ITSA-INTERCONTINENTAL TELECOMUNICACOES LTDA.
as Issuer
TV FILME BRASILIA SERVICOS DE TELECOMUNICACOES LTDA.
TV FILME GOIANIA SERVICOS DE TELECOMUNICACOES LTDA.
TV FILME BELEM SERVICOS DE TELECOMUNICACOES LTDA.
TV FILME OPERACOES LTDA.
TV FILME SISTEMAS LTDA.
LINK EXPRESS SERVICOS DE TELECOMUNICACOES LTDA.
As Guarantors
12% SENIOR SECURED NOTES DUE 2004
INDENTURE
Dated as of July 20, 2000
THE BANK OF NEW YORK
as Trustee
<PAGE>
CROSS-REFERENCE TABLE1
------------------------------ --------------------
Trust Indenture Act Section Indenture Section
310 (a)(1)............... 7.10
(a)(2)............... 7.10
(a)(3)............... N.A.
(a)(4)............... N.A.
(a)(5)............... 7.10
(b).................. 7.3, 7.10
(c).................. N.A.
311 (a).................. 7.11
(b).................. 7.11
(c).................. N.A.
312 (a).................. 2.5
(b).................. 12.3
(c).................. 12.3
313 (a).................. 7.6
(b)(1)............... N.A.
(b)(2)............... 7.6, 7.7
(c).................. 7.6, 12.2
(d).................. 7.6
314 (a).................. 4.3
(a)(4)............ 12.5
(b).................. N.A.
(c)(1)............... 12.4
(c)(2)............... 12.4
(c)(3)............... N.A.
(d).................. 10.3, 10.4
(e).................. 12.5
(f).................. N.A.
315 (a).................. 7.1(b)
(b).................. 7.5, 12.2
(c).................. 7.1(a)
(d).................. 7.1(c)
(e).................. 6.11
316 (a)(last sentence)... 2.9
(a)(1)(A)............ 6.5
(a)(1)(B)............ 6.4
(a)(2)............... N.A.
(b).................. 6.7
(c).................. 9.4
317 (a)(1)............... 6.8
(a)(2)............... 6.9
(b).................. 2.4
318 (a).................. 12.1
(b).................. N.A.
(c).................. 12.1
------------------------------
N.A. means not applicable
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.......................1
SECTION 1.1. DEFINITIONS......................................................1
SECTION 1.2. OTHER DEFINITIONS...............................................14
SECTION 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT...............15
SECTION 1.4. RULES OF CONSTRUCTION...........................................15
ARTICLE 2 THE NOTES.......................................................16
SECTION 2.1. FORM AND DATING.................................................16
SECTION 2.2. EXECUTION AND AUTHENTICATION....................................17
SECTION 2.3. TRUSTEE, REGISTRAR AND PAYING AGENT.............................18
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST.............................18
SECTION 2.5. HOLDER LISTS....................................................19
SECTION 2.6. TRANSFER AND EXCHANGE...........................................19
SECTION 2.7. CERTIFICATED NOTES..............................................22
SECTION 2.8. REPLACEMENT NOTES...............................................23
SECTION 2.9. OUTSTANDING NOTES...............................................23
SECTION 2.10. TREASURY NOTES..................................................23
SECTION 2.11. TEMPORARY NOTES.................................................23
SECTION 2.12. CANCELLATION....................................................24
SECTION 2.13. DEFAULTED INTEREST..............................................24
SECTION 2.14. PERSONS DEEMED OWNERS...........................................24
SECTION 2.15. CUSIP NUMBERS...................................................24
ARTICLE 3 REDEMPTION AND PREPAYMENT.......................................24
SECTION 3.1. NOTICES TO TRUSTEE..............................................24
SECTION 3.3. NOTICE OF REDEMPTION............................................25
SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION..................................26
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE.....................................26
SECTION 3.6. NOTES REDEEMED IN PART..........................................26
SECTION 3.7. OPTIONAL REDEMPTION.............................................26
SECTION 3.8. MANDATORY REDEMPTION............................................27
ARTICLE 4 COVENANTS.......................................................27
SECTION 4.1. PAYMENT OF NOTES................................................27
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.................................27
SECTION 4.3. PROVISIONS OF REPORTS AND OTHER INFORMATION.....................28
SECTION 4.4. COMPLIANCE CERTIFICATE..........................................28
SECTION 4.5. TAXES...........................................................29
SECTION 4.6. STAY, EXTENSION AND USURY LAWS..................................29
SECTION 4.7. LIMITATION ON RESTRICTED PAYMENTS...............................29
SECTION 4.8. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES..........................................31
SECTION 4.9. LIMITATION ON INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK...31
SECTION 4.10. LIMITATION ON ASSET SALES.......................................32
SECTION 4.11. LIMITATION ON TRANSACTIONS WITH AFFILIATES......................35
SECTION 4.12. LIMITATION ON LIENS.............................................35
SECTION 4.13. GUARANTORS......................................................36
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL......................36
SECTION 4.15. CORPORATE EXISTENCE.............................................37
SECTION 4.16. LIMITATION ON ASSET SWAPS.......................................38
SECTION 4.17. LIMITATION ON SALE LEASEBACK TRANSACTIONS.......................38
SECTION 4.18. MAINTENANCE OF BUSINESS, PROPERTIES AND INSURANCE...............38
SECTION 4.19. IMPAIRMENT OF SECURITY INTEREST.................................39
SECTION 4.20. PAYMENT OF ADDITIONAL AMOUNTS...................................39
ARTICLE 5 SUCCESSORS......................................................40
SECTION 5.1. MERGER, CONSOLIDATION, OR SALE OF ASSETS........................40
SECTION 5.2. SUCCESSOR COMPANY SUBSTITUTED...................................42
ARTICLE 6 DEFAULTS AND REMEDIES...........................................42
SECTION 6.1. EVENTS OF DEFAULT...............................................42
SECTION 6.2. ACCELERATION....................................................44
SECTION 6.3. OTHER REMEDIES..................................................44
SECTION 6.4. WAIVER OF PAST DEFAULTS.........................................44
SECTION 6.5. CONTROL BY MAJORITY.............................................44
SECTION 6.6. LIMITATION ON SUITS.............................................44
SECTION 6.7. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT...................45
SECTION 6.8. COLLECTION SUIT BY TRUSTEE......................................45
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM................................45
SECTION 6.10. PRIORITIES......................................................46
SECTION 6.11. UNDERTAKING FOR COSTS...........................................46
ARTICLE 7 TRUSTEE.........................................................46
SECTION 7.1. DUTIES OF TRUSTEE...............................................46
SECTION 7.2. RIGHTS OF TRUSTEE...............................................47
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE....................................48
SECTION 7.4. TRUSTEE'S DISCLAIMER............................................49
SECTION 7.5. NOTICE OF DEFAULTS..............................................49
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES......................49
SECTION 7.7. COMPENSATION AND INDEMNITY......................................49
SECTION 7.8. REPLACEMENT OF TRUSTEE..........................................50
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC................................51
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION...................................51
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY...............51
SECTION 7.12. LIMITATION ON DUTY OF TRUSTEE IN RESPECT OF COLLATERAL;
INDEMNIFICATION...............................................51
ARTICLE 8.....................................................................52
SECTION 8.1. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE........52
SECTION 8.2. LEGAL DEFEASANCE................................................52
SECTION 8.3. COVENANT DEFEASANCE.............................................52
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE......................52
SECTION 8.5. DISCHARGE.......................................................53
SECTION 8.6. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST...54
SECTION 8.7. REPAYMENT TO COMPANY............................................54
SECTION 8.8. REINSTATEMENT...................................................55
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER................................55
SECTION 9.1. WITHOUT CONSENT OF HOLDERS OF NOTES.............................55
SECTION 9.2. WITH CONSENT OF HOLDERS OF NOTES................................55
SECTION 9.3. COMPLIANCE WITH TRUST INDENTURE ACT.............................56
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS...............................57
SECTION 9.5. NOTATION ON OR EXCHANGE OF NOTES................................57
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.................................57
SECTION 9.7. PAYMENTS FOR CONSENT............................................57
ARTICLE 10 COLLATERAL AND SECURITY.........................................58
SECTION 10.1. SECURITY DOCUMENTS..............................................58
SECTION 10.2. OPINIONS........................................................58
SECTION 10.3. RELEASE OF COLLATERAL...........................................59
SECTION 10.4. CERTIFICATES OF THE COMPANY.....................................59
SECTION 10.5. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE
UNDER THE SECURITY DOCUMENTS....................................59
SECTION 10.6. AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER
THE SECURITY DOCUMENTS..........................................59
SECTION 10.7. TRUSTEE NOT LIABLE FOR ACTIONS OF COLLATERAL AGENT..............60
ARTICLE 11 GUARANTEE OF NOTES..............................................60
SECTION 11.1. GUARANTEE......................................................60
SECTION 11.2. GUARANTEE UNCONDITIONAL, ETC...................................61
SECTION 11.3. LIMITATION OF GUARANTOR'S LIABILITY............................61
SECTION 11.4. CONTRIBUTION...................................................62
SECTION 11.5. RELEASE........................................................62
SECTION 11.6. ADDITIONAL GUARANTORS..........................................62
SECTION 11.7. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.............62
SECTION 11.8. SUCCESSORS AND ASSIGNS.........................................62
SECTION 11.9. WAIVER OF STAY, EXTENSION OR USURY LAWS........................63
ARTICLE 12 MISCELLANEOUS..................................................63
SECTION 12.1. TRUST INDENTURE ACT CONTROLS...................................63
SECTION 12.2. NOTICES........................................................63
SECTION 12.3. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES...............................................64
SECTION 12.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.............64
SECTION 12.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..................65
SECTION 12.6. RULES BY TRUSTEE AND AGENTS....................................65
SECTION 12.7. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHERS.....................................................65
SECTION 12.8. GOVERNING LAW..................................................65
SECTION 12.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..................65
SECTION 12.10. SUCCESSORS.....................................................65
SECTION 12.11. SEVERABILITY...................................................66
SECTION 12.12. ORIGINALS......................................................66
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC...............................66
SECTION 12.14. COUNTERPARTS...................................................66
SECTION 12.15. AGENT FOR SERVICE; SUBMISSION TO JURISDICTION;
WAIVER OF IMMUNITIES...........................................66
SECTION 12.16. CURRENCY OF ACCOUNT; CONVERSION OF CURRENCY; FOREIGN
EXCHANGE RESTRICTIONS..........................................67
<PAGE>
ANNEX
Annex I EXISTING INDEBTEDNESS......................................Annex-1
Annex II GUARANTORS.................................................Annex-2
EXHIBITS
Exhibit A FORM OF NOTE...................................................A-1
Exhibit B CERTIFICATE OF TRANSFEROR......................................B-1
Exhibit C FORM OF MASTER SECURITY AGREEMENT..............................C-1
Exhibit D FORM OF MORTGAGE...............................................D-1
Exhibit E FORM OF COLLATERAL AGENCY AGREEMENT............................E-1
<PAGE>
This INDENTURE, dated as of July 20, 2000, is by and among
ITSA-Intercontinental Telecomunicacoes Ltda., a Brazilian limited liability
company, as issuer (the "Company"), TV Filme Brasilia Servicos de
Telecomunicacoes Ltda., a Brazilian limited liability company, TV Filme Goiania
Servicos de Telecomunicacoes Ltda., a Brazilian limited liability company, TV
Filme Belem Servicos de Telecomunicacoes Ltda., a Brazilian limited liability
company, TV Filme Sistemas Ltda., a Brazilian limited liability company, TV
Filme Operacoes Ltda., a Brazilian limited liability company, and Link Express
Servicos de Telecomunicacoes Ltda., a Brazilian limited liability company,
guarantors (collectively, the "Guarantors") and The Bank of New York, as trustee
(the "Trustee").
RECITALS
WHEREAS, the Company has issued to TV Filme, Inc., in a private
placement offering, its promissory note, dated December 20, 1996, in the
principal amount of US$140,000,000 (the "Existing Note"), the entire principal
amount of which remains outstanding on the date hereof;
WHEREAS, TV Filme, Inc. has transferred its assets to ITSA Ltd., a
Cayman Islands corporation ("ITSA CAYMAN"), as a result of which ITSA Cayman has
become the current holder of the Existing Note;
WHEREAS, ITSA Cayman, on the date hereof, is contributing to the
capital of the Company US$105,000,000 principal amount of the Existing Note;
WHEREAS, ITSA Cayman and the Company desire to restructure, amend and
restate the remaining US$35,000,000 outstanding principal amount of the Existing
Note as 12% Senior Secured Notes due 2004 of the Company (the "Notes"), subject
to the terms and conditions of this Indenture; and
WHEREAS, for all purposes, the provisions of this Indenture shall not
be construed to mean that the Existing Note has been prepaid or terminated
before its original final maturity;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises, the parties listed above mutually covenant and
agree, for the equal and ratable benefit of all Holders of the Notes, as
follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
"Accounts" means all present and future rights of the Company and each
Restricted Subsidiary to payment for goods sold or leased or for services
rendered, which are not evidenced by instruments or chattel paper, and whether
or not earned by performance.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, will mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED that
beneficial ownership of 10% or more of the voting securities of a Person will be
deemed to be control.
<PAGE>
"Agent" means any Registrar or Paying Agent.
"Applicable Law," except as the context may otherwise require, means
all applicable laws, rules, regulations, ordinances, judgments, decrees,
injunctions, writs and orders of any court or governmental agency or authority
and rules, regulations, orders, licenses and permits of any United States or
Brazilian federal, state, provincial, municipal, regional, or other governmental
body, instrumentality, agency or authority, in each case in any way applicable
to the Company, ITSA Cayman, any Guarantor or the Collateral (or the ownership
or use thereof) and with respect to ITSA Ltd., the Company or any Guarantor,
such Person's "Estatutos Sociales," Articles of Association, Memorandum of
Association and/or other organizational or governing documents.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback or similar arrangement) other than sales or dispositions in
the ordinary course of business consistent with past practices; and (ii) the
issuance or sale by the Company or any of its Restricted Subsidiaries of Equity
Interests of any of the Company's Restricted Subsidiaries. Notwithstanding the
foregoing, none of the following will be deemed an Asset Sale: (a) a transfer of
assets by the Company to a Restricted Subsidiary that is a Guarantor or by a
Restricted Subsidiary to the Company or to another Restricted Subsidiary that is
a Guarantor; (b) a Restricted Payment that is permitted under Section 4.7; (c)
dispositions in any fiscal year with Net Proceeds in the aggregate amount of
US$500,000 (or the equivalent thereof at time of determination) or less; (d) an
Asset Swap that is permitted under Section 4.16; (e) a contribution to an
Unrestricted Subsidiary which complies with Section 4.7; (f) a sale and
leaseback which complies with Section 4.17; (g) any liquidation of any Cash
Equivalent; (h) the issuance or sale of Equity Interests of a Restricted
Subsidiary to the Company or one of its other Restricted Subsidiaries; (i) sales
or other dispositions of excess inventory of decoders or antennae; (j) sales or
other dispositions of the assets or Capital Stock of TV Filme Programadora
Ltda., but only if and to the extent that consideration other than cash is
received for such sales or other dispositions; and (k) sales or issuances of the
Capital Stock of a Restricted Subsidiary to Persons other than the Company or
another Restricted Subsidiary in consideration of the transfer or contribution
to the Restricted Subsidiary of assets that (i) have a value at least equal to
the Fair Market Value of such Capital Stock at the time of such transaction and
(ii) would constitute a Related Business Investment if acquired by such
Restricted Subsidiary with Net Proceeds of an Asset Sale; PROVIDED that, if such
Restricted Subsidiary is a Guarantor, such sale or issuance of Capital Stock
will not impair the Guarantee given by such Restricted Subsidiary and, PROVIDED,
further, that the acquisition of such assets constitutes a Permitted Investment.
"Asset Swap" means the execution of a definitive agreement, subject
only to approvals of the Ministry of Communications or such other applicable
Brazilian governmental authority or agency and other customary closing
conditions, that the Company in good faith believes will be satisfied, for a
substantially concurrent purchase and sale, or exchange, of Telecommunications
Assets between the Company or any of its Restricted Subsidiaries and another
Person or group of Persons who are Affiliates of one another; PROVIDED that any
amendment to or waiver of any closing condition which individually or in the
aggregate is material to the Asset Swap will be deemed to be a new Asset Swap.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Authority" means any national, federal, state, provincial, municipal
or local government or quasi-governmental agency or authority.
"Bankruptcy Law" means Title 11, United States Code, or Brazilian
Decree Law No. 7,661 of June 21, 1945 as each may be amended from time to time,
or any similar federal, state or foreign law relating to bankruptcy, insolvency,
receivership, winding-up, liquidation, reorganization, "concordata" or relief of
debtors, that is applicable to the Company or any of its Subsidiaries.
"Brazil" means the Federative Republic of Brazil.
2
<PAGE>
"Brazilian GAAP" means generally accepted accounting principles in
Brazil, applied on a consistent basis.
"Business Day" means any day other than a Saturday, Sunday, public
holiday or day on which banking institutions in New York City (or, with respect
to any payments or transfers to be made by the Trustee or any Agent, as
applicable, in the city where such Trustee or Agent is located) are authorized
or obligated by law to close.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights, quotas or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the Brazilian or United States government or any agency
or instrumentality thereof having maturities of not more than twelve months from
the date of acquisition, (ii) certificates of deposit and eurodollar time
deposits with maturities of twelve months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any Brazilian regulated bank or member bank of the
U.S. Federal Reserve System having capital and surplus in excess of
US$500,000,000 (or equivalent thereof at the time of determination) (or a branch
of any such bank), (iii) repurchase obligations with a term of not more than
seven calendar days for underlying securities of the types described in clauses
(i) and (ii) above entered into with any financial institution meeting the
qualifications specified in clause (ii) above and (iv) commercial paper having
the rating of at least P-1 from Moody's or at least A-1 from S&P and in each
case maturing within 180 calendar days after the date of acquisition.
"Casualty" means, with respect to any Collateral, loss of, material
damage to or destruction of all or any part of such Collateral.
"Certificated Note" means a certificated Note bearing the securities
legend set forth in Section 2.6(f).
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act), (ii) the adoption of a plan relating to the liquidation or dissolution of
the Company, (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation, but excluding any foreclosure on the
Collateral by the Trustee) the result of which is that any "person" (as defined
above), becomes the "beneficial owner" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 35%
of the voting stock of the Company or (iv) the first day on which a majority of
the members of the Board of Directors of the Company are not Continuing
Directors.
"Collateral" means (i) all of the Capital Stock of the Company and its
Restricted Subsidiaries which is owned by the Company or another Restricted
Subsidiary (subject to the limitations set forth in the Master Security
Agreement), (ii) non-cash consideration received as consideration for an Asset
Sale pursuant to Section 4.10, and Related Business Investments acquired with
Net Proceeds from an Asset Sale, Insurance Proceeds or Condemnation Proceeds,
(iii) all Collateral Property and all of the other assets (other than Capital
Stock (except as provided for in clause (i) or (ii)) or cash and Cash
3
<PAGE>
Equivalents (except as provided for in this clause (iii)), whether now existing
or from time to time hereafter acquired, of the Company or any Restricted
Subsidiary that is a Guarantor, including, without limitation, any and all real
property and leasehold interests in real property now or hereafter owned by the
Company or any such Restricted Subsidiary, all Improvements thereon, all
Equipment, Fixtures, Inventory, Accounts, the Collateral Account and all monies,
Cash Equivalents, securities and instruments deposited or required to be
deposited in the Collateral Account, copyrights (including all reissues and
renewals thereof), patents (including all reissues and renewals thereof),
licenses used in the Telecommunications Business, (subject to the limitations
set forth in the Master Security Agreement), trademarks, trade secrets, trade
secret rights, contracts, contract rights, general intangibles, goods,
instruments, documents, and all proceeds and products of any and all of the
foregoing, and (iv) any other property or assets securing the Notes and proceeds
of any and all of the foregoing from time to time pursuant to this Indenture or
any Security Document.
"Collateral Account" means, collectively, each collateral account
established by the Company or applicable Guarantor, as the case may be, and the
Collateral Agent in accordance with the terms and conditions of the Master
Security Agreement.
"Collateral Agency Agreement" means the Collateral Agency Agreement,
dated as of July 20, 2000, among ITSA Cayman, Sub Inc., the Company, the
Guarantors, the Trustee and the Collateral Agent, substantially in the form of
Exhibit E hereto, as amended, supplemented or otherwise modified from time to
time.
"Collateral Agent" means, initially, HSBC Bank USA, and any successor
thereto or other collateral agent appointed by the Trustee or the Holders of the
Notes pursuant to any Security Document.
"Collateral Property" means any and all real property and leasehold
interests in real property (and all Fixtures and Improvements located thereon)
now or hereafter owned by the Company or any Restricted Subsidiary that is a
Guarantor.
"Commission" or "SEC" means the Securities and Exchange Commission,
and any successor thereto.
"Common Equity Interests" means (i) with respect to a person which is
a corporation, any and all shares, interests or other participations in, and
other equivalents (however designated and whether voting or nonvoting) of such
Person's Common Stock and includes, without limitation, all series and classes
of such Common Stock and (ii) with respect to a Person which is not a
corporation, Equity Interests which have characteristics similar in all material
respects to those of Common Stock of a corporation.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Condemnation" means any taking of the Collateral or any part thereof,
in or by condemnation, expropriation, or similar proceedings, eminent domain
proceedings, seizure or forfeiture, pursuant to any law, general or special, or
by reason of the temporary requisition of the use or occupancy of the
Collateral, or any part thereof, by any Authority.
"Condemnation Proceeds" means any awards, proceeds, payment or other
compensation arising out of a Condemnation.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus, to the
extent deducted in computing Consolidated Net Income, (i) an amount equal to any
extraordinary loss plus any net loss realized in connection with an Asset Sale,
(ii) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, (iii) Consolidated Interest Expense and
(iv) depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) of such Person and its Restricted Subsidiaries for such
period, and other non-cash charges (excluding any such non-cash charge to the
extent that it represents an accrual of or reserve for cash charges in any
4
<PAGE>
future period or amortization of a prepaid cash expense that was paid in a prior
period), minus (v) non-cash items increasing consolidated revenues in
determining such Consolidated Net Income for such period (excluding any items
which represent the reversal of any accrual of, or cash reserves for,
anticipated cash charges in any prior period and excluding the recognition of
deferred sign-on or hook-up fee revenue), in each case, on a consolidated basis
and determined in accordance with GAAP and (vi) to the extent included in
computing Consolidated Net Income, an amount equal to any extraordinary gain.
Notwithstanding the foregoing, the amounts referred to in clauses (i) through
(vi) of the preceding sentence with respect to Restricted Subsidiaries will only
be added to (deducted from) Consolidated Net Income to compute Consolidated Cash
Flow to the extent (and in the same proportion) that the Net Income of such
Restricted Subsidiary was included in calculating the Consolidated Net Income of
such Person and only if a corresponding amount would be permitted at the date of
determination to be paid as a dividend to such Person by such Restricted
Subsidiary without direct or indirect restriction pursuant to the terms of its
charter and by-laws and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Restricted
Subsidiary or its stockholders.
"Consolidated Indebtedness" means, with respect to any Person as of
any date of determination, the sum, without duplication, of (i) the total amount
of Indebtedness of such Person and its Restricted Subsidiaries plus (ii) the
aggregate liquidation value of all Disqualified Stock of such Person, in each
case determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
interest payments in respect of Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries (if such
Guarantee or Lien is called upon and to the extent such interest payments are
satisfied under or by means of such Lien), commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations) and (ii)
the consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period, in each case, on a consolidated basis
and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; PROVIDED that (i) the Net Income (but not loss) of any Person that is
not a Guarantor or that is accounted for by the equity method of accounting will
be included only to the extent of the amount of dividends or distributions paid
in cash to the specified Person as to which Consolidated Net Income is being
calculated or a Restricted Subsidiary thereof which is a Guarantor, (ii) the Net
Income of any Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary of such Net Income to the specified Person as to which Consolidated
Net Income is being calculated would not be permitted at the date of
determination directly or indirectly, pursuant to the terms of such Restricted
Subsidiary's constitutional documents and all agreements, instruments,
judgments, decrees, orders, statutes, rules or governmental regulations
applicable to such Restricted Subsidiary or its stockholders, (iii) the Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition will be excluded, (iv) the
cumulative effect of a change in accounting principles will be excluded and (v)
the Net Income of any Unrestricted Subsidiary will be excluded, except to the
extent of the amount of dividends or distributions paid in cash by such
Unrestricted Subsidiary to the specified Person as to which Consolidated Net
Income is being calculated or its Restricted Subsidiaries that are Guarantors.
