EXHIBIT 4.1
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INNOVA, S. DE X.X. DE C.V.,
Issuer
and
THE BANK OF NEW YORK,
Trustee
and
THE BANK OF NEW YORK (LUXEMBOURG)
Paying Agent and Transfer Agent
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Indenture
Dated as of September 19, 2003
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9.375% Senior Notes due 2013
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CROSS-REFERENCE TABLE
TIA Sections Indenture Sections
------------ ------------------
Section 310(a)(1)...................................... 7.10
(a)(2)...................................... 7.10
(a)(5)...................................... 7.10
(b)......................................... 7.03; 7.08
Section 311............................................ 7.03
Section 313(a)......................................... 7.06
(c)......................................... 7.05; 7.06
Section 314(a)......................................... 4.17; 10.02
(a)(4)...................................... 1.01 "Officers' Certificate"
(c)(1)...................................... 10.03
(c)(2)...................................... 10.03
(e)......................................... 1.01 "Officers' Certificate",
............................................ "Opinion of Counsel"
Section 315(a)-(d)..................................... 7.02
Section 316(a)......................................... 6.06
(b)......................................... 6.07
Section 317(a)(1)...................................... 6.08
(a)(2)...................................... 6.09
Section 318(a)......................................... 10.01
(c)......................................... 10.01
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.............................................................................. 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act........................................ 23
SECTION 1.03. Rules of Construction.................................................................... 24
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.......................................................................... 24
SECTION 2.02. Restrictive Legends...................................................................... 26
SECTION 2.03. Execution, Authentication and Denominations.............................................. 26
SECTION 2.04. Registrar and Paying Agent............................................................... 27
SECTION 2.05. Paying Agent to Hold Money in Trust...................................................... 28
SECTION 2.06. Transfer and Exchange.................................................................... 28
SECTION 2.07. Book-Entry Provisions for Global Notes................................................... 29
SECTION 2.08. Special Transfer Provisions.............................................................. 30
SECTION 2.09. Replacement Notes........................................................................ 32
SECTION 2.10. Temporary Notes.......................................................................... 32
SECTION 2.11. Cancellation............................................................................. 33
SECTION 2.12. CUSIP Numbers............................................................................ 33
SECTION 2.13. Defaulted Interest....................................................................... 33
SECTION 2.14. Issuance of Additional Notes............................................................. 33
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption...................................................................... 34
SECTION 3.02. Notices to Trustee....................................................................... 34
SECTION 3.03. Selection of Notes to Be Redeemed........................................................ 34
SECTION 3.04. Notice of Redemption..................................................................... 35
SECTION 3.05. Effect of Notice of Redemption........................................................... 36
SECTION 3.06. Deposit of Redemption Price.............................................................. 36
SECTION 3.07. Payment of Notes Called for Redemption................................................... 36
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes......................................................................... 37
SECTION 4.02. Maintenance of Office or Agency.......................................................... 37
SECTION 4.03. Limitation on Indebtedness............................................................... 37
SECTION 4.04. Limitation on Restricted Payments........................................................ 40
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.. 43
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of Restricted Subsidiaries.......... 44
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted Subsidiaries......................... 44
SECTION 4.08. Limitation on Transactions with Social Part Holders and Affiliates....................... 45
SECTION 4.09. Limitation on Liens...................................................................... 46
SECTION 4.10. Limitation on Asset Sales................................................................ 47
SECTION 4.11. Repurchase of Notes upon a Change of Control............................................. 48
SECTION 4.12. Existence................................................................................ 48
SECTION 4.13. Payment of Taxes and Other Claims........................................................ 48
SECTION 4.14. Maintenance of Properties and Insurance.................................................. 49
SECTION 4.15. Notice of Defaults....................................................................... 49
SECTION 4.16. Compliance Certificates.................................................................. 49
SECTION 4.17. Commission Reports and Reports to Holders................................................ 50
SECTION 4.18. Waiver of Stay, Extension or Usury Laws.................................................. 50
SECTION 4.19. Limitation on Sale-Leaseback Transactions................................................ 51
SECTION 4.20. Comision Nacional Bancaria y de Valores.................................................. 51
SECTION 4.21. Additional Amounts....................................................................... 51
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Consolidation, Merger and Sale of Assets................................................. 54
SECTION 5.02. Successor Substituted.................................................................... 55
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default........................................................................ 55
SECTION 6.02. Acceleration............................................................................. 57
SECTION 6.03. Other Remedies........................................................................... 57
SECTION 6.04. Waiver of Past Defaults.................................................................. 57
SECTION 6.05. Control by Majority...................................................................... 57
SECTION 6.06. Limitation on Suits...................................................................... 58
SECTION 6.07. Rights of Holders to Receive Payment..................................................... 58
SECTION 6.08. Collection Suit by Trustee............................................................... 59
SECTION 6.09. Trustee May File Proofs of Claim......................................................... 59
SECTION 6.10. Priorities............................................................................... 59
SECTION 6.11. Undertaking for Costs.................................................................... 60
SECTION 6.12. Restoration of Rights and Remedies....................................................... 60
SECTION 6.13. Rights and Remedies Cumulative........................................................... 60
SECTION 6.14. Delay or Omission Not Waiver............................................................. 60
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General.................................................................................. 60
SECTION 7.02. Certain Rights of Trustee................................................................ 62
SECTION 7.03. Individual Rights of Trustee............................................................. 63
SECTION 7.04. Trustee's Disclaimer..................................................................... 63
SECTION 7.05. Notice of Default........................................................................ 63
SECTION 7.06. Reports by Trustee to Holders............................................................ 63
SECTION 7.07. Compensation and Indemnity............................................................... 64
SECTION 7.08. Replacement of Trustee................................................................... 64
SECTION 7.09. Successor Trustee by Merger, Etc......................................................... 65
SECTION 7.10. Eligibility.............................................................................. 65
SECTION 7.11. Money Held in Trust...................................................................... 65
SECTION 7.12. Withholding Taxes........................................................................ 65
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations..................................................... 66
SECTION 8.02. Defeasance and Discharge of Indenture.................................................... 67
SECTION 8.03. Defeasance of Certain Obligations........................................................ 69
SECTION 8.04. Application of Trust Money............................................................... 70
SECTION 8.05. Repayment to Company..................................................................... 70
SECTION 8.06. Reinstatement............................................................................ 70
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders............................................................... 70
SECTION 9.02. With Consent of Holders.................................................................. 71
SECTION 9.03. Revocation and Effect of Consent......................................................... 72
SECTION 9.04. Notation on or Exchange of Notes......................................................... 72
SECTION 9.05. Trustee to Sign Amendments, Etc.......................................................... 73
SECTION 9.06. Conformity with Trust Indenture Act...................................................... 73
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act of 1939............................................................. 73
SECTION 10.02. Notices................................................................................. 73
SECTION 10.03. Certificate and Opinion as to Conditions Precedent...................................... 74
SECTION 10.04. Statements Required in Certificate or Opinion........................................... 74
SECTION 10.05. Rules by Trustee, Paying Agent or Registrar............................................. 75
SECTION 10.06. Payment Date Other Than a Business Day.................................................. 75
SECTION 10.07. Governing Law; Submission to Jurisdiction; Agent for Service............................ 75
SECTION 10.08. Currency Indemnity...................................................................... 75
SECTION 10.09. No Adverse Interpretation of Other Agreements........................................... 76
SECTION 10.10. No Recourse Against Others.............................................................. 76
SECTION 10.11. Successors.............................................................................. 76
SECTION 10.12. Duplicate Originals..................................................................... 76
SECTION 10.13. Separability............................................................................ 76
SECTION 10.14. Table of Contents, Headings, Etc........................................................ 76
EXHIBIT A Form of Rule 144A Note........................................ A-1
EXHIBIT B Form of Regulation S Note..................................... B-1
EXHIBIT C Form of Transfer Certificate for Exchange or Transfer
from the Rule 144A Note to the Regulations S Note
prior to the expiration of the Restricted Period.............. C-1
EXHIBIT D Form of Transfer Certificate for Transfer or Exchange
from the Rule 144A Note to the Regulation S Note after
the expiration of the Restricted Period....................... D-1
EXHIBIT E Form of Transfer Certificate for Transfer or Exchange
from the Regulation S Note to the Rule 144A Note.............. E-1
INDENTURE, dated as of September 19, 2003, among INNOVA, S. de
X.X. de C.V., a variable capital limited liability company (sociedad de
responsabilidad limitada de capital variable) organized under the laws of
Mexico, as Issuer (the "Company"), The Bank of New York, a New York banking
corporation (the "Trustee") and The Bank of New York (Luxembourg), as a Paying
Agent and Transfer Agent.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance of up to U.S.$300,000,000, aggregate
principal amount of the Company's 9.375% Senior Notes due 2013 (the "Notes")
issuable as provided in this indenture pursuant to the terms of a Purchase
Agreement dated September 12, 2003 (the "Purchase Agreement") among the Company
and X.X. Xxxxxx Securities, Inc. and Citigroup Global Markets, Inc., as the
initial purchasers. The Exchange Notes issued upon the consummation of an
exchange offer for the Notes or upon the effectiveness of a shelf registration
statement with respect to the Notes will be freely transferable under the U.S.
securities laws. All things necessary to make this Indenture a valid and legally
binding agreement of the Company, in accordance with its terms, have been done,
and the Company has done all things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee hereunder and duly
issued by the Company, the valid and legally binding obligations of the Company
as hereinafter provided.
This Indenture will, prior to the commencement of the exchange
offer referred to above, be subject to, and shall be governed by, the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be a part
of and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of
the Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders, as follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means (i) Indebtedness of a Person
existing at the time such Person becomes a Restricted Subsidiary or assumed in
connection with an Asset Acquisition by the Company or a Restricted Subsidiary
and not Incurred in connection with, or in anticipation of, such Person becoming
a Restricted Subsidiary or such Asset Acquisition and (ii) Indebtedness of a
Person secured by a Lien encumbering any asset acquired by such Person, which
Indebtedness was not Incurred in connection with, or in anticipation of, such
acquisition; provided that Indebtedness of such Person which is redeemed,
defeased, retired or otherwise repaid at the time of or immediately upon
consummation of the transactions by which such
Person becomes a Restricted Subsidiary or such Asset Acquisition shall not be
Acquired Indebtedness.
"Additional Amounts" has the meaning provided in Section 4.21.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined in conformity with Mexican GAAP; provided that the
following items shall be excluded in computing Adjusted Consolidated Net Income
(without duplication): (i) the net income (or loss) of any Person (other than
net income (or loss) attributable to a Restricted Subsidiary) in which any
Person (other than the Company or any of its Restricted Subsidiaries) has a
joint interest and the net income (or loss) of any Unrestricted Subsidiary,
except, in the case of net income, to the extent of the amount of dividends or
other distributions actually paid to the Company or any of its Restricted
Subsidiaries by such other Person or such Unrestricted Subsidiary during such
period; (ii) solely for the purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 4.04. (and in such case, except to the extent includable pursuant to
clause (i) above), the net income (or loss) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or consolidated with
the Company or any of its Restricted Subsidiaries or all or substantially all of
the property and assets of such Person are acquired by the Company or any of its
Restricted Subsidiaries; (iii) except in the case of any restriction or
encumbrance permitted under clause (ii) or (iv) of Section 4.05., the net income
of any Restricted Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary of such net
income is not at the time permitted by the operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary; (iv) any gains
or losses (on an after-tax basis, net of any related fees and expenses)
attributable to Asset Sales; (v) except for purposes of calculating the amount
of Restricted Payments that may be made pursuant to clause (C) of the first
paragraph of Section 4.04., any amount paid or accrued as dividends on Preferred
Stock of the Company or any Restricted Subsidiary owned by Persons other than
the Company and any of its Restricted Subsidiaries; and (vi) all extraordinary
gains and extraordinary losses.
"Adjusted Consolidated Net Tangible Assets" means the total
amount of assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), including any
write-ups or restatements required under Mexican GAAP (other than with respect
to items referred to in clause (ii) below), after deducting therefrom (i) all
current liabilities of the Company and its Restricted Subsidiaries (excluding
intercompany items) and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the most recent quarterly or annual consolidated balance sheet of the
Company and its Restricted Subsidiaries, prepared in conformity with Mexican
GAAP and filed with the Commission or provided to the Trustee pursuant to
Section 4.17.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person,
2
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Register, Paying Agent, authenticating agent
or co-Registrar.
"Agent Members" has the meaning provided in Section 2.07(a).
"Asset Acquisition" means (i) an Investment by the Company or
any of its Restricted Subsidiaries in any other Person pursuant to which such
Person shall become a Restricted Subsidiary or shall be merged into or
consolidated with the Company or any of its Restricted Subsidiaries; provided
that such Person's primary business is related, ancillary or complementary to
the businesses of the Company and its Restricted Subsidiaries on the date of
such investment or (ii) an acquisition by the Company or any of its Restricted
Subsidiaries of the property and assets of any Person other than the Company or
any of its Restricted Subsidiaries that constitute substantially all of a
division or line of business of such Person; provided that the property and
assets acquired are related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such acquisition.
"Asset Disposition" means the sale or other disposition by the
Company or any of its Restricted Subsidiaries (other than to the Company or
another Restricted Subsidiary) of (i) all or substantially all of the Capital
Stock of any Restricted Subsidiary or (ii) all or substantially all of the
assets that constitute a division or line of business of the Company or any of
its Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition
(including by way of merger, consolidation or sale-leaseback transaction, but
not the granting of a Lien) in one transaction or a series of related
transactions by the Company or any of its Restricted Subsidiaries to any Person
other than the Company or any of its Restricted Subsidiaries of (i) all or any
of the Capital Stock of any Restricted Subsidiary, (ii) all or substantially all
of the property and assets of an operating unit or business of the Company or
any of its Restricted Subsidiaries or (iii) any other property and assets
(excluding property, assets or Capital Stock of Unrestricted Subsidiaries) of
the Company or any of its Restricted Subsidiaries other than transactions (A) in
the ordinary course of business of the Company or such Restricted Subsidiary or
(B) that constitute "Restricted Payments" which are permitted under Section
4.04. and, in each case, that are not governed by the provisions of the
Indentures applicable to mergers, consolidations and sales of all or
substantially all of the assets of the Company; provided that "Asset Sale" shall
not include (a) sales, transfers or other dispositions of DTH Units, inventory,
services (including advertising), receivables and other current assets, (b)
sales, transfers or other dispositions of assets for consideration at least
substantially equal to the fair market value of the assets sold or disposed of,
provided that the consideration received would satisfy clause (ii) of the first
sentence of Section 4.10., or (c) sales, transfers or other dispositions of
property or equipment that has 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, provided further that a transaction
described in clauses (i), (ii) and (iii) shall constitute an Asset Sale only if
the aggregate consideration for such transfer, conveyance, sale, lease or other
disposition is equal to $2.5 million or more in any 12-month period.
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"Average Life" means, at any date of determination with
respect to any debt security, the quotient obtained by dividing (i) the sum of
the products of (a) the number of years from such date of determination to the
dates of each successive scheduled principal payment of such debt security and
(b) the amount of such principal payment by (ii) the sum of all such principal
payments.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof, if duly authorized to act under the Company's
organizational documents including with respect to the Indenture.
"Board Resolution" means a copy of a resolution, certified by
the Secretary, Pro-Secretary or Assistant Secretary of the Company as required
by the context to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in The City of New York, or in the city of
the Corporate Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all
shares, social parts, interests, participation or other equivalents (however
designated, whether voting or non-voting) in equity of such Person, whether now
outstanding or issued after the Closing Date, including, without limitation, all
Common Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) of which the discounted
present value of the rental obligations of such Person as lessee, in conformity
with Mexican GAAP, is required to be capitalized on the balance sheet of such
Person.
"Capitalized Lease Obligations" means the discounted present
value of the rental obligations under a Capitalized Lease.
"Change of Control" means such time as (i) a "person" or
"group" (within the meaning of Section 13(d) or 14(d)(2) under the Exchange Act)
(other than the Existing Social Part Holders and their Affiliates) becomes the
ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
more than 50% of the total voting power of the Voting Stock of the Company on a
fully diluted basis; or (ii) any "person" or "group" (other than the Existing
Holders and their respective Affiliates), together with any Affiliates or
Related Persons thereof, shall succeed in having a sufficient number of its
nominees appointed to the Board of Directors such that the nominees, when added
to any existing member remaining on the Board of Directors of the Company after
such appointment who was a nominee of or is an Affiliate or Related Person of
such "person" or "group," will constitute a majority of the Board of Directors
of the Company.
"Clearstream Banking" means Clearstream Banking, societe
anonyme, or any successor.
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"Closing Date" means the date on which the Notes are
originally issued under the Indenture.
"CNBV" means the Comision Nacional Bancaria y de Valores.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.
"Common Stock" means, with respect to any Person, any and all
shares, interests, social parts, participation or other equivalents (however
designated, whether voting or nonvoting) of such Person's equity, other than
Disqualified Stock of such Person, whether now outstanding or issued after the
Closing Date, including all Common Stock or Preferred Stock (other than
Disqualified Stock).
"Company" means the party named as such in the first paragraph
of this Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the
name of the Company (i) by its Chairman, a Vice Chairman, its President, its
Chief Financial Officer or a Vice President and (ii) by its Chief Accounting
Officer, Treasurer, an Assistant Treasurer, its Secretary, Pro-Secretary or an
Assistant Secretary and delivered to the Trustee; provided, however, that such
written request or order may be signed by any two of the officers or directors
listed in clause (i) above in lieu of being signed by one of such officers or
directors listed in such clause (i) and one of the officers listed in clause
(ii) above; provided further that the initial Company Order to be delivered
pursuant to Section 2.03 may be signed by one officer listed in clause (i)
above.
"Consolidated EBITDA" means, for any period, Adjusted
Consolidated Net Income for such period plus the sum of the amounts for such
period of (i) Consolidated Interest Expense, to the extent such amount was
deducted in calculating Adjusted Consolidated Net Income, plus (ii) income and
asset taxes, to the extent such amount was deducted in calculating Adjusted
Consolidated Net Income (other than income taxes (either positive or negative)
attributable to extraordinary and non-recurring gains or losses or sales of
assets), plus (iii) depreciation expense, to the extent such amount was deducted
in calculating Adjusted Consolidated Net Income, plus (iv) amortization expense,
including (without limitation) amortization of pre-operating expenses, to the
extent such amount was deducted in calculating Adjusted Consolidated Net Income,
plus (v) foreign exchange losses that are reported below the "operating income"
line on the Company's statement of income, plus (vi) all non-cash items that are
reported below the "operating income" line on the Company's statement of income
(including monetary losses and equity in losses of Persons that are not
Restricted Subsidiaries) reducing Adjusted Consolidated Net Income (other than
items that will require cash payments and for which an accrual or reserve is, or
is required by Mexican GAAP to be, made), plus (vii) any charge related to any
premium or penalty paid in connection with redeeming or retiring any
Indebtedness prior to its stated maturity, less (viii) deferred income taxes and
accrued employee
5
profit sharing amounts (other than deferred income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
sales of assets), less (ix) foreign exchange gains that are reported below the
"operating income" line on the Company's statement of income and less (x) all
non-cash items that are reported below the "operating income" line on the
Company's statement of income (including monetary gains that are reported and
equity in earnings of Persons that are not Restricted Subsidiaries), to the
extent increasing Adjusted Consolidated Net Income (other than items that will
result in the receipt of cash payments), all as determined on a consolidated
basis for the Company and its Restricted Subsidiaries in conformity with Mexican
GAAP and on a basis consistent with the methods and manner such items are
reported in the Company's audited consolidated financial statements included in
this Memorandum; provided that, if any Restricted Subsidiary is not a Wholly
Owned Restricted Subsidiary, Consolidated EBITDA shall be reduced (to the extent
not otherwise reduced in accordance with Mexican GAAP or otherwise reduced in
calculating Adjusted Consolidated Net Income) by an amount equal to (A) the
amount of the Adjusted Consolidated Net Income attributable to such Restricted
Subsidiary multiplied by (B) the quotient of (1) the number of social parts of
outstanding Common Stock of such Restricted Subsidiary not owned on the last day
of such period by the Company or any of its Restricted Subsidiaries divided by
(2) the total number of social parts of outstanding Common Stock of such
Restricted Subsidiary on the last day of such period.
"Consolidated Interest Expense" means, for any period, the
aggregate amount of interest in respect of Indebtedness (including, without
limitation, amortization of original issue discount on any Indebtedness and the
interest portion of any deferred payment obligation, calculated in accordance
with the effective interest method of accounting; all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing; the net costs associated with Interest Rate Agreements;
and interest paid (by any Person) with respect to Indebtedness that is
Guaranteed or secured by the Company or any of its Restricted Subsidiaries) and
all but the principal component of rentals in respect of Capitalized Lease
Obligations paid, accrued or scheduled to be paid or to be accrued by the
Company and its Restricted Subsidiaries during such period; excluding, however,
(i) any amount of such interest of any Restricted Subsidiary if the net income
of such Restricted Subsidiary is excluded in the calculation of Adjusted
Consolidated Net Income pursuant to clause (iii) of the definition thereof (but
only in the same proportion as the net income of such Restricted Subsidiary is
excluded from the calculation of Adjusted Consolidated Net Income pursuant to
clause (iii) of the definition thereof) and (ii) any premiums, fees and expenses
(and any amortization or write-off thereof) paid or payable in connection with
the offering of the Notes, the exchange offer or Shelf Registration Statement
with respect to the Notes, all as determined on a consolidated basis (without
taking into account Unrestricted Subsidiaries) in conformity with Mexican GAAP.
"Consolidated Leverage Ratio" means, on any Transaction Date,
the ratio of (i) the aggregate amount of Indebtedness of the Company and its
Restricted Subsidiaries on a consolidated basis as of the end of the most recent
fiscal quarter to (ii) the aggregate amount of Consolidated EBITDA for the four
preceding fiscal quarters in each case for which financial statements of the
Company have been filed with the Commission or provided to the relevant Trustee
pursuant to the "Commission Reports and Reports to Holders" covenant described
below (such four fiscal quarter period being the "Four Quarter Period");
provided that (A) pro forma
6
effect shall be given to any Indebtedness (including, if applicable, the Notes)
Incurred during such Four Quarter Period or subsequent to the end of the Four
Quarter Period and on or prior to the Transaction Date, in each case as if such
Indebtedness has been Incurred, and the proceeds thereof had been applied, on
the first day of such Four Quarter Period; (b) pro forma effect shall be given
to any Indebtedness that was outstanding during such Four Quarter Period or
thereafter but that is not outstanding or is to be repaid, defeased or satisfied
on the Transaction Date, as if such Indebtedness had been repaid, defeased or
satisfied on the first day of the Four Quarter Period; (c) pro forma effect
shall be given to Asset Sales, Asset Dispositions and Asset Acquisitions
(including given pro forma effect to the application of proceeds of any Asset
Sale or Asset Disposition) that occur during the period beginning on the first
day of the Four Quarter Period and ending on the Transaction Date (the
"Reference Period") as if they had occurred and such proceeds had been applied
on the first day of such Reference Period; and (d) pro forma effect shall be
given to asset sales, asset dispositions and asset acquisitions (including
giving pro forma effect to the application of proceeds of any asset disposition)
that have been made by any Person that has become a Restricted Subsidiary or has
been merged with or into the Company or any Restricted Subsidiary during such
Reference Period and that would have constituted Asset Sales, Asset Dispositions
or Asset Acquisitions had such transactions occurred when such Person was a
Restricted Subsidiary as if such asset dispositions or asset acquisitions were
Asset Sales, Asset Dispositions or Asset Acquisitions that occurred on the first
day of such Reference Period; provided that, to the extent that clause (c) or
(D) of this sentence requires that pro forma effect be given to an Asset Sale,
Asset Acquisition or Asset Disposition, such pro forma calculation shall be
based upon the four full fiscal quarters immediately preceding the Transaction
Date of the Person, or division or line of business of the Person, that is
acquired or disposed for which financial information is available; (E)
Indebtedness of a Restricted Subsidiary shall be excluded, in the same
proportion that, pursuant to any provision described in clause (iii) of the
definition of "Adjusted Consolidated Net Income" which is expected to remain in
effect, any of the net income of such Restricted Subsidiary is not permitted to
be paid to holders of Common Stock of such Restricted Subsidiary; and (F) the
aggregate amount of Indebtedness outstanding as of the end of the Four Quarter
Period will be deemed to include the average daily balance of Indebtedness
outstanding under any revolving credit facilities of the Company or its
Restricted Subsidiaries during the Four Quarter Period.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Disqualified Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of the Company or any of its Restricted Subsidiaries, each item to
be determined in conformity with Mexican GAAP.
"Corporate Trust Office" means the office of the Trustee at
which the corporate trust business of the Trustee shall, at any particular time,
be principally administered, which office is, at the date of this Indenture,
located at 000 Xxxxxxx Xxxxxx, Xxxxx 00X Xxx Xxxx XX 00000, Attention: Corporate
Trust Administration.
7
"CT Corporation" shall mean CT Corporation System, a Delaware
corporation, and its successor and assigns.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage
of time or both would be, an Event of Default.
