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EXHIBIT 4.1
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AMERICAN TELECASTING, INC.,
and
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
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Second Supplemental Indenture
Dated as of April 28, 1998
to Indenture
Dated as of June 23, 1994
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Senior Discount Notes due 2004
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SECOND SUPPLEMENTAL INDENTURE, dated as of April 28, 1998 (the
"Second Supplemental Indenture"), to the Indenture, dated as of June 23, 1994
and as amended as of August 10, 1995 (the "Indenture"), between AMERICAN
TELECASTING, INC., a Delaware corporation(the "Company") and U.S. BANK TRUST
NATIONAL ASSOCIATION (formerly known as FIRST TRUST NATIONAL ASSOCIATION) (the
"Trustee").
RECITALS
WHEREAS, the Company has heretofore executed and delivered to
the Trustee the Indenture, providing for, among other things, the creation and
issuance by the Company of its Senior Discount Notes due 2004 (the
"Securities"); and
WHEREAS, Section 902 of the Indenture provides that the
Company, when authorized by a Board Resolution, and the Trustee, with the
written consent of the Holders of at least a majority in aggregate principal
amount at Stated Maturity of the Outstanding Securities, may enter into an
indenture or indentures supplemental to the Indenture, subject to certain
exceptions specified in Section 902 of the Indenture; and
WHEREAS, the parties hereto are entering into this First
Supplemental Indenture to amend Section 1016 of the Indenture and to waive
application of certain covenants contained in Section 1016 of the Indenture in
the case of certain prior dispositions (the "Proposals"); and
WHEREAS, the Holders of at least a majority in aggregate
principal amount of the Securities outstanding have duly consented to the
Proposals; and
WHEREAS, the conditions set forth in the Indenture for the
execution and delivery of this Second Supplemental Indenture have been complied
with; and
WHEREAS, all things necessary to make this Second Supplemental
Indenture a valid agreement of the Company and the Trustee, in accordance with
its terms, and a valid amendment of, and supplement to, the Indenture have been
done;
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NOW THEREFORE:
In consideration of the premises, the parties have executed and
delivered this Second Supplemental Indenture, and the Company hereby covenants
and agrees with the Trustee, for the equal and proportionate benefit of all
Holders of the Securities, that the Indenture is supplemented and amended, to
the extent and for the purposes expressed herein, as follows:
Section 1. Definitions. For all purposes of this Second Supplemental
Indenture, except as otherwise expressly provided or unless the context
otherwise requires, terms used herein shall have the meanings assigned to them
in the Indenture.
Section 2. Waiver of Section 1016 of the Indenture. The application of
Section 1016 of the Indenture is hereby waived in the case of any and all net
proceeds received by the Company or any of its subsidiaries prior to April 9,
1998 from dispositions that have been completed prior to April 9, 1998,
including pursuant to an Asset Purchase Agreement, dated as of March 18, 1997,
by and among certain subsidiaries of the Company, BellSouth Corporation
("BellSouth") and a subsidiary of BellSouth.
Section 3. Amendment of Section 1016(a)(iii) of the Indenture. Section
1016(a)(iii) of the Indenture is hereby amended to read in its entirety as
follows:
SECTION 1016. LIMITATIONS ON CERTAIN ASSET DISPOSITIONS
The Company shall not, and shall not permit any Restricted Subsidiary
to, make any Asset Disposition unless:
(a) the Company or the Restricted Subsidiary, as the case may be,
receives consideration for such disposition at least equal to the fair market
value (as determined by the Board of Directors, whose good faith determination
shall be conclusive) for the assets sold or disposed of as part of such
disposition and (b) if such disposition along with other dispositions during the
twelve months immediately preceding such disposition would result in Net
Available Proceeds in excess of $1,000,000, then
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(i) the Company or the Restricted Subsidiary, as the case
may be, receives consideration for such disposition
at least equal to the fair market value of the assets
sold or disposed of as part of such disposition (as
determined by the Board of Directors whose good faith
determination shall be conclusive and evidenced by a
board resolution),
(ii) if less than 85% of the consideration for such
disposition consists of cash or readily marketable
cash equivalents or the assumption of Debt of the
Company or such Restricted Subsidiary or other
obligations relating to such assets and release from
all liability on the Debt or other obligations
assumed, then the remainder of such consideration
consists of property or assets that will be owned by
the Company or a Restricted Subsidiary and used in
the transmission of video, voice and data and related
businesses and services that thereafter will be
conducted by the Company or such Restricted
Subsidiary,
(iii) if the fair market value of the property and assets
being disposed of as part of such Asset Disposition
exceeds $20 million (as determined by the Board of
Directors, whose good faith determination shall be
conclusive and evidenced by a Board Resolution), then