"Consolidated Net Worth" means, (a) with respect to a partnership as
of any date, the sum of the common and preferred partnership interests of such
Person and its consolidated Restricted Subsidiaries as of such date, as
determined on a consolidated basis in accordance with GAAP, and (b) with respect
to any other Person as of any date, the sum of (i) the consolidated equity of
the common equity holders of such Person and its consolidated Restricted
Subsidiaries as of such date plus (ii) the respective amounts reported on such
Person's balance sheet as of such date with respect to any series of preferred
equity; PROVIDED that the preferred partnership interests or the preferred
5
<PAGE>
equity, as the case may be, is not (A) Disqualified Stock and (B) by its terms
entitled to the payment of dividends or other distributions, unless such
dividends or other distributions may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only to the
extent of any cash received by such Person upon issuance of such preferred
partnership interests or preferred equity, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the Effective Date in the book value of any
asset owned by such Person or a consolidated Restricted Subsidiary of such
Person, (y) all investments as of such date in unconsolidated Subsidiaries and
in Persons that are not Guarantors (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"Continuing Director" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board on the Effective Date, or (ii) was nominated for election or elected to
such Board with the approval of two-thirds of the following members of such
Board: (a) the members of such Board who are described in clause (i) of this
definition and (b) members of such Board previously nominated for election or
elected to such Board as described in this clause (ii).
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 12.2 hereof or such other address as to which the
Trustee may give notice to the Company.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator, custodian, "sindico," "comissario" or similar official under any
Bankruptcy Law.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Depository" means, The Depository Trust Company, until a successor
shall have been appointed and becomes such pursuant to the applicable provision
of this Indenture, and, thereafter, "Depository" will mean or include such
successor.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 calendar days after the date on which the Notes mature.
"Effective Date" means July 20, 2000.
"Equipment" means all equipment now or hereafter owned by the Company
or any Restricted Subsidiary that is a Guarantor or in which any of them has or
shall acquire an interest, now or hereafter located on, attached to or contained
in or used or usable in connection with any Collateral Property, and shall also
mean and include all building materials, construction materials, personal
property constituting furniture, fittings, appliances, apparatus, leasehold
improvements, machinery, devices, interior improvements, appurtenances,
equipment, plant, furnishings, computers, electronic data processing equipment,
telecommunications equipment and other fixed assets now owned or hereafter
acquired by the Company or any Restricted Subsidiary that is a Guarantor and now
or hereafter used in the operation of any Collateral Property, and all proceeds
thereof and all additions to, substitutions for, replacements of or accessions
to any of the items recited as aforesaid and all attachments, components, parts
(including spare parts) and accessories, whether installed thereon or affixed
thereto, and wherever located, now or hereafter owned by the Company or any
Restricted Subsidiary that is a Guarantor, and used or intended to be used in
connection with, or with the operation of, any Collateral Property or the
buildings, structures, or other improvements now or hereafter located at any
Collateral Property, or in connection with any construction being conducted or
which may be conducted thereon, all regardless of whether the same are located
on any Collateral Property or are located elsewhere (including, without
limitation, in warehouses or other storage facilities or in the possession of or
on the premises of a bailee, vendor or manufacturer) for purposes of
manufacture, storage, fabrication or transportation and all extensions and
replacements to, and proceeds of, any of the foregoing.
6
<PAGE>
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the Effective Date listed on Annex I to
this Indenture, until such amounts are repaid.
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy; PROVIDED that if such value exceeds
US$1,000,000 (or equivalent thereof at the time of determination), such
determination will be made in good faith by the Board of Directors of the
Company.
"Fixtures" means all Equipment now owned or hereafter acquired by the
Company or any Restricted Subsidiary that is a Guarantor which is so related to
the building or land in which or on which it is located that it is deemed
fixtures or real property under the laws of the state or province in which it is
located, together with all accessions, appurtenances, additions, replacements
and substitutions for any of the foregoing and the proceeds thereof (including,
without limitation, gas and electric fixtures, radiators, heaters, engines and
machinery, boilers, ranges, elevators and motors, plumbing, heating and
ventilating fixtures, elevators, carpeting and other floor coverings, water
heaters, awnings and storm sashes, and cleaning apparatus which are or shall be
attached to the building or land on which they are located, including any
additions, enlargements, extensions, modifications, repairs or replacements
thereto).
"GAAP" means, as to any determination date, generally accepted
accounting principles in the United States of America set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as have been approved by a significant segment of the accounting
profession, which are in effect on such date.
"Government Securities" means direct obligations of, or obligations
fully guaranteed by, or participations 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.
"Guarantee" means any obligation, contingent or otherwise, of any
Person, directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay for (or advance or supply funds
for the purchase or payment of) such Indebtedness or other obligation of such
other Person (whether arising by virtue of partnership arrangements, or by
arrangement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay or to maintain financial statement conditions or otherwise) or (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); PROVIDED, that
the term "Guarantee" will 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 Obligations" has the meaning provided in Section 11.1.
"Guarantor" means each Restricted Subsidiary of the Company existing
on the Effective Date and identified on Annex II, and each Restricted Subsidiary
created or acquired after the Effective Date that executes and delivers a
Guarantee of the Obligations under the Notes.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest or currency exchange rate swap
agreements, interest or currency exchange rate cap agreements and interest or
7
<PAGE>
currency exchange rate collar agreements and (ii) other agreements or
arrangements, in any case, designed to protect such Person against fluctuations
in interest or currency exchange rates.
"Holder" or "Securityholder" means a Person in whose name a Note is
registered on the Register.
"Improvements" means all buildings, structures and improvements of
every nature whatsoever to the extent such items are not owned by tenants or by
equipment lessors that lease such property to the Company or a Restricted
Subsidiary, and are situated on the land comprising any Collateral Property on
the Effective Date or thereafter.
"Indebtedness" means, with respect to any Person, without duplication,
(i) any liability, contingent or otherwise, of such Person (a) for borrowed
money (whether or not the recourse of the lender is to the whole of the assets
of such Person or only to a portion thereof), whether as a cash advance, bill,
overdraft or money market facility loan, or (b) evidenced by a note, debenture
or similar instrument or, to the extent drawn upon and not reimbursed, letters
of credit or other similar liability evidenced by book-entry mechanism, or (c)
for the payment of money relating to a Capital Lease Obligation or other
obligation relating to the deferred purchase price of property; PROVIDED,
HOWEVER, that Indebtedness will not include trade payables arising in the
ordinary course of business consistent with past practice, or (d) in respect of
any Hedging Obligation; (ii) any liability of others of the kind described in
the preceding clause (i) which the Person has Guaranteed or which is otherwise
its legal liability; and (iii) any obligation secured by a Lien to which the
property or assets of such Person are subject, whether or not the obligations
secured thereby shall have been assumed by or will otherwise be such Person's
legal liability; PROVIDED, HOWEVER, for purposes of this clause (iii), if such
obligation is not assumed by such Person, or not otherwise the legal liability
of such Person, such obligation will only be included in Indebtedness to the
extent of the Fair Market Value of such property or assets.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Insurance Proceeds" means any payment, proceeds or other amounts
received at any time under any insurance policy as compensation in respect of a
Casualty, PROVIDED, that, business interruption insurance proceeds shall not
constitute Insurance Proceeds.
"Interest Payment Date" means June 20 and December 20 of each year,
commencing on December 20, 2000.
"Inventory" means all of the Company's and each Restricted
Subsidiary's (to the extent such Restricted Subsidiary is a Guarantor) now owned
and hereafter existing or acquired raw materials, work-in-process and finished
goods inventory held by the Company and each Restricted Subsidiary (to the
extent such Restricted Subsidiary is a Guarantor) for manufacture, sale or
lease, wherever located.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to directors, officers and employees made in the ordinary course of
business), purchases or other acquisitions (for consideration) of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP; PROVIDED that an acquisition of assets, Equity Interests or other
securities by the Company or any of its Restricted Subsidiaries for
consideration consisting of Common Stock of the Company will not be deemed to be
an Investment.
"Lien" means, with respect to any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, whether or not filed, recorded or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement, and any lease in the nature thereof).
"Loss Event" means a Condemnation or Casualty involving an actual or
constructive total loss or agreed or compromised actual or constructive total
loss of all or substantially all of any Collateral Property except where the
Company reasonably concludes that Restoration of such Collateral Property can be
made in accordance with this Indenture and elects to do so in an Officers'
Certificate delivered to the Trustee within 120 calendar days of the relevant
Condemnation or Casualty.
8
<PAGE>
"Master Security Agreement" means the Master Security Agreement, dated
as of July 20, 2000, among ITSA Cayman, Sub Inc., the Company and the
Guarantors, as grantors, and the Collateral Agent, substantially in the form of
Exhibit C hereto, as amended, supplemented or otherwise modified from time to
time.
"Material Telecommunications License" means one or more authorizations
issued by the Ministry of Communications or other applicable Brazilian
governmental authority or agency used or useful in the operation of a
Telecommunications Business that individually or collectively have a Fair Market
Value exceeding US$1,000,000 (or the equivalent thereof at time of
determination).
"Moody's" means Moody's Investors Service, Inc., or any successor to
its rating business.
"Mortgage" means the Public Deed of Mortgage, to be executed and
delivered as soon as all required documentation therefor is obtained, but in any
case not later than 45 days after the Effective Date, among TV Filme Brasilia
Servicos de Telecomunicacoes Ltda., TV Filme Goiania Servicos de
Telecomunicacoes Ltda., TV Filme Belem Servicos de Telecomunicacoes Ltda. and TV
Filme Sistemas Ltda., as mortgagors, the Collateral Agent, as mortgagee, and
ITSA, TV Filme Operacoes Ltda. and Link Express Servicos de Telecomunicacoes
Ltda., as intervening parties, substantially in the form of Exhibit D hereto, as
amended, supplemented or otherwise modified from time to time.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person for such period, determined in accordance with GAAP
and before any reduction in respect of preferred stock dividends, excluding,
however, (i) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with (a) any Asset
Sales (including, without limitation, dispositions pursuant to sale and
leaseback transactions) or (b) the disposition of any securities by such Person
or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness
of such Person or any of its Restricted Subsidiaries and (ii) any extraordinary
or nonrecurring gain (but not loss), together with any related provision for
taxes on such extraordinary or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions), any
relocation expenses incurred as a result thereof, any taxes paid or payable by
the Company or any of its Restricted Subsidiaries as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be paid to any Person (other than the
Company, its Restricted Subsidiaries or its Affiliates) having a Lien on the
assets subject to the Asset Sale, amounts required to be paid to any Person
(other than the Company or any Restricted Subsidiary) owning a beneficial
interest in the assets subject to the Asset Sale, and any reserve for
adjustments in respect of the sale price of such asset or assets established in
accordance with GAAP; PROVIDED, HOWEVER, that if such proceeds are received by
any such Restricted Subsidiary, all of the Equity Interests of which are not
owned directly or indirectly by the Company, as a result of an Asset Sale by it,
Net Proceeds for purposes of Section 4.10 will mean the proportion of such
proceeds (as so adjusted) which is the same as the proportion of such Equity
Interests owned directly or indirectly by the Company.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor
or otherwise), (ii) no default with respect to which (including any rights that
the holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity and (iii) as to which the
lenders have expressly waived any recourse which they may have, in law, equity
or otherwise, whether based on misrepresentation, control, ownership or
9
<PAGE>
otherwise, to the Company or any of its Restricted Subsidiaries, including,
without limitation, a waiver of the benefits of the provisions of Section
1111(b) of Title 11, United States Code, as amended.
"Note Custodian" means the custodian with respect to the Global Note
or any successor person thereto and shall initially be the Trustee.
"Notes" means the Company's 12% Senior Secured Notes due 2004 issued
under this Indenture as an amendment and restatement of the Existing Note.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the chief executive
officer, the president, the chief operating officer, the chief financial
officer, the chief accounting officer, the treasurer, any assistant treasurer,
the controller, the secretary, any assistant secretary or any vice-president of
such Person.
"Officers' Certificate" means a certificate signed on behalf of a
Person by two Officers of such Person, one of whom must be the principal
executive officer, the principal financial officer or the principal accounting
officer of such Person, that meets the requirements set forth in this Indenture.
"Operating Agreement" means any and all agreements between the Company
or a Restricted Subsidiary, on the one hand, and another Restricted Subsidiary
or Affiliate of the Company that holds any license or permit related to the
business of the Company and its Subsidiaries, on the other hand.
"Opinion of Counsel" means an opinion, to be obtained at the sole cost
and expense of the Company or any Subsidiary of the Company, from legal counsel
who is reasonably acceptable to the Trustee, that meets the requirements of
Section 12.5 hereof. The counsel may be counsel to the Company, any Subsidiary
of the Company or the Trustee.
"Permits" means all licenses, permits, variances, approvals and
certificates used in connection with the ownership, operation, improvement, use
or occupancy of or installations at, any Collateral Property (including, without
limitation, business licenses, state health department licenses, licenses to
conduct business and all such other permits, licenses and rights, obtained from
any Authority concerning ownership, improvement, operation, use or occupancy of
such Collateral Property).
"Permitted Investments" means (i) any Investment in the Company or in
a Restricted Subsidiary of the Company which is a Guarantor; (ii) any Investment
in Cash Equivalents; (iii) any Investment by the Company or any of its
Restricted Subsidiaries in a Person engaged in the Telecommunications Business
if, as a result of such Investment, (a) such Person becomes a Restricted
Subsidiary of the Company and a Guarantor or (b) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a Restricted
Subsidiary of the Company which is a Guarantor; (iv) Investments in Restricted
Subsidiaries that are not Guarantors in an aggregate amount not to exceed
US$5,000,000 (or the equivalent thereof at the time of determination), PROVIDED,
HOWEVER, that Investments in such Restricted Subsidiaries will be excluded from
the calculation of such aggregate amount (A) if concurrently with such
Investment such Restricted Subsidiary becomes a Guarantor or (B) from the time
after such Investment such Restricted Subsidiary becomes a Guarantor; (v)
Investments in Persons engaged in the Telecommunications Business, taken
together with all other Investments made pursuant to this clause (v), in an
aggregate amount not to exceed US$5,000,000 (or the equivalent thereof at time
of determination); (vi) any Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10; (vii) loans and advances to officers, directors
and employees for business-related travel expenses, moving expenses and other
similar expenses, in each case incurred in the ordinary course of business;
(viii) Investments the payment for which consists exclusively of Equity
Interests (excluding Disqualified Stock) of the Company; (ix) any Investment
acquired by the Company or any of its Restricted Subsidiaries (A) in exchange
for any other Investment or accounts receivable held by the Company or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (B) as a result of the foreclosure by the
Company or any of its Restricted Subsidiaries with respect to any secured
Investment; (x) Investments in shares of money market funds having assets in
excess of US$500,000,000; and (xi) Investments existing on the Effective Date.
10
<PAGE>
"Permitted Liens" means (i) Liens securing any senior secured
Indebtedness which may be incurred pursuant to clause (i) of Section 4.9(b);
(ii) Liens in favor of the Company or any of its Restricted Subsidiaries which
are Guarantors; (iii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Company or any of its Restricted
Subsidiaries, PROVIDED that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Company or
any such Restricted Subsidiary; (iv) Liens on property or securing any Acquired
Debt and which exist at the time of acquisition thereof by the Company or any of
its Restricted Subsidiaries, PROVIDED that such Liens were in existence prior to
the contemplation of such acquisition; (v) Liens arising under this Indenture in
favor of the Trustee; (vi) Liens existing on the Effective Date; (vii) Liens
arising by reason of (1) any judgment, decree or order of any court, so long as
enforcement of such Lien is effectively stayed and any appropriate legal
proceedings which may have been duly initiated for the review of such judgment,
decree or order shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired; (2) taxes not
yet delinquent or which are being contested in good faith; (3) security for
payment of workers' compensation or other insurance; (4) good faith deposits in
connection with tenders, leases and contracts (other than contracts for the
payment of money), bids, licenses, performance or similar bonds and other
obligations of a like nature, in the ordinary course of business; (5) zoning
restrictions, easements, licenses, reservations, provisions, covenants,
conditions, waivers, restrictions on the use of property or minor irregularities
of title (and with respect to leasehold interests, mortgages, obligations, liens
and other encumbrances incurred, created, assumed or permitted to exist and
arising by, through or under a landlord or owner of the leased property, with or
without consent of the lessees), none of which materially impairs the use of any
parcel of property material to the operation of the business of the Company or
any Restricted Subsidiary or the value of such property for the purpose of such
business; (6) deposits to secure public or statutory obligations or in lieu of
surety or appeal bonds; (7) surveys, exceptions, title defects, encumbrances,
easements, reservations of, or rights of others for, rights of way, sewers,
electric lines, telegraph or telephone lines and other similar purposes or
zoning or other restrictions as to the use of real property not interfering with
the ordinary conduct of the business of the Company or any of its Restricted
Subsidiaries; or (8) operation of law or statute and incurred in the ordinary
course of business, including without limitation, those in favor of mechanics,
materialmen, suppliers, laborers or employees, and, if securing sums of money,
for sums which are not yet delinquent or are being contested in good faith by
negotiations or by appropriate proceedings which suspend the collection thereof;
(viii) Liens created by the Security Documents; (ix) Liens granted by the
Company or any Restricted Subsidiary to secure Indebtedness incurred pursuant to
clause (x) of Section 4.9(b), in each case representing all or part of the cost
of purchase, lease, construction or improvement of property acquired,
constructed or improved after the date hereof owed to a Person not an Affiliate
of the Company; PROVIDED, HOWEVER, that (x) in any such case such Lien shall
extend only to the specific property of the Company or any Restricted Subsidiary
leased, acquired, constructed or improved with the proceeds of such Indebtedness
and (y) the aggregate amount of Indebtedness secured by any such Lien shall not
exceed the cost of purchase, lease, construction, or improvement of such
property and (z) such Liens shall attach to such property within 90 calendar
days of the acquisition or lease of, or completion of construction or
improvement on, such property; (x) Liens incurred in the ordinary course of
business of the Company or any of its Restricted Subsidiaries which do not
secure obligations of the Company or any Restricted Subsidiary, including,
without limitation, licenses and leases granted or made by the Company or any
Restricted Subsidiary as licensor or lessor or which secure obligations that in
the aggregate do not exceed US$2,000,000 (or the equivalent thereof at time of
determination) at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (b) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Company or any such
Restricted Subsidiary; and (xi) any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or in part, of any
Lien referred to in the foregoing clauses; PROVIDED that the principal amount of
the Indebtedness secured thereby shall not exceed the principal amount of
Indebtedness so secured immediately prior to the time of such extension, renewal
or replacement, and that such extension, renewal or replacement Lien will be
limited to all or a part of the property which secured the Lien so extended,
renewed or replaced (plus improvements on such property).
11
<PAGE>
"Permitted Refinancing Debt" means any Indebtedness of the Company or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any such Restricted Subsidiary; PROVIDED that:
(i) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Debt does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded, plus accrued interest and the amount of any premiums and
transaction costs and reasonable expenses incurred in connection therewith; (ii)
such Permitted Refinancing Debt has a final maturity date equal to or later than
the final maturity date of, and has a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Notes, such Permitted Refinancing
Debt is subordinated in right of payment to the Notes on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred only by the Company
or the Restricted Subsidiary that is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Programming Agreement" means the Programming License Agreement, dated
as of June 27, 1996, between Tevecap S.A. and the TV Filme, Inc.
"Related Business" means the businesses carried out by the Company or
a Restricted Subsidiary on the date hereof and any reasonable extensions
thereof, directly or indirectly, related to the Telecommunications Business.
"Related Business Investment" means any expenditure by the Company or
a Restricted Subsidiary, as the case may be, to acquire assets, or the Equity
Interests of any Person that will as a result become a Restricted Subsidiary and
a Guarantor and which owns assets, to be used in the ordinary course of a
Related Business of the Company or such Restricted Subsidiary, as the case may
be, which shall constitute Collateral.
"Restoration" or "Restore" means the physical repair, restoration or
rebuilding of all or any portion of the Collateral following any Casualty or
Condemnation other than a Loss Event.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of such
Person that is not an Unrestricted Subsidiary.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Security Documents" means the Master Security Agreement, the Mortgage
and the Collateral Agency Agreement.
12
<PAGE>
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the Effective Date.
"S&P" means Standard and Poor's Ratings Group, a division of
McGraw-Hill, Inc, or any successor to its rating business.
"Sub Inc." means Filme Sub, Inc., a Delaware corporation.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof).
"Telecommunications Assets" means assets used or useful in the
ownership or operation of a Telecommunications Business.
"Telecommunications Business" means, when used in reference to any
Person, that such Person, directly or indirectly, is engaged primarily in the
business of (i) transmitting video, voice or data, (ii) creating, developing or
packaging entertainment or communications programming, (iii) offering private
telephony services or (iv) evaluating, participating or pursuing any other
activity or opportunity that is related to those identified in (i), (ii) or
(iii) above.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb), and the rules and regulations thereunder, as in effect
on the date on which this Indenture is qualified under the TIA (except as
provided in Sections 9.1(e) and 9.3).
"Trading Day" with respect to a securities exchange or automated
quotation system means a day on which such exchange or system is open for a full
day of trading.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor or any subsequent successor, serving hereunder in
the capacity as Trustee.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to
a resolution of the Board of Directors of the Company, but only to the extent
that such Subsidiary (i) has no Indebtedness other than Non-Recourse Debt, (ii)
does not own any Equity Interests of, or own or hold any Lien on, any property
of the Company or any Subsidiary of the Company (other than any Subsidiary of
the Subsidiary to be so designated), (iii) has not, and the Subsidiaries of such
Subsidiary have not at the time of designation, and does not thereafter, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable with respect to any Indebtedness pursuant to which the lender has
recourse to any of the assets of the Company or any of its Restricted
Subsidiaries, (iv) is not party to any material agreement, contract, arrangement
or understanding with the Company or any of its Restricted Subsidiaries unless
the terms of any such agreement, contract, arrangement or understanding are no
less favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of the
Company, (v) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results, (vi) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries and (vii) has at least one director on its board of
directors that is not a director or executive officer of the Company or any of
its Restricted Subsidiaries and has at least one executive officer that is not a
director or executive officer of the Company or any of its Restricted
Subsidiaries. Any such designation by the Board of Directors of the Company will
13
<PAGE>
be evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Company giving effect to such
designation and an Officers' Certificate certifying that (i) such designation
complied with the foregoing conditions, (ii) was permitted under Section 4.7 and
(iii) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence of such designation. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.9, the Company will be in default of
such covenant). The Board of Directors of the Company may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary, PROVIDED that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (i) such Indebtedness
is permitted under Section 4.9, and (ii) no Default or Event of Default would be
in existence following such designation.
"U.S. Dollar Equivalent" means, with respect to any monetary amount in
a currency other than the U.S. dollar at any one time for the determination
thereof, the amount of U.S. dollars obtained by converting such foreign currency
involved in such computation into U.S. dollars at the spot rate for the purchase
of U.S. dollars with the applicable foreign currency as quoted by Reuters at
approximately 11:00 a.m. (New York City time) on the date one Business Day prior
to the date of such determination.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person 95% or more of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) will at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person.
SECTION 1.2. OTHER DEFINITIONS.
