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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 24, 1999
REGISTRATION NO. 333-79325
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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METROMEDIA INTERNATIONAL GROUP, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 7812 58-0971455
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer Identification No.)
incorporation or organization) Classification Code Number)
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ONE MEADOWLANDS PLAZA
EAST RUTHERFORD, NEW JERSEY 07073-2137
(201) 531-8000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
ARNOLD L. WADLER, ESQ.
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
METROMEDIA INTERNATIONAL GROUP, INC.
ONE MEADOWLANDS PLAZA
EAST RUTHERFORD, NEW JERSEY 07073-2137
(201) 531-8000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
Copies to:
DOUGLAS A. CIFU, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
212-373-3000
APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: As soon as practicable after
this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE AMENDED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE
THE OFFER OR SALE IS NOT PERMITTED.
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SUBJECT TO COMPLETION, DATED SEPTEMBER 24, 1999
PRELIMINARY PROSPECTUS
METROMEDIA INTERNATIONAL GROUP, INC.
EXCHANGE OFFER FOR $210,631,376 OF ITS
SERIES A 10 1/2% SENIOR DISCOUNT NOTES DUE 2007
TERMS OF THE EXCHANGE OFFER
- It will expire at 5:00 p.m., New York City time, on 1999,
unless we extend it.
- The exchange notes that we will issue you in exchange for your old notes
are new securities with no established market for trading.
BEFORE PARTICIPATING IN THIS EXCHANGE OFFER OR INVESTING IN THE EXCHANGE
NOTES, PLEASE REFER TO THE SECTION IN THIS PROSPECTUS ENTITLED "RISK FACTORS"
COMMENCING ON PAGE 11.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is , 1999.
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TABLE OF CONTENTS
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Summary................................................................................................... 1
Risk Factors.............................................................................................. 11
Use of Proceeds........................................................................................... 28
Capitalization............................................................................................ 28
Metromedia International Group............................................................................ 29
About Our Merger with PLD Telekom......................................................................... 32
Unaudited Pro Forma Combined Condensed Financial Information.............................................. 34
The Exchange Offer........................................................................................ 42
Description of the Notes.................................................................................. 50
Material United States Federal Income Tax Considerations.................................................. 82
Plan of Distribution...................................................................................... 87
Legal Matters............................................................................................. 87
Experts................................................................................................... 87
Available Information..................................................................................... 89
Documents Incorporated by Reference....................................................................... 90
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SUMMARY
THIS SUMMARY HIGHLIGHTS SOME INFORMATION FROM THIS PROSPECTUS. BECAUSE IT IS
A SUMMARY, IT DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER
BEFORE PARTICIPATING IN THIS EXCHANGE OFFER. YOU SHOULD READ THE ENTIRE
PROSPECTUS CAREFULLY, INCLUDING THE SECTION ENTITLED "RISK FACTORS" AND THE
SUMMARY AND PRO FORMA FINANCIAL STATEMENTS AND RELATED NOTES TO THOSE STATEMENTS
INCLUDED IN THIS PROSPECTUS.
ABOUT OUR BUSINESS
We are a global communications company. Through our communications group, we
are engaged in the development and operation of a variety of communications
businesses in Eastern Europe, the republics of the former Soviet Union, the
People's Republic of China and other selected emerging markets. These businesses
include cellular telecommunications, fixed telephony, international and long
distance telephony, cable television, paging and radio broadcasting. See
"Metromedia International Group" on page 29.
Our objective is to establish ourselves as a major multiple-market provider
of modern communications services in Eastern Europe, the former Soviet Union and
other selected emerging markets.
We also manufacture Snapper-Registered Trademark- brand power lawn and
garden equipment for sale to both residential and commercial customers. Snapper
sells its lawnmowers, garden tractors, lawn equipment, garden tillers and snow
throwers through its approximately 5,000-dealer network and through foreign
distributors. Our communications group's consolidated revenues represented
approximatley 12.6% of our total revenues and Snapper's revenues represented
approximately 87.4% of our total revenues for the fiscal year ended December 31,
1998. We view Snapper as a non-core asset and manage it in order to maximize
shareholder value.