"Depositary" or "DTC" shall mean The Depository Trust Company,
its nominees, and their respective successors.
"Disqualified Stock" means any class or series of Capital
Stock of any Person that by its terms or otherwise is (i) required to be
redeemed prior to the Stated Maturity of the Notes, (ii) redeemable at the
option of the holder of such class or series of Capital Stock at any time prior
to the Stated Maturity of the Notes or (iii) convertible into or exchangeable
for Capital Stock referred to in clause (i) or (ii) above or Indebtedness having
a scheduled maturity prior to the Stated Maturity of the Notes; provided that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the Stated Maturity of the Notes shall
not constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Sections 4.10. and 4.11.
and such Capital Stock specifically provides that such Person will not
repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required to be repurchased pursuant to
Sections 4.10. and 4.11.
"DTH Assets" means all assets, rights (contractual or
otherwise), services and properties, whether tangible or intangible, used or
intended for use in connection with a DTH Business, including without limitation
DTH Units and shares of capital stock of or other equity interests in Grupo
Galaxy Mexicana, S. de X.X. de C.V., or any of its subsidiaries or affiliates,
as well as the capital stock of any Person with Mexican trademark rights to
"DIRECTV."
"DTH Business" means the business of (i) developing,
operating, or providing services relating to direct to home satellite systems
for the distribution of subscription programming services directly to homes and
cable systems in Mexico and other areas covered by the "footprint" of the
satellites utilized by the Company, and activities to accomplish the foregoing,
including the acquisition of the rights to exhibit subscription programming
services and channels in Mexico and such other areas or (ii) evaluating,
participating or pursuing any other activity or opportunity that is primarily
related to those identified above; provided that the determination of what
constitutes a DTH Business shall be made in good faith by the Board of
Directors, which determination shall be conclusive.
"DTH Unit" means one or more of the components used by
subscribers to receive program services in connection with the Company's DTH
Business, including satellite dishes, low noise blockers, integrated
receivers/decoders, Smart Cards, remote controls and related components.
8
"Euroclear" means Euroclear Bank S.A./N.V. or its successor as
operator of the Euroclear System.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.10.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means any securities of the Company
containing terms identical to the Notes (except that such Exchange Notes (i)
shall be registered under the Securities Act, (ii) will not provide for an
increase in the rate of interest (other than with respect to overdue amounts)
and (iii) will not contain terms with respect to transfer restrictions) that are
issued and exchanged for the Notes pursuant to the Registration Rights Agreement
and this Indenture.
"Existing Social Part Holders" means SKY DTH, S. de X.X. de
C.V., News DTH (Mexico) Investment Ltd and Liberty Mexico DTH, Inc.
"fair market value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy.
Solely for purposes of calculating fair market value under Section 4.10.
(including, without limitation, in respect of the determination of whether a
sale, transfer or other disposition of assets constitutes an "Asset Sale" under
clause (b) of the first proviso to the definition of "Asset Sales"), with
respect to amounts in excess of $15 million, fair market value shall be
determined, on the basis of the first sentence of this definition, in good faith
by the Board of Directors, whose determination shall be conclusive if evidenced
by a Board Resolution.
"Four Quarter Period" has the meaning specified in the
definition of Consolidated Leverage Ratio.
"Global Notes" has the meaning provided in Section 2.01.
"Government Securities" means direct obligations of,
obligations fully guaranteed by, or participation in pools consisting solely of
obligations of or obligations guaranteed by, the United States of America for
the payment of which guarantee or obligations the full faith and credit of the
United States of America is pledged and which are not callable or redeemable at
the option of the issuer thereof.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing (whether pursuant to a guaranty,
a fianza, an aval or otherwise) any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise (but not
including any obligations arising solely by
9
reason of such Person's status as a partner of a partnership, as a shareholder
of a limited liability company or as an equity owner of any other entity) or
(ii) entered into for purposes of assuring in any other manner the obligee of
such Indebtedness of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary course
of business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guaranteed Indebtedness" has the meaning provided in Section
4.07.
"Holder or "Noteholder" means the registered holder of any
Note.
"Incur" means, with respect to any Indebtedness, to incur,
create, issue, assume, Guarantee or otherwise become liable for or with respect
to, or become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Indebtedness by reason of a Person
becoming a Restricted Subsidiary; provided that (i) neither the accrual of
interest nor the accretion of original issue discount shall be considered an
Incurrence of Indebtedness and (ii) if the Company or any Restricted Subsidiary
shall enter into any agreement with respect to Mexican Peso denominated
Indebtedness whereby the nominal principal amount of such Indebtedness is
periodically increased as a result of and in proportion to the devaluation of
the Mexican Peso against the U.S. dollar or the rate of inflation in Mexico
during such period, then such increase in principal amount shall be deemed not
to be an "Incurrence" for purposes of the first paragraph of part (a) of Section
4.03.; provided further, however, that the Company may elect to treat all or any
portion of revolving or line of credit debt of the Company or a Subsidiary as
being Incurred from and after any date beginning the date the revolving or line
of credit commitment is extended to the Company or a Subsidiary, by furnishing
notice thereof to the Trustee, and any borrowings or reborrowings by the Company
or a Subsidiary under such commitment up to the amount of such commitment
designated by the Company as Incurred shall not be deemed to be new Incurrences
of Indebtedness by the Company or such Subsidiary.
"Indebtedness" means, with respect to any Person at any date
of determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto, but excluding obligations with
respect to letters of credit (including trade letters of credit) securing
obligations (other than obligations described in (i) or (ii) above or (v), (vi)
or (vii) below) entered into in the ordinary course of business of such Person
to the extent such letters of credit are not drawn upon or, if drawn upon, to
the extent such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except (x) Trade Payables or (y) accrued
liabilities not relating to borrowed money arising in the ordinary course of
business which are not overdue or which are being contested in good faith, (v)
all obligations of such Person as lessee under Capitalized Leases, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person; provided that the
amount of such
10
Indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness, (vii) all
Indebtedness of other Persons Guaranteed by such Person to the extent such
Indebtedness is Guaranteed by such Person and (viii) to the extent not otherwise
included in this definition, net liabilities under Currency Agreements and
Interest Rate Agreements. Notwithstanding the foregoing, "Indebtedness" shall
not include obligations of any Person as lessee under transponder leases. The
amount of Indebtedness of any Person at any date shall be (without duplication)
the outstanding balance at such date of all unconditional obligations as
described above and, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the obligation
(unless the underlying contingency has not occurred and the occurrence of the
underlying contingency is entirely within the control of the Company or its
Restricted Subsidiaries); provided (A) that the amount outstanding at any time
of any Indebtedness issued with original issue discount is the face amount of
such Indebtedness less the unamortized portion of the original issue discount of
such Indebtedness at the time of its issuance as determined in conformity with
Mexican GAAP and (B) that Indebtedness shall not include any liability for (i)
federal, state, local or other taxes of Mexico, the United States or any other
jurisdiction, (ii) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business or (iii)
any indebtedness that has been defeased or satisfied in accordance with the
terms of the documents governing such indebtedness.
"Indenture" means this Indenture as originally executed or as
it may be amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.
"Interest Payment Date" means each semiannual interest payment
date on March 19 and September 19 of each year, commencing March 19, 2004.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement, option or future contract or other
similar agreement or arrangement.
"Investment" in any Person means any direct or indirect
advance, loan or other extension of credit (including, without limitation, by
way of Guarantee or similar arrangement) or capital contribution to (by means of
any transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition of
Capital Stock, bonds, notes, debentures or other similar instruments issued by,
such Person and shall include (i) the designation of a Restricted Subsidiary as
an Unrestricted Subsidiary and (ii) the fair market value of the Capital Stock
(or any other Investment) held by the Company or any of its Restricted
Subsidiaries of (or in) any Person that has ceased to be a Restricted
Subsidiary, including without limitation, by reason of any transaction permitted
by clause (iii) of Section 4.06. Notwithstanding the foregoing, any issuance of
Common Stock of the Company in exchange for Capital Stock, property or assets of
another Person shall be deemed not to be an Investment by the Company in such
other Person. For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.04., (i) "Investment" shall include the fair market value of the
assets (net of liabilities (other than liabilities to the Company or any of its
Subsidiaries)) of any Restricted Subsidiary at the time that such Restricted
Subsidiary is designated an
11
Unrestricted Subsidiary, (ii) the fair market value of the assets (net of
liabilities (other than liabilities to the Company or any of its Subsidiaries))
of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is
designated a Restricted Subsidiary shall be considered a reduction in
outstanding Investments and (iii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer. Notwithstanding the foregoing, the term "Investment" shall not
include: (i) accounts payable to suppliers, advances to customers (other than
Subsidiaries of the Company), accounts receivables and other commercially
reasonable extensions of trade credit, in each case that are, in conformity with
Mexican GAAP, recorded as accounts receivable or accounts payable, as the case
may be, and any loan, advance, subsidy, other extension of credit or payment to
any Person in connection with DTH Units, and (ii) payments made in respect of
prepaid expenses, negotiable instruments held for collection and lease,
performance deposits and other similar deposits.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind upon or with respect to any property
(including, without limitation, any conditional sale or other title retention
agreement or lease in the nature thereof or any agreement to give any security
interest).
"Memorandum" means the final Offering Memorandum, dated
September 12, 2003, relating to the Notes.
"Mexican GAAP" means generally accepted accounting principles
in Mexico and the accounting principles and policies of the Company and its
Restricted Subsidiaries, in each case as in effect as of the date of the
Indenture. All ratios and computations shall be computed in conformity with
Mexican GAAP applied on a consistent basis and using constant Peso calculations,
except as otherwise set forth in the second sentence of the definition of
Indebtedness and except that calculations made for purposes of determining
compliance with the terms of the covenants and with other provisions of the
Indenture shall be made without giving effect to the matters referred to in
clause (ii) of the last sentence of the definition of "Consolidated Interest
Expense."
"Mexican Tax Distributions" means payments or distributions to
social part holders of the Company of the Company's Taxes (including any
interest and penalties thereon) to the extent any such payment or distribution
is required by law.
"Mexico" means the Estados Unidos Mexicanos (the United
Mexican States) and any branch of power, ministry, department, authority or
statutory corporation or other entity (including a trust), owned or controlled
directly or indirectly by the Estados Unidos Mexicanos or any of the foregoing
or created by law as a public entity.
"Moody's" means Xxxxx'x Investor Service, Inc. and its
successors.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale,
the proceeds of such Asset Sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any Restricted
Subsidiary)
12
and proceeds from the conversion of other property received when converted to
cash or cash equivalents, net of (i) brokerage commissions and other fees and
expenses (including fees and expenses of counsel and investment bankers) related
to such Asset Sale, (ii) provisions for all taxes (whether or not such taxes
will actually be paid or are payable) as a result of such Asset Sale without
regard to the consolidated results of operations of the Company and its
Restricted Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
that either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale (or in order to obtain a necessary
consent in connection therewith), (iv) appropriate amounts to be provided by the
Company or any Restricted Subsidiary of the Company as a reserve against any
liabilities associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with Mexican
GAAP, (v) any consideration for an Asset Sale (which would otherwise constitute
Net Cash Proceeds) that is required to be held in escrow pending determination
of whether a purchase price adjustment will be made, but amounts under this
clause (v) shall become Net Cash Proceeds at such time and to the extent such
amounts are released to such Person, and (vi) a pro rata portion of the amount
of cash or cash equivalents received by any Restricted Subsidiary which is
attributable to minority interests in such Restricted Subsidiary that are held
by Persons other than the Company or its Restricted Subsidiaries and (b) with
respect to any issuance or sale of Capital Stock (other than any Capital Stock
issued in connection with the Social Part Holders Note Capitalization), the
proceeds of such issuance or sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any Restricted
Subsidiary of the Company) and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of attorney's fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees incurred in connection with
such issuance or sale and net of taxes paid or payable as a result thereof.
"News Corporation" means The News Corporation Limited, an
Australian corporation.
"Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.
"Notes" means any of the notes, as defined in the first
paragraph of the recitals hereof, that are authenticated and delivered under
this Indenture. For all purposes of this Indenture, the term "Notes" shall
include the Notes initially issued on the Closing Date, any Exchange Notes to be
issued and exchanged for any Notes pursuant to the Registration Rights Agreement
and this Indenture and any other Notes issued after the Closing Date under this
Indenture. For purposes of this Indenture, all Notes shall vote together as one
series of Notes under this Indenture.
"Offer to Purchase" means an offer by the Company to purchase
Notes from the Holders commenced by mailing a notice to the Trustee and each
Holder that, unless otherwise
13
required by applicable law, shall state: (i) the covenant pursuant to which the
offer is being made and that all Notes validly tendered will be accepted for
payment on a pro rata basis; (ii) the purchase price and the date of purchase
(which shall be a Business Day no earlier than 30 days nor later than 60 days
from the date such notice is mailed) (the "Payment Date"); (iii) that any Note
not tendered will continue to accrue interest pursuant to its terms; (iv) that,
unless the Company defaults in the payment of the purchase price, any Note
accepted for payment pursuant to the Offer to Purchase shall cease to accrue
interest on and after the Payment Date; (v) that Holders electing to have a Note
purchased pursuant to the Offer to Purchase will be required to surrender the
Note, together with the form entitled "Option of the Holder to Elect Purchase"
on the reverse side of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date; (vi) that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later than the close
of business on the third Business Day immediately preceding the Payment Date, a
telegram, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Notes delivered for purchase and a statement
that such Holder is withdrawing his election to have such Notes purchased; and
(vii) that Holders whose Notes are being purchased only in part will be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered; provided that each Note purchased and each new Note issued shall be
in a principal amount of $10,000 for Rule 144A Global Notes and $1,000 for
Regulation S Global Notes and, in both cases, in integral multiples of $1,000 in
excess thereof. On the Payment Date, the Company shall (i) accept for payment on
a pro rata basis Notes or portions thereof tendered pursuant to an Offer to
Purchase; (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof so accepted; and (iii) deliver,
or cause to be delivered, to the Trustee all Notes or portions thereof so
accepted together with an Officers' Certificate specifying the Notes or portions
thereof accepted for payment by the Company. The Paying Agent shall promptly
mail to the Holders of Notes so accepted payment in an amount equal to the
purchase price, and the Trustee shall promptly authenticate and mail to such
Holders a new Note equal in principal amount to any unpurchased portion of the
Note surrendered; provided that each Note purchased and each new Note issued
shall be in a principal amount of $10,000 for Rule 144A Global Notes and $1,000
for Regulation S Global Notes and, in both cases, in integral multiples of
$1,000 in excess thereof. The Company will publicly announce the results of an
Offer to Purchase as soon as practicable after the Payment Date. The Trustee
shall act as the Paying Agent for an Offer to Purchase. The Company will comply
with Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable,
in the event that the Company is required to repurchase Notes pursuant to an
Offer to Purchase.
"Officer" means, with respect to the Company, (i) the Chief
Executive Officer, the Chairman of the Board, the President, any Vice President,
the Vice Chairman, the Chief Financial Officer, the Chief Accounting Officer and
(ii) the Treasurer or any Assistant Treasurer, or the Secretary, Pro-Secretary
or any Assistant Secretary.
"Officers' Certificate" means a certificate signed by one
Officer listed in clause (i) of the definition thereof and one Officer listed in
clause (ii) of the definition thereof; provided, however, that any such
certificate may be signed by any two of the Officers listed in clause (i) of the
definition thereof in lieu of being signed by one Officer listed in clause (i)
of the definition thereof and one Officer listed in clause (ii) of the
definition thereof. Each Officers'
14
Certificate (other than certificates provided pursuant to TIA Section 314(a)(4))
shall include the statements provided for in TIA Section 314(e); provided
further that the initial Officers' Certificate to be delivered pursuant to
Section 10.03 may be signed by one Officer listed in clause (i) of the
definition thereof.
"Opinion of Counsel" means a written opinion signed by legal
counsel who may be an employee of or counsel to the Company. Each such Opinion
of Counsel shall include the statements provided for in TIA Section 314(e).
"Outstanding" when used with respect to any Notes, means, as
of the date of determination, all such Notes theretofore authenticated and
delivered under this Indenture, except: (a) any such Note theretofore cancelled
by the Trustee or the Security Registrar or delivered to the Trustee or the
Security Registrar for cancellation; (b) any such Security for whose payment at
the Maturity thereof money in the necessary amount has been theretofore
deposited pursuant hereto (other than pursuant to Sections 8.02 or 8.03) with
the Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Notes and any Coupons appertaining
thereto, provided that, if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; (c) any such Note with respect to
which the Company has effected defeasance or covenant defeasance pursuant to the
terms hereof, except to the extent provided in Sections 8.02 or 8.03; and (d)
any such Note which has been paid pursuant to Section 2.09 or in exchange for or
in lieu of which other Notes have been authenticated and delivered pursuant to
this Indenture, unless there shall have been presented to the Trustee proof
satisfactory to it that such Note is held by a bona fide purchaser in whose
hands such Note is a valid obligation of the Company; provided, however, that in
determining whether the Holders of the requisite principal amount of Outstanding
Notes have given any request, demand, authorization, direction, notice, consent
or waiver hereunder or are present at a meeting of Holders of Notes for quorum
purposes owned by the Company or any other obligor upon the Notes or any
Affiliate of the Company or such other obligor, shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in making any such determination or relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes which a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Notes so owned which shall have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee (A) the pledgee's right so to act with respect to such Notes and (B)
that the pledgee is not the Company or any other obligor upon the Notes or any
Coupons appertaining thereto or an Affiliate of the Company or such other
obligor.
"Paying Agent" has the meaning provided in Section 2.04,
except that, for the purposes of Article Eight, the Paying Agent shall not be
the Company or a Subsidiary of the Company or an Affiliate of any of them. The
term "Paying Agent" includes any additional Paying Agent.
"Permitted Investment" means (i) an Investment in the Company
or a Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with or
into or transfer or convey all or substantially all
15
its assets to, the Company or a Restricted Subsidiary; provided that such
Person's primary business is related, ancillary or complementary to the
businesses of the Company and its Restricted Subsidiaries on the date of such
Investment; (ii) Temporary Cash Investments; (iii) payroll, travel and similar
advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses in accordance with Mexican GAAP; (iv)
Investments received in satisfaction of judgments, bankruptcy, insolvency,
work-outs or similar arrangements; (v) (A) loans or advances to employees made
in the ordinary course of business of the Company or its Restricted Subsidiaries
and that do not in the aggregate exceed at any one time outstanding the greater
of (I) $4 million and (II) 1% of Consolidated EBITDA for the Four Quarter
Period, (B) loans or advances that do not in the aggregate exceed at any one
time outstanding the greater of (I) $4 million and (II) 1% of Consolidated
EBITDA for the Four Quarter Period and (C) other loans or advances to
distributors, suppliers, content providers or customers of the Company or any
Restricted Subsidiary that do not in the aggregate exceed at any one time
outstanding the greater of (I) $6 million and (II) 1.5% of Consolidated EBITDA
for the Four Quarter Period; (vi) Interest Rate Agreements (to the extent the
notional principal amount thereof does not exceed the principal amount of the
Indebtedness of the Company and its Restricted Subsidiaries with floating rates
of interest) and Currency Agreements, to the extent entered into for the purpose
of protecting the Company or its Restricted Subsidiaries against fluctuations in
interest rates or currency exchange rates, respectively; (vii) Investments
received as a result of Asset Sales which are permitted to be received in
accordance with Section 4.10. and (viii) Investments existing on the Closing
Date.
"Permitted Liens" means (i) Liens for taxes, assessments,
governmental charges or claims that are either (a) delinquent for less than 90
days (provided that the fair market value of the aggregate amount of the
property and assets subject to such Liens does not exceed $5 million) or (b)
being contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which a reserve or other appropriate
provision, if any, as shall be required in conformity with Mexican GAAP shall
have been made; (ii) statutory and common law Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or other similar
Liens arising in the ordinary course of business and with respect to amounts not
yet delinquent or being contested in good faith by appropriate legal proceedings
promptly instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with Mexican
GAAP shall have been made; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security and statutory obligations
(including to secure government contracts); (iv) Liens incurred or deposits made
to secure (a) letters of credit (to the extent such letters of credit meet the
criteria set forth in the definition of "Indebtedness"), the performance of
tenders, bids, leases, statutory or regulatory obligations, bankers'
acceptances, surety and appeal bonds, government contracts, performance and
return-of-money bonds and other obligations of a similar nature incurred in the
ordinary course of business (exclusive of obligations for the payment of
borrowed money) and any bank's unexercised right of set off with respect to
deposits made in the ordinary course and (b) indemnity obligations in respect of
the disposition of any business or assets of the Company or any Restricted
Subsidiary (provided that the property subject to such Lien does not have a fair
market value in excess of the cash or cash equivalent proceeds received by the
Company and its Restricted Subsidiaries in connection with such disposition);
(v) easements, rights-of-way, municipal and zoning ordinances and similar
charges, encumbrances, title defects or other
16
irregularities that do not materially interfere with the ordinary course of
business of the Company or any of its Restricted Subsidiaries; (vi) Liens
(including extensions and renewals thereof) upon real or personal property
(including, without limitation, equipment, inventory, facilities, programming,
films, DTH Units and other DTH Assets and, in each case, proceeds therefrom);
provided that (a) such Lien is created solely for the purpose of securing
Indebtedness Incurred, in accordance with Section 4.03., (1) to finance the cost
(including the cost of design, development, improvement, production,
acquisition, manufacture, lease, distribution, subsidy, construction,
installation or integration) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within 270 days after the
later of the manufacture, the acquisition, the completion of construction,
installation or integration or the commencement of full operation, or the lease,
distribution or subsidy, of such property or (2) to refinance any Indebtedness
previously so secured, (b) the principal amount of the Indebtedness secured by
such Lien does not exceed 100% of such cost (plus fees, expenses and similar
payments made in connection with the Incurrence of such Indebtedness) and (c)
any such Lien shall not extend to or cover any property or assets other than
such item of property or assets and any improvements on such item; (vii) leases
or subleases granted to others that do not materially interfere with the
ordinary course of business of the Company and its Restricted Subsidiaries,
taken as a whole; (viii) bailments and other possessory Liens relating to DTH
Units granted to customers, suppliers or distributors by the Company or any
Restricted Subsidiary; (ix) Liens encumbering property or assets under
construction arising from progress or partial payments by a customer of the
Company or its Restricted Subsidiaries relating to such property or assets; (x)
any interest or title of a lessor in the property subject to any Capitalized
Lease or operating lease; (xi) Liens arising from filing Uniform Commercial Code
or similar financing statements regarding leases; (xii) Liens on property of, or
on shares of Capital Stock or Indebtedness of, any Person existing at the time
such Person becomes, or becomes a part of, any Restricted Subsidiary (including,
without limitation, Liens to secure Acquired Indebtedness); provided that such
Liens do not extend to or cover any property or assets of the Company or any
Restricted Subsidiary other than the property or assets acquired; (xiii) Liens
in favor of the Company or any Restricted Subsidiary; (xiv) Liens arising out of
judgments or awards against the Company or any Restricted Subsidiary that do not
give rise to an Event of Default with respect to which the Company or such
Restricted Subsidiary is prosecuting an appeal or proceeding for review and the
Company or such Restricted Subsidiary is maintaining adequate reserves in
accordance with Mexican GAAP; (xv) Liens arising from the rendering of a final
judgment or order against the Company or any Restricted Subsidiary of the
Company that does not give rise to an Event of Default; (xvi) Liens securing
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the products
and proceeds thereof; (xvii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; (xviii) Liens encumbering customary initial
deposits and margin deposits, and other Liens that are either within the general
parameters customary in the industry and incurred in the ordinary course of
business, in each case, securing Indebtedness under Interest Rate Agreements and
Currency Agreements and forward contracts, options, future contracts, futures
options or similar agreements or arrangements designed solely to protect the
Company or any of its Restricted Subsidiaries from fluctuations in interest
rates, currencies or the price of commodities; (xix) Liens arising out of
conditional sale, title retention, consignment or similar arrangements for the
sale of goods entered into by the Company or any of its Restricted Subsidiaries
in the ordinary course of business; (xx) Liens on or sales of
17
receivables; (xxi) Liens in connection with the satisfaction and discharge or
defeasance of Indebtedness of the Company or a Restricted Subsidiary; (xxii)
other Liens incidental to the conduct of the Company's and its Restricted
Subsidiaries' business or the ownership of its property and assets not securing
any Indebtedness, and which do not in the aggregate materially detract from the
value of the Company's and its Restricted Subsidiaries' property or assets when
taken as a whole, or materially impair the use thereof in the operation of its
business; and (xxiii) Liens incurred to renew, extend, refinance or refund, in
whole or in part, Indebtedness or obligations secured by any Lien incurred under
clauses (i)-(xxii) above, provided that (a) such Lien does not extend to any
other property or assets, and (b) the principal amount of Indebtedness (if any)
so secured is not increased except as otherwise permitted under clause (iii) of
the second paragraph of part (a) of Section 4.03.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization, government or agency or political
subdivision thereof or any other entity.
