or this Indenture, or that the Trustee
determines may be unduly prejudicial to the rights of another Securityholder or
that may involve the Trustee in personal liability. The Trustee may take any
other action reasonably deemed proper in good faith by the Trustee which is not
inconsistent with such direction.
SECTION 6.6 Limitation on Suits.
-------------------
A Securityholder may not pursue any remedy with respect to this Indenture
or the Securities unless:
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee to pursue a remedy;
(c) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 30 days
after receipt of the request and the offer of indemnity; and
(e) during such 30-day period the Holders of at least a majority
in principal amount of the then outstanding Securities do not give the Trustee a
direction which is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
39
SECTION 6.7 Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of the Accreted Value of or the principal of and
interest on a Security, on or after the respective due dates expressed in the
Security, or to bring suit for the enforcement of any such payment on or after
such respective dates, is absolute and unconditional and shall not be impaired
or affected without the consent of such Holder.
SECTION 6.8 Collection Suit by Trustee.
--------------------------
If an Event of Default occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor on the Securities for the whole amount of the Accreted
Value of or the principal and accrued interest remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest on overdue installments of interest, in each case at the
interest rate and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.9 Trustee May File Proofs of Claim.
--------------------------------
The Trustee shall be entitled and empowered to file such proofs of claim
and other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Securityholders allowed in any judicial proceedings relative to the Company
or any of its Subsidiaries (or any other obligor upon the Securities), its
creditors or its property and shall be entitled and empowered to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same, and any Custodian in any such judicial proceedings
is hereby authorized by each Securityholder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 7.7. Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10 Priorities.
----------
If the Trustee collects any money pursuant to this Article VI, it shall pay
out such money in the following order:
First: to the Trustee for amounts due under Section 7.7;
Second: to Holders for amounts due and unpaid on the Securities for
Accreted Value or principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for Accreted Value or principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Securityholders pursuant to this
Article VI.
SECTION 6.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder
40
pursuant to Section 6.7, or a suit by any Holder, or group of Holders, holding
in the aggregate more than 10% in principal amount of the outstanding
Securities.
SECTION 6.12 Rights and Remedies Cumulative.
------------------------------
No right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.13 Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article VI or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
ARTICLE VII
TRUSTEE
-------
SECTION 7.1 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Sections 6.4 or 6.5 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
41
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) Except with respect to Sections 4.1, 4.6 and 4.20 hereof, the
Trustee shall have no duty to inquire as to the performance of the Company's
covenants in Article IV hereof. In addition, the Trustee shall not be deemed to
have knowledge of any Default or Event of Default except (i) any Event of
Default occurring pursuant to Sections 4.1, 4.6, 4.20 and 6.1(a) hereof or (ii)
any Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
SECTION 7.2 Rights of Trustee.
-----------------
(a) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent (other
than the negligence or willful misconduct of an agent who is an employee of the
Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.3 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or any Affiliate
of the Company with the same right it would have if it were not Trustee.
However, in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.4 Trustee's Disclaimer.
--------------------
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities or any
money paid to the company or upon the Company's direction under any provision of
this Indenture, it shall not be
42
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Securities or any other document in
connection with the sale of the Securities or pursuant to this Indenture other
than its certificate of authentication.
SECTION 7.5 Notice of Defaults.
------------------
If a Default or an Event of Default with respect to the Securities occurs
and is continuing and is known to a Trust Officer of the Trustee, the Trustee
shall mail to each Holder a notice of the Default or Event of Default within 30
days after it occurs or, if later, within 10 days after such Default or Event of
Default becomes known to the Trustee, unless such Default or Event of Default
has been cured in accordance with TIA (S) 313(c). Except in the case of a
Default or Event of Default arising pursuant to Section 6.1(a) or 6.1(b), the
Trustee may withhold the notice to the Holders if and so long as a committee of
its Trust Officers determines in good faith that withholding the notice is in
the interest of the Holders.
SECTION 7.6 Reports by Trustee to Holders.
-----------------------------
Within 60 days after each November 15 beginning with the November 15
following the date of this Indenture, and for so long as Securities remain
outstanding, the Trustee shall mail to the Holders of the Securities a brief
report dated as of such reporting date that complies with TIA (S) 313(a) (but if
no event described in TIA (S) 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA (S) 313(b). The Trustee shall also transmit by mail all
reports as required by TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of
Securities shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Securities are listed in accordance with TIA (S) 313(d).
The Company shall promptly notify the Trustee when the Securities are listed on
any stock exchange.
SECTION 7.7 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.7) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
43
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to the
extent applicable.
SECTION 7.8 Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Securities of
a majority in principal amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Securities of at least 10% in principal amount of the then
outstanding Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Security who has
been a Holder of a Security for at least six months, fails to comply with
Section 7.10, such Holder of a Security may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Securities. The retiring Trustee shall promptly transfer all
property held by it as a Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.8, the Company's obligation under Section 7.7 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.9 Successor Trustee By Merger, Etc.
--------------------------------
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation if otherwise eligible hereunder without any further act
shall be the successor Trustee, provided, such corporation shall be otherwise
--------
qualified and eligible under this Article VII.
SECTION 7.10 Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1) and (2). The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA (S) 310(b); provided
---------
that there shall be excluded from the operation of TIA (S) 310(b)(1) any
indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are outstanding if
the requirements for such exclusion set forth in TIA (S) 310(b)(1) are met. The
provisions of TIA (S) 310 shall apply to the Company, as obligor of the
Securities.
44
SECTION 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
----------------------------------
SECTION 8.1 Termination of Obligations; Legal and Covenant Defeasance.
---------------------------------------------------------
(a) This Indenture shall cease to be of further effect (except
that the Company's obligations under Section 7.7 and the Trustee's and the
Paying Agent's obligations under Sections 8.3 and 8.4 shall survive) when all
outstanding Securities theretofore authenticated and issued have been delivered
(other than destroyed, lost or stolen Securities that have been replaced or
paid) to the Trustee for cancellation and the Company has paid all sums payable
hereunder. In addition, the Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
with respect to the Securities, elect to have either Section 8.1(b) or 8.1(c) be
applied to all outstanding Securities upon compliance with the conditions set
forth below in this Article VIII.