On the date of this prospectus, we consummated the acquisition of PLD
Telekom Inc., a major provider of local, long distance and international
telecommunications services in the Russian Federation, Kazakhstan and Belarus.
PLD Telekom's five principal operating businesses are:
- PeterStar Company Limited: a provider of integrated local, long distance
and international telecommunications services in St. Petersburg through a
fully digital fiber optic network;
- Technocom Limited: a provider, through Teleport-TP, of dedicated
international telecommunications services to Russian and foreign
businesses in Moscow and an operator of a satellite-based pan-Russian long
distance network;
- Baltic Communications Limited: a provider of dedicated international
telecommunications services in St. Petersburg;
- ALTEL (formerly BECET International): a provider of a national cellular
service in Kazakhstan; and
- Belarus-Netherlands Belcel Joint Venture: a provider of the only national
cellular service in Belarus.
In addition, PLD Telekom is developing a portfolio of international long
distance products and services under the name "PLDncompass" targeted at carriers
and corporate customers in the United States, the United Kingdom and Europe
which require telecommunications services to and from the countries of the
former Soviet Union. Please refer to the section in this prospectus entitled
"About Our Merger with PLD Telekom."
Our executive offices are located at One Meadowlands Plaza, East Rutherford,
New Jersey 07073-2137. Our telephone number is (201) 531-8000.
THE EXCHANGE OFFER
We are offering to exchange $210,631,376 in aggregate principal amount at
maturity of our Series B 10 1/2% senior discount notes due 2007 for any and all
of our outstanding Series A 10 1/2% senior discount notes due 2007. We are
making this exchange offer in connection with our merger with PLD Telekom.
Please refer to the sections in this prospectus entitled "About Our Merger with
PLD Telekom" and "The Exchange Offer."
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EXCHANGE OFFER...................... We will exchange our exchange notes for a like
aggregate principal amount at maturity of our old
notes.
EXPIRATION DATE..................... This exchange offer will expire at 5:00 p.m., New
York City time, on , 1999, unless we
decide to extend it.
CONDITIONS TO THE EXCHANGE OFFER.... We will complete this exchange offer only if:
- there is no litigation or threatened litigation
which would impair our ability to proceed with this
exchange offer,
- there is no change in the laws and regulations
which would impair our ability to proceed with this
exchange offer,
- there is no change in the current interpretation of
the staff of the Securities and Exchange Commission
which permits resales of the exchange notes,
- there is no stop order issued by the Securities and
Exchange Commission which would suspend the
effectiveness of the registration statement which
includes this prospectus or the qualification of
the notes under the Trust Indenture Act, and
- we obtain all the governmental approvals we deem
necessary to complete this exchange offer.
Please refer to the section in this prospectus
entitled "The Exchange Offer--Conditions to the
Exchange Offer."
PROCEDURES FOR TENDERING OLD To participate in this exchange offer, you must
NOTES............................... complete, sign and date the letter of transmittal or
its facsimile and transmit it, together with your old
notes to be exchanged and all other documents
required by the letter of transmittal, to U.S. Bank
Trust National Association, as exchange agent, at its
address indicated under "The Exchange Offer--Exchange
Agent." In the alternative, you can tender your old
notes by book-entry delivery following the procedures
described in this prospectus. If your old notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee, you
should contact that person promptly to tender your
old notes in this exchange offer. For more
information on tendering your notes, please refer to
the section in this prospectus entitled "The Exchange
Offer--Procedures for Tendering Old Notes."
GUARANTEED DELIVERY PROCEDURE....... If you wish to tender your old notes and you cannot
get the required documents to the exchange agent on
time, you may tender your notes by using the
guaranteed delivery procedures described under the
section of this prospectus entitled "The Exchange
Offer--Procedures for Tendering Old Notes--Guaranteed
Delivery Procedure."