Defined in
Term Section
---- -------
"Additional Amounts" 4.20
"Affiliate Transaction" 4.11
"Asset Sale Offer" 4.10(b)
"Base Currency" 14.16(b)(i)
"Change of Control Offer" 4.14(a)
"Change of Control Payment" 4.14(a)
"Change of Control Payment Date" 4.14(b)
"Covenant Defeasance" 8.3
"Discharge" 8.5
"Event of Default" 6.1
"Excess Proceeds Amount" 4.10(b)
"Excluded Holder" 4.20
"Funding Guarantor" 11.4
"Global Note" 2.1(b)
"incur" 4.9(a)
14
<PAGE>
Defined in
Term Section
---- -------
"ITSA Cayman" Recitals
"judgment currency" 14.16(b)(i)
"Legal Defeasance" 8.2
"Net Proceeds Offer Price" 4.10(b)
"Net Proceeds Purchase Date" 4.10(b)
"Participant" 2.1(b)
"Paying Agent" 2.3
"Paying Agent Agreement" 2.3
"Payment Default" 6.1(e)
"rate of exchange" 12.16(b)(v)
"Register" 2.3
"Registrar" 2.3
"Restricted Payments" 4.7(a)
"Taxes" 4.20
SECTION 1.3. 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;
"obligor" on the Notes means the Company, each Guarantor and any
successor obligor the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.4. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions;
15
<PAGE>
(f) references to sections of or rules under the Securities Act or the
Exchange Act will be deemed to include substitute, replacement or successor
sections or rules adopted by the SEC from time to time; and
(g) "herein," "hereof" and other words or similar import refer to this
Indenture as a whole (as amended or supplemented from time to time) and not to
any particular Article, Section or other subdivision.
ARTICLE 2
THE NOTES
SECTION 2.1. FORM AND DATING.
(a) Provisions relating to the Notes are set forth in this Section
2.1. The Notes shall be substantially in the form of Exhibit A hereto which is
hereby incorporated in and expressly made a part of this Indenture. Each Note
shall be dated the date of its authentication.
(b) Global Notes. Notes issued to a Person who has an account with, or
is a member of, the Depository (a "Participant") shall be issued initially in
the form of one or more permanent global Notes in definitive, fully registered
form without interest coupons with the global securities legend and other
securities legend set forth in Exhibit A hereto (each, a " Global Note"), which
shall be deposited on behalf of the Holders of the Notes represented thereby
with the Note Custodian, and registered in the name of the Depository or a
nominee of the Depository, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the Global
Notes may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depository or its nominee, as the case may be, as
hereinafter provided.
(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to the
Global Notes deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(c), authenticate and deliver initially one or more Global Notes
that (a) shall be registered in the name of the Depository or the nominee of the
Depository and (b) shall be delivered by the Trustee to the Depository or
pursuant to the Depository's instructions or held by the Trustee as custodian
for the Depository.
Participants shall have no rights under this Indenture with respect to
any Global Note held on their behalf by the Depository or by the Trustee as the
custodian of the Depository or under such Global Note, and the Depository may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of 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 Depository
or impair, as between the Depository and its Participants, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Note.
(d) Certificated Notes. Except as provided in this Section 2.1,
Section 2.6 or Section 2.7, owners of beneficial interests in Global Notes will
not be entitled to receive physical delivery of Certificated Notes. Notes issued
to a Person who is not a Participant or will not be holding the Notes through a
Participant will receive Certificated Notes; PROVIDED, HOWEVER, that upon
transfer of such Certificated Notes to a Participant or a Person holding through
a Participant, such Certificated Notes will, unless the relevant Global Note has
previously been exchanged, be exchanged for an interest in a Global Note
pursuant to the provisions of Section 2.6.
(e) Provisions Applicable to Forms of Notes. The Notes may also have
such additional provisions, omissions, variations or substitutions as are not
inconsistent with the provisions of this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with this Indenture, any Applicable Law or
with any rules made pursuant thereto or with the rules of any securities
exchange or governmental agency or as may be determined consistently herewith by
the Officer of the Company executing such Notes, as conclusively evidenced by
his/her execution of such Notes. All Notes will be otherwise substantially
identical except as provided herein.
16
<PAGE>
Subject to the provisions of this Article 2, a registered Holder of a
beneficial interest in a Global Note may grant proxies and otherwise authorize
any Person to take any action that a Holder is entitled to take under this
Indenture or the Notes.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
An Officer will sign the Notes for the Company by manual or facsimile
signature. The Company's seal may be reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid or obligatory for any purpose or entitled to
the benefits of this Indenture until authenticated by the manual signature of
the Trustee or its authenticating agent. The signature will be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall authenticate and deliver Notes for original issue in
an aggregate principal amount of US$35,000,000 upon a written order of the
Company signed by two Officers. Such order shall specify the amount of the Notes
to be authenticated and the date on which the original issue of securities is to
be authenticated. The aggregate principal amount of Notes outstanding at any
time may not exceed US$35,000,000 except (i) as provided in Section 2.8, and
(ii) that the principal amount of the Notes will increase if, on any of the
first four Interest Payment Dates occurring after the date hereof, interest on
the Notes is, at the option of the Company, to be paid in kind instead of in
cash. Upon such an event, the Company will issue to each Holder of the Notes on
any such Interest Payment Date, and the Trustee will authenticate, upon a
written order of the Company signed by two Officers, an additional Note
substantially in the form set forth in Exhibit A registered in the name of such
Holder and having a principal amount equal to the amount of interest paid in
kind on all of the outstanding Notes held by such Holder on such Interest
Payment Date.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company 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 agent. An authenticating agent has the same
rights as the Trustee to deal with the Company or an Affiliate of the Company.
17
<PAGE>
SECTION 2.3. TRUSTEE, REGISTRAR AND PAYING AGENT.
The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar will keep a register ("Register") of the Notes and of their transfer
and exchange. The Company may also from time to time appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar in accordance
with the terms of the Amended and Restated Paying Agent Agreement, dated as of
July 20, 2000, among the Company, Deutsche Trust Bank Limited and Deutsche Bank
AG London, as the same may be amended from time to time (the "Paying Agent
Agreement"). The Company will notify the Trustee in writing of the name and
address of any Paying Agent not a party to this Indenture. If the Company fails
to appoint or maintain another entity as Registrar or Paying Agent, the Trustee
will act, subject to the last paragraph of this Section 2.3, as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar;
PROVIDED, HOWEVER, that none of the Company, its Subsidiaries or the Affiliates
of the foregoing will act (i) as Paying Agent in connection with redemptions,
offers to purchase, discharges and defeasance, as otherwise specified in this
Indenture, and (ii) as Paying Agent or Registrar if a Default or Event of
Default has occurred and is continuing.
The Company hereby appoints The Bank of New York, at its Corporate
Trust Office, as the Trustee hereunder and The Bank of New York hereby accepts
such appointment. The Trustee will have the powers and authority granted to and
conferred upon it in the Notes and hereby and such further powers and authority
to act on behalf of the Company as may be mutually agreed upon by the Company
and the Trustee, and the Trustee will keep a copy of this Indenture available
for inspection during normal business hours at its Corporate Trust Office.
The Company initially appoints The Depository Trust Company to act as
Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
to act as Note Custodian with respect to the Global Notes. Deutsche Trust Bank
Limited will continue to act in its capacity as principal Paying Agent pursuant
to the terms and conditions of the Paying Agent Agreement.
All of the terms and provisions with respect to such powers and
authority contained in the Notes are subject to and governed by the terms and
provisions hereof.
The Trustee may resign as Registrar or Paying Agent, if applicable,
upon 30 calendar days prior written notice to the Company.
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company will require each Paying Agent other than the Trustee or
the Company to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of, or premium, if any, or interest on, the Notes, and will
notify the Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment of all
such money over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) will have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee will serve as Paying Agent for the Notes.
SECTION 2.5. HOLDER LISTS.
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders pursuant to TIA Section 312(a). If the Trustee is not the Registrar,
18
<PAGE>
the Company will furnish to the Trustee at least seven Business Days before each
Interest Payment Date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may require of
the names and addresses of the Holders of Notes and the Company will strictly
comply with TIA Section 312(a).
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Certificated Notes. If Certificated Notes
are presented by a Holder to the Registrar with a request:
(i) to register the transfer of the Certificated Notes; or
(ii) to exchange such Certificated Notes for an equal principal amount
of Certificated Notes of other authorized denominations,
the Registrar will register the transfer or make the exchange as requested if
its requirements for such transactions are met; PROVIDED, HOWEVER, that the
Certificated Notes presented or surrendered for register of transfer or exchange
shall be duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar duly executed by such Holder or by such
Holder's attorney, duly authorized in writing.
(b) Restrictions on Transfer of a Certificated Note for a beneficial
interest in a Global Note. A Certificated Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Certificated
Note, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Trustee, together with:
(i certification from the Holder thereof (in substantially the form
of Exhibit B hereto) that such Certificated Note is being
transferred to a Participant or will be held through a
Participant; and
(ii written instructions from the Holder thereof directing the
Trustee to make, or to direct the Note Custodian to make, an
adjustment on its books and records with respect to the Global
Note to reflect an increase in the aggregate principal amount of
the Notes represented by such Global Note, such instructions to
contain information regarding the Depository account to be
credited with such increase;
then the Trustee shall cancel such Certificated Note and cause, or direct the
Note Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Note Custodian, the aggregate
principal amount of Notes represented by the Global Note to be increased by the
aggregate principal amount of the Certificated Note to be exchanged and shall
credit or cause to be credited to the account of the Person specified in such
instructions a beneficial interest in such Global Note equal to the principal
amount of the Certificated Note so canceled. If no applicable Global Notes are
then outstanding, the Company shall issue and the Trustee shall authenticate,
upon written order of the Company in the form of an Officers' Certificate, a new
Global Note in the appropriate principal amount.
(c Transfer and Exchange of Global Notes. (i) The transfer and
exchange of Global Notes or beneficial interests in Global Notes will be
effected through the Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depository therefor. A transferor of a beneficial interest in a Global
Note to another Global Note shall deliver to the Registrar: (A) if applicable,
instructions given in accordance with the Depository's procedures directing the
Trustee to credit or cause to be credited a beneficial interest in the
applicable Global Note in an amount equal to the beneficial interest in the
Global Note to be exchanged; and (B) a written order given in accordance with
the Depository's procedures containing information regarding the Participant
account of the Depository to be credited with such increase.
The Registrar shall, in accordance with such instructions, instruct
the Depository to increase and reduce, as applicable, the principal amount of
each applicable Global Note to the extent required and to credit to the account
of the Person specified in such instructions a beneficial interest in the
applicable Global Note and to debit from the account of the Person making the
transfer the beneficial interest in the Global Note being transferred.
19
<PAGE>
(ii) Notwithstanding any provision of this Indenture (other than the
provisions set forth in Section 2.7), a Global Note may not be
transferred as a whole except by the Depository to a nominee of
the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a
nominee of such successor Depository.
(d Transfer of a Beneficial Interest in a Global Note for a
Certificated Note. (i) Any person having a beneficial interest in a Global Note
may transfer such beneficial interest in the form of a Certificated Note to a
Person that is acquiring the Note and is not a Participant or is not holding the
Note through a Participant upon receipt by the Trustee of an instruction, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with written instructions from the Holder
thereof directing the Trustee to make, or to direct the Note Custodian to make,
an adjustment on its books and records with respect to the Global Note to
reflect a decrease in the aggregate principal amount of the Notes represented by
such Global Note, such instructions to contain information regarding the
Participant account to be debited with such decrease. Upon receipt by the
Trustee of such instructions and instruments, the Trustee or the Note Custodian,
at the direction of the Trustee, will cause, in accordance with the standing
instructions and procedures existing between the Depository and the Note
Custodian, the aggregate principal amount of the Global Note to be reduced on
its books and records and, following such reduction, the Company will execute
and the Trustee will authenticate, upon a written order of the Company signed by
two Officers, and deliver to the transferee a Certificated Note equal to the
principal amount of the Global Note being reduced.
(ii) Certificated Notes issued in exchange for a beneficial interest
in a Global Note pursuant to this Section 2.6(d) shall be
registered in such names and in such authorized denominations as
the Depository, pursuant to instructions from its Participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver
such Certificated Notes to the persons in whose names such Notes
are so registered in accordance with the instructions of the
Depository.
(e Authentication of Certificated Notes in Absence of Depository. If
at any time:
(i) the Depository for the Notes notifies the Company that the
Depository is unwilling or unable to continue as Depository for
the Global Notes or, if at any time such Depository ceases to be
a "clearing agency" registered under the Exchange Act, and a
successor Depository for the Global Notes is not appointed by the
Company within 90 calendar days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Certificated
Notes under this Indenture in exchange for all or any part of the
Notes represented by a Global Note or Global Notes,
the Depository or the Note Custodian will surrender such Global Note to the
Trustee, without charge, and then the Company will execute, and the Trustee
will, upon receipt of an authentication order in accordance with Section 2.2
hereof, authenticate and deliver in exchange for such Global Notes, Certificated
Notes in an aggregate principal amount equal to the principal amount of such
Global Notes. Such Certificated Notes will be registered in such names as the
Depository shall direct in writing.
(f Legend.
(i Each Note certificate evidencing Global Notes will bear legends
in substantially the following form:
THIS IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF
20
<PAGE>
THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE DEPOSITORY TO A
SUCCESSOR NOMINEE, OR BY THE DEPOSITORY OR NOMINEE TO A SUCCESSOR
DEPOSITORY OR TO A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON 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.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE. TRANSFERS OF
PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH IN SECTION 2.6 OF
THE INDENTURE.
(ii Each note certificate evidencing Certificated Notes will bear
legends in substantially the following form:
THIS IS A SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO.
TRANSFERS OF THIS SECURITY OR PORTIONS OF THIS SECURITY TO GLOBAL
FORM SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
INSTRUCTIONS SET FORTH IN SECTION 2.6 OF THE INDENTURE.
(g Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in Global Notes have been exchanged for Certificated
Notes, redeemed, repurchased or canceled, all Global Notes will be returned to
or retained and canceled by the Trustee or its agent in accordance with Section
2.12 hereof. At any time prior to such cancellation, if any beneficial interest
in a Global Note is exchanged for Certificated Notes, redeemed, repurchased or
canceled, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note, by the
Trustee or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
(h General Provisions Relating to Transfers and Exchanges.
(i To permit registrations of transfers and exchanges, the Company
will execute and the Trustee will authenticate Certificated Notes
and Global Notes at the Registrar's request.
(ii No service charge will be made to a Holder for any registration
of transfer or exchange, 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 similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.2, 2.11, 3.6, 3.7,
4.10, 4.14 and 9.5 hereto).
(iii All Certificated Notes and Global Notes issued upon any
registration of transfer or exchange of Certificated Notes or
Global Notes will be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Certificated Notes or Global Notes
surrendered upon such registration of transfer or exchange.
21
<PAGE>
(iv Neither the Registrar nor the Company will be required:
(A0 to issue, to register the transfer of or to exchange Notes
during a period beginning at the opening of business 15
Business Days before the day of any selection of Notes for
redemption under Article III hereof and ending at the close
of business on the day of selection; or
(B0 toregister the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C0 to register the transfer of or to exchange a Note between a
record date and the next succeeding Interest Payment Date.
(v Upon a written order of the Company signed by two Officers, the
Trustee will authenticate Certificated Notes and Global Notes in
accordance with the provisions of Section 2.2 hereof.
SECTION 2.7. CERTIFICATED NOTES.
(a A Global Note deposited with the Depository or with the Trustee as
custodian for the Depository pursuant to Section 2.1 shall be transferred to the
beneficial owners thereof in the form of Certificated Notes in an aggregate
principal amount equal to the principal amount of such Global Note, in exchange
for such Global Note, only if such transfer complies with Section 2.6 and (i)
the Depository notifies the Company that it is unwilling or unable to continue
as Depository for such Global Note or if at any time such Depository ceases to
be a "clearing agency" registered under the Exchange Act and a successor
depository is not appointed by the Company within 90 calendar days of such
notice, or (ii) an Event of Default has occurred and is continuing or (iii) the
Company, in its sole discretion, notifies the Trustee in writing that it elects
to cause the issuance of Certificated Notes under this Indenture.
(b Any Global Note that is transferable to the beneficial owners
thereof pursuant to this Section 2.7 shall be surrendered by the Depository to
the Trustee located in the Borough of Manhattan, The City of New York, to be so
transferred, in whole or from time to time in part, without charge, and the
Trustee shall authenticate, upon a written order of the Company signed by two
Officers, and deliver, upon such transfer of each portion of such Global Note,
an equal aggregate principal amount of Certificated Notes of authorized
denominations. Any portion of a Global Note transferred pursuant to this Section
2.7 shall be executed, authenticated and delivered only in denominations of
$1,000 and any integral multiple thereof and registered in such names as the
Depository shall direct.
(c In the event of the occurrence of any of the events specified in
Section 2.7(a), the Company will promptly make available to the Trustee a
reasonable supply of Certificated Notes in definitive, fully registered form
without interest coupons.
SECTION 2.8. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Note, the Company will, upon the written request of the Holder
thereof, issue and the Trustee, upon the written order of the Company signed by
two Officers of the Company, will authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, an
indemnity bond must be supplied by such Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee, any
Agent and any authenticating agent from any loss that any of them may suffer if
a Note is replaced. The Company may charge for its expenses in replacing a Note.
22
<PAGE>
Every replacement Note is an additional obligation of the Company and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
The provisions of this Section 2.8 are exclusive and will preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.9. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it (or its agent), those delivered to
it (or its agent) for cancellation, those reductions in the interest in a Global
Note effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.10 hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.8 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note (other than a mutilated Note surrendered for replacement) is held
by a bona fide purchaser (as such term is defined in Section 8-302 of the
Uniform Commercial Code as in effect in the State of New York).
If the principal amount of any Note is considered paid under Section
4.1 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company or any of its
Subsidiaries) holds, on a redemption date or maturity date, cash or Cash
Equivalents sufficient to pay Notes payable on that date, then on and after that
date such Notes will be deemed to be no longer outstanding and will cease to
accrue interest.
SECTION 2.10. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee has actual knowledge are so
owned will be so disregarded.
SECTION 2.11. TEMPORARY NOTES.
Until Certificated Notes are ready for delivery, the Company may
prepare and the Trustee will authenticate temporary Notes upon a written order
of the Company signed by two Officers of the Company. Temporary Notes will be
substantially in the form of Certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as will be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company will prepare
and the Trustee will authenticate, upon a written order of the Company signed by
two Officers, Certificated Notes in exchange for temporary Notes.
Until such exchange, Holders of temporary Notes will be entitled to
all of the benefits of this Indenture.
SECTION 2.12. CANCELLATION.
The Company at any time may deliver Notes to the Trustee or its Agent
for cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee (or its Agent) and no one else will cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
will dispose of canceled Notes in accordance with its procedures for the
disposition of canceled securities in effect as of the date of such disposition
(subject to the record retention requirement of the Exchange Act). Certification
23
<PAGE>
of the disposition of all canceled Notes will be delivered to the Company from
time to time. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee (or its Agent) for cancellation.
If the Company acquires any of the Notes, such acquisition will not operate as a
redemption or satisfaction of the indebtedness represented by such Notes unless
and until the same are surrendered to the Trustee (or its Agent) for
cancellation pursuant to this Section 2.12.
SECTION 2.13. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it will
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.1 hereof. The Company will notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date, PROVIDED that no such special record date
will be less than 10 calendar days prior to the related payment date for such
defaulted interest. At least 15 calendar days before the special record date,
the Company (or, upon the written request of the Company, the Trustee in the
name and at the expense of the Company) will mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such defaulted interest to be paid.
SECTION 2.14. PERSONS DEEMED OWNERS.
Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent, the Company and any agent of the foregoing will
deem and treat the Person in whose name any Note is registered as the absolute
owner of such Note for all purposes (including the purpose of receiving payment
of principal of and interest on such Note; PROVIDED that defaulted interest will
be paid as set forth in Section 2.13), and none of the Trustee, any Agent, the
Company or any agent of the foregoing will be affected by notice to the
contrary.
SECTION 2.15. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will print CUSIP numbers on the
Notes, and the Trustee may use CUSIP numbers in notices of redemption and
purchase as a convenience to Holders; PROVIDED, HOWEVER, that any such notices
may state that no representation is made as to the correctness of such numbers
as printed on the Notes and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption or purchase
will not be affected by any defect or omission in such numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.1. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof, it will furnish to the Trustee, at
least 30 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of Section 3.7 pursuant to which the
redemption will occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed, (iv) the redemption price and accrued and unpaid interest
and (v) whether it requests the Trustee to give notice of such redemption. Any
such notice may be canceled at any time prior to the mailing of notice of such
redemption to any Holder and will thereby be void and of no effect.
SECTION 3.2. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee will select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of any applicable Depository and securities
exchange requirements or, if the Notes are not so listed, on a pro rata basis,
24
<PAGE>
by lot or in accordance with any other method the Trustee considers fair and
appropriate and in such manner as complies with any such requirements and any
applicable legal requirements; PROVIDED that no Notes of $1,000 principal amount
or less will be redeemed in part. In the event of partial redemption by lot, the
particular Notes to be redeemed will be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected will be in amounts of $1,000 or whole multiples of $1,000; except
that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, will be
redeemed. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption.
SECTION 3.3. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company will mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at such Holder's
registered address.
The notice will identify the Notes to be redeemed and will state:
(a the redemption date;
(b the redemption price and accrued and unpaid interest;
(c if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion will be issued upon cancellation of the original Note;
(d the name and address of the Paying Agent;
(e that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f that, unless the Company defaults in making such 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 of such Notes is
to receive payment of the redemption price upon surrender to the Paying Agent of
the Notes redeemed;
(g the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company will have delivered to the Trustee, at least 40 days prior to the
redemption date (unless a shorter period is acceptable to the Trustee), an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
25
<PAGE>
SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION.
Unless otherwise stated therein, once notice of redemption is mailed
in accordance with Section 3.3 hereof, Notes called for redemption become
irrevocably due and payable on the redemption date at the redemption price.
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE.
On or prior to the redemption date, the Company will deposit with the
Paying Agent (other than the Company or any of its Subsidiaries) money
sufficient in immediately available funds to pay the redemption price of, and
accrued interest on all, Notes to be redeemed on that date. The Paying Agent
will promptly return to the Company any money deposited with the Paying Agent by
the Company in excess of the amounts necessary to pay the redemption price of,
and accrued interest on, all Notes to be redeemed. If the money is deposited on
the redemption date, such deposit will be made by 11:00 a.m. New York City time.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest will cease to accrue on
the Notes or the portions of Notes called for redemption whether or not such
Notes are presented for payment, and the only remaining right of the Holders of
such Notes will be to receive payment of the redemption price upon surrender to
the Paying Agent of the Notes redeemed. If a Note is redeemed on or after an
interest record date but on or prior to the related interest payment date, then
any accrued and unpaid interest will be paid to the Person in whose name such
Note was registered at the close of business on such record date. If any Note
called for redemption will not be so paid upon surrender for redemption because
of the failure of the Company to comply with the preceding paragraph, interest
will be paid on the unpaid principal from the redemption date until such
principal is paid and to the extent lawful, on any interest not paid on such
unpaid principal, in each case at the rate provided in the Notes and in Section
4.1 hereof.
SECTION 3.6. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company will
issue and, upon the Company's written request, the Trustee will authenticate for
the Holder at the expense of the Company a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
SECTION 3.7. OPTIONAL REDEMPTION.
(a) The Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest, if any, thereon to the
applicable redemption date, if redeemed during the twelve month period beginning
on December 20 of the years indicated below:
YEAR PERCENTAGE
----- ----------
2000 106.4375%
2001 104.2917%
2002 102.1458%
2003 and thereafter 100.0000%
(b Any redemption pursuant to this Section 3.7 will be made pursuant
to the provisions of Sections 3.1 through 3.6 hereof.
26
<PAGE>
SECTION 3.8. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.14 hereof, the Company
will not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
ARTICLE 4
COVENANTS
SECTION 4.1. PAYMENT OF NOTES.
The Company will pay or cause to be paid in the Borough of Manhattan,
The City of New York the principal of, premium, if any, and interest on the
Notes on the dates and in the manner provided in the Notes. Principal, premium,
if any, and interest will be considered paid on the date due if the Paying
Agent, if other than the Company or a Subsidiary thereof, holds as of 11:00 a.m.