(b) Upon the Company's exercise under Section 8.1(a) of the
option applicable to this Section 8.1(b), the Company shall be deemed to have
been discharged from its obligations with respect to all outstanding Securities
on the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Securities, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.2 and the other Sections of
this Indenture referred to in clauses (i) and (ii) below, and to have satisfied
all its other obligations under such Securities and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder:
(i) the rights of Holders of outstanding Securities to
receive payments in respect of the principal of, premium, if any, and
interest on such Securities when such payments are due, or on the
redemption date, as the case may be, (ii) the Company's obligations with
respect to such Securities under Sections 2.4, 2.6, 2.7, 2.10, 4.2 and 4.3,
(iii) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (iv)
this Article VIII. Subject to compliance with this Article VIII, the
Company may exercise its option under this Section 8.1(b) notwithstanding
the prior exercise of its option under Section 8.1(c) with respect to the
Securities.
(c) Upon the Company's exercise under Section 8.1(a) of the
option applicable to this Section 8.1(c), the Company shall be released from its
obligations under the covenants contained in Sections 2.16, 4.5, 4.6, 4.7, 4.8,
4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17 and 4.18 and Article V with
respect to the outstanding Securities on and after the date the conditions set
forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Securities shall not be deemed outstanding for accounting
purposes). For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.1(c) or (d), as the case may be, but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to the application of
either Section 8.1(b) or 8.1(c) to the outstanding Securities:
45
(i) the Company irrevocably deposits, or causes to be
deposited, with the Trustee, in trust for the benefit of the Holders
pursuant to an irrevocable trust and security agreement in form and
substance reasonably satisfactory to the Trustee (A) U.S. Legal Tender, (B)
U.S. Government Obligations or (C) a combination thereof, in an amount
sufficient after payment of all Federal, state and local taxes or other
charges or assessments in respect thereof payable by the Trustee, which
through the payment of interest and principal will provide, not later than
one day before the due date of payment in respect of the Securities, U.S.
Legal Tender in an amount which, in the opinion of a nationally recognized
firm of independent certified public accountants expressed in a written
certification thereof (in form and substance reasonably satisfactory to the
Trustee) delivered to the Trustee, is sufficient to pay the Accreted Value
of or the principal of and interest on the Securities then outstanding on
the dates on which any such payments are due and payable in accordance with
the terms of this Indenture and of the Securities; provided that (y) the
--------
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment of said
Accreted Value or principal and interest with respect to the Securities and
(z) such money or the proceeds of such U.S. Government Obligations shall
have been on deposit with the Trustee for a period of at least 90 days;
(ii) no Default or Event of Default shall have occurred or
be continuing on the date of such deposit and such deposit will not result
in a Default or Event of Default under this Indenture or a breach or
violation of, or constitute a default under, any other instrument to which
the Company or any Subsidiary of the Company is a party or by which it or
its property is bound;
(iii) the Company shall have delivered to the Trustee an
Opinion of Counsel from independent counsel reasonably satisfactory to the
Trustee accompanied by a ruling of the Internal Revenue Service issued to
the Company or based on a change in law occurring after the date hereof to
the effect that the Holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and defeasance and
will be subject to Federal income tax in the same amounts and in the same
manner and at the same time as would have been the case if such deposit and
defeasance had not occurred;
(iv) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that after the 91st day following the
deposit, such U.S. Legal Tender or the proceeds of such U.S. Government
Obligations will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditor rights
generally; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each in form and substance
reasonably satisfactory to the Trustee, each stating that all conditions
precedent relating to either the Legal Defeasance under Section 8.1(b) or
the Covenant Defeasance under Section 8.1(c), as the case may be, have
been complied with as contemplated by this Section 8.1(d); provided,
--------
however, that no deposit under clause (i) above shall be effective to
-------
terminate the obligations of the Company under the Securities or this
Indenture prior to 90 days following any such deposit.
The Company will pay any taxes or other expenses incurred by any trust
created pursuant to this Article VIII.
SECTION 8.2 Application of Trust Money.
--------------------------
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or U.S.
Government Obligations deposited with it pursuant to Section 8.1, and shall
apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of the Accreted
Value of or the principal of and interest on the Securities. The Trustee shall
be under no obligation to invest said U.S. Legal Tender or U.S. Government
Obligations except as it may agree with the Company.
SECTION 8.3 Repayment to the Company.
------------------------
Subject to Section 8.1, the Trustee and the Paying Agent shall promptly pay
to the Company upon request any excess U.S. Legal Tender or U.S. Government
Obligations held by them at any time and thereupon shall be relieved from all
liability with respect to such money. The Trustee and the Paying Agent shall
pay to the Company upon request
46
any money held by them for the payment of Accreted Value, principal or interest
that remains unclaimed for two years; provided that the Trustee or such Paying
--------
Agent, before being required to make any payment, may at the expense of the
Company cause to be published once in a newspaper of general circulation in the
City of New York or mail to each Holder entitled to such money notice that such
money remains unclaimed and that after a date specified therein which shall be
at least 30 days from the date of such publication or mailing any unclaimed
balance of such money then remaining will be repaid to the Company. After
payment to the Company, Securityholders entitled to such money must look to the
Company for payment as general creditors unless an applicable law designates
another Person.
SECTION 8.4 Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with Section 8.1 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.1 until such time as the Trustee or Paying Agent is permitted to apply
all such U.S. Legal Tender or U.S. Government Obligations in accordance with
Section 8.1; provided that if the Company has made any payment of interest on or
--------
principal of any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the U.S. Legal Tender or U.S. Government Obligations
held by the Trustee or Paying Agent.
SECTION 8.5 Acknowledgment of Discharge by Trustee.
--------------------------------------
After (a) the conditions of Section 8.1 have been satisfied, (b) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company and (c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (a), above, relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified in Section 8.1.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
-----------------------------------
SECTION 9.1 Without Consent of Holders.