"Physical Notes" has the meaning provided in Section 2.01.
"Preferred Stock" means, with respect to any Person, any and
all shares, interests, participation or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference equity,
whether now outstanding or issued after the Closing Date, including, without
limitation, all series and classes of such preferred stock or preference stock.
"Private Placement Legend" means the legend initially set
forth on the Notes in accordance with Section 2.02.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Redemption Date" when used with respect to any Note to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Note to be
redeemed, means the price at which such Note is to be redeemed pursuant to this
Indenture.
"Registrar" has the meaning provided in Section 2.04.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Closing Date, between the Company and X.X. Xxxxxx
Securities Inc. and Citigroup Global Markets, Inc.
"Registration Statement" means the Registration Statement as
defined and described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest
Payment Date means _____ or _____ (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
18
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Note" has the meaning provided in Section 2.01.
"Related Person" of any Person means any other Person directly
or indirectly owning (a) 10% or more of the outstanding Common Stock of such
Person or (b) 10% or more of the combined voting power of the Voting Stock of
such Person.
"Responsible Officer" when used with respect to the Trustee,
means any vice president, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer or any other officer of the Trustee in its
Corporate Trust Department having direct responsibility for the administration
of this Indenture or the Pledge Agreement and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Restricted Payment" has the meaning provided in Section 4.04.
"Restricted Period" has the meaning provided in Section 2.08
(a).
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Note" has the meaning provided in Section 2.01.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning provided in Section 2.04.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"S&P" means Standard & Poor's Ratings Group and its
successors.
"Significant Subsidiary" means, at any date of determination,
any Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"Social Part Holders Agreement" means the Social Part Holders
Agreement, dated as of March 6, 1997, by an among Televisa, Galavision DTH, S.
de X.X., Xxxxxxxxx Xxxx, News Corporation, News DTH (Mexico) Investment Limited,
Xxxxx Xxxxx and the Company.
19
"Social Part Holders Note Capitalization" means the
cancellation by the Existing Social Part Holders and their Affiliates of all the
debt plus accrued interest currently owed to such entities by Innova and
Corporacion Novavision, S. de X.X. de C.V. and their Affiliates (in the amount
approximately Ps. 4.0 billion as of June 30, 2003), as contemplated in the
Offering Memorandum for the sale of the Notes.
"Start Date" means the first day of the first consecutive four
quarter period for which the amount calculated by deducting from Consolidated
EBITDA of the Company, the sum of (A) 175% of Consolidated Interest Expense and
(B) all capital expenditures made by the Company or its Restricted Subsidiaries,
in each case during such period, is positive.
"Stated Maturity" means, (i) with respect to any debt
security, the date specified in such debt security as the fixed date on which
the final installment of principal of such debt security is due and payable and
(ii) with respect to any scheduled installment of principal of or interest on
any debt security, the date specified in such debt security as the fixed date on
which such installment is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company
as to which the payment of principal of (and premium, if any) and interest and
other payment obligations in respect of such Indebtedness shall be subordinate
to the prior payment in full of the Notes to at least the following extent: (i)
no payments of principal of (or premium, if any) or interest on or otherwise due
in respect of such Indebtedness may be permitted for so long as any Default in
the payment of principal (or premium, if any) or interest on the Notes exists;
(ii) in the event that any other default that with the passing of time or the
giving of notice, or both, would constitute an Event of Default exists with
respect to the Notes, upon notice by holders of 25% or more in principal amount
of the Notes to the Trustee, the Trustee shall have the right to give notice to
the Company and the holders of such Indebtedness (or trustees or agents
therefor) of a payment blockage, and thereafter no payments of principal of (or
premium, if any) or interest on or otherwise due in respect of such Indebtedness
may be made for a period of 179 days from the date of such notice or for the
period until such default has been cured or waived or ceased to exist and any
acceleration of the Notes has been rescinded or annulled, whichever period is
shorter (which Indebtedness may provide that (A) no new period of payment
blockage may be commenced by a payment blockage notice unless and until 360 days
have elapsed since the effectiveness of the immediately prior notice, (B) no
nonpayment default that existed or was continuing on the date of delivery of any
payment blockage notice to such holders (or such agents or trustees) shall be,
or be made, the basis for a subsequent payment blockage notice and (C) failure
of the Company to make payment on such Indebtedness when due or within any
applicable grace period, whether or not on account of such payment blockage
provisions, shall constitute an event of default thereunder); and (iii) such
Indebtedness may not (x) provide for payments of principal of such Indebtedness
at the stated maturity thereof or by way of a sinking fund applicable thereto or
by way of any mandatory redemption, defeasance, retirement or repurchase thereof
by the Company (including any redemption, retirement or repurchase which is
contingent upon events or circumstances, but excluding any retirement required
by virtue of acceleration of such Indebtedness upon an event of default
thereunder), in each case prior to the final Stated Maturity of the Notes or (y)
permit redemption or other retirement (including pursuant to an offer to
purchase made by the Company) of such other Indebtedness at the option of the
holder thereof prior to the final Stated Maturity of the Notes, other than a
redemption or
20
other retirement at the option of the holder of such Indebtedness (including
pursuant to an offer to purchase made by the Company) which is conditioned upon
a Change of Control of the Company pursuant to provisions substantially similar
to those described in Section 4.11. (and which shall provide that such
Indebtedness will not be repurchased pursuant to such provisions prior to the
Company's repurchase of the Notes required to be repurchased by the Company
pursuant to the provisions of Section 4.11.).
"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which more than 50% of the
voting power of the outstanding Voting Stock is owned, directly or indirectly,
by such Person and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning provided in Section
4.07.
"Taxes" has the meaning provided in Section 4.20.
"Televisa" means Grupo Televisa, S.A., a Mexican corporation
(sociedad anonima).
"Temporary Cash Investment" means any of the following: (i)
direct obligations of the United States of America or any agency thereof or
obligations fully and unconditionally guaranteed by the United States of America
or any agency thereof, (ii) time deposit accounts, certificates of deposit and
money market deposits maturing within 365 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of $50 million (or the
foreign currency equivalent thereof) and has outstanding debt which is rated "A"
(or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by a registered broker dealer
or mutual fund distributor, (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in clause
(ii) above, (iv) commercial paper, maturing not more than 365 days after the
date of acquisition, issued by a corporation (other than an Affiliate of the
Company) incorporated or organized and in existence under the laws of Mexico or
any jurisdiction thereof or the United States of America, any state thereof or
the District of Columbia or any foreign country recognized by the United States
of America with a rating at the time as of which any investment therein is made
of "P-1" (or higher) according to Xxxxx'x or "A-1" (or higher) according to S&P
(or equivalent ratings by their Mexican affiliates), (v) securities with
maturities of six months or less from the date of acquisition issued or fully
and unconditionally guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
thereof, and rated at least "A" by S&P or Xxxxx'x, (vi) Certificados de la
Tesoreria de la Federacion (Cetes) or Bonos de Desarrollo del Gobierno Federal
(Bondes) issued by the Mexican government and maturing not more than 365 days
after the acquisition thereof, (vii) direct obligations of the Mexican
government or obligations fully and unconditionally guaranteed by the Mexican
government and (viii) certificates of deposit, bank promissory notes and
bankers' acceptances denominated in Pesos maturing not more than 365
21
days after the acquisition thereof and issued or guaranteed by (a) any one of
the five largest banks (based on assets as of the immediately preceding December
31) organized under the laws of Mexico and (b) one or more other banks organized
under the laws of Mexico, provided that the aggregate amount of certificates of
deposit, bank promissory notes and banker's acceptances issued or guaranteed by
any one such bank referred to in clause (b) shall not exceed $3 million at any
one time) and, in each case, which is not under intervention or controlled by
the Fondo Bancario de Proteccion al Ahorro.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act
of 1939, as amended (15 U.S. Code Sections 77aaa-77bbb), as in effect on the
date this Indenture was executed, except as provided in Section 9.06.
"Trade Payables" means, with respect to any Person, any
accounts payable or any other indebtedness or monetary obligation to trade
creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection with the
acquisition of tangible or intangible property or services.
"Transaction Date" means, with respect to the Incurrence of
any Indebtedness by the Company or any of its Restricted Subsidiaries, the date
such Indebtedness is to be Incurred and, with respect to any Restricted Payment,
the date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph
of this Indenture until a successor replaces it in accordance with the
provisions of Article Seven of this Indenture and thereafter means such
successor.
"United States Bankruptcy Code" means the Bankruptcy Reform
Act of 1978, as amended and as codified in Title 11 of the United States Code,
as amended from time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Restricted Subsidiary (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, the Company or any Restricted Subsidiary; provided that (A) any Guarantee by
the Company or any Restricted Subsidiary of any Indebtedness of the Subsidiary
being so designated shall be deemed an "Incurrence" of such Indebtedness and an
"Investment" by the Company or such Restricted Subsidiary (or both, if
applicable) at the time of such designation; (B) either (I) the Subsidiary to be
so designated has total assets of $1,000 or less or (II) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under Section
4.04.; and (C) if applicable, the Incurrence of Indebtedness and the Investment
referred to in clause (A) of this proviso would be permitted under Sections
4.03. and 4.04. The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided that immediately after giving effect to
such designation (x) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation would, if incurred at such time,
have been permitted to be incurred for all purposes of the Indenture and (y) no
Default or Event of Default shall have
22
occurred and be continuing. Any such designation by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee a copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof at any time prior
to the Stated Maturity of the Notes, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest or
principal of the U.S. Government Obligation evidenced by such depository
receipt.
"U.S. Person" has the meaning ascribed thereto in Rule 902
under the Securities Act.
"U.S. Physical Notes" has the meaning provided in Section
2.01.
"Voting Stock" means with respect to any Person, Capital Stock
of any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"Wholly Owned" means, with respect to any Subsidiary of any
Person, the ownership of all of the outstanding Capital Stock of such Subsidiary
(other than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
23
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. Rules of Construction. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with Mexican GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words
in the plural include the singular;
(v) provisions apply to successive events and
transactions;
(vi) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(vii) all references to Sections or Articles refer to
Sections or Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating. The Notes and the Trustee's
certificate of authentication shall be substantially in the form annexed hereto
as Exhibit A. The Notes may have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have letters, notations, legends or endorsements required by
law, stock exchange agreements to which the Company is subject or usage. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note. The Company shall approve
the form of the Notes and any notation, legend or endorsement on the Notes. Each
Note shall be dated the date of its authentication.
The terms and provisions contained in the form of the Notes
annexed hereto as Exhibits A and B shall constitute, and are hereby expressly
made, a part of this Indenture. To the extent any portion of any Note conflicts
with the express provisions of this Indenture, however, the provisions of this
Indenture shall govern and be controlling. Each of the Company and the Trustee,
by its execution and delivery of this Indenture, expressly agrees to the terms
and provisions of the Notes applicable to it and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be
issued in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit
24
A (the "Rule 144A Note"), deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Aggregate principal amount of the Rule 144A Note may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of one or more permanent global Notes
in registered form substantially in the form set forth in Exhibit B (the
"Regulation S Note"), deposited with the trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Regulation S Note
may from time to time be increased or decreased by adjustments made in the
records of the Trustee, as custodian for the Depositary or its nominee, as
herein provided.
The Rule 144A Note and the Regulation S Note are sometimes
referred to as "Global Notes".
Each Global Note authenticated under this Indenture shall be
registered in the name of the Depositary or a nominee thereof and delivered to
such Depositary or a nominee thereof or custodian therefor, and each such Global
Note shall constitute a single Note for all purposes of this Indenture.
Notwithstanding any other provision in this Indenture or the
Notes, no Global Note may be exchanged, in whole or in part for certificated
Notes, and no transfer of a Global Note in whole or in part may be registered,
in the name of any Person, other than the Depositary or a nominee thereof unless
(A) the Depositary has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Note and a successor depositary is not
appointed by the Company within 90 days or (B) the Depositary has ceased to be a
clearing agency registered under the Exchange Act, or (C) there shall have
occurred and be continuing an Event of Default with respect to such Global Note
or (D) the Company in its sole discretion determines that the Global Notes (in
whole not in part) should be exchanged for certificated Notes and delivers a
written notice to such effect to the Trustee; provided, however, that until
expiration of the Restricted Period interests in the Regulation S Note will not
be exchangeable for certificated Notes without receipt of certification of
non-U.S. beneficial ownership. Any Global Note exchanged pursuant to Clause (A)
or (B) above shall be so exchanged in whole and not in part and any Global Note
exchanged pursuant to Clause (C) above may be exchanged in whole or from time to
time in part in the manner directed by the Depositary. In the event of the
occurrence of any of the events specified in this paragraph, the Company will
promptly make available to the Trustee a reasonable supply of certificated Notes
in definitive, fully registered form, without interest coupons.
Upon any exchange, the certificated Notes shall be issued in
definitive, fully-registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global Note or portion thereof
to be so exchanged, shall be registered in such names and be in such
denominations as the Depositary shall designate and shall bear any legends
required hereunder. Any Global Note to be exchanged in whole shall be
surrendered by the Depositary to the Trustee, as Security Registrar. With regard
to any Global Note to be exchanged in part,
25
either such Global Note shall be so surrendered for exchange or, if the Trustee
is acting as custodian for the Depositary or its nominee with respect to such
Global Note, the principal thereof shall be reduced, by an amount equal to the
portion thereof to be so exchanged, by means of any appropriate adjustment made
on the records of the Trustee. Upon any such surrender or adjustment, the
Trustee shall authenticate and deliver the Note issuable on such exchange to or
upon the order of the Depositary or an authorized representative thereof.
The provisions of the "Operating Procedures of the Euroclear
System" and the "Terms and Conditions Governing Use of Euroclear" and the
"Management Regulations" and "Instructions to Participants" of Clearstream
Banking, respectively, shall be applicable to any Global Note insofar as
interests in such Global Security are held by the agent members of Euroclear or
Clearstream Banking. Account holders or participants in Euroclear and
Clearstream Banking shall have no rights under the Indenture with respect to
such Global Security, and the Depositary or its nominee may be treated by the
Company, the Trustee, and any agent of the Company or the Trustee as the owner
of such 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 Depositary or impair, as between
DTC and its agent members, the operation of customary practices governing the
exercise of the rights of a holder of any Security.
SECTION 2.02. Restrictive Legends. Unless and until a Note is
exchanged for an Exchange Note in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, the Global Notes shall
bear the applicable legends set forth in Exhibits A and B, as applicable, on the
face thereof.
SECTION 2.03. Execution, Authentication and Denominations. Two
Officers shall execute the Notes for the Company by facsimile or manual
signature in the name and on behalf of the Company.
If an Officer whose signature is on a Note no longer holds
that office at the time the Trustee or authenticating agent authenticates the
Note, the Note shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall upon receipt of a
Company Order authenticate for original issue Notes in the aggregate principal
amount specified in such Company Order; provided that the Trustee shall be
provided with an Officers' Certificate and an Opinion of Counsel of the Company
in connection with such authentication of Notes. Such Company Order shall
specify the amount of Notes to be authenticated and the date on which the
original issue of Notes is to be authenticated and in case of an issuance of
Notes pursuant to Section 2.14, shall certify that such issuance is in
compliance with Article Four. The Opinion of Counsel shall be to the effect
that:
26
(a) the form and terms of such Notes have been
established by or pursuant to a Board Resolution or an indenture
supplemental hereto in conformity with the provisions of this
Indenture;
(b) such supplemental indenture, if any, when executed
and delivered by the Company and the Trustee, will constitute a valid
and binding obligation of the Company;
(c) such Notes, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and binding obligations of the Company in accordance with their terms
and will be entitled to the benefits of this Indenture, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(d) the Company has been duly organized in, and is a
validly existing limited liability company with variable capital
(sociedad de responsibilidad limitada de capital variable) under the
laws of, Mexico; and
(e) all conditions precedent under the Indenture in
connection with the issuance of the Notes have been complied with.
The Trustee may appoint an authenticating agent to
authenticate Notes. An authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such authenticating agent. An authenticating
agent has the same rights as an Agent to deal with the Company or an Affiliate
of the Company.
The Notes shall be issuable only in fully registered form,
without coupons, in denominations of U.S.$10,000 of principal amount at maturity
for Rule 144A Global Notes and in denominations of U.S.$1,000 of principal
amount at maturity for Regulation S Global Notes and, in both cases, in integral
multiples of U.S.$1,000 in excess thereof.
SECTION 2.04. Registrar and Paying Agent. The Company shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (the "Registrar"), an office or agency where Notes 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 Notes and this
Indenture may be served, which shall be in the Borough of Manhattan, the City of
New York and in Luxembourg. The Company shall cause the Registrar acting as
agent of the Company to keep a register of the Notes and of their transfer and
exchange (the "Security Register"). The Company may have one or more
co-Registrars and one or more additional Paying Agents.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands
27
for so long as such failure shall continue. The Company may remove any Agent
upon written notice to such Agent and the Trustee; provided that no such removal
shall become effective until (i) the acceptance of an appointment by a successor
Agent to such Agent as evidenced by an appropriate agency agreement entered into
by the Company and such successor Agent and delivered to the Trustee or (ii)
notification to the Trustee that the Trustee shall serve as such Agent until the
appointment of a successor Agent in accordance with clause (i) of this proviso.
The Company, any Subsidiary of the Company, or any Affiliate of any of them may
act as Paying Agent, Registrar or co-Registrar, and/or agent for service of
notices and demands; provided, however, that neither the Company, a Subsidiary
of the Company nor an Affiliate of any of them shall act as Paying Agent in
connection with the defeasance of the Notes or the discharge of this Indenture
under Article Eight.
The Company initially appoints the Trustee as Registrar,
Paying Agent, authenticating agent and agent for service of notices and demands
and The Bank of New York (Luxembourg) as Paying Agent, Registrar and Transfer
Agent. If, at any time, the Trustee is not the Registrar, the Registrar shall
make available to the Trustee on or before each Interest Payment Date and at
such other times as the Trustee may reasonably request, the names and addresses
of the Holders as they appear in the Security Register.
SECTION 2.05. Paying Agent to Hold Money in Trust. Not later
than 12:00 noon, New York City time, on each due date of the principal, premium,
if any, and interest on any Notes, the Company shall deposit with the Paying
Agent money in immediately available funds sufficient to pay such principal,
premium, if any, and interest so becoming due. The Company shall require each
Paying Agent, if any, other than the Trustee to agree in writing that such
Paying Agent shall hold in trust for the benefit of the Holders or the Trustee
all money held by the Paying Agent for the payment of principal of, premium, if
any, and interest on the Notes (whether such money has been paid to it by the
Company or any other obligor on the Notes), and that such Paying Agent shall
promptly notify the Trustee of any default by the Company (or any other obligor
on the Notes) in making any such payment. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and account for any
funds disbursed, and the Trustee may at any time during the continuance of any
payment default, upon written request to a Paying Agent, require such Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed. Upon doing so, the Paying Agent shall have no further liability for
the money so paid over the Trustee. If the Company or any Subsidiary of the
Company or any Affiliate of any of them acts as Paying Agent, it will, on or
before each due date of any principal of, premium, if any, or interest on the
Notes, segregate and hold in a separate trust fund for the benefit of the
Holders a sum of money sufficient to pay such principal, premium, if any, or
interest so becoming due until such sum of money shall be paid to such Holders
or otherwise disposed of as provided in this Indenture, and will promptly notify
the Trustee of its action or failure to act as required by this Section 2.05.
SECTION 2.06. Transfer and Exchange. The Notes are issuable
only in registered form. A Holder may transfer a Note only by written
application to the Registrar stating the name of the proposed transferee and
otherwise complying with the terms of this Indenture. No such transfer shall be
effected until, and such transferee shall succeed to the rights of a Holder only
upon, registration of the transfer by the Registrar in the Security Register.
Prior to the registration of any transfer by a Holder as provided herein, the
Company, the Trustee and
28
any agent of the Company shall treat the person in whose name the Note is
registered as the owner thereof for all purposes whether or not the Note shall
be overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary. Furthermore, any Holder of a Global Note
shall, by acceptance of such Global Note, agree that transfers of beneficial
interests in such Global Note may be effected only through a book-entry system
maintained by the Depositary (or its agent), and that ownership of a beneficial
interest in the Note shall be required to be reflected in a book entry. When
Notes are presented to the Registrar or a co-Registrar with a request to
register the transfer or to exchange them for an equal principal amount of Notes
or other authorized denominations (including an exchange of Notes for Exchange
Notes), the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met; provided that no
exchanges of Notes for Exchange Notes shall occur until a Registration Statement
shall have been declared effective by the Commission and that any Notes that are
exchanged for Exchange Notes shall be cancelled by the Trustee. To permit
registrations of transfers and exchanges in accordance with the terms,
conditions and restrictions hereof, the Company shall execute and the Trustee
shall authenticate Notes at the Registrar's request. No service charge shall be
made to any Holder for any registration of transfer or exchange or redemption of
the Notes, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental charge payable
upon transfers, exchanges or redemptions pursuant to Section 2.10, 3.08, 4.10,
4.11 or 9.04).
The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Notes selected for redemption under Section 3.03 or Section 3.09 and ending at
the close of business on the day of such mailing or (ii) to register the
transfer of or exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
SECTION 2.07. Book-Entry Provisions for Global Notes. (a) The
Rule 144A Note and Regulation S Note initially shall (i) be registered in the
name of the Depositary for such Global Notes or the nominee of such Depositary,
(ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear
legends as set forth in Section 2.02.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depositary, or the Trustee as its custodian, or
under any Global Note, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Note 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 Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a beneficial owner of any Note.
(b) Transfers of a Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to the Depositary, its
successors or their respective nominees.
29
Interests of the beneficial owners in a Global Note may be transferred in
accordance with the applicable rules and procedures of the Depositary and the
provisions of this Section 2.07.
(c) Any beneficial interest in one of the Global Notes
that is transferred to a person who takes delivery in the form of an interest in
the other Global Note will, upon transfer, cease to be an interest in such
Global Note and become an interest in the other Global Note and, accordingly,
will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Note for as
long as it remains such an interest.
(d) The registered holder of a Global Note 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 Notes.
SECTION 2.08. Transfer Provisions. Unless and until a Note is
exchanged for an Exchange Note in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) Rule 144A Note to Regulation S Note. Prior to the
expiration of the "40-day distribution compliance period" (within the meaning of
Rule 903(b)(2) of Regulation S) (the "Restricted Period"), if a holder of a
beneficial interest in a Rule 144A Note deposited with the Depositary wishes at
any time to exchange all or a portion of its beneficial interest in such Rule
144A Note, for a beneficial interest in the Regulation S Note, or to transfer
all or a portion of its beneficial interest in such Rule 144A Note, to a Person
who wishes to take delivery thereof in the form of a beneficial interest in such
Regulation S Note, such holder may, subject to the rules and procedures of the
Depositary and to the requirements set forth below, exchange or cause the
exchange or transfer or cause the transfer of such interest for an equivalent
beneficial interest in such Regulation S Note.
Upon receipt by the Trustee, as transfer agent, at its office
in The City of New York of (1) instructions given in accordance with the
Depositary's procedures from an agent member directing the Trustee to credit or
cause to be credited a beneficial interest in the Regulation S Note in an amount
equal to the beneficial interest in the Rule 144A Note to be exchanged or
transferred, (2) a written order given in accordance with the Depositary's
procedures containing information regarding the Euroclear or Clearstream Banking
account to be credited with such increase and the name of such account and (3) a
certificate substantially in the form of Exhibit C hereto given by the holder of
such beneficial interest, the Trustee, as transfer agent, shall instruct the
Depositary, its nominee, or the custodian for the Depositary, as the case may
be, to reduce or reflect on its records a reduction of the Rule 144A Note by the
aggregate principal amount of the beneficial interest in such Rule 144A Note to
be so exchanged or transferred and the Trustee, as transfer agent, shall
instruct the Depositary, its nominee, or the custodian for the Depositary, as
the case may be, concurrently with such reduction, to increase or reflect on its
records an increase of the principal amount of such Regulation S Note by the
aggregate principal amount of the beneficial interest in such Rule 144A Note to
be so exchanged or transferred, and to credit or cause to be credited to the
account of the Person specified in such instructions (who shall be the agent
member of Euroclear or Clearstream Banking, or both, as the
30
case may be) a beneficial interest in such Regulation S Note equal to the
reduction in the principal amount of such Rule 144A Note.
After the expiration of the Restricted Period, if a holder of
a beneficial interest in the Rule 144A Note deposited with the Depositary wishes
at any time to exchange all or a portion of its interest in such Rule 144A Note,
for a beneficial interest in the Regulation S Note, or to transfer all or a
portion of its interest in such Rule 144A Note to a Person who wishes to take
delivery thereof in the form of a beneficial interest in such Regulation S Note,
such holder may, subject to the rules and procedures of the Depositary and to
the requirements set forth below, exchange or cause the exchange or transfer or
cause the transfer of such beneficial interest for an equivalent beneficial
interest in such Regulation S Note.