New York City time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest then due. The Paying Agent will return to the Company, no
later than two Business Days following the date of payment, any money (including
accrued interest) in excess of the amounts paid on the Notes.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law to the extent that such interest is an
allowed claim enforceable against the debtor under any Bankruptcy Law) on
overdue principal and premium, if any, at a rate equal to 1% per annum in excess
of the then applicable interest rate on the Notes to the extent lawful; it will
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law to the extent that such interest is an allowed claim against the
debtor under such Bankruptcy Law) on overdue installments of interest (without
regard to any applicable grace period) from time to time on demand at the same
rate to the extent lawful.
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange 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
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; PROVIDED,
HOWEVER, that no such designation or rescission will 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 designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.3.
SECTION 4.3. PROVISIONS OF REPORTS AND OTHER INFORMATION.
(a The Company and each Guarantor will deliver to the Trustee and
each Holder within 15 calendar days after the filing of the same with the
Commission, copies of the annual reports and of the information, documents and
other reports, if any, which the Company or such Guarantor is required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company will file
with the Commission, to the extent permitted, and provide the Trustee and
Holders with such annual reports and such other information that would be
27
<PAGE>
required to be contained in a filing with the Commission if the Company were
required to file such reports under Sections 13 and 15(d) of the Exchange Act
PROVIDED, HOWEVER, that (i) such reports may be prepared in accordance with
Brazilian GAAP (with annual U.S. GAAP reconciliation in accordance with the
Commission's rules), (ii) such reports shall include, without limitation, a
balance sheet, income statement and cash flow statement and shall contain
condensed consolidating financial statements concerning the Company and its
Subsidiaries, and (iii) such annual reports shall be furnished within 105
calendar days following the end of each fiscal year of the Company. The Company
will include an unaudited consolidating balance sheet and related statements of
income and cash flows for the Company and its Subsidiaries separately
identifying the Company and its Restricted Subsidiaries as one group and the
Company's Unrestricted Subsidiaries as a separate group, in all reports
containing the consolidated financial statements (which in the case of annual
reports will be audited) of the Company and its consolidated Subsidiaries which
are required to be delivered by the Company to the Holders of Notes pursuant to
this Section 4.3, including the Company's Annual Reports on Form 20-F and any
interim reports on Form 6-K. If required by the terms thereof, the Company will
also comply with the provisions of TIA Section 314(a).
(b Delivery of such reports, information and documents to the Trustee
is for information 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 4.4. COMPLIANCE CERTIFICATE.
(a The Company will deliver to the Trustee, within 120 calendar days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Restricted Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge each of the Company and its Restricted Subsidiaries has
kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action each of the
Company and the Restricted Subsidiaries is taking or proposes to take with
respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest on the Notes are prohibited or, if such event has
occurred, a description of the event and what action each of the Company and its
Restricted Subsidiaries is taking or proposes to take with respect thereto.
(b So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.3 above will be accompanied by a
written statement of the Company's independent public accountants (who will be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that either the Company or any
of the Guarantors has violated any provisions of Article 4 or Article 5 hereof
or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants will not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.
(c The Company and each of the Guarantors will, so long as any of the
Notes are outstanding, deliver to the Trustee, forthwith upon any Officer
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
SECTION 4.5. TAXES.
The Company will pay, and will cause each of its Restricted
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except (i) such as are contested in good faith and by
28
<PAGE>
appropriate proceedings, (ii) such for which reserves or other appropriate
provision, if any, as shall be required to be made in conformity with Brazilian
GAAP, has been made therefor, or (iii) where the failure to effect such payment
is not adverse in any material respect to the Holders of the Notes.
SECTION 4.6. STAY, EXTENSION AND USURY LAWS.
The Company and each Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not,
by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law has been enacted.
SECTION 4.7. LIMITATION ON RESTRICTED PAYMENTS.
(a The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company) or to any direct or indirect holder of the
Company's Equity Interests in its capacity as such, other than dividends or
distributions (A) paid or payable in Equity Interests (other than Disqualified
Stock) of the Company or (B) paid or payable to the Company or any Restricted
Subsidiary of the Company or (C) paid or payable in respect of Equity Interests
of a Restricted Subsidiary to Persons other than the Company or a Restricted
Subsidiary of the Company on not more favorable terms than a PRO RATA basis with
dividends or distributions being paid in respect of Equity Interests held by the
Company or a Restricted Subsidiary of the Company; (ii) purchase, redeem or
otherwise acquire or retire for value any Equity Interests of the Company or any
direct or indirect parent of the Company or other Affiliate of the Company or
any Restricted Subsidiary of the Company (other than any such Equity Interests
owned by the Company or any Restricted Subsidiary of the Company which is a
Guarantor); (iii) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated to
the Notes, except at or following final maturity of such Indebtedness; or (iv)
make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(I) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(II) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments declared or made by the Company and
its Restricted Subsidiaries after the Effective Date will not
exceed, at the date of determination, the sum of (A) an amount
equal to the Company's Consolidated Cash Flow from the first day
of the Company's first full fiscal quarter following the
Effective Date to the end of the Company's most recently ended
full fiscal quarter for which internal financial statements are
available, taken as a single accounting period, less the product
of 1.5 times the Company's Consolidated Interest Expense from the
first day of the Company's first full fiscal quarter following
the Effective Date to the end of the Company's most recently
ended full fiscal quarter for which internal financial statements
are available, taken as a single accounting period, plus (B) 100%
of the aggregate amount of cash and marketable securities
contributed to the capital of the Company after the Effective
Date, plus (C) 100% of the aggregate net cash proceeds received
by the Company from the issue or sale after the Effective Date of
Equity Interests of the Company or of Disqualified Stock or debt
securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or Disqualified
Stock or convertible debt securities) sold to a Subsidiary of the
Company and other than Disqualified Stock or debt securities that
have been converted into Disqualified Stock), plus (D) to the
extent that any Restricted Investment that was made after the
Effective Date is sold for cash or otherwise liquidated or repaid
29
<PAGE>
for cash, the lesser of (1) the cash return of capital with
respect to such Restricted Investment (less the cost of
disposition, if any) and (2) the initial amount of such
Restricted Investment, plus (E) the aggregate amount of any cash
dividends or distributions on any Restricted Investment and any
repayment in cash of loans constituting Restricted Investments
and the amount of any guarantee that constituted a Restricted
Investment and is or has been released.
(b The provisions of Section 4.7(a) will not prohibit (i) the payment
of any dividend or other distribution within 60 calendar days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture; (ii) the redemption, repurchase,
retirement or other acquisition of any Equity Interests of the Company in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Company) of other Equity Interests of the
Company (other than any Disqualified Stock); PROVIDED that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition will be excluded from clause (II)(C) of Section
4.7(a); (iii) the defeasance, redemption, retirement or acquisition for value or
repurchase of subordinated Indebtedness with the net cash proceeds from an
incurrence of Permitted Refinancing Debt or the substantially concurrent sale
(other than to a Subsidiary of the Company) of Equity Interests of the Company
(other than Disqualified Stock); PROVIDED that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement or
other acquisition will be excluded from clause (II)(C) of Section 4.7(a); (iv)
the redemption, repurchase, retirement or other acquisition of any Equity
Interests of the Company from an employee or former employee of the Company or
any of its Subsidiaries in connection with such employee's death, disability or
termination of employment; PROVIDED that the amount expended by the Company or
any of its Restricted Subsidiaries in connection with such redemption,
repurchase, retirement or other acquisition does not exceed US$500,000 (or the
equivalent thereof at time of determination) per year; and (v) the redemption,
repurchase, retirement or other acquisition of any Equity Interest of any of the
Company's Wholly Owned Restricted Subsidiaries.
(c) The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under Section 4.7(a). All such outstanding Investments
will be deemed to constitute Investments in an amount equal to the greater of
(i) the net book value of such Investments at the time of such designation, (ii)
the Fair Market Value of such Investments at the time of such designation and
(iii) the original Fair Market Value of such Investments at the time they were
made. Such designation will only be permitted if such Restricted Payment would
be permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. Upon being so designated as an
Unrestricted Subsidiary, any Guarantee which was previously executed by such
Unrestricted Subsidiary will be deemed terminated.
(d) The amount of all Restricted Payments not made in cash will be the
Fair Market Value (which, if it exceeds US$1,000,000 (or the equivalent thereof
at time of determination), will be determined by, and set forth in, a resolution
of the Board of Directors of the Company and described in an Officers'
Certificate delivered to the Trustee) on the date of the Restricted Payment of
the asset(s) proposed to be transferred by the Company or any Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. Not later
than the fiscal quarter end following the date of making any Restricted Payment,
the Company will deliver to the Trustee an Officers' Certificate stating that
all Restricted Payments during such quarter were permitted and setting forth the
basis upon which the calculations required by this Section 4.7 were computed,
which calculations may be based upon the Company's latest available financial
statements.
SECTION 4.8. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to (i) (a) pay dividends or make any other
30
<PAGE>
distributions to the Company or any of its Restricted Subsidiaries on its
Capital Stock or with respect to any other interest or participation in, or
measured by, its profits or (b) pay any Indebtedness owed to the Company or any
of its Restricted Subsidiaries, (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries, (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries, (iv) grant any
Liens or security interests in favor of the Holders of the Notes and the Trustee
(or to the Collateral Agent on their behalf) or (v) guarantee the Notes and any
renewals or refinancings thereof, except for such encumbrances or restrictions
existing under or by reason of (A) Existing Indebtedness, (B) Applicable Law,
(C) any instrument governing Indebtedness or Capital Stock of a Person acquired
by the Company or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness was incurred in
connection with or in contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired, PROVIDED that in the case of Indebtedness, such Indebtedness was
permitted by the terms of this Indenture to be incurred, (D) by reason of (x)
customary non-assignment provisions in leases, licenses, sales agreements or
other contracts entered into in the ordinary course of business and consistent
with past practices or (y) restrictions imposed pursuant to a binding agreement
for the sale or disposition of all or substantially all of the Equity Interests
or assets of any Restricted Subsidiary, provided such restrictions apply solely
to the Equity Interests or assets being sold, (E) Indebtedness of the Company or
any Restricted Subsidiary represented by Capital Lease Obligations, mortgage
financings or other purchase money obligations or obligations under other
financing transactions relating to capital expenditures, incurred pursuant to
clause (ix) of Section 4.9(b), (F) restrictions imposed by Permitted Liens on
the transfer of the assets that are subject to such Liens, (G) Permitted
Refinancing Debt, PROVIDED that the restrictions contained in the agreements
governing such Permitted Refinancing Debt are no more restrictive, as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced or (H) provisions in agreements with other persons who own Equity
Interests in a Restricted Subsidiary which have the effect of requiring that
transactions described in clauses (ii) or (iii) above be effected on terms no
more favorable to the Company or its Restricted Subsidiaries than a PRO RATA
basis in accordance with Equity Interests owned in such Restricted Subsidiary.
SECTION 4.9. LIMITATION ON INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) or Disqualified Stock and will not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock.
(b) The foregoing provisions will not apply to:
(i) the incurrence by the Company or any of its Restricted
Subsidiaries of senior secured Indebtedness on commercially
reasonable terms (as determined by the Board of Directors of the
Company) in an aggregate principal amount not to exceed
US$10,000,000 outstanding at any time, which Indebtedness will
(A) rank PARI PASSU with or subordinate to the Notes, (B), if
secured, be equally and ratably secured by the Collateral
pursuant to security documents containing terms and conditions
substantially similar to the Security Documents and (C) be
subject to the terms and conditions of customary intercreditor
agreements to be executed by the holders of such Indebtedness and
the Trustee on behalf of the Holders in accordance with Section
7.1(g); PROVIDED, that all of the terms and conditions of such
Indebtedness and all documentation pertaining thereto shall be
approved by the Board of Directors of the Company, such approval
to be set forth in a resolution of the Board of Directors and
described in an Officers' Certificate delivered to the Trustee;
and PROVIDED, further, that the Trustee shall be furnished with
an Opinion of Counsel to the effect that the requirements of
subclauses (A) and (B) of this clause (i) have been met;
(ii) Indebtedness of any Restricted Subsidiary consisting of a
guarantee of any senior secured Indebtedness incurred pursuant to
clause (i) above, PROVIDED that (A) such Restricted Subsidiary is
a Guarantor and (B) the obligations of such Restricted Subsidiary
under its Guarantee of the Notes will rank PARI PASSU with its
obligations under such guarantees of other senior secured
Indebtedness;
31
<PAGE>
(iii) Existing Indebtedness;
(iv) the incurrence by the Company of Indebtedness represented by the
Notes (including, without limitation, Notes issued in payment of
accrued interest on outstanding Notes) and this Indenture;
(v) the incurrence of intercompany Indebtedness between or among the
Company and any of its Restricted Subsidiaries; PROVIDED that (A)
if the Company is an obligor on such Indebtedness, such
Indebtedness is expressly subordinate to the payment in full of
all Obligations with respect to the Notes, (B) if a Restricted
Subsidiary is an obligor on such Indebtedness, such Restricted
Subsidiary must be a Guarantor, (C) such Indebtedness shall be
repaid in full prior to any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held
by a Person other than the Company or a Restricted Subsidiary of
the Company, and (D) no sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a
Restricted Subsidiary of the Company will be permitted;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the
purpose of fixing or hedging interest rate risk with respect to
any Indebtedness that is permitted by the terms of this Indenture
to be outstanding or for the purpose of fixing or hedging
currency exchange risk, in each case incurred in the ordinary
course of business and not for speculative reasons;
(vii)the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Debt;
(viii) issuance of preferred stock by a Restricted Subsidiary of the
Company to the Company or any of its Restricted Subsidiaries; or
(ix) Indebtedness of the Company or any Restricted Subsidiary
represented by Capital Lease Obligations, mortgage financings or
other purchase money obligations or obligations under other
financing transactions relating to capital expenditures, in each
case incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of property
used in a Telecommunications Business.
SECTION 4.10. LIMITATION ON ASSET SALES.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value (which, if it exceeds
US$1,000,000 (or the equivalent thereof at time of determination), will be
determined by, and set forth in, a resolution of the Board of Directors of the
Company and described in an Officers' Certificate of the Company delivered to
the Trustee) of the assets or Equity Interests issued or sold or otherwise
disposed of, (ii) at least 75% of the consideration therefor received by the
Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents; PROVIDED that any (1) liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes) that are canceled or assumed by
the transferee of any such assets pursuant to a customary novation agreement
that releases the Company or such Restricted Subsidiary from further liability,
and (2) notes or other obligations received by the Company or such Restricted
Subsidiary from such transferee that are promptly (but in any event, within 30
calendar days) converted by the Company or such Restricted Subsidiary into cash
or Cash Equivalents (to the extent of the cash or Cash Equivalents received) in
each case will be deemed to be cash or Cash Equivalents for purposes of this
provision, (iii) such Asset Sale is not made by the Company to any of its
Restricted Subsidiaries, (iv) the Company shall cause the Net Proceeds
consisting of cash or Cash Equivalents received in respect thereof to be
deposited in the Collateral Account and the other consideration received to
become Collateral as and when received by the Company or by any Restricted
Subsidiary, (v) no Default or Event of Default shall have occurred and be
continuing on the date of such proposed Asset Sale and (vi) such Asset Sale will
not materially adversely affect or materially impair the value of the remaining
Collateral or materially interfere with the Trustee's ability to realize such
32
<PAGE>
value and will not materially impair the maintenance and operation of the
remaining Collateral, as determined by the Board of Directors of the Company,
which determination shall be set forth in a resolution of the Board of Directors
and described in an Officers' Certificate delivered to the Trustee.
(b) The Company shall apply, or cause such Restricted Subsidiary to
apply, the Net Proceeds of such Asset Sale and any Insurance Proceeds or
Condemnation Proceeds, as the case may be, resulting from a Loss Event, within
270 calendar days of consummation of such Asset Sale or the collection of such
Insurance Proceeds or Condemnation Proceeds, as the case may be, for the
following purposes, individually or in combination:
(i) (A) to purchase or otherwise invest in Related Business
Investments which shall constitute additional Collateral under
the relevant Security Documents and which shall be subject to a
first priority Lien in favor of the Trustee for the benefit of
the Holders, subject to Liens permitted under the Security
Documents in respect of the relevant item of Collateral;
PROVIDED, that such purchase or Investment shall be made by the
Company or such Restricted Subsidiary, (B) to purchase Notes in
open-market transactions; PROVIDED, that the Company shall be
deemed to have applied such Net Proceeds, Insurance Proceeds or
Condemnation Proceeds pursuant to this clause (B) in satisfaction
of the requirements of this covenant in an amount equal to the
lesser of (x) the purchase price paid in such open-market
transactions and (y) 100% of the principal amount of the Notes
repurchased; PROVIDED, further that the aggregate amount of Net
Proceeds, Insurance Proceeds or Condemnation Proceeds that may be
deemed to be applied pursuant to this clause (B) shall not exceed
US$5,000,000 in the aggregate from the Effective Date, and (C) to
repay senior secured Indebtedness of the Company or its
Restricted Subsidiaries incurred pursuant to clause (i) of
Section 4.9(b); and
(ii) if and to the extent that the Company fails to expend any Net
Proceeds, Insurance Proceeds or Condemnation Proceeds remaining
after application pursuant to the preceding subparagraph (b)(i)
(the "Excess Proceeds Amount"), the Company shall make an offer
to repurchase Notes (an "Asset Sale Offer") in an amount
(expressed as an integral multiple of US$1,000) equal to the
maximum aggregate principal amount of Notes that may be purchased
with the Excess Proceeds Amount at a purchase price equal to 100%
of the principal amount thereof plus accrued and unpaid interest
thereon, if any (the "Net Proceeds Offer Price"), to the date of
purchase (the "Net Proceeds Purchase Date") in accordance with
the procedures set forth in this Section 4.10. The Company may
defer the Asset Sale Offer until the aggregate unutilized Excess
Proceeds Amount equals or exceeds US$10,000,000 resulting from
one or more Asset Sales or Loss Events (at which time, the entire
unutilized Excess Proceeds Amount, and not just the amount in
excess of US$10,000,000, shall be applied as required pursuant to
this paragraph). All amounts remaining after the consummation of
any Asset Sale Offer pursuant to this paragraph shall remain
subject to the Lien of the Security Documents and may be used by
the Company only to purchase or otherwise invest in Related
Business Investments (which shall constitute additional
Collateral under the Security Documents) or to purchase Notes in
open market transactions up to the maximum set forth in clause
(i)(B) of this paragraph (b) or to permanently repay Indebtedness
of the Company or any Guarantor that is not subordinated to the
Notes.
(c) Each notice of an Asset Sale Offer shall be mailed by first class
mail to the record Holders as shown on the register of Holders not less than 30
calendar days nor more than 60 calendar days before the Net Proceeds Purchase
Date, with a copy to the Trustee, and shall comply with the procedures set forth
in this Indenture. Upon receiving notice of the Asset Sale Offer, Holders may
elect to tender their Notes in whole or in part in integral multiples of
US$1,000 principal amount in exchange for cash. To the extent Holders properly
tender Notes in an amount exceeding the Excess Proceeds Amount, Notes of
tendering Holders will be purchased on a PRO RATA basis (based on amounts
tendered). An Asset Sale Offer shall remain open for a period of 20 Business
Days and until the close of business on the Net Proceeds Purchase Date or such
longer period as may be required by law. Each notice of an Asset Sale Offer
shall contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Asset Sale Offer and shall identify the Notes
(including CUSIP number) and shall state the following terms: (i) that the Asset
33
<PAGE>
Sale Offer is being made pursuant to this Section 4.10 and that all Notes
tendered will be accepted for payment; PROVIDED, HOWEVER, that if the aggregate
principal amount of Notes tendered in an Asset Sale Offer plus accrued interest
at the expiration of such offer exceeds the aggregate amount of the Asset Sale
Offer, the Company shall select the Notes to be purchased on a PRO RATA basis
(with such adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of US$1,000 or multiples thereof shall be purchased);
(ii) the Net Proceeds Offer Price and the Net Proceeds Purchase Date; (iii) that
any Note not tendered will continue to accrue interest; (iv) that, unless the
Company defaults in making payment therefor, any Note accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue interest after the Net
Proceeds Purchase Date; (v) that Holders electing to have a Note purchased
pursuant to an Asset Sale Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day prior to the Net Proceeds
Purchase Date; (vi) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than five Business Days prior to the Net
Proceeds Purchase Date, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Notes the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to have
such Note purchased; and (vii) that Holders whose Notes are purchased only in
part will be issued new Notes in a principal amount equal to the unpurchased
portion of the Notes surrendered; PROVIDED that each Note purchased and each new
Note issued shall be in an original principal amount of US$1,000 or an integral
multiple thereof.
On or before 11:00 a.m. on the Net Proceeds Purchase Date, the Company
shall (i) accept for payment Notes or portions thereof tendered pursuant to the
Asset Sale Offer which are to be purchased in accordance with clause (ii) of
paragraph (b) above, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the Net Proceeds Offer Price of all Notes to be purchased and
(iii) deliver to the Trustee Notes so accepted together with an Officers'
Certificate stating the Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Notes so
accepted payment in an amount equal to the Net Proceeds Offer Price. For
purposes of this Section 4.10, the Trustee shall act as the Paying Agent.
If an offer is made to repurchase the Notes pursuant to an Asset Sale
Offer, the Company will comply with the requirements of Section 14(e) of the
Exchange Act, if applicable, the provisions of Rule 13e-4 and Rule 14e-1, if
applicable, and any other tender offer rules under the Exchange Act or other
relevant United States Federal and state securities legislation which may then
be applicable and will file Schedule 13E-4 or any other schedule required
thereunder in connection with any offer by the Company to purchase Notes
pursuant to an Asset Sale Offer. Notes repurchased pursuant to an Asset Sale
Offer shall be delivered to the Trustee for cancellation pursuant to Section
2.12.
(d) All Net Proceeds, Insurance Proceeds and Condemnation Proceeds
from Loss Events and non-cash consideration from Asset Sales, including all
Excess Proceeds Amounts, shall be deposited in the Collateral Account and be
subject to the perfected first priority Lien in favor of the Collateral Agent,
for the benefit of the Trustee and the Holders of the Notes, subject to Liens
permitted under the Security Documents in respect of the relevant item of
Collateral. To the extent not applied as set forth above, such Excess Proceeds
Amounts shall remain on deposit in the Collateral Account in accordance with
this Indenture and the Security Documents. Excess Proceeds Amounts so deposited
in the Collateral Account may be withdrawn from the Collateral Account pursuant
to Section 4.10(b).
(e) Notwithstanding the foregoing, any disposition of Collateral that
is governed under and complies with Article 5 shall not be deemed to be an Asset
Sale, except that in the event of the transfer of substantially all (but not
all) of the Property of the Company and its Subsidiaries to a Person in a
transaction permitted under Article 5, the successor corporation shall be deemed
to have sold the Collateral not so transferred for purposes of this covenant,
and shall comply with the provisions of this covenant with respect to such
deemed sale as if it were an Asset Sale. In addition, the Fair Market Value of
such Property of the Company or its Subsidiaries deemed to be sold shall be
deemed to be Net Proceeds for purposes of this Section 4.10.
34
<PAGE>
SECTION 4.11. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (other than the Company or a Wholly Owned Restricted Subsidiary) (each
of the foregoing, an "Affiliate Transaction"), unless (i) such Affiliate
Transaction is on terms that are no less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction with an unrelated Person and (ii) the Company delivers to
the Trustee (a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions after the Effective Date involving aggregate
consideration in excess of US$2,000,000 (or the equivalent thereof at time of
determination), a resolution described in an Officers' Certificate, certifying
that such Affiliate Transaction complies with clause (i) above and such
Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors of the Company and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions after the
Effective Date involving aggregate consideration in excess of US$5,000,000 (or
the equivalent thereof at time of determination), an opinion as to the fairness
to the Holders of the Notes of such Affiliate Transaction from a financial point
of view issued by an accounting, appraisal or investment banking firm of
recognized national standing in Brazil; PROVIDED that (1) any transaction with
an officer or director of the Company or any Restricted Subsidiary (in
connection with such person's compensation, employee benefit or severance
arrangements) entered into by the Company or any of its Restricted Subsidiaries
in the ordinary course of business and customary in the industry of the Company
or such Restricted Subsidiary, (2) transactions between or among the Company and
its Restricted Subsidiaries, (3) the Programming Agreement, (4) any Operating
Agreement that contains terms and conditions substantially the same as the
Master Operating Agreement dated July 24, 1996 between the Company and TV Filme
Servicos, and (5) Restricted Payments and Permitted Investments that are
permitted under Section 4.7, in each case, will not be deemed Affiliate
Transactions.