--------------------------
Without the consent of any Holders, the Company, when authorized by
resolutions of its Board of Directors (copies of which shall be delivered to the
Trustee) and the Trustee may amend or supplement this Indenture or the
Securities without notice to any Holder for any of the following purposes:
(a) to cure any ambiguity, defect or inconsistency herein;
provided that such amendment or supplement does not adversely affect the rights
--------
of any Holder in any respect;
(b) to make any change that would provide any additional rights
or benefits to Holders of the Securities;
(c) to provide for collateral for the Securities;
(d) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to evidence the succession in accordance with Article V
hereof of another Person to the Company and the assumption by any such successor
of the covenants of the Company herein and in the Securities; or
47
(g) to make any other change that does not adversely affect the
rights of any Holder; provided that in making such change, the Trustee may rely
--------
upon an Opinion of Counsel stating that such change does not adversely affect
the rights of any Holder.
SECTION 9.2 With Consent of Holders.
-----------------------
Subject to Section 6.7 and the provisions of this Section 9.2, the
Company, when authorized by resolution of its Board of Directors (copies of
which shall be delivered to the Trustee), and the Trustee may amend or
supplement this Indenture with the written consent of the Holders of at least a
majority in aggregate principal amount at maturity of the Securities then
outstanding. Subject to Section 6.7 and the provisions of this Section 9.2, the
Holders of, in the aggregate, at least a majority in principal amount at
maturity of the then outstanding Securities affected may waive compliance by the
Company with any provision of this Indenture without notice to any other
Securityholder. However, without the consent of each Securityholder affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.4, may
not:
(a) reduce the principal amount at maturity of, extend the fixed
maturity of, or alter the redemption provisions of, the Securities or amend or
modify the calculation of the Accreted Value or the Default Amount so as to
reduce the amount of the Accreted Value or the Default Amount;
(b) change the currency in which any Securities or any premium
or the accrued interest thereon is payable;
(c) reduce the percentage in principal amount at maturity
outstanding of Securities who must consent to an amendment, supplement or waiver
or consent to take any action under this Indenture or the Securities;
(d) impair the right to institute suit for the enforcement of
any payment on or with respect to the Securities;
(e) waive a default in payment with respect to the Securities;
(f) reduce the rate or extend the time for payment of interest
on the Securities;
(g) alter the obligation to purchase the Securities in
accordance with the Indenture following the occurrence of a Change of Control or
an Asset Sale or waive any default in the performance thereof;
(h) affect the ranking of the Securities in a manner adverse to
the holder of any Securities.
(i) make any change in Section 6.4, 6.7 or this Section 9.2;
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
In connection with any amendment, supplement or waiver under this Article
IX, the Company may, but shall not be obligated to, offer to any Holder who
consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 9.3 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to or supplement of this Indenture or the Securities shall
be set forth in a supplemental indenture that complies with the TIA as then in
effect.
48
SECTION 9.4 Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent Holder
of that Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent
as to his Security or portion of a Security. Such revocation shall be effective
only if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective. Notwithstanding the above,
nothing in this paragraph shall impair the right of any Securityholder under
(S)316(b) of the TIA.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver which record date shall be at least 10 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the second and third sentences of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date. Such
consent shall be effective only for actions taken within 90 days after such
record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder unless it makes a change described in any of clauses (a)
through (h) of Section 9.2. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it.
SECTION 9.5 Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may (in accordance with the specific direction of the Company) request
the Holder of the Security to deliver it to the Trustee. The Trustee may (in
accordance with the specific direction of the Company) place an appropriate
notation on the Security about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms. Failure to make the appropriate
notation or issue a new Security shall not affect the validity and effect of
such amendment, supplement or waiver.
SECTION 9.6 Trustee To Sign Amendments, Etc.
-------------------------------
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article IX if the amendment, supplement or waiver does not
adversely affect the rights, duties or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. In signing any amendment, supplement or
waiver, the Trustee shall be entitled to receive, if requested, an indemnity
reasonably satisfactory to it and to receive, and shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
the execution of any amendment, supplement or waiver authorized pursuant to this
Article IX is authorized or permitted by this Indenture. The Company may not
sign an amendment until its Board of Directors approves it.
ARTICLE X
MISCELLANEOUS
-------------
SECTION 10.1 Trust Indenture Act Controls.
----------------------------
The provisions of TIA (S) (S) 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included unless expressly
excluded by this Indenture) are a part of and govern this Indenture, whether or
not physically contained herein.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by the above paragraph, the imposed duties shall control.
49
SECTION 10.2 Notices.
-------
Any notice or communication shall be sufficiently given if in writing and
delivered in person or mailed by first-class mail or by telecopier, followed by
first-class mail, or by overnight service guaranteeing next-day delivery,
addressed as follows:
(a) if to the Company:
UIH AUSTRALIA/PACIFIC, INC.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Telecopier Number: (000) 000-0000
with, in the case of any notice or communication furnished pursuant to
Article VI, a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, #0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopier Number: (000) 000-0000
(b) if to the Trustee:
Firstar Bank of Minnesota, N.A.
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Administration Department
Telecopier Number: (000) 000-0000
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Security-holder, including any
notice delivered in connection with TIA (S) 310(b), TIA (S) 313(c), TIA (S)
314(a) and TIA (S) 315(b), shall be mailed to such Holder, first-class postage
prepaid, at his address as it appears on the registration books of the Registrar
and shall be sufficiently given to such Holder if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. Except for a notice to the Trustee, which is deemed given only
when received, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 10.3 Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person shall
have the protection of TIA (S) 312(c)
SECTION 10.4 Certificate and Opinion of Counsel as to Conditions-
---------------------------------------------------
Precedent.
---------
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee at the
request of the Trustee (a) an Officers' Certificate in form and substance
50
reasonably satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with (which officer signing
such certificate may rely, as to matters of law, on an Opinion of Counsel), (b)
an Opinion of Counsel in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of counsel, all such conditions have been
complied with (which counsel, as to factual matters, may rely on an Officers'
Certificate and certificates of public officials) and (c) where applicable, a
certificate or opinion by an independent certified public accountant
satisfactory to the Trustee that complies with TIA (S) 314(c).