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WITHDRAWAL RIGHTS................... You may withdraw the tender of your old notes at any
time before 5:00 p.m., New York City time, on the
expiration date of the exchange offer. To withdraw,
you must send a written or facsimile transmission
notice of withdrawal to the exchange agent at its
address indicated under the "The Exchange
Offer--Exchange Agent" before 5:00 p.m., New York
City time, on the expiration date of the exchange
offer.
ACCEPTANCE OF OLD NOTES AND DELIVERY
OF EXCHANGE NOTES................... If all the conditions to the completion of this
exchange offer are satisfied, we will accept any and
all old notes that are properly tendered in this
exchange offer on or before 5:00 p.m., New York City
time, on the expiration date. We will return any old
note that we do not accept for exchange to you
without expense as promptly as practicable after the
expiration date. We will deliver the exchange notes
to you as promptly as practicable after the
expiration date and acceptance of your old notes for
exchange. Please refer to the section in this
prospectus entitled "The Exchange Offer--Acceptance
of Old Notes for Exchange; Delivery of Exchange
Notes."
FEDERAL INCOME TAX CONSIDERATIONS
RELATING TO THE EXCHANGE OFFER...... We have received an opinion of Paul, Weiss, Rifkind,
Wharton & Garrison regarding the material anticipated
United States federal income tax consequences
relating to the exchange offer. Pursuant to this
opinion, exchanging your old notes for exchange notes
should not be a taxable event to you for United
States federal income tax purposes.
Consequently:
- you will not realize any gain or loss upon receipt
of an exchange note,
- the holding period of the exchange note will
include the holding period of the old note
exchanged for it, and
- the adjusted tax basis of the exchange note will be
the same as the adjusted tax basis of the old note
exchanged therefor immediately before the exchange.
Please refer to the section of this prospectus
entitled "Material United States Federal Income Tax
Considerations."
EXCHANGE AGENT...................... U.S. Bank Trust National Association is serving as
exchange agent in the exchange offer.
FEES AND EXPENSES................... We will pay all expenses related to this exchange
offer. Please refer to the section of this prospectus
entitled "The Exchange Offer--Fees and Expenses."
USE OF PROCEEDS..................... We will not receive any proceeds from the issuance of
the exchange notes. We are making this exchange offer
solely in
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connection with our merger with PLD Telekom Inc.
Please refer to the sections in this prospectus
entitled "Use of Proceeds" and "About Our Merger With
PLD Telekom."
CONSEQUENCES TO HOLDERS WHO DO NOT
PARTICIPATE IN THE EXCHANGE OFFER... If you do not participate in this exchange offer:
- you will not be able to require us to register your
old notes under the Securities Act,
- you will not be able to resell, offer to resell or
otherwise transfer your old notes unless they are
registered under the Securities Act or unless you
resell, offer to resell or otherwise transfer them
under an exemption from the registration
requirements of, or in a transaction not subject
to, the Securities Act, and
- the trading market for your old notes will become
more limited.
Please refer to the section in this exchange offer
entitled "Risk Factors--Your failure to participate
in the exchange offer will have adverse
consequences."
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THE EXCHANGE NOTES
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ISSUER.............................. Metromedia International Group, Inc.
MATURITY............................ , 2007.
INTEREST RATE AND PAYMENT DATES..... The exchange notes will accrete in value until
, 2002, 2 1/2 years from the old notes'
issue date, at a rate of 10 1/2% per year, compounded
semi-annually, to a principal amount of $1,291.55 per
note on , 2002, 2 1/2 years from the old
notes' issue date. The notes will not accrue interest
in cash before , 2002, 2 1/2 years from
the old notes' issue date. Thereafter, the notes will
pay interest in cash on and
of each year, commencing on , 2002, 3
years from the old notes' issue date, at a rate of
10 1/2% per year.
ORIGINAL ISSUE DISCOUNT............. We will issue the exchange notes at an original issue
discount for federal income tax purposes. As a
result, although cash interest will not be payable on
the exchange notes before , 2002,
original issue discount will accrue from the issue
date of the exchange notes and will be included as
interest income periodically, including for periods
ending before , 2002, in a holder's gross
income for federal income tax purposes before the
receipt of the cash payments to which this income is
attributable. Please refer to the section in this
prospectus entitled "Material United States Federal
Income Tax Considerations."