Upon receipt by the Trustee, as transfer agent, at its office
in The City of New York of (1) instructions given in accordance with the
Depositary's procedures from an agent member directing the Trustee to credit or
cause to be credited a beneficial interest in the Regulation S Note in an amount
equal to the beneficial interest in the Rule 144A Note to be exchanged or
transferred, (2) a written order given in accordance with the Depositary's
procedures containing information regarding the account to be credited with such
increase and (3) a certificate substantially in the form of Exhibit D hereto
given by the holder of such beneficial interest, the Trustee, as transfer agent,
shall instruct the Depositary, its nominee, or the custodian for the Depositary,
as the case may be, to reduce or reflect on its records a reduction of the Rule
144A Note by the aggregate principal amount of the beneficial interest in such
Rule 144A Note to be so exchanged or transferred and the Trustee, as transfer
agent, shall instruct the Depositary, its nominee, or the custodian for the
Depositary, as the case may be, concurrently with such reduction, to increase or
reflect on its records an increase of the principal amount of such Regulation S
Note by the aggregate principal amount of the beneficial interest in such Rule
144A Note to be so exchanged or transferred, and to credit or cause to be
credited to the account of the Person specified in such instructions a
beneficial interest in such Regulation S Note equal to the reduction in the
principal amount of such Rule 144A Note.
(b) Regulation S Note to Rule 144A Note. If a holder of a
beneficial interest in the Regulation S Note which is deposited with the
Depositary wishes at any time to exchange its interest for a beneficial interest
in the Rule 144A Note, or to transfer its beneficial interest in such Regulation
S Note to a Person who wishes to take delivery thereof in the form of a
beneficial interest in such Rule 144A Note, such holder may, subject to the
rules and procedures of Euroclear or Clearstream Banking or the Depositary, as
the case may be, and to the requirements set forth in the following sentence,
exchange or cause the exchange or transfer or cause the transfer of such
interest for an equivalent beneficial interest in such Rule 144A Note.
Upon receipt by the Trustee, as transfer agent, at its offices
in The City of New York of (1) instructions from the Depositary, as the case may
be, directing the Trustee, as transfer agent, to credit or cause to be credited
a beneficial interest in the Rule 144A Note in an amount equal to the beneficial
interest in the Regulation S Note to be exchanged or transferred, such
instructions to contain information regarding the agent member's account with
the Depositary to be credited with such increase, and (2) with respect to an
exchange or transfer of a beneficial interest in the Regulation S Note for a
beneficial interest in the Rule 144A Note, a certificate substantially in the
form of Exhibit E hereto given by the holder of such beneficial interest, the
Trustee, as transfer agent, shall instruct the Depositary, its nominee, or the
custodian
31
for the Depositary, as the case may be, to reduce or reflect on its records a
reduction of the Regulation S Note, as the case may be, by the aggregate
principal amount of the beneficial interest in such Regulation S Note to be
exchanged or transferred, and the Trustee, as transfer agent, shall instruct the
Depositary, its nominee, or the custodian for the Depositary, as the case may
be, concurrently with such reduction, to increase or reflect on its records an
increase of the principal amount of such Rule 144A Note by the aggregate
principal amount of the beneficial interest in such Regulation S Note, as the
case may be, to be so exchanged or transferred, and to credit or cause to be
credited to the account of the Person specified in such instructions a
beneficial interest in such Rule 144A Note equal to the reduction in the
principal amount of such Regulation S Note, as the case may be.
(c) Private Placement Legend. Upon the transfer, exchange
or replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless either (i) the Private Placement Legend is no longer required by Section
2.02 or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the 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.
(d) General. By its acceptance of any Note bearing the
Private Placement Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Note only as
provided in this Indenture. The Registrar shall not register a transfer of any
Note unless such transfer complies with the restrictions on transfer of such
Note set forth in this Indenture.
SECTION 2.09. Replacement Notes. If a mutilated Note is
surrendered to the Trustee or if the Holder claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note of like tenor and principal amount and bearing a
number not contemporaneously outstanding. If required by the Trustee or the
Company, an indemnity bond must be furnished that is sufficient in the judgment
of both the Trustee and the Company to protect the Company, the Trustee or any
Agent from any loss that any of them may suffer if a Note is replaced. The
Company may charge such Holder for its expenses and the expenses of the Trustee
in replacing a Note. In case any such mutilated, lost, destroyed or wrongfully
taken Note has become or is about to become due and payable, the Company in its
discretion may pay such Note instead of issuing a new Note in replacement
thereof.
Every replacement Note is an additional obligation of the
Company and shall be entitled to the benefits of this Indenture.
SECTION 2.10. Temporary Notes. Until definitive Notes are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the Officers executing the temporary
Notes, as evidenced by their execution of such temporary Notes. If temporary
Notes
32
are issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company designated for such purpose
pursuant to Section 4.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definite Notes of authorized denominations. Until so exchanged, the
temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 2.11. Cancellation. The Company at any time may
deliver to the Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee for cancellation any Notes previously
authenticated hereunder which the Company has not issued and sold. The Registrar
and the Paying Agent shall forward to the Trustee any Notes surrendered to them
for transfer, exchange or payment. The Trustee shall cancel all Notes
surrendered for transfer, exchange, payment or cancellation and shall dispose of
them in accordance with its normal procedure. The Company shall not issue new
Notes to replace Notes it has paid in full or delivered to the Trustee for
cancellation.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Notes
may use "CUSIP" and "CINS" or "ISIN" numbers (if then generally in use), and the
Trustee shall use CUSIP, CINS or ISIN numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Notes; and provided further, however, that
failure to use CUSIP, CINS or ISIN numbers in any notice of redemption or
exchange shall not affect the validity or sufficiency of such notice. The
Company shall promptly notify the Trustee of any change in the CUSIP, CINS or
ISIN numbers, as the case may be.
SECTION 2.13. Defaulted Interest. If the Company defaults in a
payment of interest on the Notes, it shall pay, or shall deposit with the Paying
Agent money in immediately available funds sufficient to pay, the defaulted
interest, plus (to the extent lawful) interest on the defaulted interest, to the
Persons who are Holders on a subsequent special record date. A special record
date, as used in this Section 2.13 with respect to the payment of any defaulted
interest, shall mean the 15th 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 to each Holder and to the Trustee a notice that states the subsequent
special record date, the payment date and the amount of defaulted interest to be
paid.
SECTION 2.14. Issuance of Additional Notes. The Company may,
subject to Article Four of this Indenture, issue additional Notes under this
Indenture. The Notes issued on the Closing Date and any additional Notes
subsequently issued may be treated as a single class for all purposes under this
Indenture.
33
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption. (a) The Notes will be
redeemable, at the Company's option, in whole or in part, at any time or from
time to time, on or after September 19, 2008 and prior to maturity, upon not
less than 30 nor more than 60 days' prior notice mailed by first class mail to
each Holder's last address as it appears in the Security Register, at the
following Redemption Prices (expressed in percentages of principal amount), plus
accrued and unpaid interest, if any, to the Redemption Date (subject to the
right of Holders of record on the relevant Regular Record Date that is prior to
the Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing September 19, of the years set
forth below:
YEAR REDEMPTION PRICE
---- ----------------
2008 104.6875%
2009 103.1250%
2010 101.5625%
2011 100.0000%
(b) If, at any time within the 36-month period following
the Closing Date, the Company receives Net Cash Proceeds from one or more sales
of Common Stock of the Company, the Company may use all or a portion of any such
Net Cash Proceeds to redeem up to 35% of the aggregate principal amount of the
Notes at a Redemption Price (expressed as a percentage of principal amount) of
109.375%, plus accrued and unpaid interest to the Redemption Date (subject to
the rights of Holders of record on the relevant Regular Record Date that is
prior to the Redemption Date to receive interest due on an Interest Payment
Date); provided that (i) at least $195 million aggregate principal amount of
Notes remains Outstanding after each such redemption and (ii) such redemption
occurs within 90 days of such sales.
SECTION 3.02. Notices to Trustee. If the Company elects to
redeem Notes pursuant to Section 3.01 or Section 3.09, it shall notify the
Trustee in writing of the Redemption Date and, in the case of a redemption
pursuant to Section 3.01, the principal amount of Notes to be redeemed.
The Company shall give each notice provided for in this
Section 3.02 in an Officers' Certificate at least 60 days before the Redemption
Date (unless a shorter period shall be satisfactory to the Trustee).
SECTION 3.03. Selection of Notes to Be Redeemed. In the case
of any partial redemption, selection of the Notes for redemption will be made by
the Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes are
not listed on a national securities exchange, on a pro rata basis, by lot or by
such other method as such Trustee in its sole discretion shall deem to be fair
and appropriate; provided that no Notes of U.S.$1,000 in principal amount at
maturity or less shall be redeemed in part.
The Trustee shall make the selection from the Notes
Outstanding and not previously called for redemption. Notes in denominations of
U.S.$1,000 in principal amount
34
may only be redeemed in whole. The Trustee may select for redemption portions
(equal to U.S.$1,000 in principal amount or any integral multiple thereof) of
Notes that have denominations larger than U.S.$1,000 in principal amount.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company and the Registrar promptly in writing of the Notes or portions of Notes
to be called for redemption.
SECTION 3.04. Notice of Redemption. With respect to any
redemption of Notes pursuant to Section 3.01, at least 30 days but not more than
60 days before a Redemption Date, and with respect to a redemption of Notes
pursuant to Section 3.09, at least 10 days before the Redemption Date, the
Company shall mail a notice of redemption by first class mail to each Holder
whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall
state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered
to the Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the Redemption Date and the only remaining right of
the Holders is to receive payment of the Redemption Price plus accrued
interest to the Redemption Date upon surrender of the Notes to the
Paying Agent;
(vi) that, if any Note is being redeemed in part, the
portion of the principal amount (equal to U.S.$1,000 in principal
amount or any integral multiple thereof) of such Note to be redeemed
and that, on and after the Redemption Date, upon surrender of such
Note, a new Note or Notes in principal amount equal to the unredeemed
portion thereof will be reissued; and
(vii) that, if any Note contains a CUSIP, CINS or ISIN
number as provided in Section 2.12, no representation is being made as
to the correctness of the CUSIP, CINS or ISIN number either as printed
on the Notes or as contained in the notice of redemption and that
reliance may be placed only on the other identification numbers printed
on the Notes.
At the Company's request (which request may be revoked by the
Company at any time prior to the time at which the Trustee shall have given such
notice to the Holders), made in writing to the Trustee at least 60 days (or such
shorter period as shall be satisfactory to the Trustee) before a Redemption
Date, the Trustee shall give the notice of redemption in the name and at the
expense of the Company. If, however, the Company gives such notice to the
Holders,
35
the Company shall concurrently deliver to the Trustee an Officers' Certificate
stating that such notice has been given.
SECTION 3.05. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
Redemption Date and at the Redemption Price. Upon surrender of any Notes to the
Paying Agent, such Notes shall be paid at the Redemption Price, plus accrued
interest, if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed,
whether or not the Holder receives the notice. In any event, failure to give
such notice, or any defect therein, shall not affect the validity of the
proceedings for the redemption of Notes held by Holders to whom such notice was
properly given.
SECTION 3.06. Deposit of Redemption Price. At or prior to
12:00 noon on any Redemption Date, the Company shall deposit with the Paying
Agent (or, if the Company is acting as its own Paying Agent, shall segregate and
hold in trust as provided in Section 2.05) money sufficient to pay the
Redemption Price of and accrued interest on all Notes to be redeemed on that
date other than Notes or portions thereof called for redemption on that date
that have been delivered by the Company to the Trustee for cancellation.
SECTION 3.07. Payment of Notes Called for Redemption. If
notice of redemption has been given in the manner provided above, the Notes or
portions of Notes specified in such notice to be redeemed shall become due and
payable on the Redemption Date at the Redemption Price stated therein, together
with accrued interest to such Redemption Date, and on and after such date
(unless the Company shall default in the payment of such Notes at the Redemption
Price and accrued interest to the Redemption Date, in which case the principal,
until paid, shall bear interest from the Redemption Date at the rate prescribed
in the Notes), such Notes shall cease to accrue interest. Upon surrender of any
Note for redemption in accordance with a notice of redemption, such Note shall
be paid and redeemed by the Company at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders registered as such at the close of business on the
relevant Regular Record Date.
SECTION 3.08. Notes Redeemed in Part. Upon surrender of any
Note that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Note equal in principal amount to
the unredeemed portion of such surrendered Note.
SECTION 3.09. Redemption for Changes in Withholding Taxes. The
Notes will also be subject to redemption in whole, but not in part, at the
option of the Company at any time at 100% of their principal amount, together
with accrued interest thereon, if any, to the Redemption Date, in the event the
Company has become or would become obligated to pay, on the next date on which
any amount would be payable with respect to the Notes, any Additional Amounts in
excess of those attributable to a withholding tax rate of 10% as a result of a
change in or amendment to the laws (including any regulations, rules or rulings
promulgated thereunder) of Mexico (or any political subdivision or taxing
authority thereof or therein), or any change in
36
or amendment to any official position regarding the application, administration
or interpretation of such laws, regulations, rules or rulings, including a
holding of a court of competent jurisdiction, which change or amendment is
announced or becomes effective on or after the Closing Date.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall pay the
principal of, premium, if any, and interest on the Notes on the dates and in the
manner provided in the Notes and this Indenture. An installment of principal,
premium, if any, or interest shall be considered paid on the date due if the
Trustee or Paying Agent (other than the Company, a Subsidiary of the Company, or
any Affiliate of any of them) holds on that date money designated for and
sufficient to pay the installment. If the Company or any Subsidiary of the
Company or any Affiliate of any of them acts as Paying Agent, an installment of
principal, premium, if any, or interest shall be considered paid on the due date
if the entity acting as Paying Agent complies with the last sentence of Section
2.05. As provided in Section 6.09, upon any bankruptcy or reorganization
procedure relative to the Company, the Trustee shall serve as the Paying Agent,
if any, for the Notes.
The Company shall pay interest on overdue principal, premium,
if any, and interest on overdue installments of interest, to the extent lawful,
at the rate per annum specified in the Notes.
SECTION 4.02. Maintenance of Office or Agency. The Company
will maintain in the Borough of Manhattan, The City of New York an office or
agency where Notes may be surrendered for registration of transfer or exchange
or for presentation for payment and where notices and demands to or upon the
Company in respect of the Notes and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the 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 address of the Trustee set forth in Section
10.02.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided 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 will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby initially designates the Corporate Trust
Office of the Trustee as such office of the Company in accordance with Section
2.04.
SECTION 4.03. Limitation on Indebtedness. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (other than the Notes and
37
Indebtedness existing on the Closing Date); provided that the Company and any
Restricted Subsidiary may Incur Indebtedness if, after giving effect to the
Incurrence of such Indebtedness and the receipt and application of the proceeds
therefrom, the Consolidated Leverage Ratio would be less than 4.75 to 1.0 with
respect to any fiscal quarter.
Notwithstanding the foregoing, the Company and any Restricted
Subsidiary (except as specified below) may Incur each and all of the following:
(i) Indebtedness outstanding at any time in an aggregate principal amount (or,
in the case of Indebtedness issued at a discount, an accreted amount (determined
in accordance with Mexican GAAP)) not to exceed $100 million; (ii) Indebtedness
(A) to the Company evidenced by an unsubordinated promissory note or (B) to any
of its Restricted Subsidiaries; provided that any event which results in any
such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Company or another
Restricted Subsidiary) shall be deemed, in each case, to constitute an
Incurrence of such Indebtedness not permitted by this clause (ii); (iii)
Indebtedness Incurred in exchange for, or the net proceeds of which are used to
refinance or refund or as an extension of credit for or to satisfy or defease (a
"refinancing"), then outstanding Indebtedness, other than Indebtedness Incurred
under clause (i), (ii), (iv) or (vi) of this paragraph, and any refinancings
thereof in an amount not to exceed the amount so refinanced (plus premiums,
accrued interest, fees and expenses and other related payment obligations
Incurred in connection with such refinancing); provided that Indebtedness the
proceeds of which are used to refinance the Notes or Indebtedness that is pari
passu with, or subordinated in right of payment to, the Notes shall only be
permitted under this clause (iii) if (A) in case the Notes are refinanced in
part or the Indebtedness to be refinanced is pari passu with the Notes, such new
Indebtedness, by its terms or by the terms of any agreement or instrument
pursuant to which such new Indebtedness is outstanding, is expressly made pari
passu with, or subordinate in right of payment to, the remaining Notes, (B) in
case the Indebtedness to be refinanced is subordinated in right of payment to
the Notes, such new Indebtedness, by its terms or by the terms of any agreement
or instrument pursuant to which such new Indebtedness is issued or remains
outstanding, is expressly made subordinate in right of payment to the Notes at
least to the extent that the Indebtedness to be refinanced is subordinated to
the Notes and (C) except in respect of the Indebtedness Incurred under clause
(xi) below, such new Indebtedness, determined as of the date of Incurrence of
such new Indebtedness, does not mature prior to the Stated Maturity of the
Indebtedness to be refinanced, and the Average Life of such new Indebtedness is
at least equal to the remaining Average Life of the Indebtedness to be
refinanced; (iv) Indebtedness (A) in respect of performance, surety or appeal
bonds and reimbursement obligations provided in the ordinary course of business,
(B) under Currency Agreements and Interest Rate Agreements (to the extent that
the notional principal amount thereunder does not exceed the principal amount of
Indebtedness of the Company and its Restricted Subsidiaries with floating rates
of interest) entered into for the purpose of protecting the Company or any
Restricted Subsidiary from fluctuations in currency exchange rates or interest
rates, respectively; provided that such agreements do not increase the
Indebtedness of the obligor outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates or interest rates or by reason
of fees, indemnities and compensation payable thereunder; or (C) arising from
agreements providing for indemnification, adjustment of purchase price or
similar obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in any case Incurred in
connection with the disposition of any business, assets or Restricted Subsidiary
of the Company
38
(other than Guarantees of Indebtedness Incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary of the Company for
the purpose of financing such acquisition), in a principal amount not to exceed
the gross proceeds actually received by the Company or any Restricted Subsidiary
in connection with such disposition; (v) Indebtedness, to the extent the net
proceeds thereof are promptly (A) used to purchase Notes tendered in an Offer to
Purchase made as a result of a Change in Control and to pay fees, expenses,
premiums and other payment obligations payable in connection with such offer, or
(B) deposited to defease the Notes pursuant to Article Eight and to pay fees,
expenses, premiums and other payment obligations related to such defeasance;
(vi) Guarantees of the Notes and Guarantees of Indebtedness of the Company by
any Restricted Subsidiary provided the Guarantee of such Indebtedness is
permitted by and made in accordance with Section 4.07.; (vii) Indebtedness
Incurred to finance the cost (including the cost of design, manufacture,
development, improvement, production, acquisition, construction, distribution,
installation, integration, lease or subsidy) of equipment, inventory,
facilities, programming, films, DTH Units and other DTH Assets acquired by the
Company or a Restricted Subsidiary (if such design, manufacture, development,
improvement, production, acquisition, construction, distribution, installation,
integration, lease or subsidy occurred prior to the Closing Date, such
Indebtedness must be Incurred within six months of such design, manufacture,
development, improvement, production, acquisition, construction, distribution,
installation, integration, lease or subsidy); (viii) Indebtedness of the Company
or a Restricted Subsidiary not to exceed, at any one time outstanding, two times
the Net Cash Proceeds received by the Company after the Closing Date from the
issuance and sale of its Capital Stock (other than any Capital Stock issued in
connection with the Social Part Holders Note Capitalization) or capital
contributions in respect thereof (in each case other than Disqualified Stock) to
a Person that is not a Subsidiary of the Company to the extent such Net Cash
Proceeds have not been used pursuant to clause (C)(2) of the first paragraph or
clause (iii), (iv) or (ix) of the second paragraph of Section 4.04. to make a
Restricted Payment; provided that such Indebtedness does not mature prior to the
Stated Maturity of the Notes and has an Average Life longer than the Notes; (ix)
Subordinated Indebtedness owed by the Company to any Existing Social Part Holder
(or any Affiliates thereof) which pays no interest in cash unless Consolidated
EBITDA is for the four fiscal quarters next preceding the payment of such
interest greater than 200% of Consolidated Interest Expense for the same four
fiscal quarters; provided that pro forma effect shall be given to the Incurrence
of such Subordinated Indebtedness as if it had been Incurred on the first day of
such four quarter period; (x) Indebtedness Incurred to finance, directly or
indirectly, capital expenditures of the Company and its Restricted Subsidiaries
in an aggregate principal amount not to exceed the greater of (A) $20 million
and (B) 20% of Consolidated EBITDA for the preceding fiscal year, in each fiscal
year of the Company; provided that the amount of Indebtedness that may be
Incurred in any fiscal year of the Company pursuant to this clause (x) shall be
increased by the amount of Indebtedness that could have been Incurred in prior
fiscal years pursuant to this clause (x) (including by reason of this proviso)
but which was not so Incurred; and (xi) Capitalized Lease Obligations not to
exceed $10 million at any one time outstanding.
(b) Notwithstanding any other provision of this Section
4.03., the maximum amount of Indebtedness that the Company or a Restricted
Subsidiary may Incur pursuant to this Section 4.03. shall not be deemed to be
exceeded, with respect to any outstanding Indebtedness due solely to the result
of fluctuations in the exchange rates of currencies.
39
(c) For purposes of determining any particular amount of
Indebtedness under this Section 4.03., (1) Guarantees, Liens or obligations with
respect to letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included and (2) any Liens
granted pursuant to the equal and ratable provisions referred to in Section
4.09. shall not be treated as Indebtedness. For purposes of determining
compliance with this Section 4.03., in the event that an item of Indebtedness
meets the criteria of more than one of the types of Indebtedness described in
the above clauses, the Company, in its sole discretion, shall classify such item
of Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
SECTION 4.04. Limitation on Restricted Payments. The Company
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, (i) declare or pay any dividend or make any distribution on or with
respect to its Capital Stock (other than dividends or distributions payable
solely in social parts of its Capital Stock (other than Disqualified Stock) or
in options, warrants or other rights to acquire social parts of such Capital
Stock held by Persons other than the Company or any of its Restricted
Subsidiaries (and other than pro rata dividends or distributions on Common Stock
of Restricted Subsidiaries), (ii) purchase, redeem, retire or otherwise acquire
for value any social parts or shares of Capital Stock of (A) the Company or an
Unrestricted Subsidiary (including options, warrants or other rights to acquire
such social parts or shares of Capital Stock) held by any Person or (B) a
Restricted Subsidiary (including options, warrants or other rights to acquire
such social parts or shares of Capital Stock) held by any holder (or any
Affiliate of such holder) of 5% or more of the Capital Stock of the Company,
(iii) make any voluntary or optional principal payment, or voluntary or optional
redemption, repurchase, defeasance, or other acquisition or retirement for
value, of Indebtedness of the Company that is subordinated in right of payment
to the Notes, or (iv) make any Investment, other than a Permitted Investment, in
any Person (such payments or any other actions described in clauses (i) through
(iv) being collectively "Restricted Payments") if, at the time of, and after
giving effect to, the proposed Restricted Payment: (A) a Default or Event of
Default shall have occurred and be continuing, (B) except with respect to an
Investment, the Company could not Incur at least $1.00 of Indebtedness under the
first paragraph of Section 4.03. or (C) the aggregate amount of all Restricted
Payments made during any consecutive four quarter period shall exceed the sum of
(1) (x) for any consecutive four quarter period prior to the Start Date, zero
and (y) during the consecutive four quarter period commencing with the Start
Date and each subsequent consecutive four quarter period thereafter, to the
extent positive, 75% of the amount calculated by subtracting from Consolidated
EBITDA of the Company for such period the sum of (I) 175% of Consolidated
Interest Expense for such period and (II) capital expenditures made by the
Company or its Restricted Subsidiaries during such period; provided that the
amount included in this clause (C)(1)(y) shall be increased by the amount of
Restricted Payments that could have been made in prior periods pursuant to this
clause (C)(1)(y) (including by reason of this proviso) but which were not so
made minus (2) in any such consecutive four quarter period commencing with the
Start Date, to the extent negative, Consolidated EBITDA of the Company during
such period plus (3) the aggregate Net Cash Proceeds received by the Company
after the Closing Date from the issuance and sale permitted by the Indenture of
its Capital Stock (other than Disqualified Stock) to a Person who is not a
Subsidiary of the Company (except to the extent such Net Cash Proceeds are used
to Incur Indebtedness pursuant to clause (viii) of Section 4.03.) or from the
issuance to a Person who is not a Subsidiary of the Company of any options,
warrants or other rights to acquire Capital Stock of the Company (in each case,
exclusive of any
40
Disqualified Stock or any options, warrants or other rights that are redeemable
at the option of the holder, or are required to be redeemed, prior to the Stated
Maturity of the Notes) plus (4) an amount equal to the aggregate net reduction
in Investments made after the Closing Date pursuant to this first paragraph of
Section 4.04. in any Person resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances, or other transfers of assets, in
each case to the Company or any Restricted Subsidiary or from the Net Cash
Proceeds from the sale of any such Investment (except, in each case, to the
extent any such payment or proceeds are included in the calculation of Adjusted
Consolidated Net Income), or from redesignations of Unrestricted Subsidiaries as
Restricted Subsidiaries (valued in each case as provided in the definition of
"Investments"), not to exceed, in each case, the amount of Investments
previously made by the Company or any Restricted Subsidiary in such Person or
Unrestricted Subsidiary.