SECTION 10.5 Statements Required in Certificate and Opinion of Counsel.
---------------------------------------------------------
Each certificate and Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate or
rendering such Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in such
certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 10.6 Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Securityholders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 10.7 Legal Holidays.
--------------
If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
SECTION 10.8 Governing Law.
-------------
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE
SECURITIES WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY AGREES
TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE
SECURITIES.
SECTION 10.9 No Recourse Against Others.
--------------------------
No past, present or future director, officer, employee, incorporator or
stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Securities.
SECTION 10.10 Successors.
----------
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
51
SECTION 10.11 Counterparts.
------------
The parties may sign any number of counterparts of this Indenture. Each
such counterpart shall be an original, but all of them together represent the
same agreement.
SECTION 10.12 Severability.
------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby,
and a Holder shall have no claim therefor against any party hereto.
SECTION 10.13 Table of Contents, Headings, Etc.
--------------------------------
The table of contents, cross-reference sheet and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, and are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
SECTION 10.14 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.15 Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture or the Securities.
SECTION 10.16 Independence of Covenants.
-------------------------
All covenants and agreements in this Indenture shall be given independent
effect so that if any particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
[Signatures on following page]
52
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
UIH AUSTRALIA/PACIFIC, INC.,
as Issuer
By: /s/ J. Xxxxxxx Xxxxx
--------------------------------
Name: J. Xxxxxxx Xxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
FIRSTAR BANK OF MINNESOTA, N.A.
as Trustee
By: /s/ Xxxxx X. Xxxxxx III
--------------------------------
Name: Xxxxx X. Xxxxxx III
Title: Vice President
53
EXHIBIT A-1
-----------
[FORM OF SERIES C SECURITY]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
MAY NOT BE OFFERED, SOLD ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND, IN THE CASE OF CLAUSE (b), (c) OR (d), BASED UPON AN
OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER OR (3) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OR
ANY SECURITY ISSUED IN EXCHANGE FOR OR IN SUBSTITUTION HEREOF OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, AS OF THE ISSUE
DATE, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH
$1,000 PRINCIPAL AMOUNT OF THIS SECURITY, (1) THE ISSUE PRICE IS $665.00; (2)
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $335.00; (3) THE ISSUE DATE IS
SEPTEMBER 23, 1997; (4) THE YIELD TO MATURITY (COMPOUNDED SEMI-ANNUALLY) IS
12.79% IF AN EQUITY SALE IS CONSUMMATED ON SEPTEMBER 23, 1997 OR 13.54% IF AN
EQUITY SALE IS NOT CONSUMMATED PRIOR TO MATURITY. THESE AMOUNTS ARE SUBJECT TO
CHANGE.
A-1(1)
No. $__________
UIH AUSTRALIA/PACIFIC, INC.
14% SERIES C SENIOR DISCOUNT NOTE DUE 2006
UIH AUSTRALIA/PACIFIC, INC. promises to pay to
or registered assigns the principal sum of
Dollars on May 15, 2006.
Interest Payment Dates: May 15 and November 15,
commencing November 15, 2001
Record Dates: May 1 and November 1
By:
-------------------------------------
Authorized Signature
By:
-------------------------------------
Authorized Signature
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the 14% Series C Senior Discount Notes due 2006 referred to
in the within-mentioned Indenture.
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By:
-------------------------------------
Authorized Signatory
A-1(2)
(REVERSE OF SECURITY)
14% SERIES C SENIOR DISCOUNT NOTE DUE 2006
1. Interest. UIH AUSTRALIA/PACIFIC, INC., a Colorado corporation (the
--------
"Company", which term shall include any successor thereto in accordance with the
Indenture), promises to pay, until the principal hereof is paid or made
available for payment, interest on the Accreted Value at the Interest Rate.
Cash interest on the Securities will accrue from and including the most recent
date to which interest has been paid or, if no interest has been paid, from and
including November 15, 2001. Cash interest shall be payable in arrears on May
15 and November 15 (each an "Interest Payment Date"), commencing November 15,
2001. Cash interest will be computed on the basis of a 360-day year of twelve
full 30- day months. "Accreted Value" means, as of any date of determination,
the sum (rounded to the nearest whole dollar) of (a) the initial offering price
for each $1,000 principal amount at maturity of Securities and (b) the portion
of the excess of the principal amount of Securities over such initial offering
price which shall have been accreted thereon through such date, such amount to
be so accreted on a daily basis at the Interest Rate then in effect, compounded
semi-annually on each May 15 and November 15 from the date of issuance of the
Securities through the earlier of (x) the date of determination and (y) May 15,
2001; "Interest Rate" means, at any time, 14% per annum; provided that if an
Equity Sale has not been consummated on or prior to May 15, 1997, then from (and
including) such date through (but excluding) the date of the consummation of an
Equity Sale, the "Interest Rate" shall be increased by 0.75% per annum.
Capitalized terms used herein without definition have the meanings set forth in
the Indenture.
2. Method of Payment. The Company will pay cash interest on the
-----------------
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the May 1 or November 1 next preceding
the Interest Payment Date. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal, premium, if any,
and cash interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. At the Company's option,
interest may be paid by check mailed to the registered address of the Holder of
this Security.
3. Paying Agent and Registrar. Initially, American Bank National
--------------------------
Association (the "Trustee", which term shall include any successor thereto in
accordance with the Indenture) will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar without notice.
4. Indenture. The Company issued the Securities under an Indenture dated
---------
as of September 23, 1997 (the "Indenture") between the Company and the Trustee.
This Security is one of an issue of Securities of the Company issued under the
Indenture. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S. Code (S)(S) 77aaa-77bbbb) as amended from time to time. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and such Act for a statement of them. Capitalized terms used
herein and not otherwise defined have the meanings set forth in the Indenture.