SECTION 4.12. LIMITATION ON LIENS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, affirm, assume or suffer
to exist any Lien of any kind on any property or asset now owned or hereafter
acquired, or any income or profits therefrom or assign or convey any right to
receive income therefrom, except for Liens securing any senior secured
Indebtedness incurred pursuant to clause (i) of Section 4.9(b), PROVIDED that no
such Lien shall be senior to the Liens on the Collateral granted to the Trustee
under the Security Documents; PROVIDED, HOWEVER, that the foregoing will not
prohibit or restrict Permitted Liens.
SECTION 4.13. GUARANTORS.
(a) If at any time on or after the Effective Date, and at any time
that any of the Obligations remain outstanding, the Company or any Restricted
Subsidiary establishes or creates a Restricted Subsidiary and either the Company
elects to have such Restricted Subsidiary become a Guarantor or the
establishment or creation of such Restricted Subsidiary would be a Restricted
Investment unless it becomes a Guarantor, then the Company (or the Restricted
Subsidiary directly owning Capital Stock of such other Restricted Subsidiary)
shall (i) cause each such Restricted Subsidiary to execute and deliver to the
Trustee a supplemental indenture pursuant to which each such Restricted
Subsidiary shall guarantee the Obligations of the Company on a senior basis
together with an opinion of counsel (which counsel may be an employee of the
Company) to the effect that the supplemental indenture has been duly executed
and delivered by each such Restricted Subsidiary and is in compliance in all
material respects with the terms of this Indenture, (ii) cause such Restricted
Subsidiary to execute and deliver to the Collateral Agent such Security
Documents, and do all other acts and things, as may be required to convey to the
Collateral Agent for the benefit of the Trustee and the Holders a first priority
security interest in all property of such Restricted Subsidiary included within
the definition of "Collateral" herein, and (iii) subject to the limitations set
forth in the Master Security Agreement, deliver to the Collateral Agent for the
benefit of the Trustee and the Holders the stock certificates representing the
Capital Stock of any such Restricted Subsidiary, together with stock powers with
respect to such Capital Stock in blank.
35
<PAGE>
(b) The Company will not permit any Restricted Subsidiary that is a
Guarantor to issue or sell any Capital Stock other than to the Company or a
Restricted Subsidiary, (i) if such issuance or sale could adversely affect or
impair the legality or enforceability of, or the ability of the Trustee to
realize upon, the Guarantee granted by such Restricted Subsidiary hereunder;
(ii) if such issuance or sale would result in any Person or Persons (other than
the Company or a Restricted Subsidiary), directly or indirectly, owning or
controlling 15% or more of the Capital Stock of any Restricted Subsidiary that
is a Guarantor; PROVIDED, HOWEVER, that any sale of 100% of the shares of
Capital Stock of any Restricted Subsidiary that is a Guarantor effected in
accordance with Section 4.10 or Section 5.1 shall be permitted; and (iii) unless
such Restricted Subsidiary receives the Fair Market Value for such Capital
Stock.
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company will make
an offer (a "Change of Control Offer") to repurchase all or any part (equal to
US$1,000 or an integral multiple thereof) of each Holder's Notes at an offer
price in cash equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest, if any, thereon to the date of repurchase (the
"Change of Control Payment"). Within 30 calendar days following any Change of
Control, the Company will mail a notice to each Holder describing the
transaction that constitutes the Change of Control and offering to repurchase
Notes pursuant to the procedures required by this Indenture and described in
such notice. The Company will comply with the requirements of 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 connection with the
repurchase of the Notes as a result of a Change of Control. The Change of
Control provisions described in this Section 4.14 will be applicable whether or
not any other provisions of this Indenture are applicable.
(b) Notice of a Change of Control Offer will be mailed by the Company,
with a copy to the Trustee, or, at the Company's option, by the Trustee (at the
Company's expense) not more than 30 calendar days after the Change of Control to
each Holder of the Notes at such Holder's last registered address appearing in
the Register. In such notice, the Company will describe the transaction that
constitutes the Change of Control and offer to repurchase Notes pursuant to the
procedures established by this Section 4.14 and described in such notice. The
notice will contain all instructions and materials necessary to enable Holders
to tender Notes pursuant to the Change of Control Offer. In addition, the notice
will state: (i) that the Change of Control Offer is being made pursuant to this
Section 4.14 and that all Notes tendered will be accepted for payment; (ii) the
Change of Control Payment and the purchase date, which will be no sooner than 60
nor later than 90 calendar days after the Change of Control (the "Change of
Control Payment Date"); (iii) that any Note not tendered will continue to accrue
interest; (iv) that, unless the Company defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control Payment
Date; (v) that Holders electing to have any Notes purchased pursuant to a Change
of Control Offer will be required to deliver the Notes, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Notes completed, or
transfer by book-entry transfer, to the Company, the Depository (if appointed by
the Company), or the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day preceding the Change of
Control Payment Date; (vi) that Holders will be entitled to withdraw their
election if the Company, the Depository or the Paying Agent, as the case may be,
receives, not later than the close of business on the third Business Day
preceding the Change of Control Payment Date, a telegram, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of Notes
delivered for purchase, and a statement that such Holder is withdrawing his
election to have the 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 (or transferred by
book-entry transfer), which unpurchased portion must be equal to at least
US$1,000 in principal amount or an integral multiple thereof.
36
<PAGE>
(c) On the Change of Control Payment Date, the Company will (i) accept
for payment Notes or portions thereof validly tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent money in immediately available
funds sufficient to pay the purchase price of all Notes or portions thereof so
accepted, and (iii) deliver to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof accepted for payment
by the Company. If the Company complies with its obligations set forth in the
immediately preceding sentence, whether or not a Default or Event of Default has
occurred and is continuing on the Change of Control Payment Date, the Paying
Agent will as promptly as practicable mail or deliver to each Holder of Notes so
accepted payment in an amount equal to the purchase price, and the Company will
execute and the Trustee will as promptly as practicable authenticate and mail or
deliver to such Holder a new Note equal in principal amount to any unpurchased
portion of the Note surrendered; PROVIDED that each such new Note will be in a
principal amount of US$1,000 or an integral multiple thereof. Any Notes not so
accepted will be as promptly as practicable mailed or delivered by the Trustee
to the Holders thereof. The Company will publicly announce the results of the
Change of Control Offer on or as promptly as practicable after the Change of
Control Payment Date. For purposes of this Section 4.14, the Trustee will act as
the Paying Agent.
(d) Prior to complying with the other provisions of this Section 4.14,
but in any event within 90 calendar days following a Change of Control, the
Company will either repay all outstanding Indebtedness or obtain the requisite
consents, if any, under all agreements governing outstanding Indebtedness to
permit the repurchase of Notes required by this Section 4.14.
(e) The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
SECTION 4.15. CORPORATE EXISTENCE.
Except as otherwise permitted pursuant to the terms hereof, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Restricted Subsidiaries in
accordance with their respective organizational documents (as the same may be
amended from time to time), and (ii) the material rights (charter and
statutory), licenses and franchises of the Company and each of its Restricted
Subsidiaries; PROVIDED, HOWEVER, that the Company will not be required to
preserve any such right, license or franchise belonging to it or any of its
Restricted Subsidiaries, or the corporate, partnership or other existence of any
of its Restricted Subsidiaries, if the Board of Directors of the Company
determines that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Subsidiaries, taken as a whole, and that
the loss thereof would not reasonably be expected to be adverse in any material
respect to the Holders of the Notes.
SECTION 4.16. LIMITATION ON ASSET SWAPS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, in one or a series of related transactions, directly or
indirectly, engage in any Asset Swaps, unless:
(i) at the time of entering into the agreement to swap assets and
immediately after giving effect to the proposed Asset Swap, no
Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof;
(ii) the respective Fair Market Values of the assets being purchased
and sold by the Company or any of its Restricted Subsidiaries are
substantially the same at the time of entering into the agreement
to swap assets; and
(iii)at the time of the consummation of the proposed Asset Swap, the
percentage of any decline in the Fair Market Value of the asset
or assets being acquired by the Company and its Restricted
Subsidiaries will not be significantly greater than the
percentage of any decline in the Fair Market Value of the assets
being disposed of by the Company or its Restricted Subsidiaries,
calculated from the time the agreement to swap assets was entered
into.
SECTION 4.17. LIMITATION ON SALE LEASEBACK TRANSACTIONS.
37
<PAGE>
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; PROVIDED that
the Company may enter into a sale and leaseback transaction if the Company could
have (i) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction and (ii) incurred a Lien to
secure such Indebtedness pursuant to Section 4.12.
SECTION 4.18. MAINTENANCE OF BUSINESS, PROPERTIES AND INSURANCE.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than the Telecommunications
Business and such business activities as are incidental or directly related
thereto.
(b) The Company shall, and shall cause each of the Restricted
Subsidiaries to, maintain its material properties in good working order and
condition (subject to ordinary wear and tear) and make all reasonably necessary
repairs, renewals, replacements, additions, betterments and improvements thereto
to actively conduct and carry on its business; PROVIDED, HOWEVER, that nothing
in this Section 4.18 shall prevent the Company or any of the Restricted
Subsidiaries from discontinuing the operation and maintenance of any of its
properties, if such discontinuance is, in the good faith judgment of the Board
of Directors of the Company or such Restricted Subsidiary, as the case may be,
desirable in the conduct of their respective businesses and is not
disadvantageous in any material respect to the Holders as determined by the
Board of Directors of the Company.
(c) The Company shall provide or cause to be provided, for itself and
each of its Restricted Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Board of Directors of the Company, are adequate and appropriate
for the conduct of the business of the Company and its Restricted Subsidiaries
in a prudent manner, with reputable insurers or with the government of Brazil or
an agency or instrumentality thereof, in such amounts, with such deductibles,
and by such methods as shall be customary, in the good faith judgment of the
Board of Directors of the Company, for companies in Brazil and for companies
similarly situated in the industry; PROVIDED, HOWEVER, that the Company shall
provide or cause to be provided, for itself and each of its Restricted
Subsidiaries, directors and officers liability insurance with reputable
insurers.
(d) The Company shall, and shall cause each of its Restricted
Subsidiaries to comply with all Applicable Laws of any Authority except to the
extent that noncompliance could not, singly or in the aggregate, reasonably be
expected to have a material adverse effect on the business, properties,
condition (financial or otherwise) or prospects of the Company or its Restricted
Subsidiaries, as determined by the Board of Directors of the Company.
(e) The Company will not permit the Operating Agreement to terminate
or be modified in any way which prevents the Company and the Restricted
Subsidiaries from operating pay television systems relating to the Company's
authorizations, licenses or Permits.
SECTION 4.19. IMPAIRMENT OF SECURITY INTEREST.
Neither the Company nor any of its Subsidiaries will take or omit to
take any action which action or omission could reasonably be expected to have
the result of materially and adversely affecting or materially impairing the
security interests in favor of the Collateral Agent, on behalf of the Trustee
and the Holders, with respect to the Collateral. Neither the Company nor any of
its Subsidiaries will enter into any agreement or instrument that by its terms
requires the Net Proceeds received from any sale of Collateral to be applied to
repay, redeem, defease or otherwise acquire or retire any Indebtedness of any
Person prior to the repayment in full of the Notes, other than the Indebtedness
permitted under Section 4.9(b)(i) to the extent such repayment, redemption,
defeasance, acquisition or retirement is permitted under Section 4.10(b).
SECTION 4.20. PAYMENT OF ADDITIONAL AMOUNTS.
38
<PAGE>
All payments by the Company in respect of the Notes or any Guarantor
in respect of its Guarantee of the Notes shall be made free and clear of and
without withholding or deduction for or on account of any present or future
taxes, duties, assessments or other governmental charges of whatever nature,
including penalties, interest and any other liabilities related thereto, imposed
or levied by or on behalf of Brazil or any relevant jurisdiction or any
political subdivision or authority thereof or therein having power to tax
("Taxes"). In the event that the Company or any Guarantor, as the case may be,
is required to make any withholding or deduction for or on account of any Taxes
from any payment made under or with respect to the Notes, or its Guarantee, as
the case may be, the Company or any Guarantor, as the case may be, will pay such
additional amounts ("Additional Amounts") as may be necessary so that the net
amount received by each Holder (including Additional Amounts) after such
withholding or deduction will not be less than the amount the Holder would have
received had such Taxes not been withheld or deducted; PROVIDED, that no
Additional Amounts will be payable to a Holder (an "Excluded Holder") (i) with
which the Company or any Guarantor, as the case may be, does not deal at arm's
length at the time of making such payment, (ii) which is subject to such Taxes
by reason of its being connected with Brazil or any political subdivision or
authority thereof otherwise than by the mere holding of the Notes or the receipt
of payments thereunder, (iii) which presents any Note for payment of principal
more than 60 calendar days after the later of (x) the date on which payment
first became due and (y) if the full amount payable has not been received by the
Trustee on or prior to such due date, the date on which, the full amount payable
having been so received, notice to that effect shall have been given to the
Holders by the Company, except to the extent that the Holder would have been
entitled to such Additional Amounts on presenting such Note for payment on the
last day of the applicable 60-day period, (iv) which failed to duly and timely
comply with a timely request of the Company to provide information, documents or
other evidence concerning the Holder's nationality, residence, entitlement to
treaty benefits, identity or connection with Brazil or any political subdivision
or authority thereof, if and to the extent that due and timely compliance with
such request would have reduced or eliminated any Taxes as to which Additional
Amounts would have otherwise been payable to such Holder but for this clause
(iv), (v) on account of any estate, inheritance, gift, sale, transfer, personal
property or other similar Tax, (vi) which is a fiduciary, a partnership, or not
the beneficial owner of any payment on a Note, if and to the extent that any
beneficiary or settlor of such fiduciary, any partner in such partnership, or
the beneficial owner of such payment (as the case may be) would not have been
entitled to receive Additional Amounts with respect to such payment if such
beneficiary, settlor, partner or beneficial owner had been the Holder of such
Note or (vii) any combination of the foregoing numbered clauses of this proviso.
The Company or any Guarantor, as the case may be, will also (i) make
such withholding or deduction as required by applicable law and (ii) remit the
full amount deducted or withheld to the relevant authority in accordance with
applicable law. The Company or any Guarantor, as the case may be, will furnish,
within 60 calendar days after the date the payment of any Taxes is due pursuant
to applicable law, to the Trustee copies of tax receipts evidencing that such
payment has been made by the Company or such Guarantor, as the case may be, in
such form as provided in the normal course by the taxing authority imposing such
Taxes and as is reasonably available to the Company or such Guarantor, as the
case may be. The Trustee shall make such evidence available to the Holders of
Notes upon written request.
If the Company or any Guarantor, as the case may be, has paid any
Additional Amounts to any Holder or, if different, the beneficial owners of an
interest in any Note, and such person is entitled to a refund of the Taxes to
which such Additional Amounts are attributable from any competent taxation
authority or other governmental body, then (a) such person shall so notify the
Company or such Guarantor as promptly as practicable after learning of such
entitlement, and as soon as practicable but in any event within 30 calendar days
after receiving a written request therefor from the Company or such Guarantor,
as the case may be, comply with any administrative procedure to obtain such
refund and (b) upon receipt of such refund, promptly pay over such refund to the
Company or such Guarantor, as the case may be. If Additional Amounts are paid to
a Holder, or, if different, the beneficial owner of an interest in any Note, and
it is subsequently determined that such Person was not entitled to such
Additional Amounts, then such Person shall promptly refund to the Company or
such Guarantor, as the case may be, the amount of all such Additional Amounts
previously paid to such Person.
The Company will indemnify and hold harmless each Holder of Notes that
are outstanding on the date that withholding or deduction was required pursuant
to applicable law (other than an Excluded Holder) and upon written request
reimburse each such Holder for the amount of (i) any taxes so levied or imposed
and paid by such Holder as a result of payments made under or with respect to
the Notes or any Guarantee, as the case may be, (ii) any liability (including
39
<PAGE>
penalties, interest and expenses) arising therefrom or with respect thereto, and
(iii) any taxes imposed with respect to any reimbursement under clause (i) or
(ii) above.
Whenever in this Indenture there is mentioned, in any context, (a) the
payment of principal (and premium, if any), (b) purchase prices in connection
with a repurchase of Notes, (c) interest or (d) any other amount payable on or
with respect to any of the Notes, such mention shall be deemed to include
mention of the payment of Additional Amounts provided for in this section to the
extent that, in such context, Additional Amounts are, were or would be payable
in respect thereof.
ARTICLE 5
SUCCESSORS
SECTION 5.1. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
(a) The Company may not consolidate or merge with or into (whether or
not the Company is the surviving entity), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity, unless:
(i) the Company is the surviving entity or the entity or Person
formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of Brazil;
(ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity
or Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all
the obligations of the Company under the Notes and this Indenture
pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee;
(iii)immediately after giving effect to such transaction, no Default
or Event of Default exists or would exist;
(iv) such transaction will not result in the loss or suspension or
material impairment of any Material Telecommunications License;
(v) except in the case of a merger of the Company with or into a
Wholly Owned Restricted Subsidiary of the Company, the Company or
the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which
such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made will (treating any Indebtedness
not previously an obligation of the Company or any of its
Restricted Subsidiaries as a result of such transaction as having
been incurred at the time of such transaction) (A) have a
Consolidated Net Worth immediately after the transaction equal to
or greater than the Consolidated Net Worth of the Company
immediately prior to the transaction and (B) be in compliance
with the Indebtedness limitation set forth in Section 4.9(b); and
(vi) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in form reasonably
satisfactory to the Trustee, each stating that such
consolidation, merger or transfer and such supplemental indenture
(if any) comply with this Indenture.
(b) Subject to the provisions described in Section 5.1(e), no
Guarantor may consolidate or merge with or into (whether or not such Guarantor
is the surviving entity or Person), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions, to another corporation, entity or Person unless:
40
<PAGE>
(i) the entity or Person formed by or surviving any such
consolidation or merger (if other than such Guarantor) or the
entity or Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all
the obligations of such Guarantor under the Guarantee, in form
satisfactory to the Trustee;
(ii) immediately after such transaction, no Default or Event of
Default exists;
(iii)the Company and its Restricted Subsidiaries will have a
Consolidated Net Worth immediately after such transaction equal
to or greater than the Consolidated Net Worth of the Company and
its Restricted Subsidiaries immediately preceding such
transaction and be in compliance with the Indebtedness limitation
set forth in Section 4.9(b) (treating any Indebtedness not
previously an obligation of the Company or any of its Restricted
Subsidiaries as a result of such transaction as having been
incurred at the time of such transaction);
(iv) the Company shall have delivered to the Trustee an Officers'
Certificate, and an Opinion of Counsel in form reasonably
satisfactory to the Trustee, each stating that such
consolidation, merger or transfer complies with this Indenture;
and
(v) such Guarantor shall have delivered a written instrument in form
reasonably satisfactory to the Trustee confirming its Guarantee
after giving effect to such consolidation, merger or transfer.
Notwithstanding the foregoing, any Guarantor may merge into, consolidate with or
transfer all or part of its properties or assets to the Company, one or more
Guarantors or one or more Restricted Subsidiaries of the Company which become
Guarantors concurrently therewith.
(c) Notwithstanding Section 5.1(b), if no Default exists or would
exist under this Indenture, concurrently with any sale or disposition (by merger
or otherwise) of any Guarantor in accordance with the terms of this Indenture
(other than a transaction subject to the provisions of Section 5.1(b)) by the
Company or any of its Restricted Subsidiaries to any Person that is not an
Affiliate of the Company or any of its Restricted Subsidiaries, such Guarantor
will automatically and unconditionally be released from all obligations under
its Guarantee; PROVIDED, HOWEVER, that any such release will occur only to the
extent that all obligations of such Guarantor under, and all of its guarantees
of, and all of its pledges of assets or other security interests which secure,
any other Indebtedness of the Company or any of its Restricted Subsidiaries will
also terminate upon such release, sale or transfer; and PROVIDED, further, that
the Company deposits the Net Proceeds of such Asset Sale in the Collateral
Account in accordance with Section 4.10.
(d) For purposes of this Section 5.1, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more of the Subsidiaries of the Company or a Guarantor, the Capital Stock of
which constitutes all or substantially all of the properties and assets of the
Company or such Guarantor, as the case may be, will be deemed to be the transfer
of all or substantially all of the properties and assets of the Company or such
Guarantor, as the case may be.
(e) Notwithstanding Section 5.1(a), any Restricted Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to, the Company or another Restricted Subsidiary.
SECTION 5.2. SUCCESSOR COMPANY SUBSTITUTED.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole in accordance with Section 5.1, the successor corporation
formed by such consolidation or into which the Company or the Restricted
Subsidiary is merged or to which such transfer is made, will succeed to, and be
substituted for, and may exercise every right and power of the Company or the
Restricted Subsidiary under this Indenture with the same effect as if such
41
<PAGE>
successor corporation had been named as the Company or the Restricted Subsidiary
herein; and thereafter, if the Company or the Restricted Subsidiary is dissolved
following a transfer of all or substantially all of its assets in accordance
with this Indenture, the Company or the Restricted Subsidiary will be discharged
and released from all obligations and covenants under this Indenture, the
Security Documents and the Notes. The Trustee will enter into a supplemental
indenture to evidence the succession and substitution of such successor Person
and such discharge and release of the Company or the Restricted Subsidiary.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.
An "Event of Default" occurs if one of the following shall have
occurred and be continuing:
(a) the Company defaults in the payment when due of any interest
payable with respect to the Notes at any time, which default continues for a
period of 30 calendar days;
(b) the Company defaults in payment when due of the principal of or
premium, if any, on the Notes at maturity, upon repurchase (including, without
limitation, pursuant to a Change of Control Offer or an Asset Sale Offer), upon
acceleration, redemption or otherwise;
(c) the granting by the Company or any Restricted Subsidiary of any
Lien to secure Indebtedness in excess of US$100,000 (other than a Permitted
Lien);
(d) the Company fails to comply with the provisions of Sections 4.10,
4.14, 4.19 or 5.1;
(e) the Company fails to comply with any of its other agreements in
this Indenture or the Notes and such failure continues for 30 calendar days
after notice from the Trustee or Holders of at least 25% in aggregate principal
amount of the Notes then outstanding;
(f) the Company defaults under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed of the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists or
is created after the Effective Date, which default (i) is caused by a failure to
pay principal of or premium, if any, or interest on such Indebtedness following
the expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or (ii) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates US$5,000,000 (or the equivalent
thereof at time of determination) or more;
(g) the Company or any of its Restricted Subsidiaries fails to pay
final non-appealable judgments rendered against the Company or any of its
Restricted Subsidiaries aggregating in excess of US$2,500,000 (or the equivalent
thereof at time of determination), which judgments are not paid, discharged or
stayed for a period of 60 calendar days after such judgments become final and
non-appealable;
(h) the Company or any Restricted Subsidiary of the Company pursuant
to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case
or proceeding, (ii) consents to the entry of an order for relief against it in
an involuntary case or proceeding, (iii) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (iv) makes a
general assignment for the benefit of its creditors, (v) admits in writing its
inability to pay its debts generally as they become due or (vi) takes any
comparable action under any foreign laws relating to insolvency;
42
<PAGE>
(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (i) is for relief against the Company or any
Significant Subsidiary of the Company in an involuntary case or proceeding, (ii)
appoints a Custodian of the Company or any Significant Subsidiary of the Company
or for all or substantially all of its respective properties, or (iii) orders
the liquidation of the Company or any Significant Subsidiary of the Company, or
any similar relief is granted under any foreign laws, and in each case the order
or decree remains unstayed and in effect for 60 calendar days;
(j) (a) a default in the observance or performance of any covenant or
agreement contained in any Security Document which default continues for 20
calendar days after notice has been given to the Company by the Collateral
Agent, the Trustee or the holders of at least 25% in principal amount of the
outstanding Notes, or (b) for any reason other than the satisfaction in full and
discharge of all obligations secured thereby or any action or inaction of the
Collateral Agent, the Trustee or the Holders after receiving notice of the
requirement to take any such action from the Company, any of the Security
Documents ceases to be in full force and effect (other than in accordance with
its respective terms), or any of the Security Documents ceases to give the
Collateral Agent the Liens, rights, powers and privileges purported to be
created thereby, or any Security Document is declared null and void, or the
Company or any of its Restricted Subsidiaries denies any of its obligations
under any Security Document, in each case with respect to Collateral the
aggregate value of which is in excess of US$100,000, or the Collateral becomes
subject to one or more Liens other than Permitted Liens securing one or more
obligations in excess of US$100,000 in the aggregate; or
(k) any Guarantee is declared null and void or ceases to be in full
force and effect (except as permitted under this Indenture) or any Guarantor
shall deny or disaffirm its obligations under its Guarantee.