The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the date of declaration
thereof if, at said date of declaration, such payment would comply with the
foregoing paragraph; (ii) the redemption, repurchase, defeasance or other
acquisition or retirement for value of Indebtedness that is subordinated in
right of payment to the Notes including premium, if any, and accrued and unpaid
interest, with the proceeds of, or in exchange for, Indebtedness Incurred under
clause (iii) of the second paragraph of part (a) of Section 4.03.; (iii) (A) the
repurchase, redemption or other acquisition of Capital Stock of the Company (or
options, warrants or other rights to acquire such Capital Stock) in exchange
for, or out of the proceeds of a substantially concurrent offering of, social
parts of Capital Stock (other than Disqualified Stock and any Capital Stock
issued in connection with the Social Part Holders Note Capitalization) of the
Company (or options, warrants or other rights to acquire such Capital Stock) or
(B) the repurchase, redemption or other acquisition of Disqualified Stock of the
Company (or options, warrants or other rights to acquire such Disqualified
Stock) in exchange for, or out of the proceeds of a substantially concurrent
offering of social parts of Disqualified Stock of the Company (or options,
warrants or other rights to acquire such Disqualified Stock); (iv) the making of
any principal payment or the repurchase, redemption, retirement, defeasance or
other acquisition for value of Indebtedness of the Company which is subordinated
in right of payment to the Notes in exchange for, or out of the proceeds of, a
substantially concurrent offering of, social parts of the Capital Stock of the
Company (other than Disqualified Stock); (v) the declaration or payment of
dividends on, or the making of any distribution on or with respect to, the
Common Stock of the Company or repurchases of Capital Stock of the Company, in
an amount each year not to exceed 6% of the Net Cash Proceeds received by the
Company from the issuance and sale, after the Closing Date, of Common Stock of
the Company (other than any Capital Stock issued in connection with the Social
Part Holders Note Capitalization) to a Person that is not a Subsidiary of the
Company or an Existing Social Part Holder; provided that sales of Common Stock
to an Existing Social Part Holder shall be excluded only to the extent that the
Existing Social Part Holder purchases Common Stock in excess of such Existing
Social Part Holder's proportionate ownership interest in the Company prior to
such sale; (vi) payments or distributions, to dissenting social part holders
pursuant to applicable law, pursuant to or in connection with a consolidation,
merger or transfer of assets that complies with the provisions of the Indenture
applicable to mergers, consolidations and transfers of all or substantially all
of the property and assets of the Company; (vii) the purchase, redemption,
acquisition, cancellation or other retirement for value of social parts of
Capital Stock of the Company to the extent necessary in the good faith judgment
of the Board of Directors of the Company, to prevent the loss or secure the
renewal or reinstatement of
41
any license or franchise held by the Company or any Restricted Subsidiary for
any governmental agency; (viii) Investments in an aggregate amount at any one
time outstanding not to exceed $10 million per fiscal year of the Company or its
Restricted Subsidiaries; provided that the amount of Investments that may be
made in any fiscal year pursuant to this clause (viii) shall be increased by (x)
the amount of Investments that could have been made in prior fiscal years
pursuant to this clause (viii) (including by reason of the proviso) but which
were not so made and (y) an amount equal to the net reduction in Investments
made pursuant to this clause (viii) in any Person resulting from payments of
interest on Indebtedness, dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or any Restricted Subsidiary or
from the Net Cash Proceeds from the sale of any such Investment, or from
redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries (valued
in each case as provided in the definition of "Investments"), not to exceed, in
each case, the amount of Investments previously made by the Company or any
Restricted Subsidiary in such Person or Unrestricted Subsidiary pursuant to this
clause (viii); (ix) Investments in any Person the primary business of which is
related, ancillary or complementary to the business of the Company or its
Restricted Subsidiaries on the date of such Investments; provided that the
amount of such Investments shall not exceed the amount of Net Cash Proceeds
received by the Company after the Closing Date from the sale of its Capital
Stock (other than Disqualified Stock and any Capital Stock issued in connection
with the Social Part Holders Note Capitalization) to a Person who is not a
Subsidiary of the Company, except to the extent such Net Cash Proceeds were used
to Incur Indebtedness pursuant to clause (viii) of Section 4.03. or to make
Restricted Payments pursuant to clause (C)(2) of the first paragraph or clause
(iii) or (iv) of this paragraph of Section 4.04.; (x) Investments of any Person
existing at the time such Person becomes a Restricted Subsidiary and not made in
connection with or in contemplation of such Person becoming a Restricted
Subsidiary; and (xi) Mexican Tax Distributions; provided that, except in the
case of clauses (i), (iii), (vi) and (xi), no Default or Event of Default shall
have occurred and be continuing or occur as a consequence of the actions or
payments set forth therein.
Any Restricted Payment made other than in cash shall be valued
at fair market value. Solely for purposes of calculating fair market value under
the preceding sentence, with respect to amounts in excess of $5 million, fair
market value shall be determined on the basis of the first sentence of the
definition of "fair market value" in good faith by the Board of Directors, whose
determination shall be conclusive if evidenced by a Board Resolution. The amount
of any Investment "outstanding" at any time shall be deemed to be equal to the
amount of such Investment on the date made, less the return of capital to the
Company and its Restricted Subsidiaries with respect to such Investment (up to
the amount of such Investment).
Each Restricted Payment permitted pursuant to the preceding
paragraph (other than the Restricted Payments referred to in clauses (ii), (x)
or (xi) thereof and an exchange of Capital Stock for Capital Stock or
Indebtedness referred to in clause (iii) or (iv) thereof), and the Net Cash
Proceeds from any issuance of Capital Stock referred to in clauses (iii), (iv)
and (v), shall be included in calculating whether the conditions of clause (C)
of the first paragraph of this Section 4.04. have been met with respect to any
subsequent Restricted Payments. In the event the proceeds of an issuance of
Capital Stock of the Company are used for the redemption, repurchase or other
acquisition of the Notes, or Indebtedness that is pari passu with the Notes,
then the Net Cash Proceeds of such issuance shall be included in clause (C) of
the first paragraph of this Section 4.04. only to the extent such proceeds are
not used for such redemption,
42
repurchase or other acquisition of Indebtedness. For purposes of determining
compliance with this Section 4.04., in the event that a Restricted Payment meets
the criteria of more than one of the types of Restricted Payments described in
the clauses in the preceding paragraph, the Company, in its sole discretion,
shall classify such Restricted Payment and only be required to include the
amount and type of such Restricted Payment in one of such clauses. Any
Investment initially made pursuant to any of the clauses in the preceding
paragraph may at any time at the sole discretion of the Company be treated as
having been made pursuant to any other clause as long as the outstanding amount
of such Investment at the time of any reclassification could be made pursuant to
such other clause. If the Company makes a Restricted Payment which, at the time
of the making of such Restricted Payment, would in the good faith determination
of the Company be permitted under the Indenture, such Restricted Payment shall
be deemed to have been made in compliance with the Indenture notwithstanding any
subsequent adjustments made in good faith to the Company financial statements
affecting Adjusted Consolidated Net Income for any period.
SECTION 4.05. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries. The Company will not, and will
not permit any Restricted Subsidiary to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Restricted Subsidiary to (i) pay dividends or make any
other distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (iii) make loans or advances to the Company or any other Restricted
Subsidiary or (iv) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances
or restrictions: (i) existing on the Closing Date in the Indenture or any other
agreements in effect on the Closing Date, and any extensions, refinancings,
renewals or replacements of such agreements or of an agreement pursuant to which
an encumbrance or restriction permitted under clause (iii) or (iv)(D) of this
paragraph exists; provided that the encumbrances and restrictions in any such
extensions, refinancings, renewals or replacements are no less favorable in any
material respect to the Holders than those encumbrances or restrictions that are
then in effect and that are being extended, refinanced, renewed or replaced;
(ii) existing under or by reason of applicable law; (iii) existing with respect
to any Person (including any Person that becomes a Restricted Subsidiary) or the
property or assets of such Person acquired by the Company or any Restricted
Subsidiary, existing at the time of such acquisition and not incurred in
contemplation thereof, which encumbrances or restrictions are not applicable to
any Person or the property or assets of any Person other than such Person or the
property or assets of such Person so acquired; (iv) in the case of clause (iv)
of the first paragraph of this Section 4.05., (A) that restrict in a customary
manner the subletting, assignment or transfer of any property or asset that is a
lease, license, conveyance or contract or similar property or asset, (B)
existing by virtue of any transfer of, agreement to transfer, option or right
with respect to, or Lien on, any property or assets of the Company or any
Restricted Subsidiary not otherwise prohibited by the Indenture, (C) arising or
agreed to in the ordinary course of business, not relating to any Indebtedness,
and that do not, individually or in the aggregate, detract from the value of
property or assets of the Company or any Restricted Subsidiary in any manner
material to the Company or any Restricted Subsidiary or (D) restrictions
contained in any security agreement (including a Capitalized Lease) securing
43
Indebtedness of the Company or a Restricted Subsidiary otherwise permitted under
the Indenture, but only to the extent such restrictions restrict the transfer of
the property subject to such security agreement; (v) with respect to a
Restricted Subsidiary and imposed pursuant to an agreement that has been entered
into for the sale or disposition of all or substantially all of the Capital
Stock of, or property and assets of, such Restricted Subsidiary; (vi) pursuant
to applicable law or regulations; (vii) pursuant to the Indenture and the Notes;
or (viii) if, immediately after giving effect to such encumbrances or
restrictions, the Company could Incur at least $1.00 of additional Indebtedness
under the first paragraph of Section 4.03.; provided that subsequent Investments
in any such Restricted Subsidiary are reasonably related to, and used in, the
business of such Restricted Subsidiary. Nothing contained in this Section 4.05.
shall prevent the Company or any Restricted Subsidiary from (1) creating,
incurring, assuming or suffering to exist any Liens otherwise permitted in
Section 4.09. or (2) restricting the sale or other disposition of property or
assets of the Company or any of its Restricted Subsidiaries that secure
Indebtedness of the Company or any of its Restricted Subsidiaries.
SECTION 4.06. Limitation on the Issuance and Sale of Capital
Stock of Restricted Subsidiaries. The Company will not sell, and will not permit
any Restricted Subsidiary, directly or indirectly, to issue or sell, any shares
or social parts of Capital Stock of a Restricted Subsidiary (including options,
warrants or other rights to purchase shares or social parts of such Capital
Stock) except (i) to the Company or a Wholly Owned Restricted Subsidiary; (ii)
issuances of director's qualifying shares or social parts or sales to foreign
nationals of shares or social parts of Capital Stock of foreign Restricted
Subsidiaries, to the extent required by applicable law; (iii) if, immediately
after giving effect to such issuance or sale, such Restricted Subsidiary would
no longer constitute a Restricted Subsidiary, provided any Investment in such
Person remaining after giving effect to such issuance or sale would have been
permitted to be made under Section 4.04., if made on the date of such issuance
or sale; (iv) if the proceeds from such issuance or sale are applied in
accordance with Section 4.10.; (v) in a transaction in which, or in connection
with which, the Company or a Restricted Subsidiary acquires at the same time
sufficient Capital Stock of such Restricted Subsidiary to at least maintain the
same percentage ownership interest it had prior to such transaction; and (vi)
Disqualified Stock of a Restricted Subsidiary issued in exchange for, or upon
conversion of, or the proceeds of the issuance of which are used to exchange,
convert, redeem, replace, refinance or refund social parts of Disqualified Stock
of such Restricted Subsidiary, provided that the amounts and the timing of the
redemption obligations of such Disqualified Stock shall not exceed the amounts
of, or provide for redemption obligations earlier than, the redemption
obligations of the Disqualified Stock being so exchanged, converted, redeemed,
replaced, refinanced or refunded.
SECTION 4.07. Limitation on Issuances of Guarantees by
Restricted Subsidiaries. The Company will not permit any Restricted Subsidiary,
directly or indirectly, to Guarantee any Indebtedness of the Company which is
pari passu with or subordinate in right of payment to the Notes ("Guaranteed
Indebtedness"), unless (i) such Restricted Subsidiary simultaneously executes
and delivers supplemental indentures to the Indenture providing for a Guarantee
(a "Subsidiary Guarantee") of payment of the Notes by such Restricted Subsidiary
and (ii) such Restricted Subsidiary waives and will not in any manner whatsoever
claim or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against the Company or any other
Restricted Subsidiary as a result of any payment by such
44
Restricted Subsidiary under its Subsidiary Guarantee; provided that this
paragraph shall not be applicable to any Guarantee of any Restricted Subsidiary
that existed at the time such Person became a Restricted Subsidiary and was not
Incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary. If the Guaranteed Indebtedness is (A) pari passu with the
Notes, then the Guarantee of such Guaranteed Indebtedness shall be pari passu
with, or subordinated to, the Subsidiary Guarantee or (B) subordinated to the
Notes, then the Guarantee of such Guaranteed Indebtedness shall be subordinated
to the Subsidiary Guarantee at least to the extent that the Guaranteed
Indebtedness is subordinated to the Notes.
Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary may provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Company, of all of the Company's
and each Restricted Subsidiary's Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by the Indenture) or (ii) the release or discharge of the
Guarantee which resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such Guarantee.
SECTION 4.08. Limitation on Transactions with Social Part
Holders and Affiliates. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, enter into, renew or extend any
transaction (including, without limitation, the purchase, sale, lease or
exchange of property or assets, or the rendering of any service) with any
Affiliate or Related Person of the Company or any Restricted Subsidiary, except
upon fair and reasonable terms no less favorable in any material respect to the
Company or such Restricted Subsidiary than could be obtained, at the time of
such transaction or, if such transaction is pursuant to a written agreement, at
the time of the execution of the agreement providing therefor, in a comparable
arm's-length transaction with a Person that is not an Affiliate or Related
Person.
The foregoing limitation does not limit, and shall not apply
to (i) a transaction or series of related transactions (A) approved by a
majority of the disinterested members of the Board of Directors (or, in respect
of transactions with TechCo., SESLA, any of their subsidiaries or any respective
successors, approved by the Chief Executive Officer of the Company and at least
two thirds of the Board of Directors) or (B) for which the Company or a
Restricted Subsidiary delivers to the Trustee a written opinion of a United
States nationally recognized investment banking or accounting firm (or their
Mexican affiliate) stating that the transaction is fair to the Company or such
Restricted Subsidiary from a financial point of view or (C) involving
consideration of less than $1 million; (ii) a transaction or series of related
transactions solely between the Company and any of its Subsidiaries or
controlled Affiliates (other than Subsidiaries or controlled Affiliates in which
any Related Person of the Company owns Capital Stock having more than 10% of the
economic value or voting power of all of such Subsidiary's or controlled
Affiliates' Capital Stock) or solely between Subsidiaries or controlled
Affiliates (other than Subsidiaries or controlled Affiliates in which any
Related Person of the Company owns Capital Stock having more than 10% of the
economic value or voting power of all of such Subsidiary's or controlled
Affiliates' Capital Stock); (iii) the payment of reasonable and customary
regular fees to directors of the Company or its Restricted Subsidiaries; (iv)
any payments or other transactions pursuant to any tax-sharing agreement between
the Company and any other Person with which the Company files a consolidated tax
return or with which the Company is part of a
45
consolidated group for tax purposes; (v) loans or advances to employees made in
the ordinary course of business of the Company or its Restricted Subsidiaries
and that do not in the aggregate exceed at any one time outstanding the greater
of (I) $4 million and (II) 1% of Consolidated EBITDA for the Four Quarter
Period; (vi) other transactions pursuant to employee compensation arrangements
approved by the Board of Directors; (vii) any payments or transactions pursuant
to agreements or other arrangements in effect on the Closing Date; (viii)
agreements and transactions regarding programming pursuant to Article IV of the
Social Part Holders Agreement; (ix) any Investments by an Affiliate or a Related
Person of the Company in the Capital Stock (other than Disqualified Stock) of
the Company or any Restricted Subsidiary of the Company; (x) any sale or grant
of advertising time by the Company or a Restricted Subsidiary to any Affiliate,
provided that the advertising time is sold or granted to such Affiliate no more
than 72 hours prior to the time such advertising time is scheduled to be
broadcast and such advertising time was otherwise unsold at the time of such
sale or grant; or (xi) the Social Part Holders Note Capitalization; or (xii) any
Restricted Payments not prohibited by Section 4.04. Notwithstanding the
foregoing, a transaction or series of related transactions covered by the first
paragraph of this Section 4.08 and not covered by clauses (ii) through (xii) of
this paragraph, (I) the aggregate amount of which exceeds $20 million in value,
but is less than $30 million in value, must be determined to be fair by the
Chief Executive Officer of the Company, who shall deliver to the Trustee an
officers' certificate certifying such conclusion, and (II) the aggregate amount
of which is $30 million or more must be approved in the manner provided for in
clause (i)(A) or (i)(B) above.
SECTION 4.09. Limitation on Liens. The Company will not, and
will not permit any Restricted Subsidiary to, create, incur, assume or suffer to
exist any Lien on any of its assets or properties of any character, or any
social parts of Capital Stock or Indebtedness of any Restricted Subsidiary,
without making effective provision for all of the Notes and all other amounts
due under the Indenture to be directly secured equally and ratably with (or, if
the obligation or liability to be secured by such Lien is subordinated in right
of payment to the Notes, prior to) the obligation or liability secured by such
Lien.
The foregoing limitation does not apply to (i) Liens existing
on the Closing Date; (ii) Liens granted after the Closing Date on any assets or
Capital Stock of the Company or its Restricted Subsidiaries created in favor of
the Holders; (iii) Liens with respect to the assets of a Restricted Subsidiary
granted by such Restricted Subsidiary to the Company or a Wholly Owned
Restricted Subsidiary to secure Indebtedness owing to the Company or such other
Restricted Subsidiary; (iv) Liens securing Indebtedness which is Incurred to
refinance secured Indebtedness which is permitted to be Incurred under clause
(iii) of the second paragraph of Section 4.03., provided that such Liens do not
extend to or cover any property or assets of the Company or any Restricted
Subsidiary other than the property or assets securing the Indebtedness being
refinanced; (v) Permitted Liens; (vi) other Liens, provided that the book value,
determined at the time such Lien is granted (as adjusted in accordance with
Mexican GAAP), of the assets subject to such Lien and all other Liens incurred
pursuant to this clause (vi) does not in the aggregate exceed (at the time such
Lien is granted) the greater of (A) $60 million and (B) 15% of Adjusted
Consolidated Net Tangible Assets; or (vii) Liens on proceeds from assets which
are subject to a Lien described in any of the foregoing clauses (i) through
(vi).
46
SECTION 4.10. Limitation on Asset Sales. The Company will not,
and will not permit any Restricted Subsidiary to, consummate any Asset Sale,
unless (i) the consideration received by the Company or such Restricted
Subsidiary is at least substantially equal to the fair market value of the
assets sold or disposed of and (ii) at least 75% of the consideration received
consists of (1) cash or Temporary Cash Investments (provided that the amount of
unsubordinated Indebtedness of the Company or any Indebtedness of any Restricted
Subsidiary, with respect to which all creditors release the Company and its
Restricted Subsidiaries in connection with such Asset Sale, shall be deemed to
be cash for purposes of this clause (ii)(1)), (2) DTH Assets or (3) to the
extent that the Company would be permitted to Incur $1.00 of additional
Indebtedness under the first paragraph of Section 4.03. after giving pro forma
effect to such Asset Sale, shares of publicly traded Voting Stock of any Person
engaged in the DTH Business. In the event and to the extent that the Net Cash
Proceeds received by the Company or any of its Restricted Subsidiaries from one
or more Asset Sales occurring on or after the Closing Date in any period of 12
consecutive months exceed 10% of Adjusted Consolidated Net Tangible Assets
(determined as of the date closest to the commencement of such 12-month period
for which a consolidated balance sheet of the Company and its subsidiaries have
been filed with the Commission or provided to the Trustee pursuant to Section
4.17.), then the Company shall or shall cause the relevant Restricted Subsidiary
to (i) within twelve months after the date Net Cash Proceeds so received exceed
10% of Adjusted Consolidated Net Tangible Assets (A) apply an amount equal to
such excess Net Cash Proceeds to permanently repay unsubordinated Indebtedness
of the Company or any Restricted Subsidiary, in each case owing to a Person
other than the Company or any of its Restricted Subsidiaries or (B) invest an
equal amount, or the amount not so applied pursuant to clause (A) (or enter into
a definitive agreement committing to so invest within twelve months after the
date of such agreement), in property or assets (other than current assets not
consisting of DTH Assets) of a nature or type or that are used in a business (or
in a company having property and assets of a nature or type, or engaged in a
business) similar or related, ancillary or complimentary to the nature or type
of the property and assets of, or the business of, the Company and its
Restricted Subsidiaries existing on the date of such investment and (ii) apply
(no later than the end of the twelve-month period referred to in clause (i))
such excess Net Cash Proceeds (to the extent not applied pursuant to clause (i))
as provided in the last paragraph of this Section 4.10. The amount of such
excess Net Cash Proceeds required to be applied (or to be committed to be
applied) during such twelve-month period as set forth in clause (i) of the
preceding sentence and not applied as so required by the end of such period
shall constitute "Excess Proceeds."
Notwithstanding the foregoing, (a) to the extent that any or
all of the Net Cash Proceeds of any Asset Sale are prohibited or delayed by
applicable local law from being repatriated to Mexico, the portion of such Net
Cash Proceeds so affected will not be required to be applied pursuant to this
Section 4.10. but may be retained for so long, but only for so long, as the
applicable local law will not permit repatriation to Mexico (the Company agrees
in the Indenture to promptly take all reasonable actions required by applicable
local law to permit such repatriation) and once such repatriation of any such
affected Net Cash Proceeds is permitted under the applicable local law, such
repatriation will be immediately effected and such repatriated Net Cash Proceeds
will be applied in the manner set forth in this Section 4.10. as if such Asset
Sale had occurred on the date of repatriation; and (b) to the extent that the
Board of Directors has determined in good faith that repatriation of any or all
of the Net Cash Proceeds
47
would have an adverse tax consequence to the Company, the Net Cash Proceeds so
affected may be retained outside Mexico for so long as such adverse tax
consequence would continue.
If, as of the first day of any calendar month, the aggregate
amount of Excess Proceeds not theretofore subject to an Offer to Purchase
pursuant to this Section 4.10. totals at least $10 million, the Company must
commence, not later than the fifteenth Business Day of such month, and
consummate an Offer to Purchase from the Holders on a pro rata basis an
aggregate principal amount of Notes equal to the Excess Proceeds on such date,
at a purchase price equal to 101% of the principal amount of the Notes plus
accrued interest (if any) to the Payment Date. To the extent such Offer to
Purchase is made and the full amount of Excess Proceeds that are the subject of
the offer are not used to repurchase Notes then the Company and its Restricted
Subsidiaries may use any remaining amount for general corporate purposes.
SECTION 4.11. Repurchase of Notes upon a Change of Control.
The Company must commence, within 30 days of the occurrence of a Change of
Control, and consummate an Offer to Purchase for all Notes then Outstanding, at
a purchase price equal to 101% of the principal amount of the Notes plus accrued
interest (if any) to the Payment Date. The Company is not required to make an
Offer to Purchase following a Change of Control if a third party makes an Offer
to Purchase that would be in compliance with the provisions described in this
section if it were made by the Company and such third party purchases (for the
consideration referred to in the immediately preceding sentence) the Notes
validly tendered and not withdrawn. Prior to the mailing of the notice to
Holders commencing such Offer to Purchase, but in any event within 30 days
following any Change of Control, the Company covenants to (i) repay in full all
indebtedness of the Company that would prohibit the repurchase of the Notes
pursuant to such Offer to Purchase or (ii) obtain any requisite consents under
instruments governing any such indebtedness of the Company to permit the
repurchase of the Notes. The Company shall first comply with the covenant in the
preceding sentence before it shall be required to repurchase Notes pursuant to
this Section 4.11.
SECTION 4.12. Existence. Subject to Articles Four and Five of
this Indenture, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and the existence of
each of its Restricted Subsidiaries in accordance with the respective
organizational documents of the Company and each such Subsidiary and the rights
(whether pursuant to charter, partnership certificate, agreement, statute or
otherwise), material licenses and franchises of the Company and each such
Subsidiary; provided that the Company shall not be required to preserve any such
right, license or franchise, or the existence of any Restricted Subsidiary, if
(a) the maintenance or preservation thereof is no longer desirable in the
conduct of the business of the Company and its Restricted Subsidiaries taken as
whole or (b) the failure to maintain or preserve any such right, license or
franchise does not have a material adverse effect on the Company and its
Restricted Subsidiaries, taken as a whole.