The Securities are general unsecured senior obligations of the Company limited
in aggregate principal amount at maturity to $45,000,000 except (x) as provided
in Section 2.7 of the Indenture or (y) as required to give effect to an increase
in the Interest Rate if an Equity Sale has not been consummated on or prior to
May 15, 1997.
5. Optional Redemption. The Securities will be redeemable, in whole or
-------------------
in part, at any time on or after May 15, 2001 at the option of the Company, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount at maturity) set forth below, plus
accrued and unpaid interest to the redemption date, if redeemed during the 12-
month period beginning May 15 of the years indicated below:
Redemption Year Price
--------------- -----
2001.................. 107.00%
A-1(3)
2002.................. 104.67%
2003.................. 102.33%
2004 and thereafter... 100.00%
Notwithstanding the foregoing, on or prior to May 15, 1999, the Company may, at
its option, use the net cash proceeds of (i) a Public Equity Offering or (ii) a
sale or series of related sales by the Company (or any person of which the
Company is a direct Subsidiary) of its Capital Stock (other than Disqualified
Capital Stock) to one or more Strategic Equity Investors to redeem up to an
aggregate of 33% of the originally issued principal amount at maturity of
Securities from the holders of Securities, on a pro rata basis (or as nearly pro
rata as practicable), at a redemption price equal to 113% of the Accreted Value
thereof; provided that not less than 67% of the originally issued principal
--------
amount at maturity of Securities are outstanding immediately thereafter;
provided, further, that in the case of a Public Equity Offering by, or an
-------- -------
investment by a Strategic Equity Investor in, a person of which the Company is a
direct Subsidiary, such person contributes to the capital of the Issuer net cash
proceeds in an amount sufficient to redeem Securities called for redemption in
accordance with the terms thereof. In order to effect the foregoing redemption
with the net proceeds of a Public Equity Offering or an investment by a
Strategic Equity Investor, the Company shall send the redemption notice not
later than 60 days after the consummation thereof.
6. Notice of Redemption. Notice of redemption will be mailed at least 30
--------------------
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. If any Security is to be
redeemed in part only, the notice of redemption that relates to such Security
shall state the portion of the principal amount thereof to be redeemed. On and
after the Redemption Date, unless the Company defaults in making the redemption
payment, interest ceases to accrue on or Accreted Value ceases to accumulate on,
as the case may be, Securities or portions thereof called for redemption.
7. Offers to Purchase. Sections 4.13 and 4.15 of the Indenture provide
------------------
that after an Asset Sale, or upon the occurrence of a Change of Control, and
subject to further limitations contained therein, the Company shall make an
offer to purchase certain amounts of Securities in accordance with the
procedures set forth in the Indenture.
8. Denominations, Transfer, Exchange. The Securities are in registered
---------------------------------
form without coupons in denominations of $1,000 and integral multiples of
$1,000. A Holder may register the transfer of or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay to
it any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Security or portion
of a Security selected for redemption, or register the transfer of or exchange
any Securities for a period of 15 days before a selection of Securities to be
redeemed.
9. Persons Deemed Owners. The Holder of a Security may be treated as the
---------------------
owner of it for all purposes.
10. Unclaimed Money. If money for the payment of principal or interest
---------------
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment as general creditors unless an "abandoned
property" law designates another Person.
11. Amendment, Supplement, Waiver. The Company and the Trustee may,
-----------------------------
without the consent of the Holders of any outstanding Securities, amend, waive
or supplement the Indenture or the Securities for certain specified purposes,
including, among other things, curing ambiguities, defects or inconsistencies,
maintaining the qualification of the Indenture under the Trust Indenture Act of
1939 or making any other change that does not adversely affect the rights of any
Holder. Other amendments and modifications of the Indenture or the Securities
may be made by the Company and the Trustee with the consent of the Holders of
not less than a majority of the aggregate principal amount of the outstanding
Securities, subject to certain exceptions requiring the consent of the Holders
of the particular Securities to be affected.
12. Successor Corporation. When a successor corporation assumes all the
---------------------
obligations of its predecessor under the Securities and the Indenture and the
transaction complies with the terms of Article V of the Indenture, the
predecessor corporation will, subject to certain exceptions, be released from
those obligations.
A-1(4)
13. Defaults and Remedies. Events of Default include: default in payment
---------------------
of interest on, or Liquidated Damages, if any, with respect to, any Security for
30 days; default in payment of principal or Accreted Value, as the case may be,
of or premium on the Securities at maturity, or upon acceleration, redemption or
otherwise; failure by the Company to comply with certain provisions of the
Indenture; failure by the Company for 30 days after written notice to it from
the Trustee or Holders of at least 25% in principal amount at maturity of the
then outstanding Securities to comply with any of its other agreements in the
Indenture or the Securities; certain defaults under other Indebtedness; certain
final judgments that remain undischarged for 60 days after being entered; and
certain events of bankruptcy or insolvency with respect to the Company and its
Restricted Subsidiaries. If an Event of Default occurs and is continuing, then
the Trustee or the Holders of at least 25% in principal amount at maturity of
the then outstanding Securities may and the Trustee upon request of the Holders
of not less than 25% in principal amount at maturity of the outstanding
Securities shall, declare the Default Amount of, and any accrued and unpaid
interest on, all outstanding Securities to be immediately due and payable and
upon any such declaration such amounts (plus, in the case of an Event of Default
that is the result of an action by the Company or any of its Restricted
Subsidiaries intended to avoid restrictions on or premiums related to
redemptions of the Securities contained in the Indenture or the Securities, an
amount of premium that would have been applicable pursuant to the Securities or
as set forth in the Indenture) shall become immediately due and payable, except
that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Securities become due and payable
immediately without further action or notice. Holders may not enforce the
Indenture or the Securities except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Securities may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders notice of any
continuing Default or Event of Default (except a Default or an Event of Default
in payment of principal or interest and the failure to make payment when
required by Sections 4.13 and 4.15 or the failure by the Company to observe the
provisions of Article V of the Indenture) if and so long as a committee of its
Trust Officers determines in good faith that withholding notice is in their
interests. The Company must furnish an annual compliance certificate to the
Trustee.