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OPTIONAL REDEMPTION................. We will not be able to redeem any of the exchange
notes before , 2002, 2 1/2 years from the
old notes' issue date. We will be able to redeem the
exchange notes at any time thereafter, at our sole
option, in whole or in part, at a redemption price
equal to the principal amount of the notes, plus
accrued and unpaid interest, if any, through but
excluding the date of redemption. Please refer to the
section in this prospectus entitled "Description of
the Notes--Optional Redemption."
RANKING............................. The exchange notes will be senior unsecured
obligations of Metromedia International Group. They
will rank equal in right of payment to all our
existing and future senior indebtedness and will rank
senior in right of payment to all our subordinated
indebtedness. The exchange notes will not be
guaranteed by any of our subsidiaries. The exchange
notes will be effectively junior in right of payment
to:
- all of our existing and future secured indebtedness
to the extent of the assets that secure this
indebtedness, and
- all of our subsidiaries' existing or future
indebtedness, whether or not secured.
CHANGE OF CONTROL................... If a change of control of Metromedia International
Group occurs, you will have the right to require us
to make an offer to repurchase all of your exchange
notes at a repurchase price in cash equal to 101% of
their accreted value, plus accrued and unpaid
interest, if any, through but excluding the date of
repurchase. We cannot assure you that we will have
available or that we will be able to obtain funds
sufficient to repurchase your exchange notes when
required by a change of control. Please refer to the
sections in this prospectus entitled "Risk
Factors--We may not be able to repay the notes upon a
change of control" and "Description of the
Notes--Change of Control."
RESTRICTIVE COVENANTS............... The indenture under which the exchange notes will be
issued limits our ability and our subsidiaries'
ability to:
- incur additional indebtedness or issue capital
stock or preferred stock,
- pay dividends on, and repurchase or redeem our and
our subsidiaries', capital stock and repurchase or
redeem our subordinated obligations,
- invest and sell assets and subsidiary stock,
- engage in transactions with related entities, and
- incur additional liens.
In addition, the indenture for the exchange notes
limits our ability to engage in consolidations,
mergers and transfers of substantially all of our
assets and also contains limitations
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on restrictions on distributions from our
subsidiaries. All of these limitations and
prohibitions have a number of important
qualifications and exceptions. Please refer to the
sections in this prospectus entitled "Risk Factors--
Restrictions imposed by our debt agreement may
significantly limit out business strategy and
increase the risk of default under our debt
obligations" and "Description of the Notes--Certain
Covenants."
ABSENCE OF A PUBLIC MARKET FOR THE
EXCHANGE NOTES...................... The exchange notes are new securities with no
established market for them. We cannot assure you
that a market for these notes will develop or that
this market will be liquid.
FORM OF THE NOTES................... The exchange notes will be represented by one or more
permanent global securities in bearer form deposited
on behalf of The Depository Trust Company with U.S.
Bank Trust National Association, as custodian. You
will not receive exchange notes in registered form
unless one of the events described in the section of
this prospectus entitled "Description of the
Notes--Book Entry; Delivery and Form" occurs.
Instead, beneficial interests in the exchange notes
will be shown on, and transfers of these notes will
be effected only through, records maintained in
book-entry form by The Depository Trust Company with
respect to its participants.
RISK FACTORS........................ You should carefully consider all of the information
provided in this prospectus and, in particular, you
should evaluate the specific factors described under
"Risk Factors" on page 11 for a description of the
risks associated with this exchange offer and an
investment in the exchange notes.
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SUMMARY CONSOLIDATED FINANCIAL DATA
We are providing the following historical financial information to aid you
in your analysis of the financial aspects of the exchange offer. The information
is only a summary and you should read it together with our consolidated
financial statements and other financial information contained in our most
recent annual and quarterly reports, which are incorporated by reference and
from which we derived this information. See "Available Information" on page 89.