Notwithstanding the foregoing, if an Event of Default specified in
clause (f) above occurs and is continuing, such Event of Default and all
consequences thereof (including, without limitation, any acceleration or
resulting payment default) will be annulled and rescinded, automatically and
without any action by the Trustee or the Holders of the Notes, if (i) the
Indebtedness that is the subject of such Event of Default has been repaid, or
(ii) the default relating to such Indebtedness is waived or cured (and if such
Indebtedness has been accelerated, when the holders thereof have rescinded their
declaration of acceleration in respect of such Indebtedness).
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of this Indenture, an equivalent premium will
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes.
SECTION 6.2. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
Section 6.1 (h) or (i)) occurs and is continuing, then the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes by
written notice to the Company and the Trustee may declare the unpaid principal
of, and any accrued interest on, all the Notes to be due and payable
immediately. If any Event of Default specified in Section 6.1(h) or (i) hereof
occurs with respect to the Company, any Significant Subsidiary of the Company or
any group of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary of the Company, all outstanding principal
and interest on the Notes will be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. The Holders
of a majority in principal amount of the Notes then outstanding, by written
notice to the Trustee and to the Company, may rescind an acceleration (except an
acceleration due to a default in payment of the principal of, or premium or
interest on, any of the Notes) if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, premium, interest that have become due solely because of the
acceleration) have been cured or waived.
SECTION 6.3. OTHER REMEDIES.
43
<PAGE>
Subject to Section 6.2, 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 any payment due on the Notes or to enforce the performance
of any provision of the Notes, this Indenture or the Security Documents.
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. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default will not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.4. WAIVER OF PAST DEFAULTS.
Subject to Section 9.2, Holders of a majority in aggregate principal
amount of the then outstanding Notes by notice to the Trustee may, on behalf of
the Holders of all of the Notes, waive an existing Default or Event of Default
and its consequences hereunder (including without limitation acceleration and
its consequences, including any related payment default that resulted from such
acceleration) except a continuing Default or Event of Default in the payment of
the principal of, or premium or interest on the Notes. Upon any such waiver,
such Default will cease to exist, and any Event of Default arising therefrom
will be deemed to have been cured for every purpose of this Indenture; but no
such waiver will extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.5. CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture or that the Trustee determines may be
unduly prejudicial to the rights of another Holder or that involves the Trustee
in personal liability. The Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction.
SECTION 6.6. LIMITATION ON SUITS.
Subject to the provisions of Section 6.7 hereof, no Holder of a Note
may pursue any remedy with respect to this Indenture or the Notes (including,
without limitation, the institution of any proceeding, judicial or otherwise,
with respect to the Notes or this Indenture or for the appointment of a receiver
or trustee for the Company and/or any of its Subsidiaries) unless:
(a) the Holder has given to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding have made a written request to the Trustee to pursue the
remedy;
(c) such Holders have offered to provide to the Trustee indemnity
reasonably satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee has not complied with the request within 60 calendar
days after receipt of the request and the offer of indemnity; and
(e) during such 60-day period, the Holders of a majority in aggregate
principal amount of the Notes then outstanding have not given the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
44
<PAGE>
SECTION 6.7. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
The right of any Holder of a Note to receive payment of principal of,
and premium, if any, or interest on, such Note, on or after the respective due
dates expressed in such Note (including in the case of a redemption, the
applicable redemption price on the applicable redemption date), or to bring suit
for the enforcement of any such payment on or after such respective dates, will
not be impaired or affected without the consent of such Holder.
SECTION 6.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for principal of, premium, if
any, and interest on, the Notes and interest on overdue principal and, to the
extent lawful, interest, and such further amount as will 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 and
any other amounts due to the Trustee under Section 7.7.
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and will be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian 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 agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof. To the extent that the payment of any such reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same will be secured by a Lien on, and will be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained will be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, 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 6, it will
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal, premium, if any, and interest, respectively; and
Third: the remainder to the Company or to such party as a court of
competent jurisdiction may direct.
45
<PAGE>
The Trustee may fix a record date and payment date for any payment to
Holders of Notes 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 a Trustee, each party to this Indenture agrees, and each Holder by its
acceptance of its Notes will be deemed to have agreed, that any court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.7
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.1. DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee will exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in its exercise, as
a prudent Person would exercise or use under the circumstances in the conduct of
its own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(i) the Trustee will not be liable hereunder except for such
duties of the Trustee which will be determined solely by the
express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in
this Indenture and no others, and no implied covenants or
obligations will be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
Officers' Certificates or Opinions of Counsel furnished to
the Trustee and conforming to the requirements of this
Indenture. However, the Trustee will examine the
certificates and opinions to determine whether or not such
documents conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee will not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.1.
(e) No provision of this Indenture will require the Trustee to expend
or risk its own funds or incur any liability whatsoever in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers
46
<PAGE>
hereunder. The Trustee will be under no obligation to exercise any of its 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 and
indemnity satisfactory to the Trustee in its sole subjective discretion (which
discretion will be exercised in good faith) against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(f) The Trustee will not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) In the event the Company incurs senior secured Indebtedness
pursuant to clause (i) of Section 4.9(b), the Trustee shall, and the Holders
shall be deemed to have authorized the Trustee to, enter into appropriate
intercreditor agreements providing for the ratable sharing of the Collateral
between the holders of senior secured Indebtedness and the Trustee for the
benefit of the Holders of the Notes and otherwise giving effect to the
provisions of clause (i) of Section 4.9(b). For this purpose, the Trustee may
consult with counsel and rely on Opinions of Counsel and Officers' Certificates.
SECTION 7.2. RIGHTS OF TRUSTEE.
(a) Subject to Section 7.1, the Trustee may conclusively rely upon any
document believed by it to be genuine and to have been signed or presented by
the proper Person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and require an Officers' Certificate or an Opinion of Counsel or
both. The Trustee will not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and will not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee will not be liable for any action it takes or omits to
take in good faith that it believes in its sole subjective discretion (which
discretion will be exercised in good faith) to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) The permissive right of the Trustee to act hereunder will not be
construed as a duty.
(f) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an authorized Officer of the Company.
(g) The Trustee will 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 satisfactory to the Trustee in its sole subjective
discretion (which discretion will be exercised in good faith) against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.
(h) The Trustee will not be required to take notice or deemed to have
notice of any Event of Default hereunder, except failure by the Company to make
any of the payments to the Trustee pursuant to Section 6.1(a) or (b), unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless the
Trustee shall be specifically notified in writing of such Event of Default by
the Company or by one or more of the Holders and such notice references the
Notes and this Indenture.
(i) The Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
47
<PAGE>
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties.
(j) 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 document, 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 examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(k) 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 to each agent, custodian and other Person employed to act
hereunder.
(l) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 7.3. 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 any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as such term is defined in TIA Section 310(b)), it must eliminate such
conflict within 90 calendar days, apply to the SEC for permission to continue as
trustee (to the extent permitted under TIA Section 310(b)) or resign. Any Agent
may do the same with like rights and duties. The Trustee is also subject to
Sections 7.10 and 7.11 hereof.
SECTION 7.4. TRUSTEE'S DISCLAIMER.
The Trustee will not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it will not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.5. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 calendar days after such event occurs.
Except in the case of a Default or Event of Default under Section 6.1(a) or (b)
(including, without limitation, the payment of the Change of Control Payment on
the Change of Control Payment Date, the payment of the applicable redemption
price on the redemption date and the payment of the Net Proceeds Offer Price on
the Net Proceeds Purchase Date), the Trustee may withhold such notice if it
determines that withholding the notice is in the interests of the Holders of the
Notes.
48
<PAGE>
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 calendar days after each May 15 beginning with the May 15
following the Effective Date, and for so long as Notes remain outstanding, the
Trustee will mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also will comply
with TIA Section 313(b)(2). The Trustee will also transmit by mail all reports
as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes will be mailed to the Company and filed with the SEC and each stock
exchange, if any, on which the Notes are listed in accordance with and to the
extent required by TIA Section 313(d). The Company will promptly notify the
Trustee if the Notes become listed on any stock exchange or automatic quotation
system or any delisting thereof.
SECTION 7.7. COMPENSATION AND INDEMNITY.
Absent any other agreement to the contrary, the Company will pay to
the Trustee from time to time compensation as may be agreed upon in writing
between the Company and the Trustee for its acceptance of this Indenture and
services hereunder. The Trustee's compensation will not be limited by any law on
compensation of a trustee of an express trust. The Company will reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses will include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
The Company will indemnify the Trustee and any predecessor Trustee and
their agents, against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.7) and defending itself
against any claim (whether asserted by the Company or any Holder or any other
Person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its gross negligence or bad faith. The Trustee
will promptly notify the Company of any claim for which it may seek indemnity.
The Company will defend the claim and the Trustee will cooperate in the defense.
The Trustee may have separate counsel and the Company will pay the reasonable
fees and expenses of such counsel; PROVIDED that the Company will not be
required to pay such fees and expenses if it assumes the Trustee's defense with
counsel acceptable to and approved by the Trustee (such approval not to be
unreasonably withheld) and there is no conflict of interest between the Company
and the Trustee in connection with such defense. The Company need not pay for
any settlement made without its written consent, which consent will not be
unreasonably withheld. The Company need not reimburse the Trustee for any
expense or indemnity against any liability or loss of the Trustee to the extent
such expense, liability or loss is attributable to the gross negligence, bad
faith or willful misconduct of the Trustee.
The obligations of the Company under this Section 7.7 will survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee will have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee will comply with the provisions of TIA Section 313(b)(2) .
49
<PAGE>
SECTION 7.8. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing upon 30 calendar days notice and be
discharged from the trust hereby created by so notifying the Company in writing.
The Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing and
may appoint a successor trustee with the consent of the Company. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a receiver, Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint or request
the Trustee to appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 calendar days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of at least 10% in principal amount of the then
outstanding Notes may at the expense of the Company petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders of the Notes. The retiring Trustee will promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums owing
to the Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 hereof will continue
for the benefit of the retiring Trustee.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act will,
if the resulting, surviving or transferee corporation is otherwise eligible
hereunder, be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least
US$100,000,000 as set forth in its most recent published annual report of
condition.
50
<PAGE>
This Indenture will always have a Trustee who satisfies the
requirements of TIA Section 310(a) (1), (2) and (5). The Trustee shall comply
with TIA Section 310(b) .
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed will be subject to TIA Section 311(a) to the extent indicated therein.
SECTION 7.12. LIMITATION ON DUTY OF TRUSTEE IN RESPECT OF COLLATERAL;
INDEMNIFICATION
(a) Beyond the exercise of reasonable care in the custody thereof, the
Trustee shall have no duty as to any Collateral in its possession or control or
in the possession or control of any agent or bailee or any income thereon or as
to preservation of rights against prior parties or any other rights pertaining
thereto and the Trustee shall not be responsible for filing any financing or
continuation statements or recording any documents or instruments in any public
office at any time or times or otherwise perfecting or maintaining the
perfection of any security interest in the Collateral. The Trustee shall be
deemed to have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property and shall not be liable or responsible for any
loss or diminution in the value of any of the Collateral, by reason of the act
or omission of any carrier, forwarding agency or other agent or bailee selected
by the Trustee in good faith.
(b) The Trustee shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Liens in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder, except to the extent such action or omission constitutes
gross negligence, bad faith or wilful misconduct on the part of the Trustee, for
the validity or sufficiency of the Collateral or any agreement or assignment
contained therein, for the validity of the title of the Company or any Guarantor
to the Collateral, for insuring the Collateral or for the payment of taxes,
charges, assessments or Liens upon the Collateral or otherwise as to the
maintenance of the Collateral. The Trustee shall have no duty to ascertain or
inquire as to the performance or observance of any of the terms of this
Indenture, the Master Security Agreement, the Collateral Agency Agreement or the
Mortgage by the Company, any Guarantors, or the Collateral Agent. ARTICLE 8
SECTION 8.1. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.2 or 8.3 hereof applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
51
<PAGE>
SECTION 8.2. LEGAL DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company will, subject to the satisfaction of
the conditions set forth in Section 8.4 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which will thereafter be deemed to be "outstanding" only for
the purposes of Section 8.6 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, will execute proper instruments acknowledging
the same), except for the following provisions which will survive until
otherwise terminated or discharged pursuant to this Indenture: (a) the rights of
Holders of outstanding Notes to receive solely from the trust fund described in
Section 8.4 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, and premium, if any, and interest on, such Notes
when such payments are due, (b) the Company's obligations with respect to such
Notes under Article 2 and, to the extent such obligations are not satisfied by
payment from such trust fund, Section 4.1 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Company may exercise its option under this
Section 8.2 notwithstanding the prior exercise of its option under Section 8.3
hereof.
SECTION 8.3. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, and subject to the satisfaction of the
conditions set forth in Section 8.4 hereof, the Company will be released from
its obligations under the covenants contained in Sections 4.3, 4.4, 4.5, 4.7,
4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18, 4.19, 4.20, 5.1, and
5.2 with respect to the outstanding Notes on and after the date the conditions
set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Notes will thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but will
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes will not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company need not comply with and will have no liability
in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply will
not constitute a Default or an Event of Default under Section 6.1 hereof, but,
except as specified above, the remainder of this Indenture and such Notes will
be unaffected thereby. In addition, upon the Company's exercise under Section
8.1 hereof of the option applicable to this Section 8.3 hereof, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, Sections 6.1(d),
(f) and (g) hereof will not constitute Events of Default.
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
In order to exercise either Legal Defeasance or Covenant Defeasance,
the Company must irrevocably deposit, or cause to be deposited, with the Trustee
(or another trustee satisfying the requirements of this Indenture), in trust for
such purpose, (1) money in an amount, (2) non-callable Government Securities
which through the scheduled payment of principal, interest and premium, if any,
in respect thereof in accordance with their terms will provide not later than
one day before the due date of any payment money in an amount, or (3) a
combination thereof, sufficient, without reinvestment, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay the principal of,
and premium, if any, and interest on, the outstanding Notes at maturity or upon
redemption, together with all other amounts payable by the Company under this
Indenture. Such Legal Defeasance or Covenant Defeasance will become effective
123 calendar days after such deposit if and only if:
52
<PAGE>
(i) no Default or Event of Default with respect to the Notes shall
have occurred and be continuing immediately prior to the time of
such deposit;
(ii) no Default or Event of Default pursuant to Section 6.1(h) or
6.1(i) shall have occurred at any time in the period ending on
the 123rd day after the date of such deposit and will be
continuing on such 123rd day;
(iii)such defeasance does not result in a breach or violation of, or
constitute a default under, any other material agreement or
instrument to which the Company is a party or by which it is
bound (and, in furtherance of such condition, no Default or Event
of Default will result under this Indenture due to the incurrence
of Indebtedness to fund such deposit and the entering into of
customary documentation in connection therewith, even though such
documentation may contain provisions that would otherwise give
rise to a Default or Event of Default); and
(iv) the Company has delivered to the Trustee (A) (1) in the case of
Legal Defeasance, an Opinion of Counsel to the effect that (x)
there has been published by the Internal Revenue Service a ruling
or (y) since the Effective Date, there has been a change in the
applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel will confirm
that, the Holders of the Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred, or (2)
in the case of Covenant Defeasance, an Opinion of Counsel to the
effect that the Holders of the Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on
the same amount, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not
occurred; (B) an Opinion of Counsel to the effect that after the
123rd day after the date of such deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors'
rights generally; (C) an Officers' Certificate stating that such
deposit was not made by the Company with the intent of preferring
the Holders of Notes over the other creditors of the Company with
the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and (D) an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to such Legal Defeasance or
Covenant Defeasance have been complied with.
53
<PAGE>
SECTION 8.5. DISCHARGE.
If (i) either (a) all such Notes theretofore authenticated and
delivered except lost, stolen or destroyed Notes that have been
replaced or paid and Notes for whose payment money has
theretofore been deposited in trust with the Trustee and
thereafter repaid to the Company or discharged from such trust)
have been delivered to the Trustee for cancellation; or (b) all
such Notes not heretofore delivered to the Trustee for
cancellation have become due and payable by their terms and the
Company has irrevocably deposited or caused to be deposited with
the Trustee funds in an amount of money in U.S. dollars
sufficient to pay and discharge the entire indebtedness on the
Notes not theretofore delivered to the Trustee for cancellation,
for the principal amount, premium, if any, accrued and unpaid
interest, to the date of such deposit together with irrevocable
instructions from the Company directing the Trustee to apply such
funds to the payment thereof; (ii) the Company has paid all other
sums payable by it under this Indenture; and (iii) the Company
has delivered irrevocable instructions to the Trustee to apply
the deposited money toward the payment of the Notes (except lost,
stolen or destroyed Notes that have been replaced or paid and
Notes for whose payment money has been theretofore deposited in
trust with the Trustee and thereafter repaid to the Company or
discharged from such trust) at maturity, as the case may be, then
this Indenture will cease to be of further force or effect and,
at the written request of the Company, accompanied by an
Officers' Certificate and Opinion of Counsel, each stating that
all conditions precedent provided for herein relating to the
satisfaction and discharge of this Indenture have been complied
with, and upon payment of the costs, charges and expenses
incurred or to be incurred by the Trustee in relation thereto or
in carrying out the provisions of this Indenture, the Trustee
will satisfy and discharge this Indenture ("Discharge"); PROVIDED
that the Company's obligations with respect to the payment of
principal, premium, if any, and interest will not terminate until
the Trustee shall apply the moneys so deposited to the payment to
the Holders of Notes of all sums due and to become due thereon.
SECTION 8.6. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.7 hereof, all money and Government Securities
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.6, the "Trustee") pursuant
to Section 8.4 or 8.5 hereof in respect of the outstanding Notes will be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company or any of its Subsidiaries or Affiliates acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest but such money need not be segregated from other funds except to the
extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the money or Government Securities
deposited pursuant to this Section 8.6 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee will deliver or pay to the Company from time to time upon the request of
the Company any money or Government Securities held by it as provided in this
Section 8.6 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.4 hereof), are in
excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance, Covenant Defeasance or Discharge.
SECTION 8.7. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company or any of its Subsidiaries or Affiliates, in trust for the
payment of the principal of, or premium, if any, or interest on, any Note and
remaining unclaimed for one year after such principal, premium, if any, or
interest has become due and payable will be paid to the Company on its request
or (if then held by the Company or any of its subsidiaries or Affiliates) will
be discharged from such trust; and the Holder of such Note will thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
54
<PAGE>
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company or any of its Subsidiaries or Affiliates
as trustee thereof, will thereupon cease; PROVIDED, HOWEVER, that the Trustee or
such Paying Agent, before being required to make any such repayment, shall, at
the pre-paid expense of the Company, cause to be published once, in The New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which will not be
less than 30 calendar days from the date of such notification or publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 8.8. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or Government Securities in accordance with Section 8.2, 8.3 or 8.5
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
will be revived and reinstated as though no deposit had occurred pursuant to
Section 8.2, 8.3 or 8.5 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such assets in accordance with Section 8.2, 8.3 or 8.5
hereof, as the case may be; PROVIDED, HOWEVER, that, if the Company makes any
payment of principal of, or premium, if any, or interest on, any Note following
the reinstatement of its obligations, the Company will be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.2 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture, the Security Documents or the
Guarantees without the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
Certificated Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of Notes in the case of a merger or consolidation pursuant to Article 5
hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any such Holder; or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA as then in effect.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.2 hereof, the Trustee will join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained.
SECTION 9.2. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided in Section 9.1 and in this Section 9.2, this
Indenture, the Notes, the Security Documents or the Guarantees may be amended or
supplemented by the Company, each Guarantor, and the Trustee with the consent of
the Holders of at least a majority in principal amount of the Notes then
outstanding (including, without limitation, consents obtained in connection with
a purchase of, or tender offer or exchange offer for, Notes), and, subject to
55
<PAGE>
Sections 6.4 and 6.7 and the second to last paragraph of Section 6.1, any
existing Default, Event of Default (other than a Default or Event of Default in
the payment of principal of, premium, if any, or interest on, the Notes, except
a payment default resulting from an acceleration that has been rescinded) or
non-compliance with any provision of this Indenture, the Notes, the Security
Documents or the Guarantees may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a purchase of, or a tender offer or exchange offer
for, the Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture (or amendment or supplement to the Security Documents or the
Guarantees, as the case may be), and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
7.2 hereof, the Trustee will join with the Company in the execution of such
amended or supplemental Indenture (or amendment or supplement to the Security
Documents or the Guarantees, as the case may be), and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee will not be obligated to enter into such amended or supplemental
Indenture or any other document in connection with this Indenture that adversely
affects its own rights, duties, liabilities or immunities under this Indenture
or otherwise.
It will not be necessary for the consent of the Holders of Notes under
this Section 9.2 to approve the particular form of any proposed amendment or
waiver, but it will be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof, the
Holders of a majority in principal amount of the Notes then outstanding may
waive compliance in a particular instance by the Company with any provision of
this Indenture or the Notes. However, without the consent of each Holder
affected, an amendment or waiver may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other than
provisions relating to Section 3.7);
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal
of, or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the Notes and a waiver of the payment default that resulted
from such acceleration) or reduce the Change of Control Payment, the Net
Proceeds Offer Price or the applicable redemption price;
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of, premium, if any, or interest on, the Notes;
(g) waive a redemption payment with respect to any Note (other than
provisions relating to Section 3.7);
(h) release any Collateral from the Lien created by the Security
Documents, except in accordance with the terms thereof, or amend such terms; or
(i) make any change in the foregoing amendment and waiver provisions.
56
<PAGE>
SECTION 9.3. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes will be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment has
been approved by the requisite Holders. An amendment, supplement or waiver
becomes effective when approved by the requisite Holders and executed by the
Trustee (or, if otherwise provided in such waiver, supplement or amendment, in
accordance with its terms) and thereafter binds every Holder.
The Company may, but will 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
sentence of the immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and only those Persons,
will be entitled to consent to such amendment or waiver or revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No consent will be valid or effective for more than 90 calendar
days after such record date except to the extent that the requisite number of
consents to the amendment, supplement or waiver have been obtained within such
90-day period or as set forth in the next paragraph of this Section 9.4.
After an amendment, supplement or waiver becomes effective, it will
bind every Holder, unless it makes a change described in any of clauses (a)
through (i) of Section 9.2, in which case, the amendment, supplement or waiver
will bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same
indebtedness as the consenting Holder's Note, PROVIDED that any such waiver
shall not impair or affect the right of any other Holder to receive payment of
principal, premium, or interest on a Note, on or after the respective dates set
for such amounts to become due and payable expressed in such Note, or to bring
suit for the enforcement of any such payment on or after such respective dates.
SECTION 9.5. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee or
require the Holder to put an appropriate notation on the Note. The Trustee may
place an appropriate notation on the Note about the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note will issue and the Trustee will authenticate a
new Note that reflects the changed terms. Any failure to make the appropriate
notation or to issue a new Note shall not affect the validity of such amendment,
supplement or waiver.