14. Restrictive Covenants. The Indenture imposes certain limitations on
---------------------
the ability of the Company and its Subsidiaries to, among other things, make
Restricted Payments, incur additional Indebtedness and issue preferred stock,
pay dividends and make distributions, make Restricted Investments, create
certain Liens, engage in certain businesses, enter into certain transactions
with Affiliates, sell assets, or enter into certain mergers and consolidations.
The limitations are subject to a number of important qualifications and
exceptions. The Company must annually report to the Trustee on compliance with
such limitations.
15. Trustee Dealings with Company. The Trustee, in its individual any
-----------------------------
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not Trustee.
16. No Recourse Against Others. No past, present or future director,
--------------------------
officer, employee, incorporator or stockholder of the Company, as such, shall
have any liability for any obligations of the Company under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
17. Discharge. The Company's obligations pursuant to the Indenture will
---------
be discharged, except for certain specified obligations, subject to the terms of
the Indenture, upon the payment of all the Securities or upon the irrevocable
deposit with the Trustee of U.S. Legal Tender or U.S. Government Obligations
sufficient to pay when due principal or the interest on the Securities to
maturity or redemption, as the case may be.
18. Authentication. This Security shall not be valid until the Trustee
--------------
signs the certificate of authentication on the other side of this Security.
19. Registration Rights. Pursuant to the Registration Rights Agreement,
-------------------
the Company will be obligated to consummate an exchange offer pursuant to which
the Holder of this Security shall have the right to exchange this Security for
Securities of a separate series issued under the Indenture (or a trust indenture
substantially identical to the Indenture in accordance with the terms of the
Registration Rights Agreement) which have been registered under the
A-1(5)
Securities Act, in like principal amount and having identical terms as this
Security. The Holders of the Securities shall be entitled to receive certain
additional interest payments in the event such exchange offer is not consummated
and upon certain other conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement.
20. Abbreviations. Customary abbreviations may be used in the name of a
-------------
Securityholder or an assignee, such as: TEN COM (= tenants in common), TENANT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. GOVERNING LAW. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
UIH AUSTRALIA/PACIFIC, INC.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
A-1 (6)
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
-----------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
---------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Security (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) May 15, 1999, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A thereunder.
or
--
[ ] (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the conditions of
transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Security in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.15 of the Indenture shall have
been satisfied.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A-1 (7)
Date: Your signature:
---------------- -----------------------------------
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee:
-----------------------------------------------------------
-------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
---------------------- ------------------------------------------------
NOTICE: To be executed by an executive officer
A-1 (8)
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 4.13 or 4.15 of the Indenture, check the Box: [_]
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 4.13 or 4.15 of the Indenture, state the amount:
$
-------------
Date: Your Signature:
------------------------- -----------------------------
(Sign exactly as your name appears on the other side of
this Security)
Signature Guarantee:
-----------------------
A-1 (9)
EXHIBIT A-2
------------
[FORM OF SERIES D SECURITY]
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS SECURITY IS
BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF
THIS SECURITY, (1) THE ISSUE PRICE IS $665.00; (2) THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT IS $335.00; (3) THE ISSUE DATE IS SEPTEMBER 23, 1997; AND (4) THE YIELD
TO MATURITY (COMPOUNDED SEMI-ANNUALLY) IS 12.79% IF AN EQUITY SALE IS
CONSUMMATED ON SEPTEMBER 23, 1997 OR 13.54% IF AN EQUITY SALE IS NOT CONSUMMATED
PRIOR TO MATURITY.
No. [ ] $[ ]
UIH AUSTRALIA/PACIFIC, INC.
14% SERIES D SENIOR DISCOUNT NOTE DUE 2006
UIH AUSTRALIA/PACIFIC, INC. promises to pay to
or registered assigns the principal sum of
Dollars on May 15, 2006.
Interest Payment Dates: May 15 and November 15, commencing November 15, 2001
Record Dates: May 1 and November 1
By:
-------------------------------------
Authorized Signature
By:
-------------------------------------
Authorized Signature
Dated: September 23, 1997
CERTIFICATE OF AUTHENTICATION
This is one of the 14% Series D Senior Discount Notes due 2006 referred to
in the within-mentioned Indenture.
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By:
----------------------------------------
Authorized Signatory
A-2 (1)
(REVERSE OF SECURITY)
14% SERIES D SENIOR DISCOUNT NOTE DUE 2006
1. Interest. UIH AUSTRALIA/PACIFIC, INC., a Delaware corporation (the
--------
"Company", which term shall include any successor thereto in accordance with the
Indenture), promises to pay, until the principal hereof is paid or made
available for payment, interest on the Accreted Value at the Interest Rate.
Cash interest on the Securities will accrue from and including the most recent
date to which interest has been paid or, if no interest has been paid, from and
including November 15, 2001. Cash interest shall be payable in arrears on May
15 and November 15 (each an "Interest Payment Date"), commencing November 15,
2001. Cash interest will be computed on the basis of a 360-day year of twelve
full 30- day months. "Accreted Value" means, as of any date of determination,
the sum (rounded to the nearest whole dollar) of (a) the initial offering price
for each $1,000 principal amount at maturity of Securities and (b) the portion
of the excess of the principal amount of Securities over such initial offering
price which shall have been accreted thereon through such date, such amount to
be so accreted on a daily basis at the Interest Rate then in effect, compounded
semi-annually on each May 15 and November 15 from the date of issuance of the
Securities through the earlier of (x) the date of determination and (y) May 15,
2001; "Interest Rate" means, at any time, 14% per annum; provided that if an
Equity Sale has not been consummated on or prior to May 15, 1997, then from (and
including) such date (but excluding) the date of the consummation of an Equity
Sale, the "Interest Rate" shall be increased by 0.75% per annum. Capitalized
terms used herein without definition have the meanings set forth in the
Indenture.
2. Method of Payment. The Company will pay cash interest on the
-----------------
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the May 1 or November 1 next preceding
the Interest Payment Date. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal, premium, if any,
and cash interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. At the Company's option,
interest may be paid by check mailed to the registered address of the Holder of
this Security.