METROMEDIA-HISTORICAL FINANCIAL INFORMATION
The following selected consolidated financial data should be read in
conjunction with Metromedia International Group's consolidated financial
statements, including the notes thereto, and the other financial data
incorporated by reference in this prospectus. The consolidated statement of
operations data and consolidated balance sheet data as of and for the years
ended December 31, 1998, 1997, 1996, 1995 and the fiscal year ended February 28,
1995 are derived from the consolidated financial statements of Metromedia
International Group and the notes related thereto, which were audited by KPMG
LLP, independent certified public accountants. The consolidated financial
statements as of December 31, 1998 and 1997 and for each of the years in the
three-year period ended December 31, 1998 and the report of KPMG LLP thereon,
are incorporated by reference in this prospectus. The selected consolidated
statement of operations data and balance sheet data as of June 30, 1999 and for
the six-month periods ended June 30, 1999 and 1998 are derived from the
unaudited consolidated financial statements of Metromedia International Group
incorporated by reference in this prospectus which, in the opinion of
management, include all adjustments necessary for a fair presentation of the
financial condition and results of operations of Metromedia International Group
for such periods. The results of operations for interim periods are not
necessarily indicative of a full year's operations. Net loss per share is
computed on the basis described in the notes to Metromedia International Group's
consolidated financial statements.
The consolidated financial statements for the year ended December 31, 1996
include two months (November and December 1996) of the results of operations of
Snapper, Inc. In addition, the consolidated financial statements for the year
ended December 31, 1995 include operations for The Actava Group Inc. and MCEG
Sterling Incorporated from November 1, 1995 and two months for Orion Pictures
Corporation (January and February 1995) that were included in the February 28,
1995 consolidated financial statements. The net loss for the two month duplicate
period is $11.4 million.
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SIX MONTHS
ENDED
JUNE 30, YEARS ENDED DECEMBER31, YEAR ENDED
-------------------- ------------------------------------------ FEBRUARY 28,
1999 1998 1998 1997 1996 1995 1995
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(IN THOUSANDS, EXCEPT PER SHARE DATA)
Consolidated Statement of
Operations Data:
Revenues.......................... $ 132,647 $ 134,458 $ 240,292 $ 204,328 $ 36,592 $ 5,158 $ 3,545
Equity in losses of unconsolidated
investees (1)................... (5,933) (7,645) (18,151) (53,150) (7,835) (6,367) (1,785)
Loss from continuing operations
(1) (2)......................... (22,877) (45,152) (135,986) (130,901) (72,146) (36,265) (19,141)
Net income (loss)................. $ (22,877) $ (39,885) $(123,670) $ 88,443 $(115,243) $(412,976) $ (69,411)
Income (loss) per common share--
Basic:
Continuing operations........... $ (0.44) $ (0.77) $ (2.19) $ (2.02) $ (1.33) $ (1.48) $ (0.95)
Net income (loss)............... $ (0.44) $ (0.69) $ (2.01) $ 1.26 $ (2.12) $ (16.83) $ (3.43)
Ratio of earnings to fixed charges
(4)............................. -- -- -- -- -- -- --
Weighted average common shares
outstanding..................... 69,137 68,810 68,955 66,961 54,293 24,541 20,246
Dividends per common share........ -- -- -- -- -- -- --
Consolidated Balance Sheet Data
(at end of period):
Total assets (3).................. $ 559,532 N/A $ 609,641 $ 789,272 $ 513,118 $ 328,600 $ 40,282
Notes and subordinated debt....... 44,659 N/A 51,834 79,416 190,754 171,004 24,948
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(1) Included in the year ended December 31, 1997 are equity in losses and
writedown of investment in RDM Sports Group, Inc. of $45.1 million.
(2) For the year ended December 31, 1998, in connection with Metromedia
International Group's communications group's paging operations, Metromedia
International Group adjusted the carrying value of goodwill and other
intangibles, fixed assets, investments in and advances to its joint ventures
and wrote down inventory. The total non-cash nonrecurring charge and write
down was $49.9 million.