the Company receives a written opinion from an
independent banking or appraisal firm of national
standing with experience in appraising the terms and
conditions of the type of transaction involved as to
the fairness to the Company or such Restricted
Subsidiary, as the case may be, from a financial
point of view of such disposition, and
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(iv) all Net Available Proceeds from such disposition are
applied within 270 days of such disposition:
(1) first, to prepay or repay Outstanding Debt of
the Company or any Restricted Subsidiary to the
extent the terms of the governing documents
therefor require such repayment and, at the
Company's option, to prepay or repay Debt of the
Company or any Restricted Subsidiary that
prohibits purchases of the Securities and/or Debt
of the Company that ranks pari passu in right of
payment with the Securities and/or Debt of any
Restricted Subsidiary;
(2) second, to the extent of any such Net Available
Proceeds remaining after application thereof
pursuant to clause (1) above, to the acquisition
of assets (including interests in a Person that
becomes a Restricted Subsidiary as a result of
such acquisition) used in the transmission of
video, voice and data and related businesses and
services of, the Company or a Restricted
Subsidiary; and
(3) third, to the extent of any such Net Available
Proceeds remaining after application thereof
pursuant to clauses (1) and (2) above, (i) first
prepay or repay all Outstanding Debt of the
Company or any Restricted Subsidiary that
prohibits purchases of the Securities and (ii)
then, to the extent of any remaining Net Available
Proceeds, to make an Offer to Purchase Outstanding
Securities at a purchase price equal to 100% of
the Accreted Value thereof to any Purchase Date
prior to June 15, 1999 or 100% of the principal
amount thereof plus accrued and unpaid
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interest, if any, to any Purchase Date on or after
June 15, 1999 (and to any other Debt of the
Company ranking pari passu with the Securities
containing substantially similar provisions
requiring offers to purchase upon asset sales),
provided that if the amount of such Net Available
Proceeds remaining after application thereof
pursuant to clauses (1) and (2) and subclause (i)
of this clause (3) above is less than $5 million,
the Company's obligation to make an Offer to
Purchase may be deferred until such time as Net
Available Proceeds, plus the aggregate amount of
Net Available Proceeds resulting from any
subsequent Asset Disposition or Asset Dispositions
and remaining after application thereof pursuant
to clauses (1) and (2) and subclause (i) of this
clause (3) above are equal to or greater than $5
million (such lesser amount to be carried for xxxx
on a cumulative basis for any fiscal year), at
which time the Company shall be obligated to make
such Offer to Purchase at a purchase price equal
to 100% of the Accreted Value thereof to any
Purchase Date prior to June 15, 1999 or 100% of
the principal amount thereof plus accrued and
unpaid interest, if any, to any Purchase Date on
and after June 15, 1999. If the aggregate
principal amount of Net Available Proceeds, the
Trustee shall select the Securities to be pu
chased on a pro rata basis. Upon completion of
such Offer to Purchase, the amount of Net
Available Proceeds shall be reset at zero.
Provided, that the provisions described in the preceding paragraph
shall not apply (i) to a transaction of the type described in clause (x) or (y)
of the first paragraph of Section 801 and consummated in compliance
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with the provisions of Article Eight, or (ii) to any and all net proceeds
received by the Company or any of its subsidiaries from (1) the up to $46.2
million in proceeds that may be received in connection with dispositions
("Future BellSouth Dispositions") contemplated by the Asset Purchase Agreement,
dated as of March 18, 1997 (the "BellSouth Agreement"), by and among certain
subsidiaries of the Company, BellSouth Corporation ("BellSouth") and a
subsidiary of BellSouth, that close after the expiration date of the April 1998
Offer, depending on the total number of channel leases and licenses ultimately
delivered by the Company to BellSouth, and (2) the up to approximately $6.4
million in proceeds that may be received from an escrow account that was
established under the BellSouth Agreement in connection with a disposition
completed prior to April 8, 1998 (the "Escrow Proceeds"). In the case of
proceeds received pursuant to subsection (ii) above, no later than 30 days after
the aggregate amount of Net Available Proceeds resulting from Future BellSouth
Dispositions and the Escrow Proceeds first equals or is greater than $10
million, the Company shall be obligated to utilize 57% of the amount of such Net
Available Proceeds to make an offer to purchase the outstanding 2005 Notes and
the Securities (a "Required Offer"), which Required Offer shall remain open for
a minimum of 20 business days, unless extended, at a purchase price in cash
equal to the greater of (i) $280.50 per $1,000 principal amount at maturity in
the case of the Securities and $247.50 per $1,000 principal amount at maturity
in the case of the 2005 Notes and (ii) the market value of the 2005 Notes and
the Securities as determined on the date preceding the date of the commencement
of the Required Offer by Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation,
the financial advisor to the Company. If the aggregate principal amount of 2005