3. Paying Agent and Registrar. Initially, American Bank National
--------------------------
Association (the "Trustee", which term shall include any successor thereto in
accordance with the Indenture) will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar without notice.
4. Indenture. The Company issued the Securities under an Indenture dated
---------
as of September 23, 1997 (the "Indenture") between the Company and the Trustee.
This Security is one of an issue of Securities of the Company issued under the
Indenture. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S. Code (S) (S) 77aaa-77bbbb) as amended from time to time. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and such Act for a statement of them. Capitalized terms used
herein and not otherwise defined have the meanings set forth in the Indenture.
The Securities are general unsecured senior obligations of the Company limited
in aggregate principal amount at maturity to $45,000,000 except (x) as provided
in Section 2.7 of the Indenture or (y) as required to give effect to an increase
in the Interest Rate if an Equity Sale has not been consummated on or prior to
May 15, 1997.
5. Optional Redemption. The Securities will be redeemable, in whole or
-------------------
in part, at any time on or after May 15, 2001 at the option of the Company, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount at maturity) set forth below, plus
accrued and unpaid interest to the redemption date, if redeemed during the 12-
month period beginning May 15 of the years indicated below:
Redemption Year Price
--------------- -------
2001......................... 107.00%
2002......................... 104.67%
2003......................... 102.33%
2004 and thereafter.......... 100.00%
A-2 (2)
Notwithstanding the foregoing, on or prior to May 15, 1999, the Company
may, at its option, use the net cash proceeds of (i) a Public Equity Offering or
(ii) a sale or series of related sales by the Company (or any person of which
the Company is a direct Subsidiary) of its Capital Stock (other than
Disqualified Capital Stock) to one or more Strategic Equity Investors to redeem
up to an aggregate of 33% of the originally issued principal amount at maturity
of Securities from the holders of Securities, on a pro rata basis (or as nearly
pro rata as practicable), at a redemption price equal to 113% of the Accreted
Value thereof; provided that not less than 67% of the originally issued
--------
principal amount at maturity of Securities are outstanding immediately
thereafter; provided, further, that in the case of a Public Equity Offering by,
-------- -------
or an investment by a Strategic Equity Investor in, a person of which the
Company is a direct Subsidiary, such person contributes to the capital of the
Issuer net cash proceeds in an amount sufficient to redeem Securities called for
redemption in accordance with the terms thereof. In order to effect the
foregoing redemption with the net proceeds of a Public Equity Offering or an
investment by a Strategic Equity Investor, the Company shall send the redemption
notice not later than 60 days after the consummation thereof.
6. Notice of Redemption. Notice of redemption will be mailed at least 30
--------------------
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. If any Security is to be
redeemed in part only, the notice of redemption that relates to such Security
shall state the portion of the principal amount thereof to be redeemed. On and
after the Redemption Date, unless the Company defaults in making the redemption
payment, interest ceases to accrue on or Accreted Value ceases to accumulate on,
as the case may be, Securities or portions thereof called for redemption.
7. Offers to Purchase. Sections 4.13 and 4.15 of the Indenture provide
------------------
that after an Asset Sale, or upon the occurrence of a Change of Control, and
subject to further limitations contained therein, the Company shall make an
offer to purchase certain amounts of Securities in accordance with the
procedures set forth in the Indenture.
8. Denominations, Transfer, Exchange. The Securities are in registered
---------------------------------
form without coupons in denominations of $1,000 and integral multiples of
$1,000. A Holder may register the transfer of or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay to
it any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities for a
period of 15 days before a selection of Securities to be redeemed.
9. Persons Deemed Owners. The Holder of a Security may be treated as the
---------------------
owner of it for all purposes.
10. Unclaimed Money. If money for the payment of principal or interest
---------------
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment as general creditors unless an "abandoned
property" law designates another Person.
11. Amendment, Supplement, Waiver. The Company and the Trustee may,
-----------------------------
without the consent of the Holders of any outstanding Securities, amend, waive
or supplement the Indenture or the Securities for certain specified purposes,
including, among other things, curing ambiguities, defects or inconsistencies,
maintaining the qualification of the Indenture under the Trust Indenture Act of
1939 or making any other change that does not adversely affect the rights of any
Holder. Other amendments and modifications of the Indenture or the Securities
may be made by the Company and the Trustee with the consent of the Holders of
not less than a majority of the aggregate principal amount of the outstanding
Securities, subject to certain exceptions requiring the consent of the Holders
of the particular Securities to be affected.
12. Successor Corporation. When a successor corporation assumes all the
---------------------
obligations of its predecessor under the Securities and the Indenture and the
transaction complies with the terms of Article V of the Indenture, the
predecessor corporation will, subject to certain exceptions, be released from
those obligations.
13. Defaults and Remedies. Events of Default include: default in payment
---------------------
of interest on, or Liquidated Damages, if any, with respect to, any Security for
30 days; default in payment of principal or Accreted Value, as the case may be,
of or premium on the Securities at maturity, or upon acceleration, redemption or
otherwise; failure by the Company to comply with certain provisions of the
Indenture; failure by the Company for 30 days after written notice to
A-2 (3)
it from the Trustee or Holders of at least 25% in principal amount at maturity
of the then outstanding Securities to comply with any of its other agreements in
the Indenture or the Securities; certain defaults under other Indebtedness;
certain final judgments that remain undischarged for 60 days after being
entered; and certain events of bankruptcy or insolvency with respect to the
Company and its Restricted Subsidiaries. If an Event of Default occurs and is
continuing, then the Trustee or the Holders of at least 25% in principal amount
at maturity of the then outstanding Securities may and the Trustee upon request
of the Holders of not less than 25% in principal amount at maturity of the
outstanding Securities shall, declare the Default Amount of, and any accrued and
unpaid interest on, all outstanding Securities to be immediately due and payable
and upon any such declaration such amounts (plus, in the case of an Event of
Default that is the result of an action by the Company or any of its Restricted
Subsidiaries intended to avoid restrictions on or premiums related to
redemptions of the Securities contained in the Indenture or the Securities, an
amount of premium that would have been applicable pursuant to the Securities or
as set forth in the Indenture) shall become immediately due and payable, except
that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Securities become due and payable
immediately without further action or notice. Holders may not enforce the
Indenture or the Securities except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Securities may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders notice of any
continuing Default or Event of Default (except a Default or an Event of Default
in payment of principal or interest and the failure to make payment when
required by Sections 4.13 and 4.15 or the failure by the Company to observe the
provisions of Article V of the Indenture) if and so long as a committee of its
Trust Officers determines in good faith that withholding notice is in their
interests. The Company must furnish an annual compliance certificate to the
Trustee.