(3) Total assets include the net assets of the entertainment assets and the
Landmark Theatre Group, Inc. The net assets (liabilities) of the
entertainment assets at December 31, 1996 and 1995 and February 28, 1995
were $11.0 million, $12.1 million and ($8.5) million, respectively. At
December 31, 1997 and 1996, the net assets of the Landmark Theatre Group,
Inc., which was acquired on July 2, 1996, were $46.8 million and $46.5
million, respectively.
(4) For purposes of this computation, earnings are defined as pre-tax earnings
or loss from continuing operations of Metromedia International Group before
adjustment for minority interests in consolidated subsidiaries or income or
loss from equity investees attributable to common stockholders plus fixed
charges and distributed income of equity investees.
Fixed charges are the sum of:
- interest expensed and capitalized,
- amortization of deferred financing costs, premium and debt discounts,
- the portion of operating lease rental expense that is representative of
the interest factor (deemed to be one-third) and
- dividends on preferred stock.
The ratio of earnings to fixed charges of Metromedia International Group was
less than 1.00 for each of the six months ended June 30, 1999 and 1998 and for
the years ended December 31, 1998, 1997, 1996 and 1995 and for the year ended
February 28, 1995; thus earnings available for fixed charges were inadequate to
cover fixed charges for these periods. The deficiency in earnings to fixed
charges
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for the six months ended June 30, 1999 and 1998 and for the years ended December
31, 1998, 1997, 1996 and 1995 and for the year ended February 28, 1995 were:
$28.7 million, $48.2 million, $141.1 million, $95.3 million, $64.3 million,
$30.1 million and $17.4 million, respectively.
UNAUDITED SELECTED PRO FORMA COMBINED FINANCIAL DATA
The following unaudited selected pro forma combined condensed financial data
are derived from the Unaudited Pro Forma Combined Financial Information included
elsewhere in this prospectus and should be read together with that data and with
the notes to that data. These unaudited selected pro forma combined financial
data:
- are based upon the historical financial statements of Metromedia
International Group and PLD Telekom, as of and for the six months ended
June 30, 1999 and for the year ended December 31, 1998;
- are adjusted to give effect to the merger;
- are adjusted for the restructuring of all of PLD Telekom's outstanding
senior and subordinated notes, the loans owed to the Travelers Insurance
Company and News America Incorporated and PLD Telekom's obligation to
purchase the minority interests in the PLD Telekom subsidiary Technocom
Limited.
With respect to the balance sheet data, the transactions referred to above
are assumed to have been completed as of June 30, 1999. With respect to the
statement of operations data the transactions referred to above are assumed to
have been completed as of the beginning of the periods presented.
These unaudited selected pro forma combined condensed financial data are for
illustrative purposes only and do not necessarily indicate the operating results
or financial position that would have been achieved had the merger and the
restructuring described above been completed as of the dates indicated or of the
results that may be obtained in the future. In addition, the data does not
reflect synergies that might be achieved from combining these operations.
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SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1999 1998
----------------- ------------
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
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Statement of Operations Data:
Revenues........................................................................ $ 189,975 $ 385,652
Equity in losses of unconsolidated investees.................................... (6,363) (19,109)
Loss from continuing operations................................................. (47,664) (187,941)
Income (loss) per common share--Basic:
Continuing operations......................................................... $ (0.61) $ (2.25)
Ratio of earnings to fixed charges (1).......................................... -- --
Weighted average common shares outstanding...................................... 90,387 90,205
Dividends per common share...................................................... -- --
Balance Sheet Data (at end of period):
Total assets.................................................................... $ 968,636 N/A
Debt............................................................................ 228,246 N/A
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(1) For purposes of this computation, earnings are defined as pro forma pre-tax
earnings or loss from combined continuing operations before adjustment for
minority interests in consolidated subsidiaries or income loss from equity
investees attributable to common stockholders plus (i) fixed charges and
(ii) distributed income of equity investees. Fixed charges are the sum of
(i) interest expensed and capitalized, (ii) amortization of deferred
financing costs, premium and debt discounts, (iii) the portion of operating
lease rental expense that is representative of the interest
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factor (deemed to be one-third) and (iv) dividends on preferred stock. The
pro forma combined ratio of earnings to fixed charges was less than 1.00 for
the six months ended June 30, 1999 and for the year ended December 31, 1998;
thus earnings available for fixed charges were inadequate to cover fixed
charges for such periods. The pro forma combined deficiency in earnings to
fixed charges for the six months ended June 30, 1999 and for the year ended
December 31, 1998, were $46.2 million and $170.8 million, respectively.