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee will sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. In
executing any amended or supplemental indenture, the Trustee will be entitled to
receive and (subject to Section 7.1) will be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel to the effect that the execution
of such amended or supplemental indenture is authorized or permitted by this
Indenture.
57
<PAGE>
SECTION 9.7. PAYMENTS FOR CONSENT.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Notes for or as an
inducement to any consent, waiver or amendment of any terms or provisions of
this Indenture, the Notes, the Security Documents or the Guarantees unless such
consideration is offered to be paid or is paid to all Holders of the Notes that
so consent, waive or agree to amend in the time frame set forth in solicitation
documents relating to such consent, waiver or agreement.
ARTICLE 10
COLLATERAL AND SECURITY
SECTION 10.1. SECURITY DOCUMENTS.
The due and punctual payment of the principal and premium, if any, of,
and interest on, the Notes when and as the same shall be due and payable,
whether on an Interest Payment Date, at maturity, by acceleration, repurchase,
redemption or otherwise, interest on the overdue principal of and interest (to
the extent permitted by law), if any, on the Notes and performance of all other
Obligations of the Company to the Holders of the Notes and the Trustee under
this Indenture with respect to the Notes, shall be secured as provided in the
Security Documents.
The Company shall, and shall cause each of its Restricted Subsidiaries
to, do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the Security Documents, to
assure and confirm to the Trustee and the Collateral Agent, for the benefit of
the Trustee and the Holders of the Notes, the security interest in the
Collateral contemplated hereby and by the Security Documents, as from time to
time constituted, so as to render the same available for the security and
benefit of this Indenture and the Notes according to the intent and purposes
herein and therein expressed. The Company shall, and shall cause each of its
Restricted Subsidiaries to, take, upon request of the Trustee or the Collateral
Agent, any and all actions required to cause the Security Documents to create
and maintain, valid and enforceable, perfected (except as expressly provided
herein or therein), Liens in and on all the Collateral, in favor of the
Collateral Agent for the benefit of the Trustee and the Holders of the Notes
superior to and prior to the rights of all other third Persons, and subject to
no other Liens, other than Permitted Liens.
The Company represents, covenants and agrees that it has, at all
relevant times has had, and that it and its Restricted Subsidiaries shall at all
times have, full right, power and lawful authority to grant, bargain, sell,
release, convey, hypothecate, assign, mortgage, pledge, transfer and confirm the
property constituting the Collateral, in the manner and form provided in the
Security Documents, free and clear of all Liens, pledges, charges and
encumbrances whatsoever (other than Permitted Liens), and that (i) it will
forever warrant and defend the title to the same against the claims of all
persons whatsoever (except as to Permitted Liens), (ii) to the extent provided
by the Master Security Agreement, it and the Restricted Subsidiaries, as
applicable, will execute, acknowledge and deliver to the Trustee or the
Collateral Agent such further assignments, transfers, assurances or other
instruments as the Trustee or the Collateral Agent may reasonably require or
request, and (iii) to the extent provided by the Master Security Agreement, it
and the Restricted Subsidiaries, as applicable, will do or cause to be done all
such acts and things as may be necessary or proper, or as may be required by the
Trustee or the Collateral Agent, to assign and confirm to the Trustee and the
Collateral Agent the Collateral, or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit of
the Security Documents, this Indenture and the Notes. The Company and each
Restricted Subsidiary further covenants and agrees that the Master Security
Agreement and the Mortgage each creates or will create, as the case may be, a
valid first-ranking Lien (subject to Permitted Liens) on the Collateral subject
thereto.
58
<PAGE>
SECTION 10.2. OPINIONS.
The Company shall furnish to the Trustee within three months after
each anniversary of the date hereof, an Opinion of Counsel, dated as of such
date of delivery, stating either that (i) in the opinion of such counsel, all
action has been taken with respect to the recording, registering, filing, re-
recording, re-registering and refiling of the Security Documents and all
supplements thereto or to this Indenture, financing statements, continuation
statements or other instruments of further assurance as is necessary to maintain
the Liens of the Security Documents and reciting the details of such action or
(ii) in the opinion of such Counsel, no such action is necessary to maintain
such Liens, which Opinion of Counsel also shall state what actions it then
believes are necessary to maintain the effectiveness of such Liens during the
next two years.
SECTION 10.3. RELEASE OF COLLATERAL.
(a) Unless a Default or Event of Default shall have occurred and be
continuing, Collateral shall be released from the Liens created by the Security
Documents from time to time at the sole cost and expense of the Company:
(i)upon payment in full of the Notes and all other Obligations of the
Company to the Holders of the Notes and the Trustee under this Indenture with
respect to the Notes then due and owing, or
(ii) upon the sale or other disposition of such Collateral pursuant to
an Asset Sale made in accordance with Section 4.10 hereof or pursuant to a
transaction which is deemed not to be an Asset Sale as provided in the
definition of such term,
PROVIDED, that the Trustee shall not release any Lien on any Collateral unless
and until it shall have received an Officers' Certificate certifying that all
conditions precedent hereunder have been met and such other documents required
by Section 10.4 hereof. Upon compliance with the above provisions, the Trustee
shall execute, deliver or acknowledge any necessary or proper instrument of
termination, satisfaction or release to evidence the release of any Collateral
permitted to be released pursuant to this Indenture or the Security Documents;
(b) The disposition of Inventory or Accounts in the ordinary course of
business may be made without delivery to the Trustee of certificates required by
TIA ss.314(d); and
(c) The release of any Collateral from the terms of the Security
Documents shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof and of the Security Documents if and to
the extent the Collateral is released pursuant to the terms of this Indenture
and the Security Documents.
SECTION 10.4. CERTIFICATES OF THE COMPANY.
The Company shall furnish to the Trustee prior to each proposed
release of Collateral other than by reason of transactions referred to in
Section 10.3(b), all documents required by TIA ss. 314(d). The Trustee may, to
the extent permitted by Sections 7.1 and 7.2 hereof, accept as conclusive
evidence of compliance with the foregoing provisions the appropriate statements
contained in such instruments. Any certificate or opinion required by TIA ss.
314(d) may be made by an Officer of the Company except in cases where TIA ss.
314(d) requires that such certificate or opinion be made by an independent
engineer, appraiser or other expert within the meaning of TIA ss. 314(d).
SECTION 10.5. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE
SECURITY DOCUMENTS.
The Trustee may, in its sole discretion and without the consent of the
Holders, on behalf of the Holders, take all actions it deems necessary or
appropriate in order to (a) enforce any of the terms of the Security Documents
and (b) collect and receive any and all amounts payable in respect of the
Obligations of the Company and the Guarantors hereunder. The Trustee shall have
the power to institute and to maintain such suits and proceedings as it may deem
59
<PAGE>
expedient to prevent any impairment of the Collateral by any acts that may be
unlawful or in violation of the Security Documents or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders in the Collateral (including
power to institute and maintain suits or proceedings to restrain the enforcement
of or compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid if the enforcement of,
or compliance with, such enactment, rule or order would impair the security
interest hereunder or be prejudicial to the interests of the Holders or the
Trustee).
SECTION 10.6. AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE
SECURITY DOCUMENTS.
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture and the Security Documents.
SECTION 10.7.TRUSTEE NOT LIABLE FOR ACTIONS OF COLLATERAL AGENT.
Each of the Company and each Holder of a Note hereby acknowledges and
agrees that in no event shall the Trustee be liable for any action or inaction
of the Collateral Agent hereunder or under any Security Document.
ARTICLE 11
GUARANTEE OF NOTES
SECTION 11.1. GUARANTEE.
(a) Each Guarantor hereby jointly and severally irrevocably and
unconditionally guarantees, as a primary obligor and not a surety, to each
Holder of a Note now or hereafter authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the Obligations of the Company
hereunder or thereunder, (i) the due and punctual payment of the principal,
premium, if any, interest (including post-petition interest in any proceeding
under any Bankruptcy Law whether or not an allowed claim in such proceeding) on
overdue principal, premium, if any, and interest, if lawful on such Note, and
(ii) all other monetary Obligations payable by the Company, under this Indenture
(including under Section 7.7 hereof) and the Notes (all of the foregoing being
hereinafter collectively called the "Guaranteed Obligations"), when and as the
same shall become due and payable, whether by acceleration thereof, call for
redemption or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code), in
accordance with the terms of any such Note and of this Indenture, subject,
however, in the case of (i) and (ii) above, to the limitations set forth in
Section 11.3 hereof. Each Guarantor hereby agrees that the Guaranteed
Obligations hereunder shall be absolute and unconditional, irrespective of, and
shall be unaffected by, any failure to enforce the provisions of any such Note
or this Indenture, any waiver, modification or indulgence granted to the Company
with respect thereto, the recovery of any judgment against the Company, any
action to enforce the same by the Holders or the Trustee, or any other
circumstances which might otherwise constitute a legal or equitable discharge of
a surety or guarantor. Each Guarantor hereby waives diligence, presentment,
filing of claims with a court in the event of a merger or bankruptcy of the
Company, any right to require a proceeding first against the Company, the
benefit of discussion, protest or notice with respect to any such Note or the
Indebtedness evidenced thereby and all demands whatsoever, and covenants that
this Guarantee shall not be discharged as to any such Note except by payment in
full of the principal thereof, premium, if any, and all accrued interest
thereon.
(b) Each Guarantor further agrees that this Guarantee constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any Note held for payment of the Guaranteed
Obligations.
60
<PAGE>
(c) Each Guarantor agrees that it will not exercise any right of
subrogation in relation to the Holders or the Trustee in respect of any
Guaranteed Obligations until such time as the Notes and all other Guaranteed
Obligations are indefeasibly paid in full. Each Guarantor further agrees that,
as between such Guarantor, on the one hand, and the Holders and the Trustee, on
the other hand, (i) the maturity of the Guaranteed Obligations may be
accelerated as provided in Article 6 for the purposes of such Guarantor's
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Guaranteed Obligations, and (ii) in the
event of any declaration of acceleration of such Guaranteed Obligations as
provided in Article 6 hereof, such Guaranteed Obligations (whether or not due
and payable) shall forthwith become due and payable by such Guarantor for the
purpose of this Article 11.
(d) Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee or
any Holder in enforcing any rights under this Article 11.
(e) The Guarantee set forth in this Article 11 shall not be valid or
become obligatory for any purpose with respect to a Note until the certificate
of authentication on such Note shall have been signed by or on behalf of the
Trustee.
(f) Each Guarantee is secured by a first priority security interest
(subject to Permitted Liens) in the Collateral.
SECTION 11.2. GUARANTEE UNCONDITIONAL, ETC.
Upon failure of payment when due of any Guaranteed Obligation for
whatever reason, each Guarantor will be obligated to pay the same immediately.
Each Guarantor hereby agrees that its obligations hereunder shall be continuing,
absolute and unconditional, irrespective of: the recovery of any judgment
against the Company or any Guarantor; any extension, renewal, settlement,
compromise, waiver or release in respect of any obligation of the Company under
this Indenture or any Note, by operation of law or otherwise; any modification
or amendment of or supplement to this Indenture or any Note; any change in the
corporate existence, structure or ownership of the Company, or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the Company or
its assets or any resulting release or discharge of any obligation of the
Company contained in this Indenture or any Note; the existence of any claim,
set-off or other rights which any Guarantor may have at any time against the
Company, the Trustee, any Holder or any other Person, whether in connection
herewith or any unrelated transactions; PROVIDED, that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim; any invalidity or unenforceability relating to or against the
Company for any reason of this Indenture or any Note, or any provision of
applicable law or regulation purporting to prohibit the payment by the Company
of the principal, premium, if any, or interest on any Note or any other
Guaranteed Obligation; or any other act or omission to act or delay of any kind
by the Company, the Trustee, any Holder or any other Person or any other
circumstance whatsoever which might, but for the provisions of this Section
11.2, constitute a legal or equitable discharge of the Guarantors' obligations
hereunder. Subject to Section 11.5, each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demand whatsoever and covenants
that this Guarantee will not be discharged except by the complete performance of
the obligations contained in the Notes, this Indenture and in this Article 11.
Each Guarantor's obligations hereunder shall remain in full force and effect
until the Indenture shall have terminated and the principal of and interest on
the Notes and all other Guaranteed Obligations shall have been paid in full. If
at any time any payment of the principal of or interest on any Note or any other
payment in respect of any Guaranteed Obligation is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Company or otherwise, each Guarantor's obligations hereunder with respect
to such payment shall be reinstated as though such payment had been due but not
made at such time, and this Article 11, to the extent therefore discharged,
shall be reinstated in full force and effect. Each Guarantor irrevocably waives
any and all rights to which it may be entitled, by operation of law or
otherwise, upon making any payment hereunder to be subrogated to the rights of
the payee against the Company with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by the Company in respect thereof.
61
<PAGE>
SECTION 11.3. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor and by its acceptance hereof each Holder hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of the Bankruptcy Law, federal, state or provincial
fraudulent conveyance laws or other legal principles. To effectuate the
foregoing intention, the Holders and each Guarantor hereby irrevocably agree
that the obligations of each Guarantor under its Guarantee shall be limited to
the maximum amount which, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee of the Notes or pursuant
to Section 11.4 hereof, will result in the obligations of such Guarantor under
its Guarantee not constituting such fraudulent transfer or conveyance under
applicable law.
SECTION 11.4. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, INTER SE, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a PRO RATA amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor), determined in accordance with GAAP,
for all payments, damages and expenses incurred by that Funding Guarantor in
discharging the Company's obligations with respect to the Notes or any other
Guarantor's obligations with respect to the Guarantee.
SECTION 11.5. RELEASE.
Upon the sale or disposition of all of the Equity Interests of a
Guarantor to an entity which is not the Company or a Restricted Subsidiary of
the Company, which is otherwise in compliance with this Indenture, such
Guarantor shall be deemed released from all its obligations under this Indenture
without any further action required on the part of the Trustee or any Holder;
PROVIDED, HOWEVER, that any such termination shall occur if and only to the
extent that all Obligations of such Guarantor under all of its guarantees of,
and under all of its pledges of assets which secure, Indebtedness of the Company
and the other Guarantors shall also terminate upon such release, sale or
transfer; PROVIDED further, that without limiting the foregoing, any proceeds
received by the Company or any Restricted Subsidiary of the Company from such
transaction shall be applied as provided in Section 4.10. The Trustee shall
deliver an appropriate instrument evidencing such release upon receipt of a
request by the Company accompanied by an Officers' Certificate certifying as to
the compliance with this Section 11.5. Any Guarantor not released in accordance
with the first sentence of this Section 11.5, remains liable for the full amount
of principal, premium, if any, and interest on the Notes as provided in this
Article 11.
SECTION 11.6. ADDITIONAL GUARANTORS.
Any Person that was not a Guarantor on the Effective Date may become a
Guarantor by executing and delivering to the Trustee (a) a supplemental
indenture in form and substance satisfactory to the Trustee, which subjects such
Person to the provisions (including, without limitation, the representations and
warranties in this Article 11 and Article 10) of this Indenture as a Guarantor
and (b) an Opinion of Counsel to the effect that such supplemental indenture has
been duly authorized and executed by such Person and constitutes the legal,
valid, binding and enforceable obligation of such Person (subject to such
customary exceptions concerning creditors' rights and equitable principles as
may be acceptable to the Trustee in its discretion). The Guarantee of each
Person described in this Section 11.6 shall apply to all Notes whether executed,
authenticated and delivered on, before or after the date such Person becomes a
Guarantor.
SECTION 11.7. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
62
<PAGE>
Nothing contained in this Indenture or in any of the Notes shall
prevent any consolidation or merger of a Guarantor with or into the Company or
another Guarantor or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety, to the Company or
another Guarantor. Upon any such consolidation, merger, sale or conveyance, the
Guarantee given by such Guarantor shall no longer have any force or effect.
SECTION 11.8. SUCCESSORS AND ASSIGNS.
This Article 11 shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Noteholders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Notes shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions of this Indenture.
SECTION 11.9. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each Guarantor covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive such Guarantor from
performing its Guarantee as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) each such
Guarantor hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), such TIA-imposed duties will control.
SECTION 12.2. NOTICES.
Any notice or communication by the Company or a Guarantor or the
Trustee to the other is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
other's address:
If to the Company or a Guarantor:
ITSA-Intercontinental Telecomunicacoes Ltda.
SCS, Quadra 07-B1.A
Ed. Executive Tower
Sala 601
70.300.911 Brasilia-DF Brazil
Phone No.: 011-55-61-314-9908
Telecopier No.: 011-55-61-323-5660
Attention: Hermano Studart Lins de Albuquerque
With a copy to:
Kelley Drye & Warren LLP
63
<PAGE>
Two Stamford Plaza
281 Tresser Boulevard
Stamford, CT 06901-3229
Phone No.: (203) 324-1400
Telecopier No.: (203) 964-3188
Attention: John T. Capetta, Esq.
If to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Phone No.: (212) 815-5919
Telecopier No.: (212) 815-5595
Attention: Luis Perez
With a copy to:
Emmet, Marvin & Martin, LLP
120 Broadway
New York, New York 10271-3291
Phone No.: (212) 238-3000
Telecopier No.: (212) 238-3100
Attention: Edward P. Zujkowski, Esq.
Bryant K. Berg, Esq.
The Company or the Trustee, by notice to the other, may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; ten Business Days after being deposited in the mail, postage prepaid,
if mailed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery, in each case to the address shown above.
Notwithstanding the foregoing, notices to the Trustee will only be effective
upon actual receipt thereof by the Trustee at the Corporate Trust Office of the
Trustee.
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the Register. Any
notice or communication will also be so mailed to any Person described in TIA
Section 313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it will not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will
mail a copy to the Trustee and each Agent at the same time.
SECTION 12.3. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else will have the protection of
TIA Section 312(c).
64
<PAGE>
SECTION 12.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company will furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which will include the statements set forth in
Section 12.5 hereof) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which will include the statements set forth in
Section 12.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 12.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a) (4)) will comply with the provisions of
TIA Section 314(e) and will include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 12.6. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 12.7. NO PERSONAL LIABILITY OF DIRECTORS , OFFICERS, EMPLOYEES AND
OTHERS.
No past, present or future director, officer, employee, incorporator,
partner or stockholder of either of the Company or any of its Subsidiaries, as
such, will have any liability for any obligations of the Company or its
Subsidiaries under the Notes, the Security Documents, the Guarantees or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes and the Guarantees.
SECTION 12.8. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES.
SECTION 12.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
65
<PAGE>
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 12.10. SUCCESSORS.
This Indenture will inure to the benefit of and be binding upon the
parties hereto and each of their respective successors and assigns, except that
the Company may not assign this Indenture or its obligations hereunder except as
expressly permitted by Sections 5.1 and 5.2. Without limiting the generality of
the foregoing, this Indenture will inure to the benefit of all Holders from time
to time. Nothing expressed or mentioned in this Indenture is intended or shall
be construed to give any Person, other than the parties hereto, their respective
successors and assigns, and the Holders, any legal or equitable right, remedy or
claim under or in respect of this Indenture or any provision herein contained.
SECTION 12.11. SEVERABILITY.
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 12.12. ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
SECTION 12.13. 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 of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
SECTION 12.14. COUNTERPARTS.
This Indenture may be signed in counterparts and by the different
parties hereto in separate counterparts, each of which will constitute an
original and all of which together will constitute one and the same instrument.
SECTION 12.15. AGENT FOR SERVICE; SUBMISSION TO JURISDICTION; WAIVER OF
IMMUNITIES.
66
<PAGE>
By the execution and delivery of this Indenture or any amendment or
supplement hereto, each of the Company and the Guarantors (i) acknowledges that
it has, by separate written instrument, designated and appointed Corporation
Service Company currently located at Two World Trade Center, Suite 8746, New
York, New York 10048-0203, as its authorized agent upon which process may be
served in any suit, action or proceeding with respect to, arising out of, or
relating to, the Notes, this Indenture (other than an insolvency, liquidation or
bankruptcy proceeding or any other proceeding in the nature of an in rem or
quasi in rem proceeding), that may be instituted in any Federal or state court
in the State of New York, The City of New York, the Borough of Manhattan, or
brought under Federal or state securities laws or brought by the Trustee
(whether in its individual capacity or in its capacity as Trustee hereunder),
and acknowledges that Corporation Service Company has accepted such designation,
(ii) submits to the jurisdiction of any such court in any such suit, action or
proceeding, and (iii) agrees that service of process upon Corporation Service
Company shall be deemed in every respect effective service of process upon the
Company in any such suit, action or proceeding. Each of the Company and each
Guarantor further agrees to take any and all action, including the execution and
filing of any and all such documents and instruments as may be necessary to
continue such designation and appointment of Corporation Service Company in full
force and effect so long as this Indenture shall be in full force and effect;
PROVIDED that the Company and each Guarantor may and shall (to the extent
Corporation Service Company ceases to be able to be served on the basis
contemplated herein), by written notice to the Trustee, designate such
additional or alternative agents for service of process under this Section 12.15
that (i) maintains an office located in the Borough of Manhattan, The City of
New York in the State of New York, (ii) are either (a) counsel for the Company
or the Guarantor, as the case may be, or (b) a corporate service company which
acts as agent for service of process for other persons in the ordinary course of
its business and (iii) agrees to act as agent for service of process in
accordance with this Section 12.15. Such notice shall identify the name of such
agent for process and the address of such agent for process in the Borough of
Manhattan, The City of New York, State of New York. Upon the request of any
Holder of a Note, the Trustee shall deliver such information to such Holder.
Notwithstanding the foregoing, there shall, at all times, be at least one agent
for service of process for the Company and each Guarantor appointed and acting
in accordance with this Section 12.15.
To the extent that the Company or any Guarantor has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service of notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) with respect to itself or its
property, the Company or the Guarantor, as the case may be, hereby irrevocably
waives such immunity in respect of its obligations under this Indenture and the
Notes, to the extent permitted by law.
SECTION 12.16. CURRENCY OF ACCOUNT; CONVERSION OF CURRENCY; FOREIGN EXCHANGE
RESTRICTIONS.
(a) 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 or this
Indenture, including damages. Any amount received or recovered in a currency
other than U.S. 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 will only constitute a
discharge to the Company to the extent of the U.S. 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 U.S. dollar amount is less than the U.S. dollar
amount expressed to be due to the recipient under any Note, the Company will
indemnify it against any loss sustained by it as a result as set forth in
Section 12.16(b). In any event, the Company will indemnify the recipient against
the cost of making any such purchase. For the purposes of this Section 12.16, it
will be sufficient for the Holder of a Note to certify in a satisfactory manner
(indicating sources of information used) that it would have suffered a loss had
an actual purchase of U.S. dollars been made with the amount so received in that
other currency on the date of receipt or recovery (or, if a purchase of U.S.
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 manner mentioned above). The indemnities set forth in
this Section 12.16 constitute 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.
67
<PAGE>
(b) The Company covenants and agrees that the following provisions
shall apply to conversion of currency in the case of the Notes and this
Indenture:
(i) If for the purpose of obtaining judgment in, or enforcing the
judgment of, any court in any country, it becomes necessary to convert
into a currency (the "judgment currency") an amount due in any other
currency (the "Base Currency"), then the conversion shall be made at
the rate of exchange (as defined in clause (v) below) prevailing on
the Business Day before the day on which the judgment is given or the
order of enforcement is made, as the case may be (unless a court shall
otherwise determine).
(ii) If there is a change in the rate of exchange prevailing
between the Business Day before the day on which the judgment is given
or an order of enforcement is made, as the case may be (or such other
date as a court shall determine), and the date of receipt of the
amount due, the Company will pay such additional (or, as the case may
be, such lesser) amount, if any, as may be necessary so that the
amount paid in the judgment currency when converted at the rate of
exchange prevailing on the date of receipt will produce the amount in
the Base Currency originally due.