14. Restrictive Covenants. The Indenture imposes certain limitations on
---------------------
the ability of the Company and its Subsidiaries to, among other things, make
Restricted Payments, incur additional Indebtedness and issue preferred stock,
pay dividends and make distributions, make Restricted Investments, create
certain Liens, engage in certain businesses, enter into certain transactions
with Affiliates, sell assets, or enter into certain mergers and consolidations.
The limitations are subject to a number of important qualifications and
exceptions. The Company must annually report to the Trustee on compliance with
such limitations.
15. Trustee Dealings with Company. The Trustee, in its individual or any
-----------------------------
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not Trustee.
16. No Recourse Against Others. No past, present or future director,
--------------------------
officer, employee, incorporator or stockholder of the Company, as such, shall
have any liability for any obligations of the Company under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
17. Discharge. The Company's obligations pursuant to the Indenture will
---------
be discharged, except for certain specified obligations, subject to the terms of
the Indenture, upon the payment of all the Securities or upon the irrevocable
deposit with the Trustee of U.S. Legal Tender or U.S. Government Obligations
sufficient to pay when due principal or the interest on the Securities to
maturity or redemption, as the case may be.
18. Authentication. This Security shall not be valid until the Trustee
--------------
signs the certificate of authentication on the other side of this Security.
19. Registration Rights. Pursuant to the Registration Rights Agreement,
-------------------
the Company will be obligated to consummate an exchange offer pursuant to which
the Holder of this Security shall have the right to exchange this Security for
Securities of a separate series issued under the Indenture (or a trust indenture
substantially identical to the Indenture in accordance with the terms of the
Registration Rights Agreement) which have been registered under the Securities
Act, in like principal amount and having identical terms as this Security. The
Holders of the Securities shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
A-2 (4)
20. Abbreviations. Customary abbreviations may be used in the name of a
-------------
Securityholder or an assignee, such as: TEN COM (= tenants in common), TENANT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. GOVERNING LAW. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
UIH AUSTRALIA/PACIFIC, INC.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
A-2 (5)
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
----------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
agent to transfer this Security on the
------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
books of the Company. The agent may substitute another to act for him.
Date: Your signature:
----------------------- ------------------------------
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee:
--------------------------------------
A-2 (6)
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 4.13 or 4.15 of the Indenture, check the Box: [_]
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 4.13 or 4.15 of the Indenture, state the amount:
$
---------------
Date: Your Signature:
------------------------- --------------------------------
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee:
---------------------------
A-2 (7)
EXHIBIT B
---------
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY
IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
B-1
EXHIBIT C
---------
Form of Certificate to Be
Delivered in Connection With
Transfers to Non-QIB Accredited Investors
-----------------------------------------
_______________, ___
FIRSTAR BANK OF MINNESOTA, N.A.
Attention: Corporate Trust Administration Department
Re: UIH Australia/Pacific, Inc. (the "Company")
14% Senior Discount Notes due 2006
(the "Securities")
------------------
Dear Sirs:
In connection with our proposed purchase of $[ ] aggregate principal
amount of the Securities, we confirm that:
1. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture dated
as of September 23, 1997, relating to the Securities (the "Indenture") and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the Securities have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Securities, that such Securities may be offered,
resold, pledged or otherwise transferred only (i) to a person whom we reasonably
believe to be a qualified institutional buyer (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, in a
transaction meeting the requirements of Rule 144 under the Securities Act,
outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act, or in accordance with
another exemption from the registration requirements of the Securities Act (and,
unless such transfer occurs in a transaction meeting the requirements of Rule
144A, based upon an opinion of counsel if the Company so requests), (ii) to the
Company or (iii) pursuant to an effective registration statement, and, in each
case, in accordance with any applicable securities laws of any State of the
United States or any other applicable jurisdiction. We understand that the
registrar will not be required to accept for registration of transfer any
Securities, except upon presentation of evidence satisfactory to the Company
that the foregoing restrictions on transfer have been complied with. We further
understand that the Securities purchased by us will be in the form of definitive
physical certificates and that such certificates will bear a legend reflecting
the substance of this paragraph. We further agree to provide to any person
acquiring any of the Securities from us a notice advising such person that
resales of the Securities are restricted as stated herein.
3. We understand that, on any proposed resale of any Securities, we will
be required to furnish to you and the Company such certification, legal opinions
and other information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further
understand that the Securities purchased by us will bear a legend to the
foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Securities, and we and any accounts
for which we are acting are each able to bear the economic risk of our or its
investment, as the case may be.
C-1
5. We are acquiring the Securities purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
----------------------
Authorized Signature
C-2
EXHIBIT D
---------
Form of Certificate to Be Delivered
In Connection with Transfers
Pursuant to Regulation S
------------------------
-----------, ---
FIRSTAR BANK OF MINNESOTA, N.A.
Attention: Corporate Trust Administration Department
Re: UIH Australia/Pacific, Inc. (the "Company")
14% Senior Discount Notes due 2006
(the "Securities")
---------------
Dear Sirs:
In connection with our proposed sale of $[ ] aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the U.S. Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States, or (b) the
transaction was executed in, on or through the facilities of a designated off-
shore securities market and neither we nor any person acting on our behalf knows
that the transaction has been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions applicable
to the Securities.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
----------------------------------
Authorized Signature
D-1