Notes and Securities is tendered by Holders thereof pursuant to a Required Offer
exceeds the amount of the 57% of the Net Available Proceeds to be used for the
purchase of the 2005 Notes and the Securities, the 2005 Notes and the Securities
shall be selected for purchase on a pro rata basis. Upon completion of a
Required Offer, the amount of Net Available Proceeds shall be reset at zero. The
43% of the amount of such Net Available Proceeds not to be utilized for such
Required Offer to purchase, as well as the amount of the 57% of the Net
Available Proceeds to be used to purchase 2005 Notes and Securities pursuant to
such Required Offer that
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is in excess of the amount required to purchase the 2005 Notes and Securities
tendered by holders thereof (the "Unencumbered Net Available Proceeds"), shall
not be subject to any such tender obligation and shall be freely available for
use by the Company as it deems appropriate. In addition, any and all financial
advisor, legal and other costs and fees incurred by the Company in connection
with completing or facilitating any Future BellSouth Dispositions, Escrow
Proceeds, or any Required Offer as described in this Statement shall be deemed
to be reduce Net Available Proceeds resulting from Future BellSouth Dispositions
and Escrow Proceeds that are required to be used to purchase Notes. At such time
that the amount of Net Available Proceeds resulting from additional Future
BellSouth Dispositions or Escrow Proceeds equals or is greater than $5 million
(which amount shall not include the Unencumbered Net Available Proceeds), the
Company shall be obligated to utilize 57% of the amount of such additional Net
Available Proceeds to make a subsequent Required Offer, subject to the same
terms and conditions set forth above applicable to the initial Required Offer.
This proviso does not restrict the Company from using Unencumbered Net Available
Proceeds for the purchase or other retirement of 2005 Notes or Securities on
such terms as it determines to be appropriate.
For purposes of this Section 1016, the "April 1998 Offer" shall mean
the offer by the Company to purchase for cash a portion of the 2005 Notes and a
portion of the Securities at a cash price in the case of the Securities equal to
$255 per $1,000 principal amount at maturity of the Securities purchased and in
the case of the 2005 Notes equal to $225 per $1,000 principal amount at maturity
of the 2005 Notes purchased pursuant to the Offer to Purchase and Consent
Solicitation Statement, dated April 9, 1998, and the accompanying Consent and
Letter of Transmittal.
Section 4. Operation of Proposed Amendment. The Supplemental Indenture
will become effective upon the execution by the Company and the Trustee on the
Consent Date. The Proposals, however, will not become operative unless the 2005
Notes and Securities validly tendered pursuant to the April 1998 Offer are
accepted for purchase by the Company in accordance with the terms and conditions
set forth therein. Thereafter, the Proposals
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will be binding on each Holder of the Securities remaining outstanding, whether
or not such Holder tendered Securities pursuant to the April 1998 Offer. The
Indenture, without giving effect to the Proposals, will remain in effect until
the Proposals becomes operative. If the April 1998 Offer is terminated or
withdrawn, or the Securities are never accepted for purchase, the Supplemental
Indenture will never become operative.
Section 5. Recitals. The recitals of fact contained herein shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or adequacy of this Second Supplemental
Indenture or the due execution hereof by the Company.
Section 6. Ratification and Confirmation of Indenture. Except as hereby
expressly amended, the Indenture is in all respects ratified and confirmed and
all the terms, provisions and conditions thereof shall be and remain in full
force and effect.
Section 7. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SECOND SUPPLEMENTAL INDENTURE, WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES.
Section 8. Successors. All agreements of the Company in this Second
Supplemental Indenture and the Securities shall bind its successors. All
agreements of the Trustee in this Second Supplemental Indenture shall bind its
successors.
Section 9. Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all such
executed copies together represent the same agreement.
Section 10. Separability. In case any provision of this Second
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and a Holder shall have no claim therefor against
any party hereto.
Section 11. Headings. The headings of the sections
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of this Second Supplemental 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 or provisions hereof.
Section 12. Trust Indenture Act Controls. If any provision of this
Second Supplemental Indenture limits, qualifies or conflicts with the duties
imposed by TIA Sections 310-317 by operation of TIA Sections 318(c), the
imposed duties shall control.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed as of the day and year first above
written.
AMERICAN TELECASTING, INC.
By:
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Name:
Title:
U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Trustee
By:
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Name:
Title:
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