(iii) In the event of the winding-up of the Company at any time
while any amount or damages owing under the Notes and this Indenture,
or any judgment or order rendered in respect thereof, shall remain
outstanding, the Company will indemnify and hold the Holders of the
Notes and the Trustee harmless against any deficiency arising or
resulting from any variation in rates of exchange between (1) the date
as of which the U.S. Dollar Equivalent of the amount due or
contingently due under the Notes and this Indenture (other than under
this subsection (b) (iii) is calculated for the purposes of such
winding-up and (2) the final date for the filing of proofs of claim in
such winding-up. For the purpose of this subsection (b) (iii), the
final date for the filing of proofs of claim in the winding-up of the
Company will be the date fixed by the liquidator or otherwise in
accordance with the relevant provisions of applicable law as being the
latest practicable date as at which liabilities of the Company may be
ascertained for such winding-up prior to payment by the liquidator or
otherwise in respect thereof.
(iv) The obligations contained in subsections (a), (b) (ii) and
(b) (iii) of this Section 12.16 shall constitute separate and
independent obligations from the other Indenture obligations of the
Company, shall give rise to separate and independent causes of action
against the Company, shall apply irrespective of any waiver or
extension granted by any Holder of a Note or the Trustee or either of
them from time to time and shall continue in full force and effect
notwithstanding any judgment or order or the filing of any proof of
claim in the winding-up of the Company for a liquidated sum in respect
of amounts due hereunder (other than under subsection (b) (iii) above)
or under any such judgment or order. Any such deficiency as aforesaid
shall be deemed to constitute a loss suffered by the Holders of the
Note or the Trustee, as the case may be, and no proof or evidence of
any actual loss shall be required by the Company or the liquidator or
otherwise or any of them. In the case of subsection (b) (iii) above,
the amount of such deficiency shall not be deemed to be reduced by any
variation in rates of exchange occurring between the said final date
and the date of any liquidating distribution.
(v)The term "rate(s) of exchange" shall mean the rate of exchange
quoted by Reuters at 10:00 a.m. (New York City time) for spot
purchases of the Base Currency with the judgment currency other than
the Base Currency referred to in subsections (b) (i) and (b) (ii)
above and includes any premiums and costs of exchange payable.
(c) In the event that on any payment date in respect of the Notes, any
restrictions or prohibition of access to the Brazilian foreign exchange market
exists, the Company agrees to pay all amounts payable under the Notes in the
currency of the Notes by all reasonable means (which shall not include
commencement of legal proceedings against the Central Bank of Brazil or any
other governmental agency or authority or central bank), on any due date for
payment under the Notes, for the purchase of the currency of such Notes. All
costs and taxes payable in connection with the procedures referred to in this
Section 12.16 shall be borne by the Company.
68
<PAGE>
69
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Indenture this July
20, 2000.
ITSA-INTERCONTINENTAL TELECOMUNICACOES
LTDA.
By: /s/ Hermano Studart Lins de Albuquerque *
------------------------------------------
Name: Hermano Studart Lins de Albuquerque
Title: Chief Executive Officer
WITNESSES:
Name:
Name:
TV FILME BRASILIA SERVICOS DE
TELECOMUNICACOE LTDA.
By: /s/ Hermano Studart Lins de Albuquerque *
-----------------------------------------
Name: Hermano Studart Lins de Albuquerque
Title: Chief Executive Officer
WITNESSES:
Name:
Name:
TV FILME GOIANIA SERVICOS DE
TELECOMUNICACOES LTDA.
By: /s/ Hermano Studart Lins de Albuquerque *
-------------------------------------------
Name: Hermano Studart Lins de Albuquerque
Title: Chief Executive Officer
WITNESSES:
Name:
Name:
TV FILME BELEM SERVICOS DE
TELECOMUNICACOES LTDA.
By: /s/ Hermano Studart Lins de Albuquerque *
-----------------------------------
Name: Hermano Studart Lins de Albuquerque
Title: Chief Executive Officer
WITNESSES:
Name:
Name:
* Signature notarized by Brazilian notary as follows:
___________________________________________
| 2ND OFICIO DE NOTAS E PROTESTO |
| SRTV/SUL DD.701 BL.01 LOJA 24 - TERREO |
| ED.ASSIS CHATEAUERIAND - BRASILIA-DF |
| CGC/MF 00.618.421/0001-80 |
| ------------------------- |
| RECONHECO e dou fe'por AUTENTICIDADE a/s |
| firma(s) de: |
| 0045264-HERMANO STUDART LINS DE..........|
| ALBUQUERQUE......................|
| |
| Em testamento________da verdade. |
| BRASILIA, 29 de Junho de 2000 |
| |
| GOIANIO BORGES TEIXEIRA - TABELIAO |
| ENOQUES ALVES GOUVEIA - ESC. NOT. AUT. |
| RITA OLIDES B.P. PAES - ESC. NOT. AUT. |
| GUILHERMANDO H. DA SILVA- ESC. NOT. AUT. |
|___________________________________________|
<PAGE>
TV FILME SISTEMAS LTDA.
By: /s/ Hermano Studart Lins de Albuquerque *
-----------------------------------
Name: Hermano Studart Lins de Albuquerque
Title: Chief Executive Officer
WITNESSES:
Name:
Name:
TV FILME OPERACOES LTDA.
By: /s/ Hermano Studart Lins de Albuquerque *
-----------------------------------
Name: Hermano Studart Lins de Albuquerque
Title: Chief Executive Officer
WITNESSES:
Name:
Name:
LINK EXPRESS SERVICOS DE
TELECOMUNICACOES LTDA.
By: /s/ Hermano Studart Lins de Albuquerque *
-----------------------------------
Name: Hermano Studart Lins de Albuquerque
Title: Chief Executive Officer
WITNESSES:
Name:
* Signature notarized by Brazilian notary as follows:
___________________________________________
| 2ND OFICIO DE NOTAS E PROTESTO |
| SRTV/SUL QD.701 BL.01 LOJA 24 - TERREO |
| ED.ASSIS CHATEAUERIAND - BRASILIA-DF |
| CGC/MF 00.618.421/0001-80 |
| ------------------------- |
| RECONHECO e dou fe'por AUTENTICIDADE a/s |
| firma(s) de: |
| 0045264-HERMANO STUDART LINS DE..........|
| ALBUQUERQUE......................|
| |
| Em testamento________da verdade. |
| BRASILIA, 29 de Junho de 2000 |
| |
| GOIANIO BORGES TEIXEIRA - TABELIAO |
| ENOQUES ALVES GOUVEIA - ESC. NOT. AUT. |
| RITA OLIDES B.P. PAES - ESC. NOT. AUT. |
| GUILHERMANDO H. DA SILVA- ESC. NOT. AUT. |
|___________________________________________|
<PAGE>
Name:
THE BANK OF NEW YORK, as trustee
By: /s/ Carlos J. Capellan
-----------------------------------
Name: Carlos J. Capellan
Title: Assistant Treasurer
<PAGE>
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this 10 day of July, 2000, before me, a notary public within and
for said county, personally appeared Carlos J. Capellan, to me personally known
who being duly sworn, did say that he was the Assistant Treasurer of The Bank of
New York, one of the persons described in and which executed the foregoing
instrument, and acknowledges said instrument to be the free act and deed of said
corporation.
Notary Public
[NOTARIAL SEAL]
_____________________________________
| William J. Cassels |
| Notary Public, State of New York |
| No. 01CA5027729 |
| Qualified in Bronx County |
| |
| Commission Expires May 16, 2002 |
|_____________________________________|
<PAGE>
ANNEX I
EXISTING INDEBTEDNESS
None.
<PAGE>
ANNEX II
GUARANTORS
TV Filme Brasilia Servicos de Telecomunicacoes Ltda.
TV Filme Goiania Servicos de Telecomunicacoes Ltda.
TV Filme Belem Servicos de Telecomunicacoes Ltda.
TV Filme Sistemas Ltda.
TV Filme Operacoes Ltda.
Link Express Servicos de Telecomunicacoes Ltda.
<PAGE>
EXHIBIT A
(Face of Note)
[IF GLOBAL NOTE:] THIS IS A GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY,
OR BY ANY SUCH NOMINEE OF THE DEPOSITORY TO A SUCCESSOR NOMINEE, OR BY THE
DEPOSITORY OR NOMINEE TO A SUCCESSOR DEPOSITORY OR TO A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON 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.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE. TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH IN SECTION 2.6 OF THE
INDENTURE.
[IF CERTIFICATED NOTE:] THIS IS A SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO.
TRANSFERS OF THIS SECURITY OR PORTIONS OF THIS SECURITY TO GLOBAL FORM SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH IN
SECTION 2.6 OF THE INDENTURE.
A-1
<PAGE>
ITSA-INTERCONTINENTAL TELECOMUNICACOES LTDA.
12% Senior Secured Notes due 2004
No. __________ US$__________
[CUSIP No. __________]1
[CUSIP No. __________]2
ITSA-Intercontinental Telecomunicacoes Ltda., a Brazilian limited liability
company (the "Company") promises to pay to ______________________________ or
registered assigns, the principal sum of ________________________ Dollars on
December 20, 2004
Interest Payment Dates: June 20 and December 20 of each year, commencing on
December 20, 2000.
Record Dates: June 1 and December 1.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed.
Dated: __________, 2000
ITSA-INTERCONTINENTAL TELECOMUNICACOES
LTDA.
By:
-----------------------------------
Name:
Title:
________________
* CUSIP NO. for the Global Note.
** CUSIP NO. for the Certificated Notes
A-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By:_______________________________
Authorized Signatory
Dated:____________________________
A-3
<PAGE>
(Back of Note)
12% Senior Secured Notes due 2004
Capitalized terms used herein but not defined will have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST.
On any of the first four Interest Payment Dates occurring after the
date of the Indenture, interest on the Notes shall, at the option of the
Company, be paid in kind instead of in cash. Upon such an event, the Company
will issue to Holders of the Notes on any such Interest Payment Date, and the
Trustee will authenticate, an additional Note substantially in the form hereof
registered in the name of such Holder and having a principal amount equal to the
amount of interest paid in kind on all of the outstanding Notes held by such
Holder on such Interest Payment Date. The Notes will mature on December 20,
2004. The Company promises to pay interest on the principal amount of this Note
from December 20, 1999 until maturity. The Company will pay interest
semi-annually on June 20 and December 20 of each year, commencing December 20,
2000, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Notes will accrue at the
rate of 12% per annum from the most recent date to which interest has been paid
or, if no interest has been paid, from December 20, 1999. The Company will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law to the extent that such interest is an allowed claim enforceable
against the debtor under such Bankruptcy Law) on overdue principal and premium,
if any, from time to time on demand at the rate equal to 1% per annum in excess
of the then applicable interest rate on this Note to the extent lawful; it will
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law to the extent that such interest is an allowed claim against the
debtor under such Bankruptcy Law) on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at the same
rate to the extent lawful. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months.
2. METHOD OF PAYMENT.
The Company will pay the principal of, and premium, and interest on,
the Notes on the dates and in the manner provided herein and in the Indenture.
Principal, premium, if any, and interest on, Certificated Notes will be payable,
and Certificated Notes may be presented for registration of transfer or
exchange, at the office or agency of the Company maintained for such purpose.
Principal of, and premium and interest on, Global Notes will be payable by the
Company through the Trustee to the Depository in immediately available funds.
Holders of Certificated Notes will be entitled to receive interest payments by
wire transfer in immediately available funds if appropriate wire transfer
instructions have been received in writing by the Trustee not less than 15
calendar days prior to the applicable Interest Payment Date. Such wire
instructions, upon receipt by the Trustee, will remain in effect until revoked
by such Holder. If wire instructions have not been received by the Trustee with
respect to any Holder of a Certificated Note, payment of interest may be made by
check in immediately available funds mailed to such Holder at the address set
forth upon the Register maintained by the Registrar.
3. PAYING AGENT AND REGISTRAR.
Initially, Deutsche Trust Bank Limited will act as principal Paying
Agent, and The Bank of New York, the Trustee under the Indenture, will act as
Registrar. The Company may change any Paying Agent or Registrar in accordance
with the terms of the Paying Agent Agreement. The Company or any of its
Subsidiaries may act in any such capacity, PROVIDED, HOWEVER, that none of the
Company, its Subsidiaries or the Affiliates of the foregoing will act (i) as
Paying Agent in connection with any redemption, offer to purchase, discharge or
defeasance, as otherwise specified in the Indenture, and (ii) as Paying Agent or
Registrar if a Default or Event of Default has occurred and is continuing.
4. INDENTURE.
A-4
<PAGE>
The Company issued the Notes under an Indenture dated as of July 20,
2000 (as such may be amended, supplemented or restated from time to time, the
"Indenture") between the Company and the Trustee. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. The Notes are
senior obligations of the Company ranking PARI PASSU in right of payment with
all existing and future senior Indebtedness of the Company and ranking senior in
right of payment to any future subordinated Indebtedness of the Company.
5. OPTIONAL REDEMPTION.
The Notes will be subject to redemption at the option of the Company,
in whole or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest if any, thereon to the applicable
redemption date, if redeemed during the twelve month period beginning on
December 20 of the years indicated below:
Year Percentage
------ ------------
2000 106.4375%
2001 104.2917%
2002 102.1458%
2003 and thereafter 100.0000%
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company will not be
required to make mandatory redemption or sinking fund payments with respect to
the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon a Change of Control, the Company will be required to make an
offer to Holders to repurchase all or any part (equal to US$1,000 or an integral
multiple thereof) of each Holder's Notes at an offer price in cash equal to 101%
of the aggregate principal amount thereof, plus accrued and unpaid interest
thereon to the date of repurchase as provided in, and subject to the terms of,
the Indenture.
(b) If the Company or any Restricted Subsidiary consummates any Asset
Sale, the Company may be required, subject to the terms and conditions of the
Indenture, to utilize a certain portion of the proceeds received from such Asset
Sale to repurchase Notes at a purchase price equal to Net Proceeds Offer Price
on the Net Proceeds Purchase Date.
8. DENOMINATIONS, TRANSFER, EXCHANGE.
The Notes are in registered form without coupons in denominations of
US$1,000 and integral multiples of US$1,000. The transfer of Notes may be
registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or portion of
a Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Notes for a period of 15 calendar days before a selection of Notes to be
redeemed or during the period between a record date and the next succeeding
Interest Payment Date.
A-5
<PAGE>
9. PERSONS DEEMED OWNERS.
The registered Holder of a Note may be treated as its owner for all
purposes.
10. UNCLAIMED MONEY.
If money for the payment of principal, premium or interest remains
unclaimed for one year, the Trustee and the Paying Agent will pay the money back
to the Company at its request. After that, all liability of the Trustee and such
Paying Agent with respect to such money will cease.
11. DEFEASANCE PRIOR TO REDEMPTION OR MATURITY.
Subject to certain conditions contained in the Indenture, the Company
at any time may terminate some or all of its obligations under the Notes and the
Indenture if the Company deposits with the Trustee money or Government
Securities sufficient to pay the principal of, premium, and interest on, the
Notes to redemption or maturity, as the case may be.
12. AMENDMENT, SUPPLEMENT AND WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding, and any existing Default or
Event or Default or compliance with any provision of the Indenture or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes. Without the consent of any Holder of a Note, the
Indenture or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of Certificated Notes, to provide for the assumption of the Company's
obligations to Holders of Notes in case of a merger or consolidation, to make
any change that would provide any additional rights or benefits to the Holders
of the Notes or that does not adversely affect the legal rights under the
Indenture of any such Holder, or to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the TIA as
then in effect.
13. DEFAULTS AND REMEDIES.
An "Event of Default" occurs if one of the following shall have
occurred and be continuing:
(a) the Company defaults in the payment when due of any interest
payable with respect to the Notes at any time, which default continues for a
period of 30 calendar days;
(b) the Company defaults in payment when due of the principal of or
premium, if any, on the Notes at maturity, upon repurchase (including, without
limitation, pursuant to a Change of Control Offer or an Asset Sale Offer), upon
acceleration, redemption or otherwise;
(c) the granting by the Company or any Restricted Subsidiary of any
Lien to secure Indebtedness in excess of US$100,000 (other than a Permitted
Lien);
(d) the Company fails to comply with the provisions of Sections 4.10,
4.14, 4.19 or 5.1 of the Indenture;
(e) the Company fails to comply with any of its other agreements in
this Indenture or the Notes and such failure continues for 30 calendar days
after notice from the Trustee or Holders of at least 25% in aggregate principal
amount of the Notes then outstanding;
(f) the Company defaults under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed of the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists or
is created after the Effective Date, which default (i) is caused by a failure to
A-6
<PAGE>
pay principal of or premium, if any, or interest on such Indebtedness following
the expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or (ii) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates US$5,000,000 (or the equivalent
thereof at time of determination) or more;
(g) the Company or any of its Restricted Subsidiaries fails to pay
final non-appealable judgments rendered against the Company or any of its
Restricted Subsidiaries aggregating in excess of US$2,500,000 (or the equivalent
thereof at time of determination), which judgments are not paid, discharged or
stayed for a period of 60 calendar days after such judgments become final and
non-appealable;
(h) the Company or any Restricted Subsidiary of the Company pursuant
to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case
or proceeding, (ii) consents to the entry of an order for relief against it in
an involuntary case or proceeding, (iii) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (iv) makes a
general assignment for the benefit of its creditors, (v) admits in writing its
inability to pay its debts generally as they become due or (vi) takes any
comparable action under any foreign laws relating to insolvency;
(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (i) is for relief against the Company or any
Significant Subsidiary of the Company in an involuntary case or proceeding, (ii)
appoints a Custodian of the Company or any Significant Subsidiary of the Company
or for all or substantially all of its respective properties, or (iii) orders
the liquidation of the Company or any Significant Subsidiary of the Company, or
any similar relief is granted under any foreign laws, and in each case the order
or decree remains unstayed and in effect for 60 calendar days;
(j) (a) a default in the observance or performance of any covenant or
agreement contained in any Security Document which default continues for 20
calendar days after notice has been given to the Company by the Trustee or the
holders of at least 25% in principal amount of the outstanding Notes, or (b) for
any reason other than the satisfaction in full and discharge of all obligations
secured thereby or any action or inaction of the Trustee or the Holders after
receiving notice of the requirement to take any such action from the Company,
any of the Security Documents ceases to be in full force and effect (other than
in accordance with its respective terms), or any of the Security Documents
ceases to give the Trustee the Liens, rights, powers and privileges purported to
be created thereby, or any Security Document is declared null and void, or the
Company or any of its Restricted Subsidiaries denies any of its obligations
under any Security Document, in each case with respect to Collateral the
aggregate value of which is in excess of US$100,000, or the Collateral becomes
subject to one or more Liens other than Permitted Liens securing one or more
obligations in excess of US$100,000 in the aggregate; or
(k) any Guarantee is declared null and void or ceases to be in full
force and effect (except as permitted under this Indenture) or any Guarantor
shall deny or disaffirm its obligations under its Guarantee.
Notwithstanding the foregoing, if an Event of Default specified in
clause (f) above occurs and is continuing, such Event of Default and all
consequences thereof (including, without limitation, any acceleration or
resulting payment default) will be annulled and rescinded, automatically and
without any action by the Trustee or the Holders of the Notes, if (i) the
Indebtedness that is the subject of such Event of Default has been repaid, or
(ii) the default relating to such Indebtedness is waived or cured (and if such
Indebtedness has been accelerated, when the holders thereof have rescinded their
declaration of acceleration in respect of such Indebtedness).
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of this Indenture, an equivalent premium will
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes.
A-7
<PAGE>
If any Event of Default (other than an Event of Default specified in
clause (h) or (i) above occurs and is continuing), then the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes by
written notice to the Company and the Trustee may declare the unpaid principal
of, and any accrued interest on, all the Notes to be due and payable
immediately. If any Event of Default with respect to the Company specified in
clause (h) or (i) hereof occurs with respect to the Company, any Significant
Subsidiary of the Company or any group of Restricted Subsidiaries of the Company
that, taken together, would constitute a Significant Subsidiary of the Company,
all outstanding principal and interest on the Notes will be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of a majority in principal amount of the Notes then
outstanding, by written notice to the Trustee and to the Company, may rescind an
acceleration (except an acceleration due to a default in payment of the
principal of, or premium or interest on, any of the Notes) if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal, premium, interest that have become due
solely because of the acceleration) have been cured or waived.
Subject to the preceding paragraph, 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 any payment due, or to enforce the performance of any
provision, under the Notes, this Indenture or the Security Documents. The
Trustee may refuse to enforce the Indenture or the Notes unless it receives
indemnity or security reasonably satisfactory to it. Holders of Notes may not
enforce the Indenture or the Notes except as provided in the Indenture. Subject
to certain limitations, Holders of a majority in principal amount of the Notes
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except under clauses (a) or (b) above) if it determines that
withholding notice is in their interest.
14. 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 any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as such term is defined in TIA Section 310(b)), it must eliminate such
conflict within 90 calendar days, apply to the SEC for permission to continue as
trustee (to the extent permitted under TIA Section 310(b)) or resign. Any Agent
may do the same with like rights and duties.
15. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
OTHERS.
No past, present or future director, officer, employee, incorporator,
partner or stockholder of either of the Company or any of its Subsidiaries, as
such, will have any liability for any obligations of the Company or its
Subsidiaries under the Notes, the Security Documents, the Guarantees or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes and the Guarantees.
16. AUTHENTICATION.
This Note will not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
18. CUSIP NUMBERS.
A-8
<PAGE>
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.
19. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THE INDENTURE AND THE NOTES.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
ITSA-Intercontinental Telecomunicacoes Ltda.
SCS, Quadra 07-B1.A
Ed. Executive Tower
Sala 601
70.300.911 Brasilia-DF Brazil
Phone No.: 011-55-61-314-9908
Telecopier No.: 011-55-61-323-5660
Attention: Hermano Albuquerque
A-9
<PAGE>
Assignment Form
To assign this Note, fill in the form below and have your signature
guaranteed: (I) or (we) assign and transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________________ to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
--------------------------------------------------------------------------------
Date: Your Name:
------------------ -------------------------------------------
(Print your name exactly as it appears
on the face of this Note)
Your Signature:
----------------------------
(Sign exactly as your name
appears on the face of this
Note)
Signature Guarantee*:
----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-10
<PAGE>
Option of Holder to Elect Purchase
If you elect to have this Note purchased by the Company pursuant to
Section 4.10 or Section 4.14 of the Indenture, check the appropriate box below:
| __ | Section 4.10 | __ | Section 4.14
If you elect to have only part of this Note purchased by the Company
pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount (in
minimum denominations of US$1,000 or integral multiples thereof) you elect to
have purchased: US$_________
Date: Your Name:
------------------ -------------------------------------------
(Print your name exactly as it appears
on the face of this Note)
Your Signature:
----------------------------
(Sign exactly as your name
appears on the face of this
Note)
Signature Guarantee**:
----------------------
** Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-11
<PAGE>
SCHEDULE OF EXCHANGES OF CERTIFICATED NOTE1
The following exchanges of a part of this Global Note for Certificated
Notes have been made:
Date of Exchange Amount of decrease in Amount of increase in Principal Amount
Principal Amount of Principal Amount of Global Note
this Global Note this Global Note following such
(or increase)
---------------------
* This schedule should be included only if the Note is issued in global form.
A-12
<PAGE>
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF NOTES
Re: 12% Senior Secured Notes due 2004 of ITSA-Intercontinental
Telecomunicacoes Ltda.
This Certificate relates to US$ principal amount of Notes held in *|_|
global or *|_| certificated form by ________________________ (the "Transferor").
The Transferor* has requested the Trustee by written order to exchange or
register the transfer of a Note or Notes as follows:
Date: Your Name:
------------------ -------------------------------------------
(Print your name exactly as it appears
on the face of this Note)
Your Signature:
----------------------------
(Sign exactly as your name
appears on the face of this
Note)
Social Security or Tax Identification No:
-------------------------------------------
Signature Guarantee*:
----------------------
------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
<PAGE>
EXHIBIT C
FORM OF MASTER SECURITY AGREEMENT
See attached.
<PAGE>
EXHIBIT D
FORM OF MORTGAGE
See attached.
<PAGE>
EXHIBIT E
FORM OF COLLATERAL AGENCY AGREEMENT
See attached.