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE INFORMATION BELOW AS WELL AS ALL OTHER
INFORMATION PROVIDED TO YOU IN THIS PROSPECTUS BEFORE TENDERING YOUR OLD NOTES
IN THIS EXCHANGE OFFER, INCLUDING INFORMATION IN THE SECTION OF THIS PROSPECTUS
ENTITLED "--OUR FUTURE RESULTS OF OPERATIONS MAY BE SUBSTANTIALLY DIFFERENT FROM
OUR STATEMENTS ABOUT OUR FUTURE PROSPECTS AND YOU SHOULD NOT UNDULY RELY ON
THESE STATEMENTS."
WE EXPECT TO CONTINUE TO INCUR LOSSES FROM OUR CONTINUING OPERATIONS, WHICH
COULD PREVENT US FROM PURSUING OUR GROWTH STRATEGIES AND COULD CAUSE US TO
DEFAULT UNDER OUR DEBT OBLIGATIONS.
We cannot assure you that we will succeed in establishing an adequate
revenue base or that our services will be profitable or generate positive cash
flow. We have reported substantial losses from operations over the previous
three years. For the six months ended June 30, 1999 and for the years ended
December 31, 1998, 1997 and 1996, we reported a loss from continuing operations
of approximately $22.9 million, $136.0 million, $130.9 million and $72.1
million, respectively, and a net loss of $22.9 million, $123.7 million, net
income of $88.4 million, and a net loss of $115.2 million, respectively. We
expect that we will report significant operating losses, including losses
attributable to Snapper, Inc., for the fiscal year ended December 31, 1999. In
addition, many of our joint ventures in our communications group are still in
the early stages of their development and we expect this group to continue to
generate significant losses as it continues to build-out and market its
services. Accordingly, we expect to generate consolidated losses for the
foreseeable future.
Continued losses and negative cash flow may prevent us from pursuing our
strategies for growth and could cause us to be unable to meet our debt service
obligations, including our obligations under the notes, capital expenditures or
working capital needs.
CHINESE GOVERNMENTAL AUTHORITIES ARE CAUSING THE TERMINATION OF CERTAIN OF OUR
JOINT VENTURES, WHICH COULD HAVE NEGATIVE EFFECTS ON OUR FINANCIAL POSITION AND
RESULTS OF OPERATIONS.
Because legal restrictions in China prohibit foreign participation in the
operation or ownership in the telecommunications sector, our telecommunications
joint ventures in China have been established so as to provide financing,
technical advice, consulting and other services for the construction and
development of telephony networks for China United Telecommunications
Incorporated, known as China Unicom, a Chinese telecommunications operator.
We have recently been notified by China Unicom that a department of the
Chinese government has requested termination of two of our telecommunications
joint ventures with China Unicom. Negotiations have commenced with
representatives of China Unicom on the amount of compensation and terms of the
resolution of all issues between the parties. The content of the negotiations
includes determining the investment principal of these joint ventures,
appropriate compensation and other matters related to termination of contracts.
We were further notified that due to technical reasons which were not specified,
the cash distribution plan for the first half of 1999 had not been decided and
that China Unicom also expected to discuss this subject with the joint ventures.
As a result, we cannot assure you that we will receive compensation from the
Chinese government for the termination of our joint ventures or that the
compensation that we will receive, if any, will be adequate.
While the notification only involved two of our telecommunications joint
ventures, we expect that the other two telecommunications projects in which we
have invested will receive similar notifications. In addition, China Unicom has
suspended cooperation on further development of networks with these joint
ventures, which we believe reflects China Unicom's intention to negotiate the
termination of its relationship with these joint ventures as well.