SECTION 4.13. Payment of Taxes and Other Claims. The Company
will pay or discharge and shall cause each of its Subsidiaries to pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent (i) all material taxes, assessments and governmental charges levied
or imposed upon (a) the Company or any such Subsidiary, (b) the income of
profits of any such Subsidiary which is a corporation or (c) the property of the
Company or any such Subsidiary and (ii) all material lawful claims for labor,
materials and
48
supplies that, if unpaid, might by law become a lien upon the property of the
Company or any such Subsidiary; provided that the Company shall not be required
to pay or discharge, or cause to be paid or discharged, any such tax,
assessment, charge or claim the amount, applicability or validity of which is
being considered in good faith by appropriate proceedings and for which adequate
reserves have been established.
SECTION 4.14. Maintenance of Properties and Insurance. The
Company will cause all properties used or useful in the conduct of its business
or the business of any of its Restricted Subsidiaries to be maintained and kept
in good condition, repair and working order (reasonable wear and tear excepted)
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided that nothing in this Section 4.14 shall prevent the
Company or any such Subsidiary from discontinuing the use, operation or
maintenance of any of such properties or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Company, desirable in the
conduct of the business of the Company or such Subsidiary.
The Company will provide or cause to be provided, for itself
and its Restricted Subsidiaries, reasonably adequate insurance (including
appropriate self-insurance) with respect to its properties and business against
loss or damage of the kinds customarily insured against by corporations of
established reputation engaged in the same or similar businesses similarly
situated and owning like properties, of such types and in such amounts, with
such deductibles and by such methods as shall be customary for companies
similarly situated in the industry in which the Company or such Restricted
Subsidiary, as the case may be, is then conducting business, except to the
extent that failure to carry or maintain any such insurance would not, singly or
in the aggregate, have a material adverse effect on the condition, financial or
otherwise, or the earnings, business or operations of the Company and its
Subsidiaries, taken as a whole.
SECTION 4.15. Notice of Defaults. In the event that the
Company becomes aware of any Default or Event of Default, the Company, promptly
(and in any event within five Business Days) after it becomes aware thereof,
will give written notice thereof to the Trustee.
SECTION 4.16. Compliance Certificates. (a) The Company shall
deliver to the Trustee, within 180 days after the end of the Company's fiscal
year, an Officers' Certificate stating whether or not the signers know of any
Default or Event of Default that occurred during such fiscal year. Such
certificates shall contain a certification from the principal executive officer,
principal financial officer or principal accounting officer of the Company that
a review has been conducted of the activities of the Company and the Restricted
Subsidiaries and the Company's performance under this Indenture and that, to
their knowledge, the Company has complied with all conditions and covenants
under this Indenture. For purposes of this Section 4.16., such compliance shall
be determined without regard to any period of grace or requirement of notice
provided under this Indenture. If they do know of such a Default or Event of
Default, the certificate shall describe any such Default or Event of Default and
its status.
(b) The Company shall deliver to the Trustee, within 180
days after the end of its fiscal year, a certificate signed by the Company's
independent certified public accounts
49
stating (i) that their audit examination has included a review of the terms of
this Indenture and the Notes as they relate to accounting matters, (ii) that
they have read the most recent Officers' Certificate delivered to the Trustee
pursuant to paragraph (a) of this Section 4.15. and (iii) whether, in connection
with their audit examination, anything came to their attention that caused them
to believe that the Company was not in compliance with any of the terms,
covenants, provisions or conditions of Article Four and Section 5.01 of this
Indenture as they pertain to accounting matters and, if any Default or Event of
Default has come to their attention, specifying the nature and period of
existence thereof; provided that such independent certified public accountants
shall not be liable in respect of such statement by reason of any failure to
obtain knowledge of any Default or Event of Default that would not be disclosed
in the course of an audit examination conducted in accordance with generally
accepted auditing standards in effect at the date of such examination.
(c) Within 180 days of the end of the Company's fiscal
year, the Company shall deliver to the Trustee a list of all Significant
Subsidiaries. The Trustee shall have no duty with respect to any such list
except to keep it on file and available for inspection by the Holders.
SECTION 4.17. Commission Reports and Reports to Holders. At
all times, whether or not the Company is then required to file reports with the
Commission, for so long as any Notes are Outstanding, the Company shall file
with the Commission all such reports and other information as it would be
required to file with the Commission by Section 13(a) or 15(d) under the
Exchange Act if it were subject thereto, unless the Commission does not permit
such filings, in which case the Company shall provide such reports and other
information to the Trustee (within the same time periods that would be
applicable if the Company were required and permitted to file reports with the
Commission) and instruct the Trustee to mail such reports and other information
to Holders at their addresses set forth on the Security Register. The Company
shall supply the Trustee and each Holder or shall supply to the Trustee for
forwarding to such Holder, without cost to such Holder, copies of such reports
and other information. In addition, at all times prior to the earlier of the
date of the registration and May 19, 2004, the Company shall, at its cost,
deliver to each Holder of the Notes, or supply to the Trustee for forwarding to
each such Holder, quarterly and annual reports substantially equivalent to those
which would be required by the Exchange Act. The Company also shall comply with
the other provisions of TIA Section 314(a). Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 4.18. Waiver of Stay, Extension or Usury Laws. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Notes as contemplated herein,
wherever enacted, now or at anytime hereafter in force, or that may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) 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,
50
but will suffer and permit the execution of every such power as though no such
law had been enacted.
SECTION 4.19. Limitation on Sale-Leaseback Transactions. The
Company will not, and will not permit any Restricted Subsidiary to, enter into
any sale-leaseback transaction involving any of its assets or properties whether
now owned or hereafter acquired, whereby the Company or a Restricted Subsidiary
sells or transfers such assets or properties and then or thereafter leases such
assets or properties or any part thereof or any other assets or properties which
the Company or such Restricted Subsidiary, as the case may be, intends to use
for substantially the same purpose or purposes as the assets or properties sold
or transferred.
The foregoing restriction does not apply to any sale-leaseback
transaction if (i) the lease is for a period, including renewal rights, of not
in excess of three years; (ii) the lease secures or relates to industrial
revenue or pollution control bonds; (iii) the transaction is solely between the
Company and any Wholly Owned Restricted Subsidiary or solely between Wholly
Owned Restricted Subsidiaries; or (iv) the Company or such Restricted
Subsidiary, within twelve months after the sale or transfer of any assets or
properties is completed, applies an amount not less than the net proceeds
received from such sale in accordance with clause (A) or (B) of the first
paragraph of Section 4.10.
SECTION 4.20. Comision Nacional Bancaria y de Valores.
Promptly after the date of this Indenture, the Company will furnish to the CNBV
all information necessary to complete the registration of the Securities in the
Special Section of the National Registry of Securities.
SECTION 4.21. Additional Amounts. Any payments made by the
Company under or with respect to the Notes will be made free and clear of and
without withholding or deduction for or on account of any present or future tax,
duty, levy, impost, assessment or other governmental charge imposed or levied by
or on behalf of Mexico or of any subdivision thereof or by an authority or
agency therein or thereof having power to tax (hereinafter "Taxes"), unless the
Company is required to withhold or deduct Taxes by law or by the interpretation
or administration thereof. If the Company is so required to withhold or deduct
any amount for or on account of Taxes from any payment made under or with
respect to the Notes, the Company will pay such additional amounts ("Additional
Amounts") as may be necessary, so that the net amount received by each Holder of
Notes (including Additional Amounts) after such withholding or deduction will
not be less than the amount each Holder would have received if such Taxes had
not been withheld or deducted.
Notwithstanding the foregoing, no such Additional Amounts
shall be payable with respect to:
(a) any Taxes which are imposed on, or deducted or
withheld from, payments made to the Holder or beneficial owner of a
Note by reason of the existence of any connection between the Holder or
beneficial owner of the Note (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or possessor of a power over,
such Holder or beneficial owner, if such Holder or beneficial owner is
an estate, trust, corporation or
51
partnership) and Mexico (or any political subdivision or territory or
possession thereof or area subject to its jurisdiction), including,
without limitation, such Holder or beneficial owner (or such fiduciary,
settlor, beneficiary, member, shareholder or possessor) (i) being or
having been a citizen or resident thereof, (ii) maintaining or having
maintained an office, permanent establishment, fixed base or branch
therein, or (iii) being or having been present or engaged in trade or
business therein), except for a connection relating to or otherwise
arising from the mere ownership of, or receipt of payment under, such
Note or the exercise of rights under such Note or the Indenture
(personally or through the Trustee);
(b) any estate, inheritance, gift, sales, stamp, transfer
or personal property Tax;
(c) any Taxes that are imposed on, or withheld or
deducted from, payments made to the Holder or beneficial owner of a
Note to the extent such Taxes would not have been so imposed, deducted
or withheld but for the failure by such Holder or beneficial owner of
such Note to comply with any certification, identification,
information, documentation or other reporting requirement concerning
the nationality, residence, identity or connection with Mexico of the
Holder or beneficial owner of such Note if (i) such compliance is
required or imposed by a statute, treaty, regulation, rule, ruling or
administrative practice in order to make any claim for exemption from,
or reduction in the rate of, the imposition, withholding or deduction
of any Taxes, and (ii) at least 60 days prior to the first payment date
with respect to which the Company shall apply this clause (c), the
Company shall have notified all the Holders of Notes, in writing, that
such Holders or beneficial owners of the Notes will be required to
provide such information or documentation;
(d) any Taxes imposed on, or withheld or deducted from,
payments made to a Holder or beneficial owner of a Note at a rate in
excess of the 4.9% rate of Tax in effect on the date hereof and
uniformly applicable in respect of payments made by the Company to all
Holders or beneficial owners eligible for the benefits of a treaty for
the avoidance of double taxation to which Mexico is a party without
regard to the particular circumstances of such Holders or beneficial
owners provided that, upon any subsequent increase in the rate of Tax
that would be applicable to payments to all such Holders or beneficial
owners without regard to their particular circumstances, such increased
rate shall be substituted for the 4.9% rate for purposes of this clause
(d), but only to the extent that (i) such Holder or beneficial owner
has failed to provide on a timely basis, at the reasonable request of
the Company (subject to the conditions set forth below), information,
documentation or other evidence concerning whether such Holder or
beneficial owner is eligible for benefits under a treaty for the
avoidance of double taxation to which Mexico is a party if necessary to
determine the appropriate rate of deduction or withholding of Taxes
under such treaty or under any statute, regulation, rule, ruling or
administrative practice, and (ii) at least 60 days prior to the first
payment date with respect to which the Company shall make such
reasonable request, the Company shall have notified the Holders of the
Notes, in writing, that such Holders or beneficial owners of Notes will
be required to provide such information, documentation or other
evidence;
52
(e) to or on behalf of a Holder of a Note in respect of
Taxes that would not have been imposed but for the presentation by such
Holder for payment on a date more than 30 days after the date on which
such payment became due and payable or the date on which payment
thereof is duly provided for and notice thereof given to Holders,
whichever occurs later, except to the extent that the Holder of such
Note would have been entitled to Additional Amounts in respect of such
Taxes on presenting such Note for payment on any date during such
30-day period;
(f) any combination of (a), (b), (c), (d) or (e) above
(the Taxes described in clauses (a) through (f), for which no
Additional Amounts are payable, are hereinafter referred to as
"Excluded Taxes").
Notwithstanding the foregoing, the limitations on the
Company's obligation to pay Additional Amounts set forth in clauses (c) and (d)
above shall not apply if (i) the provision of information, documentation or
other evidence described in such clauses (c) and (d) would be materially more
onerous, in form, in procedure or in the substance of information disclosed, to
a Holder or beneficial owner of a Note (taking into account any relevant
differences between U.S. and Mexican law, rules, regulations or administrative
practice) than comparable information or other reporting requirements imposed
under U.S. tax law, regulation and administrative practice (such as IRS Forms
W-8, W-8BEN and W-9) or (ii) Rule 3.25.15 issued by the Secretaria de Hacienda y
Credito Publico (Ministry of Finance and Public Credit) on March 31, 2003 or a
substantially similar successor of such rule is in effect, unless the provision
of the information, documentation or other evidence described in clauses (c) and
(d) is expressly required by statute, regulation, rule, ruling or administrative
practice in order to apply Rule 3.25.15 (or a substantially similar successor of
such rule), the Company cannot obtain such information, documentation or other
evidence on its own through reasonable diligence and the Company otherwise would
meet the requirements for application of Rule 3.25.15 (or such successor of such
rule). In addition, such clauses (c) and (d) shall not be construed to require
that a non-Mexican pension or retirement fund or a non-Mexican financial
institution or any other Holder register with the Ministry of Finance and Public
Credit for the purpose of establishing eligibility for an exemption from or
reduction of Mexican withholding tax or to require that a Holder or beneficial
owner certify or provide information concerning whether it is or is not a
tax-exempt pension or retirement fund.
The Company will, upon written request of any Holder,
reimburse such Holder for the amount of (i) any Taxes (other than Excluded
Taxes) so levied or imposed and paid by such Holder as a result of payments made
under or with respect to the Notes and (ii) any Taxes (other than Excluded
Taxes) so levied or imposed with respect to any reimbursement under the
foregoing clause (i), but excluding any such Taxes on such Holder's net income,
so that the net amount received by such Holder after such reimbursement will not
be less than the net amount the Holder would have received if Taxes on such
reimbursement had not been imposed.
At least 30 days prior to each date on which any payment under
or with respect to the Notes is due and payable, if the Company will be
obligated to pay Additional Amounts with respect to such payment (other than
Additional Amounts payable on the Closing Date), the Company will deliver to the
Trustee an Officers' Certificate stating the fact that such Additional Amounts
will be payable and the amounts so payable and will set forth such other
information
53
necessary to enable the Trustee to pay such Additional Amounts to Holders on the
payment date. Whenever either in the Indenture or in the Offering Memorandum
there is mentioned, in any context, the payment of principal (and premiums, if
any), Redemption Price, interest or any other amount payable under or with
respect to any Note, such mention shall be deemed to include mention of the
payment of Additional Amounts to the extent that, in such context, Additional
Amounts are, were or would be payable in respect thereof.
In the event that the Company has become or would become
obligated to pay, on the next date on which any amount would be payable under or
with respect to the Notes, any Additional Amount in excess of those attributable
to a Mexican withholding tax rate of 10%, as a result of certain changes
affecting Mexican withholding tax laws, the Company may redeem all, but not less
than all, of the Notes at any time at 100% of the principal amount, together
with accrued interest thereon, if any, to the Redemption Date.
The Company will provide the Trustee with documentation
evidencing the payment of Mexican taxes in respect of which the Company has paid
any Additional Amounts. Copies of such documentation will be made available to
the Holders or the Paying Agent, as applicable, upon request therefor.
In addition, the Company will pay any stamp, issue,
registration, documentary or other similar taxes and other duties (including
interest and penalties) (i) payable in Mexico or the United States (or any
political subdivision of either jurisdiction) in respect of the creation, issue
and offering of the Notes, and (ii) payable in Mexico (or any political
subdivision thereof) in respect of the subsequent redemption or retirement of
the Notes (other than in the case of any subsequent redemption or retirement,
Excluded Taxes, except for this purpose, the definition of Excluded Taxes will
not include those defined in clause (b) thereof).
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Consolidation, Merger and Sale of Assets. The
Company will not consolidate with, merge with or into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its property
and assets (as an entirety or substantially an entirety in one transaction or a
series of related transactions) to, any Person or permit any Person to merge
with or into the Company unless: (i) the Company shall be the continuing Person,
or the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or that acquired or leased such property and assets
of the Company shall be a corporation organized and validly existing under the
laws of Mexico, the United States of America or any jurisdiction of either such
country and shall expressly assume, by supplemental indentures, executed and
delivered to the Trustee, all of the obligations of the Company on all of the
Notes and under the Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) immediately after giving effect to such transaction on a pro
forma basis, (A) the Company or any Person becoming the successor obligor of the
Notes shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such transaction, (B)
the Consolidated Leverage Ratio of the Company, or any Person becoming the
successor obligor of the Notes, as the case may be, is no worse than 110% of the
Consolidated Leverage Ratio of the Company without giving effect to
54
such transaction or (C) the Company or any Person becoming the successor obligor
of the Notes could incur $1.00 of additional Indebtedness under the first
paragraph of Section 4.03.; and (iv) the Company delivers to the Trustee an
Officers' Certificate (attaching the arithmetic computations to demonstrate
compliance with clause (iii) and Opinion of Counsel, in each case stating that
such consolidation, merger or transfer and such supplemental indenture complies
with this provision and that all conditions precedent provided for herein
relating to such transaction have been complied with; provided that one or more
sales, conveyances, transfers, leases or other dispositions of DTH Units shall
not be considered a sale of substantially all of the Company's property and
assets; provided further that clause (iii) above does not apply if, in the good
faith determination of the Board of Directors of the Company, whose
determination shall be evidenced by a Board Resolution, the principal purpose of
such transaction is to change the state of incorporation of the Company or
jurisdiction within Mexico, to incorporate the Company under the laws of a state
of the United States or to transform the Company to a sociedad de
responsabilidad limitada, a sociedad anonima or a sociedad anonima de capital
variable; and provided further that any such transaction shall not have as one
of its purposes the evasion of the foregoing limitations.
SECTION 5.02. Successor Substituted. Upon any consolidation or
merger, or any sale, conveyance, transfer or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. An "Event of Default" shall
occur with respect to the Notes if:
(a) the Company defaults in the payment of principal of
(or premium, if any, on) any Notes, when the same becomes due and
payable at maturity, upon acceleration, redemption or otherwise;
(b) the Company defaults in the payment of interest on
any Notes, when the same becomes due and payable, and such default
continues for a period of 30 days;
(c) the Company defaults in the performance or breach of
the provisions of the Indenture applicable to mergers, consolidations
and transfers of all or substantially all of the assets of the Company
or the failure to make or consummate an Offer to Purchase in accordance
with Section 4.10 or Section 4.11;
(d) the Company defaults in the performance of or breach
any other covenant or agreement of the Company in the Indenture or
under the Notes, (other than a default specified in clause (a), (b), or
(c) above) and such default or breach continues for a period
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of 30 consecutive days after written notice by the Trustee or the
Holders of 25% or more in aggregate principal amount of the Notes;
(e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Significant Subsidiary having an
outstanding principal amount of $15 million or more in the aggregate
for all such issues of all such Persons, whether such Indebtedness now
exists or shall hereafter be created, (I) an event of default that has
caused the holder thereof to declare such Indebtedness to be due and
payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or
annulled within 30 days of such acceleration and/or (II) the failure to
make a principal payment and such defaulted payment shall not have been
made, waived or extended within 30 days of such payment default;
(f) any final judgment or order (not covered by
insurance) for the payment of money in excess of $15 million in the
aggregate for all such final judgments or orders against all such
Persons (treating any deductibles, self-insurance or retention as not
so covered) shall be rendered against the Company or any Significant
Subsidiary and shall not be paid or discharged, and there shall be any
period of 60 consecutive days following entry of the final judgment or
order that causes the aggregate amount for all such final judgments or
orders outstanding and not paid or discharged against all such Persons
to exceed $15 million during which a stay of enforcement of such final
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect;
(g) the failure by the Existing Social Part Holders and
their Affiliates to conclude the Social Part Holders Note
Capitalization on or before the one hundred and twentieth day following
the initial issuance of the Notes;
(h) a court having jurisdiction in the premises enters a
decree or order for (A) relief in respect of the Company or any
Significant Subsidiary in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
(B) appointment of a receiver, liquidator, assignee, sindico,
custodian, trustee, sequestrator or similar official of the Company or
any Significant Subsidiary or for all or substantially all of the
property and assets of the Company or any Significant Subsidiary or (C)
the winding up or liquidation of the affairs of the Company or any
Significant Subsidiary and, in each case, such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(i) the Company or any Significant Subsidiary (A)
commences a voluntary case under any applicable bankruptcy, suspension
of payments, insolvency or other similar law now or hereafter in
effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (B) consents to the appointment of
or taking possession by a receiver, liquidator, assignee, sindico,
custodian, trustee, sequestrator or similar official of the Company or
any Significant Subsidiary or for all or substantially all of the
property and assets of the Company or any Significant Subsidiary or (C)
effects any general assignment for the benefit of creditors.
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SECTION 6.02. Acceleration. If an Event of Default (other than
an Event of Default specified in clause (h) or (i) above that occurs with
respect to the Company) occurs and is continuing under the Indenture, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then Outstanding, by written notice to the Company (and to the Trustee if
such notice is given by the Holders), may, and the Trustee at the request of
such Holders shall, declare the principal amount of, premium, if any, and
accrued interest on such Notes to be immediately due and payable. Upon a
declaration of acceleration, such principal amount, premium, if any, and accrued
interest shall be immediately due and payable. In the event of a declaration of
acceleration because an Event of Default set forth in clause (e) above has
occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (e) shall be remedied or cured by the
Company or the relevant Significant Subsidiary or waived by the holders of the
relevant Indebtedness within 60 days after the declaration of acceleration with
respect thereto. If an Event of Default specified in clause (h) or (i) above
occurs with respect to the Company, the principal amount of, premium, if any,
and accrued interest on the Notes then Outstanding shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder.
The Holders of at least a majority in principal amount at
maturity of the Outstanding Notes by written notice to the Company and to the
Trustee, may waive all past defaults or any Event of Default and rescind and
annul a declaration of acceleration and its consequences if (i) all existing
Events of Default, other than the nonpayment of the principal of, premium, if
any, and interest on the Notes that have become due solely by such declaration
of acceleration, have been cured or waived and (ii) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction.
SECTION 6.03. 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 principal of, premium, if any, or
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections
6.02, 6.07 and 9.02, the Holders of at least a majority in principal amount of
the Outstanding Notes, by notice to the Trustee, may waive an existing Default
or Event of Default and its consequences, except a Default in the payment of
principal of, premium, if any, or interest on any Notes as specified in clause
(a) or (b) of Section 6.01 or in respect of a covenant or provision of this
Indenture which cannot be modified or amended without the consent of the holder
of each Outstanding Note affected. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Event of Default or impair any right
consequent thereto.
SECTION 6.05. Control by Majority. The Holders of at least a
majority in aggregate principal amount of the Outstanding Notes may direct the
time, method and place of
57
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided, that the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, that
may involve the Trustee in personal liability, or that the Trustee determines in
good faith may be unduly prejudicial to the rights of Holders of the Notes not
joining in the giving of such direction; and provided further, that the Trustee
may take any other action it deems proper that is not inconsistent with any
directions received from Holders of Notes pursuant to this Section 6.05.
SECTION 6.06. Limitation on Suits. A Holder may not institute
any proceeding, judicial or otherwise, with respect to this Indenture or the
Notes, or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(i) such Holder has previously given to the Trustee
written notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount of Outstanding Notes shall have made a written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to the Trustee against any costs,
liabilities or expenses to be incurred in compliance with such request;
(iv) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(v) during such 60-day period, the Holders of a majority
in aggregate principal amount of the Outstanding Notes have not given
the Trustee a direction that is inconsistent with such written request.
For purposes of Section 6.05 of this Indenture and this
Section 6.06, the Trustee shall comply with TIA Section 316(a) in making any
determination of whether the Holders of the required aggregate principal amount
of Outstanding Notes have concurred in any request or direction of the Trustee
to pursue any remedy available to the Trustee or the Holders with respect to
this Indenture or the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
The limitations set forth in this Section 6.06 shall not apply
to the right of any Holder of a Note to receive payment of the principal,
premium, if any, or interest on, such Note or to bring suit for the enforcement
of any such payment, on or after the due date expressed in the Notes, which
right shall not be impaired or affected without the consent of the Holder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of principal of, premium, if any, or interest on
such Holder's Note on or after the respective due
58
dates expressed on such Note, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default in payment of principal, premium or interest specified in clause (a) or
(b) of Section 6.01 occurs and is continuing, the Trustee may recover judgment
in its own name and as trustee of an express trust against the Company or any
other obligor of the Notes for the whole amount of principal, premium, if any,
and, accrued interest remaining unpaid, together with interest on overdue
principal, premium, if any, and to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
specified in the Notes, and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Notes), its creditors or its property
and shall be entitled and empowered to collect and receive any monies,
securities or other property payable or deliverable upon conversion or exchange
of the Notes or upon any such claims and to distribute the same, and any
custodian, receiver, assignee, sindico, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agent and counsel, and
any other amounts due the Trustee under Section 7.07. Nothing herein contained
shall be deemed to empower the Trustee to authorize or consent to, or accept or
adopt on behalf of the Holder, any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money
pursuant to this Article Six, it shall pay out the money in the following order:
First: to the Trustee for all amounts due under Section 7.07;
Second: to Holders for amounts then due and unpaid for
principal of, premium, if any, and interest on the Notes in respect of
which or for the benefits of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Notes for principal, premium, if any,
and interest, respectively; and
Third: to the Company or any other obligors of the Note, as
their interests may appear, or as a court of competent jurisdiction may
direct in writing.
59
The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment to Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court may
require any party litigant in such suit to file an undertaking to pay the costs
of the suit, and the court may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 of this Indenture, or a suit by Holders of more
than 20% in principal amount of the Outstanding Notes.
SECTION 6.12. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then, and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Company, the Trustee and the Holders shall continue as
though no such proceeding had been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or wrongfully taken Notes in Section 2.09, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article Six or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General. (a) Except during the continuance of an
Event of Default.
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in
this Indenture, and no implied covenants or
obligations shall be read into this Indenture against
the Trustee; and
60
(2) 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; but in the case of
any such certificates or opinions which by any
provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or
not they conform to the requirements of this
Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts
stated therein).
(b) In case 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 their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except
that
(1) this Subsection shall not be construed to
limit the effect of Subsection (a) of this Section
7.01;
(2) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the
Holders of a majority in principal amount of the
Outstanding Notes, relating to the time, method and
place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this
Indenture with respect to the Notes; and
(4) notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any
financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or
adequate indemnity against such risk or liability is
not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this
Indenture relating to the conduct or affecting
liability of or affording protection to the Trustee
shall be subject to the provisions of this Article
Seven.
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(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to
the provisions of this Section 7.01.
SECTION 7.02. Certain Rights of Trustee. Subject to Section
7.01:
(i) the Trustee may rely conclusively and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document (whether in original or
facsimile form) 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 and may in good faith
conclusively rely as to the truth of the statements and the correctness
of the opinions therein;
(ii) before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel, which
shall conform to Section 10.04. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate, opinion and/or an accountants' certificate if required
under the TIA:
(iii) the Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any
agent appointed with due care;
(iv) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders, unless such Holders shall
have offered to the Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities that
would reasonably be expected to be incurred by it in compliance with
such request or direction;
(v) the Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized
or within its rights or powers or for any action it takes or omits to
take in accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Notes relating to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture; provided that the Trustee's conduct does not
constitute negligence or bad faith;
(vi) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(vii) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or documents, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
62
examine the books, records and premises of the Company personally or by
agent or attorney at the reasonable expense of the Company and shall
incur no liability of any kind by reason of such inquiry or
investigation;
(viii) the Trustee may consult with counsel of its selection
and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(ix) the Trustee shall not be deemed to have notice of any
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in
fact such a default is received by the Trustee at the Corporate Trust
Office of the Trustee, and such notice references the Notes and this
Indenture;
(x) in no event shall the Trustee be responsible or
liable for special, indirect or consequential loss or damage of any
kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood
of such loss or damage and regardless of the form of action; and
(xi) the rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each agent, custodian
and other Person employed to act hereunder.
SECTION 7.03. Individual Rights of Trustee. The Trustee, in
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not the Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(ii) shall not be accountable for the Company's use or application of the
proceeds from the Notes and (iii) shall not be responsible for any statement in
the Notes other than its certificate of authentication.
SECTION 7.05. Notice of Default. If any Default or any Event
of Default occurs and is continuing and if such Default or Event of Default is
known to a Responsible Officer of the Trustee, the Trustee shall mail to each
Holder in the manner and to the extent provided in TIA Section 313(c) notice of
the Default within 90 days after it occurs, unless such Default or Event of
Default has been cured; provided, however, that, except in the case of a default
in the payment of the principal of, premium, if any, or interest on any Note,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days
after each May 15, beginning with May 15, 2005 the Trustee shall mail to each
Holder as provided in TIA
63
Section 313(c) a brief report that complies with TIA Section 313(a) dated as of
such May 15, if required by TIA Section 313(a).
SECTION 7.07. Compensation and Indemnity. The Company shall
pay to the Trustee such compensation as shall be agreed upon in writing for all
services rendered by it hereunder. The compensation of the Trustee shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable out-of-pocket
expenses and advances incurred or made by the Trustee. Such expenses shall
include the reasonable compensation and expenses of the Trustee's agents and
counsel.
The Company shall indemnify the Trustee and its agents for,
and hold them harmless against, any loss, claim, damage or liability or expenses
incurred by it without negligence or willful misconduct on its part in
connection with the acceptance or administration of this Indenture and its
duties under this Indenture and the Notes, including the costs and expenses of
defending itself against any claims or liability and of complying with any
process served upon it or any of its officers in connection with the exercise or
performance of any of its powers or duties under this Indenture and the Notes.
The Trustee shall notify the Company promptly of any claim asserted against the
Trustee of which a Responsible Officer receives written notice for which it may
seek indemnity, provided that the failure to so notify the Company shall only
relieve the Company of its obligation to indemnify hereunder to the extent the
Company is actually prejudiced.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a lien prior to the Notes on all money or property
held or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of, premium, if any, and interest on
particular Notes.
If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in clause (h) or (i) of Section
6.01, the expenses and the compensation for the services will be intended to
constitute expenses of administration under Title 11 of the Untied States
Bankruptcy Code or any applicable federal or state law for the relief of
debtors.
The provisions of this Section 7.07 shall survive the
termination of this Indenture and the resignation or removal of the Trustee.
SECTION 7.08. Replacement of Trustee. A resignation or removal
of the Trustee and appointment of a successor Trustee shall become effective
only upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign at any time by so notifying the Company
in writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the Outstanding Notes may remove
the Trustee by so notifying the Trustee in writing and may appoint a successor
Trustee with the consent of the Company. The Company may at any time remove the
Trustee by Company Order given at least 30 days prior to the date of the
proposed removal.
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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 Outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount of the Outstanding Notes may petition any
court of competent jurisdiction for 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. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07, (i) the retiring Trustee shall transfer all property held by it as Trustee
to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee shall become effective and (iii) the successor Trustee shall have all
the rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Holder.
If the Trustee is no longer eligible under Section 7.10, any
Holder who satisfies the requirements of TIA Section 310(b) may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
The Company shall give notice of any resignation and any
removal of the Trustee and each appointment of a successor Trustee to all
Holders. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligation under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
SECTION 7.10. Eligibility. This Indenture shall always have a
Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5).
The Trustee shall have a combined capital and surplus of at least
U.S.$100,000,000 as set forth in its most recent published annual report of
condition.
SECTION 7.11. Money Held in Trust. The Trustee shall not be
liable for interest on any money received by it except as the Trustee may agree
with the Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law and except for money held in
trust under Article Eight of this Indenture.
SECTION 7.12. Withholding Taxes. The Trustee, as agent for the
Company, shall exclude and withhold from each payment of principal and interest
and other amounts due hereunder or under the Notes any and all withholding taxes
applicable thereto as required by law.
65
The Trustee agrees to act as such withholding agent and, in connection
therewith, whenever any present or future taxes or similar charges are required
to be withheld with respect to any amounts payable in respect of the Notes, to
withhold such amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Holders of the Notes, that it will file any
necessary withholding tax returns or statements when due, and that it will make
available to the Holders appropriate documentation showing the payment thereof,
upon request therefor.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations. Except as
otherwise provided in this Indenture, the Company may terminate its obligations
under the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered
(other than destroyed, lost or stolen Notes that have been replaced or
Notes that are paid pursuant to Section 4.01 or Notes for whose payment
money or securities have theretofore been held in trust and thereafter
repaid to the Company, as provided in Section 8.05) have been delivered
to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder; or
(ii) (A) all Notes theretofore delivered to the Trustee
have become due and payable, the Notes mature within one year or all of
them are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption, (B)
the Company irrevocably deposits or causes to be deposited in trust
with the Trustee during such one-year period, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds solely for the benefit of the Holders for that
purpose, money or U.S. Government Obligations sufficient (in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee), without consideration of any reinvestment of any interest
thereon, to pay principal, premium, if any, and interest on the Notes
to maturity or redemption, as the case may be, and to pay all other
sums payable by it hereunder, (C) the Company has paid all other sums
payable by it hereunder and (D) the Company has delivered to the
Trustee an Officer's Certificate and an Opinion of Counsel each stating
(and such statements shall be true) that (1) all conditions precedent
provided for herein relating to the satisfaction and discharge of this
Indenture have been complied with and (2) such satisfaction and
discharge will not result in a breach or violation of, or constitute a
default under, this Indenture or any other material agreement or
instrument (which, in the case of an Opinion of Counsel, would be any
other material agreement or instrument known to such counsel after due
inquiry) to which the Company is a party or by which it is bound.
With respect to the foregoing clause (i), the Company's
obligations under Section 7.07 shall survive. With respect to the foregoing
clause (ii), the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06,
2.07, 2.08, 2.09, 2.13, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 shall
survive until the Notes are no longer Outstanding. Thereafter, only the
Company's obligations in Sections 7.07, 8.05 and 8.06 shall survive such
satisfaction or discharge. After any
66
such irrevocable deposit, the Trustee upon request shall acknowledge in writing
the discharge of the Company's obligations under the Notes and this Indenture
except for those surviving obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The
Company will be deemed to have paid and will be discharged from any and all
obligations in respect of the Notes on the 123rd day after the date of the
deposit referred to in clause (a) of this Section 8.02, and the provisions of
this Indenture will no longer be in effect with respect to the Notes, and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same, except as to (i) rights of registration of transfer and
exchange, (ii) substitution of apparently mutilated, defaced, destroyed, lost or
stolen Notes, (iii) rights of Holders to receive payments of principal thereof
and interest thereon, (iv) the Company's obligations under Section 4.02, (v) the
rights, obligations and immunities of the Trustee hereunder and (vi) the rights
of the Holders as beneficiaries of this Indenture with respect to the property
so deposited with the Trustee payable to all or any of them; provided that the
following conditions shall have been satisfied:
(A) with reference to this Section 8.02, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10
of this Indenture) and conveyed all right, title and interest for the
benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance reasonably satisfactory to the Trustee
as trust funds in trust, specifically pledged to the Trustee for the
benefit of the Holders as security for payment of the principal of,
premium, if any, and interest, if any, on the Notes, and dedicated
solely to, the benefit of the Holders, in and to (1) money in an
amount, (2) U.S. Government Obligations that, through the payment of
interest, premium, if any, and principal in respect thereof in
accordance with their terms, will provide, not later than one day
before the due date of any payment referred to in this clause (a),
money in an amount or (3) a combination thereof in an amount
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of, premium, if
any, and accrued interest on the Outstanding Notes at the Stated
Maturity of such principal or interest; provided that the Trustee shall
have been irrevocably instructed by the Company to apply such money or
the proceeds of such U.S. Government Obligations to the payment of such
principal, premium, if any, and interest with respect to the Notes.
(B) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it
is bound.
(C) immediately after giving effect to such deposit on a
pro forma basis, no Default or Event of Default shall have occurred and
be continuing on the date of such deposit or during the period ending
on the 123rd day after such date of deposit;
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(D) the Company shall have delivered to the Trustee (1)
either (x) a ruling directed to the Trustee received from the Internal
Revenue Service to the effect that the Holders will not recognize
income, gain or loss for U.S. federal income tax purposes as a result
of the Company's exercise of its option under this Section 8.02 and
will be subject to U.S. federal income taxes on the same amount and in
the same manner and at the same times as would have been the case if
such option had not been exercised or (y) an Opinion of Counsel to the
same effect as the ruling described in clause (1)(x) above accompanied
by a ruling to that effect published by the Internal Revenue Service,
unless such Opinion of Counsel states that there has been a change in
the applicable U.S. federal income tax law since the date of this
Indenture such that a ruling from the Internal Revenue Service is no
longer required, (2) either (x) an Opinion of Counsel to the effect
that, based upon Mexican tax law then in effect, Holders will not
recognize income, gain or loss for Mexican federal income tax
(including withholding tax) purposes as a result of the Company's
exercise of its option under this Section 8.02 and will be subject to
Mexican federal income tax (including withholding tax) on the same
amount and in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred, or
(y) a ruling directed to the Trustee received from the Mexican taxing
authorities to the same effect as the Opinion of Counsel to the effect
that the creation of the defeasance trust does not violate the
Investment Company Act of 1940;
(E) if the Notes are then listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit, defeasance and discharge will
not cause the Notes to be delisted; and
(F) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day
period referred to in this Section 8.02, none of the Company's obligations under
this Indenture shall be discharged. Subsequent to the end of such 123-day period
with respect to this Section 8.02, the Company's obligations in Sections 2.02,
2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.05 and
8.06 shall survive until the Notes are no longer Outstanding. Thereafter, only
the Company's obligations in Sections 7.07, 8.05 and 8.06 shall survive. If and
when rulings from the Internal Revenue Service, the Mexican taxing authorities
and Opinions of Counsel referred to in clauses (D)(1) and (D)(2) of this Section
8.02 are provided specifically without regard to, and not in reliance upon, the
continuance of the Company's obligations under Section 4.01, then the Company's
obligations under such Section 4.01 shall cease upon delivery to the Trustee of
such ruling or Opinion of Counsel and compliance with the other conditions
precedent provided for herein relating to the defeasance contemplated by this
Section 8.02.
After any such irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Notes and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
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SECTION 8.03. Defeasance of Certain Obligations. the Company
may omit to comply with any term, provision or condition set forth in clauses
(iii) and (iv) of Section 5.01 and Sections 4.03 through 4.17, Section 4.19,
Section 4.20 and clauses (c) and (d) of Section 6.01 with respect to clauses
(iii) and (iv) of Section 5.01 and Sections 4.03 through 4.17, Section 4.19,
Section 4.20, Section 4.21 and clauses (e) and (f) of Section 6.01 shall be
deemed not to be Events of Default, in each case with respect to the Outstanding
Notes if:
(i) with reference to this Section 8.03, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section
7.10) and conveyed all right, title and interest to the Trustee for the
benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged to the Trustee for the benefit of
the Holders as security for payment of the principal of, premium, if
any, and interest, if any, on the Notes, and dedicated solely to, the
benefit of the Holders, in and to (A) money in an amount, (B) U.S.
Government Obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will
provide, not later than one day before the due date of any payment
referred to in this clause (i), money in an amount or (C) a combination
thereof in an amount sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such interest
and after payment of all federal, state and foreign taxes or other
charges and assessments in respect thereof payable by the Trustee, the
principal of, premium, if any, and interest on the Outstanding Notes on
the Stated Maturity of such principal of, premium, if any, and
interest, provided that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to the payment of such principal, premium, if any, and
interest with respect to the Notes;
(ii) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it
is bound;
(iii) no Default or Event of Default shall have occurred
and be continuing at the time of such deposit;
(iv) the Company has delivered to the Trustee an Opinion
of Counsel to the effect that (A) the creation of the defeasance trust
does not violate the Investment Company Act of 1940, (B) the Holders
will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such deposit and the defeasance of the
obligations referred to in the first paragraph of this Section8.03 and
will be subject to U.S federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred and (C) the Holders will not
recognize income, gain or loss for Mexican federal income tax
(including withholding tax) purposes as a result of such deposit and
the defeasance of the obligations referred to in the first paragraph of
this Section 8.03 and will be subject to Mexican federal income tax
(including withholding tax) on the same amount and in the
69
same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred;
(v) if the Notes are then listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit defeasance and discharge will
not cause the Notes to be delisted; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. Application of Trust Money. Subject to Section
8.06, the Trustee or Paying Agent shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the
case may be, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with the Notes and this Indenture to the
payment of principal of, premium, if any, and interest on the Notes; but such
money need not be segregated from other funds except to the extent required by
law.
SECTION 8.05. Repayment to Company. Subject to Sections 7.07,
8.01, 8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Company upon request set forth in an Officers' Certificate any excess money held
by them at any time and thereupon shall be relieved from all liability with
respect to such money. The Trustee and the Paying Agent shall pay to the Company
upon request any money held by them for the payment of principal, premium, if
any, or interest that remains unclaimed for two years; provided that the Trustee
or such Paying Agent before being required to make any payment may cause to be
published at the expense of the Company once in a newspaper of general
circulation in the City of New York or mail to each Holder entitled to such
money at such Holder's address (as set forth in the Security Register) notice
that such money remains unclaimed and that after a date specified therein (which
shall be at least 30 days from the date of such publication or mailing) any
unclaimed balance of such money then remaining will be repaid to the Company.
After payment to the Company, Holders entitled to such money must look to the
Company for payment as general creditors unless an applicable law designates
another Person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
Section 8.01, 8.02 or 8.03, as the case may be, by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01, 8.02 or
8.03, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 8.01, 8.02 or 8.03, as the case may be; provided that, if the
Company has made any payment of principal of, premium, if any, or interest on
any Notes because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.
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ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company, when
authorized by resolutions of its Board of Directors, and the Trustee may amend
or supplement this Indenture or the Notes without notice to or the consent of
any Holder:
(1) to cure any ambiguity, defect or
inconsistency in this Indenture; provided that such amendments
or supplements shall not adversely affect the interests of the
Holders in any material respect;
(2) to comply with Article Five;
(3) to comply with any requirements of the
Commission in connection with the qualification of this
Indenture under the TIA;
(4) to evidence and provide for the acceptance
of appointment hereunder by a successor Trustee; or
(5) to make any change that does not materially
and adversely affect the rights of any Holder.
SECTION 9.02. With Consent of Holders. Subject to Sections
6.04, 6.07 and 9.01 and with prior notice to the Holders, the Company, when
authorized by its Board of Directors (as evidenced by a Board Resolution), and
the Trustee may amend this Indenture and the Notes with the written consent of
the Holders of a majority in principal amount of the Notes then Outstanding. The
Holders of a majority in principal amount of the Notes then Outstanding by
written notice to the Trustee may waive future compliance by the Company with
any provision of this Indenture or the Notes.
Notwithstanding the provisions of this Section 9.02, without
the consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or
any installment of interest on, any Note, or reduce the principal
amount thereof, or adversely affect any right or repayment at the
option of any Holder of any Note, or the currency in which, any Note or
any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);
(ii) reduce the percentage in principal amount of
Outstanding Notes the consent of whose Holders is required for any such
supplemental indenture, for any waiver of compliance with certain
provisions of this Indenture or certain Defaults and their consequences
provided for in this Indenture;
(iii) waive a Default in the payment of principal of,
premium, if any, or interest on, any Note; or
71
(iv) modify any of the provisions of this Section 9.02,
except increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
9.02 becomes effective, the Company shall mail to the Holder affected thereby a
notice briefly describing the amendment, supplement or waiver. The Company will
mail supplemental indentures to Holders upon request. 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 or waiver.
SECTION 9.03. Revocation and Effect of Consent. Until an
amendment or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the Note of the consenting
Holder, even if notation of the consent is not made on any Note. However, any
such Holder or subsequent Holder may revoke the consent as to its Note or
portion of its Note. Such revocation shall be effective only if the Trustee
receives the notice of revocation before the date the amendment, supplement or
waiver becomes effective. An amendment, supplement or waiver shall become
effective on receipt by the Trustee of written consents from the Holders of the
requisite percentage in principal amount of the Outstanding Notes.
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. If a record date is fixed, then,
notwithstanding the last two sentences of the immediately preceding paragraph,
those persons who were Holders at such record date (or their duly designated
proxies) and only those persons shall be entitled to consent to such amendment,
supplement or waiver or to revoke any consent previously given, whether or not
such persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder unless it is of the type described in any of clauses (i)
through (iv) of Section 9.02. In case of an amendment or waiver of the type
described in clauses (i) through (iv) of Section 9.02, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder of a
Note that evidences the same indebtedness as the Note of the consenting Holder.
SECTION 9.04. Notation on or Exchange of Notes. If an
amendment, supplement or waiver changes the terms of a Note, the Trustee may
require the Holder to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Note about the changed terms and return it to the
Holder and the Trustee may place an appropriate notation on any Note thereafter
authenticated. Alternatively, if the Company or the Trustee so determined, the
Company in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that
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reflects the changed terms. Failure to make the appropriate notation or issue a
new Note shall not affect the validity and effect of such amendment, supplement
or waiver.
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee
shall be provided with and shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Subject to the preceding sentence, the Trustee shall sign such
amendment, supplement or waiver if the same does not adversely affect the rights
of the Trustee. The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.06. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article Nine shall conform to
the requirements of the TIA as then in effect.
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act of 1939. Prior to the
effectiveness of the Registration Statement, this Indenture shall incorporate
and be governed by the provisions of the TIA that are required to be part of and
to govern indentures qualified under the TIA. After the effectiveness of the
Registration Statement, this Indenture shall be subject to the provisions of the
TIA that are required to be a part of this Indenture and shall, to the extent
applicable, be governed by such provisions.
SECTION 10.02. Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail addressed as follows:
if to the Company:
Innova, S. de X.X. de C.V.
Xxxxxxxxxxx Xxx 000, Xxxx 0
Xxx. Xxx Xxxxx 00000, Xxxxxx D.F., Mexico
Attention: Xxxxxx Xxxxxxxx Xxxxx, Chief Financial Officer
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xx. 00X
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
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 Holder shall be mailed
to him at his address as it appears on the Security Register by first class mail
and shall be sufficiently given to
73
him if so mailed within the time prescribed. Copies of any such communication or
notice to a Holder shall also be mailed to the Trustee and each Agent at the
same time.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
Except for a notice to the Trustee, which is deemed given only when received,
and except as otherwise provided in this Indenture, if a notice or communication
is mailed in the manner provided in this Section 10.02, it is duly given,
whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 10.03. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(i) an Officers' Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of
such Counsel, all such conditions precedent have been complied with.
SECTION 10.04. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that each person signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion
contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of
each such person, such condition or covenant has been complied with;
provided, however, that, with respect to
74
matters of fact, an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
SECTION 10.05. Rules by Trustee, Paying Agent or Registrar.
The Trustee may make reasonable rules for action by or at a meeting of Holders.
The Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 10.06. Payment Date Other Than a Business Day. If an
Interest Payment Date, Redemption Date, Payment Date, Stated Maturity or date of
maturity of any Note, whether by the terms of this Agreement, by acceleration or
otherwise, shall not be a Business Day, then payment of principal of, premium,
if any, or interest on such Note, as the case may be, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Payment Date or Redemption
Date, or at the Stated Maturity or date of maturity of such Note; provided that
no interest shall accrue for the period from and after such Interest Payment
Date, Payment Date, Redemption Date, Stated Maturity or date of maturity, as the
case may be.
SECTION 10.07. Governing Law; Submission to Jurisdiction;
Agent for Service. The laws of the State of New York applicable to contracts to
be performed entirely in that state shall govern this Indenture and the Notes.
The Company hereby appoints CT Corporation, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, as its agent for service of process in any suit, action or
proceeding with respect to this Indenture or the Notes and for actions brought
under the U.S. federal or state securities laws brought in any federal or state
court located in The City of New York (each a "New York court"). Each of the
parties hereto submits to the jurisdiction of any New York court and to the
courts of its corporate domicile with respect to any actions brought against it
as defendant in any suit, action or proceeding arising out of or relative to
this Indenture or the Notes and waives any other right to which it may be
entitled on account of its place of residence, domicile or otherwise.
SECTION 10.08. Currency Indemnity. U.S. dollars are the sole
currency of account and payment for all sums payable by the Company under or in
connection with the Notes, including damages. Any amount received or recovered
in a currency other than dollars (whether as a result of, or of the enforcement
of, a judgment or order of a court of any jurisdiction, in the winding-up or
dissolution of the Company or otherwise) by any Holder of a Note in respect of
any sum expressed to be due to it from the Company shall only constitute a
discharge to the Company to the extent of the dollar amount which the recipient
is able to purchase with the amount so received or recovered in that other
currency on the date of that receipt or recovery (or, if it is not practicable
to make that purchase on that date, on the first date on which it is practicable
to do so). If that dollar amount is less than the dollar amount expressed to be
due to the recipient under any Note, the Company shall indemnify the recipient
against any loss sustained by it as a result. In any event, the Company shall
indemnify the recipient against the cost of making any such purchase. For the
purposes of this Section 10.08, it will be sufficient for the Holder of a Note
to certify in a satisfactory manner (indicating the sources of information used)
that it would have suffered a loss had an actual purchase of dollars been made
with the amount so received in that other currency on the date of receipt or
recovery (or, if a purchase of dollars on such date had not been practicable, on
the first date on which it would have been practicable, it being required that
the need for a change of date be certified in the
75
manner mentioned above). These indemnities constitute a separate and independent
obligation from the Company's other obligations, shall give rise to a separate
and independent cause of action, shall apply irrespective of any indulgence
granted by any Holder of a Note and shall continue in full force and effect
despite any other judgment, order, claim or proof for a liquidated amount in
respect of any sum due under any Note.
SECTION 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
SECTION 10.10. No Recourse Against Others. No recourse for the
payment of the principal of, premium, if any, or interest on any of the Notes,
or for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company contained in
this Indenture, or in any of the Notes, or because of the creation of any
Indebtedness represented thereby, shall be had against any incorporator or
against any past, present or future partner, social part holder, other
equityholder, officer, director, employee or controlling person, as such, of the
Company or of any successor Person, either directly or through the Company or
any successor Person, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Notes.
SECTION 10.11. Successors. All agreements of the Company in
this Indenture and the Notes shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 10.12. Duplicate Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.
SECTION 10.13. Separability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 10.14. Table of Contents, Headings, Etc. The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms and provisions hereof.
76
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
INNOVA, S. DE X.X. DE C.V.
By: /s/ Xxxxx Xxxx Xxxxxxx Xxxx
---------------------------------------
Name: Xxxxx Xxxx Xxxxxxx Xxxx
Title: Chief Executive Officer
By: /s/ Xxxxxx Xxxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxx Xxxxx
Title: Chief Financial Officer
THE BANK OF NEW YORK
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
THE BANK OF NEW YORK (LUXEMBOURG)
By: /s/ Xxxx Xxxxxx
---------------------------------------
Name: Xxxx Xxxxxx
Title: Director
THE BANK OF NEW YORK (LUXEMBOURG)
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Deputy General Manager
Exhibit A
FORM OF RULE 144A NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY (AS DEFINED BELOW)
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
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.
INCLUDE PRIOR TO EFFECTIVENESS OF REGISTRATION STATEMENT:
THIS NOTE IS A RULE 144A NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY (AS DEFINED IN THE
INDENTURE) OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR SECURITIES IN DEFINITIVE FORM, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY, OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES LAWS.
NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN "OFFSHORE
TRANSACTION" PURSUANT TO RULE 903 OR 904 OF REGULATION S, (2) AGREES THAT IT
WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)(I) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION COMPLYING
WITH RULE 144A, (II) IN AN OFFSHORE TRANSACTION COMPLYING WITH THE REQUIREMENTS
OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (III)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO BE BOUND BY THE
PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT RELATING TO ALL THE NOTES.
Xx. 0 X.X.x000,000,000.00
XXXXX Xx. 00000XXX0
Innova, S. de X.X. de C.V.
9.375% Senior Notes due 2013
Rule 144A Note
Innova, S. de X.X. de C.V., a variable capital limited
liability company (sociedad de responsabilidad limitada de capital variable)
organized under the laws of the United Mexican States (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of TWO HUNDRED THIRTY THREE MILLION AND
THIRTY THOUSAND DOLLARS (U.S.$233,030,000.00) (or such lesser amount as shall be
the outstanding principal amount of this Rule 144A Note shown in Schedule A
hereto) on September 19, 2013 and to pay interest thereon from September 19,
2003 or from the most recent date to which interest has been paid or provided
for, semi-annually on March 19 and September 19 in each year (each, an "Interest
Payment Date"), commencing March 19, 2004 at the rate of 9.375% per annum, until
the principal hereof is paid or made available for payment. Interest on this
Note shall be calculated on the basis of a 360-day year consisting of twelve
30-day months. The interest so payable and paid or provided for on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest, which shall be fifteen
calendar days preceding such Interest Payment Date. Any such interest which is
payable, but is not paid or provided for, on any Interest Payment Date shall
forthwith cease to be payable to the registered Holder hereof on the relevant
Regular Record Date by virtue of having been such Holder, and may be paid to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Company, notice whereof shall be given to
the Holders of Notes of this Series not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in such Indenture.
Payment of the principal of and the interest on this Note will
be made at the office or agency of the Company maintained for that purpose in
The Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that, at the option of the
Company, interest may be paid by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register;
provided, further, that payment to DTC or any successor Depositary may be made
by wire transfer to the account designated by DTC or such successor Depositary
in writing.
This Security is a global Rule 144A Note issued on the date
hereof which represents U.S.$233,030,000.00 of the principal amount of the
Company's 9.375% Senior Notes due 2013, initially offered and sold to qualified
institutional buyers, as defined in Rule 144A under the Securities Act. This
Note is one of a duly authorized issue of securities of the Company (herein
called the "Notes") issued and to be issued in one series under an Indenture
dated as of September 19, 2003 (herein called the "Indenture") between the
Company and The Bank of New York, as Trustee (herein called the "Trustee", which
term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Notes, and of the terms upon which the Notes are,
and are to be, authenticated and delivered. This Note is one of the series
designated on the face hereof, initially limited (subject to exceptions provided
in the Indenture) to the aggregate principal amount specified in the Indenture.
If an Event of Default with respect to the Notes shall occur
and be continuing, the principal of the Notes may be declared due and payable in
the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Notes issued
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Notes Outstanding, on behalf of
the Holders of all Notes, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Notes issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note or such Notes.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Note, at the times, place and rate, and in the coin or currency, herein and
in the Indenture prescribed.
As provided in the Indenture and subject to certain
limitations set forth therein and in this Note, the transfer of this Note may be
registered on the Security Register upon surrender of this Note for registration
of transfer at the office or agency of the Company maintained for the purpose in
any place where the principal of and interest on this Note are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or by his attorney duly authorized in writing, and thereupon one
or more new Notes of this series and of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Notes are issuable in book-entry fully registered form
without coupons in minimum denominations of U.S.$10,000, and integral multiples
thereof as more fully provided in the Indenture. As provided in the Indenture,
and subject to certain limitations set forth in the Indenture and in this Note,
the Notes are exchangeable for a like aggregate principal amount of Notes of
this Series in different authorized denominations, as requested by the Holders
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith,
other than in certain cases provided in the Indenture.
Interests in this Note are exchangeable or transferable in
whole or in part for interests in the Regulation S Note, of the same series,
only if such exchange or transfer complies with the terms for transfer contained
in the Indenture.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture contains provisions whereby (i) the Company may
be discharged from its obligations with respect to the Notes (subject to certain
exceptions) or (ii) the Company may be released from its obligation under
specified covenants and agreements in the Indenture, in each case if the Company
irrevocably deposits with the Trustee money or U.S. Government Obligations
sufficient to pay and discharge the entire indebtedness on all Notes of this
series, and satisfies certain other conditions, all as more fully provided in
the Indenture.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee under the Indenture by the manual
signature of one of its authorized signatories, this Note shall not be entitled
to any benefits under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
INNOVA, S. DE X.X. DE C.V.
Attest: __________________________________ By: ____________________________
Name: Name:
Title: Title:
By: ____________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned
Indenture.
Dated: September 19, 0000 Xxx Xxxx xx Xxx Xxxx,
as Trustee
By: ____________________________
Authorized Signatory
FORM OF REVERSE OF RULE 144A NOTE
This Security is one of a duly authorized issue of Notes of
the Company designated as its 9.375% Senior Notes due 2013 (hereinafter called
the "Notes"), limited in aggregate principal amount to U.S.$233,030,000.00,
issued and to be issued under an Indenture, dated as of September 19, 2003
(hereinafter called the "Indenture"), among the Company, The Bank of New York,
as Trustee, Registrar, Paying Agent and Transfer Agent and The Bank of New York
(Luxembourg), as Luxembourg Paying Agent and Transfer Agent.
Additional Amounts. The Company will pay to the Holders of the
Notes such Additional Amounts as may become payable under Section 4.21 of the
Indenture.
Repurchase of Notes upon a Change of Control. The Company must
commence, within 30 days of the occurrence of a Change of Control, and
consummate an Offer to Purchase for all Notes then Outstanding, at a purchase
price equal to 101% of the principal amount of the Notes plus accrued interest
(if any) to the Payment Date. The Company is not required to make an Offer to
Purchase following a Change of Control if a third party makes an Offer to
Purchase that would be in compliance with the provisions described in this
section if it were made by the Company and such third party purchases (for the
consideration referred to in the immediately preceding sentence) the Notes
validly tendered and not withdrawn. Prior to the mailing of the notice to
Holders commencing such Offer to Purchase, but in any event within 30 days
following any Change of Control, the Company covenants to (i) repay in full all
indebtedness of the Company that would prohibit the repurchase of the Notes
pursuant to such Offer to Purchase or (ii) obtain any requisite consents under
instruments governing any such indebtedness of the Company to permit the
repurchase of the Notes. The Company shall first comply with the covenant in the
preceding sentence before it shall be required to repurchase Notes pursuant to
this "Repurchase of Notes upon a Change of Control" covenant.
Withholding Tax Redemption. The Notes will be subject to
redemption in whole, but not in part, at the option of the Company at any time
at 100% of their principal amount, together with accrued interest thereon, if
any, to the Redemption Date, in the event the Company has become or would become
obligated to pay, on the next date on which any amount would be payable with
respect to such Notes, any Additional Amounts in excess of those attributable to
a withholding tax rate of 10% as a result of a change in or amendment to the
laws (including any regulations, rules or rulings promulgated thereunder) of
Mexico (or any political subdivision or taxing authority thereof or therein), or
any change in or amendment to any official position regarding the application,
administration or interpretation of such laws, rules, regulations or rulings,
including a holding of a court of competent jurisdiction, which change or
amendment is announced or becomes effective on or after the Closing Date.
Notice of Redemption. Notice of redemption shall be given by
the Company to the Trustee and each Holder whose Notes are to be redeemed in
accordance with the provisions of Sections 3.02 and 3.04, respectively, of the
Indenture.
If notice of redemption has been given in the manner provided
above, the Notes specified in such notice to be redeemed shall become due and
payable on the Redemption Date at the Redemption Price stated therein, together
with accrued interest to such Redemption Date, and
on and after such date (unless the Company shall default in the payment of such
Notes at the Redemption Price and accrued interest to the Redemption Date, in
which case the principal, until paid, shall bear interest from the Redemption
Date at the rate prescribed in the Notes), such Notes shall cease to accrue
interest. Upon surrender of any Note for redemption in accordance with a notice
of redemption, such Note shall be paid and redeemed by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders registered as such
at the close of business on the relevant Regular Record Date.
All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SCHEDULE A
SCHEDULE OF EXCHANGES
The following exchanges of Notes for Notes represented by this Rule 144A Note
have been made:
Principal Amount of Change in Principal Principal amount of
this Rule 144 A Note amount of this Rule this Rule 144A Note Notation made by or
as of the date of Date exchange 144A Note due to following such on behalf of the
exchange made exchange exchange Trustee
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U.S.$
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Exhibit B
REGULATION S NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY (AS DEFINED BELOW)
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
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.
INCLUDE PRIOR TO EFFECTIVENESS OF REGISTRATION STATEMENT:
PRIOR TO EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD (AS DEFINED IN
REGULATION S ("REGULATION S") UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT")), THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES (AS DEFINED IN REGULATION S) OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, A U.S. PERSON (AS DEFINED IN REGULATION S), EXCEPT TO
A PERSON REASONABLY BELIEVED TO BE A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A ("RULE 144A") UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A AND THE INDENTURE REFERRED TO HEREIN.
THIS SECURITY IS A REGULATION S SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY (AS
DEFINED IN THE INDENTURE) OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS GLOBAL SECURITY MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY, OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO BE BOUND BY THE
PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT RELATING TO ALL THE SECURITIES.
No. 1 U.S.$66,970,000.00
CUSIP No. X00000XX0
INNOVA, S. DE X.X. DE C.V.
9.375% Senior Notes due 2013
Regulation S Note
Innova S. de X.X. de C.V., a variable capital limited
liability company (sociedad de responsabilidad limitada de capital variable),
organized under the laws of the United Mexican States (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of SIXTY SIX MILLION AND NINE HUNDRED
SEVENTY THOUSAND DOLLARS (U.S.$66,970,000.00) (or such lesser amount as shall be
the outstanding principal amount of this Regulation S Security shown in Schedule
A hereto) on September 19, 2013 and to pay interest thereon from September 19,
2003 or from the most recent date to which interest has been paid or provided
for, semiannually on March 19 and September 19 in each year (each, an "Interest
Payment Date"), commencing March 19, 2004 at the rate of 9.375% per annum, until
the principal hereof is paid or made available for payment. Interest on this
Note shall be calculated on the basis of a 360-day year consisting of twelve
30-day months. The interest so payable and paid or provided for on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest, which shall be fifteen
calendar days preceding such Interest Payment Date. Any such interest which is
payable, but is not paid or provided for, on any Interest Payment Date shall
forthwith cease to be payable to the registered Holder hereof on the relevant
Regular Record Date by virtue of having been such Holder, and may be paid to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Company, notice whereof shall be given to
the Holders of Notes of this Series not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in such Indenture.
Payment of the principal of and the interest on this Note will
be made at the office or agency of the Company maintained for that purpose in
The Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that, at the option of the
Company, interest may be paid by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register;
provided, further, that payment to DTC or any successor Depositary may be made
by wire transfer to the account designated by DTC or such successor Depositary
in writing.
This Note is a Regulation S Note issued on the date hereof
which represents U.S.$66,970,000.00 of the principal amount of the Company's
9.375% Senior Notes due 2013 initially offered and sold to non-U.S. persons as
defined in Regulation S under the Securities Act. This Note is one of a duly
authorized issue of securities of the Company (herein called the "Notes") issued
and to be issued in one series under an Indenture dated as of September 19, 2003
(the "Indenture") between the Company and The Bank of New York, as Trustee
(herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Notes, and of the
terms upon which the Notes are, and are to be, authenticated and delivered. This
Note is one of the series designated on the face hereof, limited (subject to
exceptions provided in the Indenture) to the aggregate principal amount
specified in the Indenture.
If an Event of Default with respect to the Notes shall occur
and be continuing, the principal of the Notes may be declared due and payable in
the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Notes issued
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Notes at the time Outstanding of each series affected thereby. The Indenture
also contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Notes at the time Outstanding, on behalf of
the Holders of all Notes, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Notes issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note or such Notes.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Note, at the times, place and rate, and in the coin or currency, herein and
in the Indenture prescribed.
As provided in the Indenture and subject to certain
limitations set forth therein and in this Note, the transfer of this Note may be
registered on the Security Register upon surrender of this Note for registration
of transfer at the office or agency of the Company maintained for the purpose in
any place where the principal of and interest on this Note are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or by his attorney duly authorized in writing, and thereupon one
or more new Notes of this series and of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Notes are issuable in book-entry fully registered form
without coupons in minimum denominations of U.S.$1,000, and integral multiples
thereof as more fully provided in the Indenture. As provided in the Indenture,
and subject to certain limitations set forth in the Indenture and in this Note,
the Notes are exchangeable for a like aggregate principal amount of Notes of
this Series in different authorized denominations, as requested by the Holders
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith,
other than in certain cases provided in the Indenture.
Interests in this Note are exchangeable or transferable in
whole or in part for interests in the Rule 144A Note only if such exchange or
transfer complies with the terms for transfer contained in the Indenture.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture contains provisions whereby (i) the Company may
be discharged from its obligations with respect to the Notes (subject to certain
exceptions) or (ii) the Company may be released from its obligation under
specified covenants and agreements in the Indenture, in each case if the Company
irrevocably deposits with the Trustee money or U.S. Government Obligations
sufficient to pay and discharge the entire indebtedness on all Notes of this
series, and satisfies certain other conditions, all as more fully provided in
the Indenture.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee under the Indenture by the manual
signature of one of its authorized signatories, this Note shall not be entitled
to any benefits under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
INNOVA, S. DE X.X. DE C.V.
Attest: __________________________________ By: ____________________________
Name: Name:
Title: Title:
By: ____________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned
Indenture.
Dated: September 19, 0000 Xxx Xxxx xx Xxx Xxxx, as Trustee
By: ____________________________
Authorized Signatory
FORM OF REVERSE OF REGULATION S NOTE
This Security is one of a duly authorized issue of Notes of
the Company designated as its 9.375% Senior Notes due 2013 (hereinafter called
the "Notes"), limited in aggregate principal amount to U.S.$66,970,000.00,
issued and to be issued under an Indenture, dated as of September 19, 2003
(hereinafter called the "Indenture"), among the Company, The Bank of New York,
as Trustee, Registrar, Paying Agent and Transfer Agent and The Bank of New York
(Luxembourg), as Luxembourg Paying Agent and Transfer Agent.
Additional Amounts. The Company will pay to the Holders of the
Notes such Additional Amounts as may become payable under Section 4.21 of the
Indenture.
Repurchase of Notes upon a Change of Control. The Company must
commence, within 30 days of the occurrence of a Change of Control, and
consummate an Offer to Purchase for all Notes then Outstanding, at a purchase
price equal to 101% of the principal amount of the Notes plus accrued interest
(if any) to the Payment Date. The Company is not required to make an Offer to
Purchase following a Change of Control if a third party makes an Offer to
Purchase that would be in compliance with the provisions described in this
section if it were made by the Company and such third party purchases (for the
consideration referred to in the immediately preceding sentence) the Notes
validly tendered and not withdrawn. Prior to the mailing of the notice to
Holders commencing such Offer to Purchase, but in any event within 30 days
following any Change of Control, the Company covenants to (i) repay in full all
indebtedness of the Company that would prohibit the repurchase of the Notes
pursuant to such Offer to Purchase or (ii) obtain any requisite consents under
instruments governing any such indebtedness of the Company to permit the
repurchase of the Notes. The Company shall first comply with the covenant in the
preceding sentence before it shall be required to repurchase Notes pursuant to
this "Repurchase of Notes upon a Change of Control" covenant.
Withholding Tax Redemption. The Notes will be subject to
redemption in whole, but not in part, at the option of the Company at any time
at 100% of their principal amount, together with accrued interest thereon, if
any, to the Redemption Date, in the event the Company has become or would become
obligated to pay, on the next date on which any amount would be payable with
respect to such Notes, any Additional Amounts in excess of those attributable to
a withholding tax rate of 10% as a result of a change in or amendment to the
laws (including any regulations, rules or rulings promulgated thereunder) of
Mexico (or any political subdivision or taxing authority thereof or therein), or
any change in or amendment to any official position regarding the application,
administration or interpretation of such laws, rules, regulations or rulings,
including a holding of a court of competent jurisdiction, which change or
amendment is announced or becomes effective on or after the Closing Date.
Notice of Redemption. Notice of redemption shall be given by
the Company to the Trustee and each Holder whose Notes are to be redeemed in
accordance with the provisions of Sections 3.02 and 3.04, respectively, of the
Indenture.
If notice of redemption has been given in the manner provided
above, the Notes specified in such notice to be redeemed shall become due and
payable on the Redemption Date at the Redemption Price stated therein, together
with accrued interest to such Redemption Date, and
on and after such date (unless the Company shall default in the payment of such
Notes at the Redemption Price and accrued interest to the Redemption Date, in
which case the principal, until paid, shall bear interest from the Redemption
Date at the rate prescribed in the Notes), such Notes shall cease to accrue
interest. Upon surrender of any Note for redemption in accordance with a notice
of redemption, such Note shall be paid and redeemed by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders registered as such
at the close of business on the relevant Regular Record Date.
All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SCHEDULE A
SCHEDULE OF EXCHANGES
The following exchanges of Notes for Notes represented by this Rule 144A Note
have been made:
Principal Change in Principal
Amount of this Principal amount of this
Regulation S Note as amount of this Regulation S Note Notation made
of the date of Date exchange Regulation S Note following such by or on behalf
exchange made due to exchange exchange of the Trustee
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U.S.$
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Exhibit C
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RULE 144A NOTE
TO REGULATION S NOTE
PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Innova, S. de X.X. de C.V.
U.S.$_______ ___% Senior Notes due 20__ (the "Notes")
Reference is hereby made to the Indenture dated as of ______,
200_, between THE BANK OF NEW YORK (the "Trustee"), INNOVA, S. DE X.X. DE C.V.
(the "Company") and THE BANK OF NEW YORK (LUXEMBOURG), as Luxembourg Paying
Agent and Transfer Agent (the "Indenture"). Capitalized terms not defined in
this Certificate shall have the meanings given to them in the Indenture.
This Certificate relates to ______________ principal amount of
Notes represented by a beneficial interest in the Rule 144A Note (CUSIP
No._______) held with the Depositary by or on behalf of [transferor] as
beneficial owner (the "Transferor"). The Transferor has requested an exchange or
transfer of its beneficial interest for an interest in the Regulation S Security
(CUSIP (CINS) No._______) held through the Depositary.
In connection with such request and in respect of such Notes,
the Transferor does hereby certify that such exchange or transfer has been
effected in accordance with the transfer restrictions set forth in the Notes and
pursuant to and in accordance with Rule 903 or Rule 904 (as applicable) of
Regulation S under the Securities Act, and accordingly the Transferor does
hereby certify that:
(1) the Transferor is not a distributor of the Notes, an
affiliate of the Company or any such distributor or a
person acting on behalf of any of the foregoing;
(2) the offer of the Notes was not made to a person in
the United States;
(3) either: (A) at the time the buy order was
originated, the transferee was outside the
United States or the Transferor and any
person acting on its 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
offshore securities market and neither the
Transferor nor any person acting on its
behalf knows that the transaction was
prearranged with a buyer in the United
States;
(4) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or
904(b) of Regulation S, as applicable;
(5) if the Transferor is a dealer in securities or has
received a selling concession, fee or other
remuneration in respect of the Securities covered by
this transfer certificate then the requirements of
Rule 904(c)(1) have been satisfied; and
(6) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities
Act;
This Certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Initial Purchasers of
such Notes being exchanged or transferred. Terms used in this Certificate and
not otherwise defined in the Indenture have the meanings set forth in Regulation
S under the Securities Act.
[Insert Name of Transferor]
By:________________________________________
Name:
Title:
Dated: __________________
cc: Innova, S. de X.X. de C.V.
Exhibit D
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
OR EXCHANGE FROM RULE 144A NOTE
TO REGULATION S NOTE AFTER THE
EXPIRATION OF THE RESTRICTED PERIOD
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Innova, S. de X.X. de C.V.
U.S.$_____ __% Senior Notes due 20__ (the "Notes")
Reference is hereby made to the Indenture dated as of _______,
200_, between THE BANK OF NEW YORK (the "Trustee"), INNOVA, S. DE X.X. DE C.V.
(the "Company") and THE BANK OF NEW YORK (LUXEMBOURG), as Luxembourg Paying
Agent and Transfer Agent (the "Indenture"). Capitalized terms not defined in
this Certificate shall have the meanings given to them in the Indenture.
This Certificate relates to ______________ principal amount of
Notes represented by a beneficial interest in the Rule 144A Note (CUSIP No.
_______) held with the Depositary by or on behalf of [transferor] as beneficial
owner (the "Transferor"). The Transferor has requested an exchange or transfer
of its interest for an interest in the Regulation S Note (CUSIP (CINS) No.
________) to be held by the Depositary.
In connection with such request and in respect of such Notes,
the Transferor does hereby certify that such exchange or transfer has been
effected in accordance with the transfer restrictions set forth in the Notes and
that, with respect to transfers made in reliance on Regulation S under the
Securities Act, pursuant to and in accordance with Regulation S under the
Securities Act, and accordingly the Transferor does hereby further certify that:
(i) (A) the offer of the Notes was not made
to a person in the United States;
(B) either: (1) at the time the buy
order was originated, the transferee
was outside the United States or the
Transferor and any person acting on
its behalf reasonably believed that
the transferee was outside the
United States, or
(2) the transaction was
executed in, on or through the
facilities of a designated offshore
securities market and neither the
Transferor nor any person acting on
its behalf knows that the
transaction was pre-arranged with a
buyer in the United States;
(C) no directed selling efforts have
been made in contravention of the
requirements of Rule 903(b) or
904(b) of Regulation S, as
applicable; and
(D) the transaction is not part of a
plan or scheme to evade the
registration requirements of the
Securities Act.
or (ii) With respect to transfers made in reliance
on Rule 144 under the Securities Act, the
Notes are being transferred in a transaction
permitted by Rule 144 under the Securities
Act.
This Certificate and the statements contained herein
are made for your benefit and the benefit of the Company and the Initial
Purchasers of such Notes being exchanged or transferred. Terms used in this
Certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By: _______________________________________
Name:
Title:
Dated: __________________
cc: Innova, S. de X.X. de C.V.
Exhibit E
FORM OF TRANSFER CERTIFICATE FOR TRANSFER OR
EXCHANGE FROM REGULATION S NOTE
TO RULE 144A NOTE
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Innova, S. de X.X. de C.V.
U.S.$_____ __% Senior Notes due 20__ (the "Notes")
Reference is hereby made to the Indenture dated as of _______,
200_, between THE BANK OF NEW YORK (the "Trustee"), INNOVA, S. DE X.X. DE C.V.
(the "Company") and THE BANK OF NEW YORK (LUXEMBOURG), as Luxembourg Paying
Agent and Transfer Agent (the "Indenture"). Capitalized terms not defined in
this Certificate shall have the meanings given to them in the Indenture.
This Certificate relates to _________________________________
principal amount of Notes which are held in the form of the Regulation S Note
(CUSIP No. ________) through the Depositary by or on behalf of transferor as
beneficial owner (the "Transferor"). The Transferor has requested an exchange or
transfer of its interest in the Notes for an interest in the Rule 144A Note
(CUSIP NO. _________).
In connection with such request, and in respect of such Notes,
the Transferor does hereby certify that such transfer is being effected in
accordance with the transfer restrictions set forth in the Indenture and
pursuant to and in accordance with Rule 144A under the United States Securities
Act of 1933, as amended (the "Securities Act") to a transferee that the
Transferor reasonably believes is purchasing the Securities for its own account
or an account with respect to which the transferee exercises sole investment
discretion and the transferee and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in each case in a transaction meeting
the requirements of Rule 144A and in accordance with any applicable securities
laws of any state of the United States or any other jurisdiction.
This Certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Initial Purchasers of
the Notes being transferred.
[Insert Name of Transferor]
By:___________________________________________
Name:
Title:
Dated: _______________________
cc: Innova, S. de X.X. de C.V.