In light of the current uncertainty, we are unable to estimate the impact on
our financial condition and results of operations of such negotiations and
expected winding up of our other two Chinese
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telecommunications joint ventures. We believe that negotiations, if adversely
concluded, could have a materially negative effect on our financial position and
operating results. Depending on the amount of compensation we receive, we will
record a non cash charge equal to the difference between the sum of the carrying
values of our investment and advances made to joint ventures plus goodwill less
the cash compensation we receive from the joint ventures which China Unicom has
paid. Our investment in and advances to joint ventures and goodwill balance at
June 30, 1999 were approximately $71 million and $67 million respectively. See
"Metromedia International Group."
WE WILL BE UNABLE TO MEET OUR OBLIGATIONS IF WE DO NOT RECEIVE DISTRIBUTIONS
FROM OUR SUBSIDIARIES AND OUR SUBSIDIARIES HAVE NO OBLIGATIONS TO MAKE ANY
PAYMENTS TO US.
We are a holding company with no direct operations and no assets of
significance other than the stock of our subsidiaries. As such, we are dependent
on the earnings of our subsidiaries and the distribution or other payment of
these earnings to us to meet our obligations, including the payment of principal
and interest on the notes. Our subsidiaries are separate legal entities that
will have no obligation to pay any amounts due under the notes or to make any
funds available for payments due under the notes, whether by dividends, loans or
other payments. Our subsidiaries will not guarantee the payment of the notes
either. Snapper, Inc.'s credit facility contains substantial restrictions on
dividends and other payments by Snapper to us. In addition, many of our joint
ventures are in their early stages of development and are operating businesses
that are capital intensive. As a result, we will only be able to rely on cash on
hand, proceeds from the disposition of non-core assets and net proceeds from
additional financings through a public or private sale of debt or equity
securities to meet our cash requirements, including the payment of principal and
interest on the notes. Please refer to the section in this prospectus entitled
"Description of the Notes."
PAYMENT OF PRINCIPAL AND INTEREST ON THE NOTES IS EFFECTIVELY JUNIOR IN RIGHT OF
PAYMENT TO THE CLAIMS OF OUR SECURED CREDITORS AND OUR SUBSIDIARIES' CREDITORS
WHO WOULD BE ENTITLED TO REALIZE THEIR CLAIMS ON OUR ASSETS BEFORE YOU.
There might only be a limited amount of assets available to satisfy your
claims as a holder of the notes upon an acceleration of their maturity. The
notes are unsecured and therefore will be effectively junior in right of payment
to all our existing and future secured indebtedness to the extent of the value
of the assets securing this indebtedness. In addition, the notes will also be
effectively junior in right of payment to all of our subsidiaries' existing or
future indebtedness, whether or not secured. We expect that our current and
future subsidiaries will incur significant amounts of debt in connection with
the development of their operations. The indenture for the notes will permit us
and our subsidiaries to incur additional indebtedness to finance the purchase
price, development, acquisition, construction or improvement of real or personal
property in connection with our telecommunications business. Please refer to the
section of this prospectus entitled "Description of the Notes."
Consequently, in the event of a bankruptcy, liquidation, dissolution,
reorganization or similar proceeding of Metromedia International Group, the
assets of Metromedia International Group will be available to satisfy
obligations of this secured debt before any payment may be made on the notes. In
addition, to the extent these assets cannot satisfy in full the secured
indebtedness, the holders of this indebtedness would have a claim for any
shortfall that would rank equally in right of payment with the notes. If the
indebtedness were issued by a subsidiary, the holders' claim for any shortfall
would effectively rank senior to the notes.
WE HAVE SUBSTANTIAL DEBT WHICH MAY LIMIT OUR ABILITY TO BORROW, RESTRICT THE USE
OF OUR CASH FLOWS AND CONSTRAIN OUR BUSINESS STRATEGY AND WE MAY NOT BE ABLE TO
MEET OUR DEBT OBLIGATIONS.
We have substantial debt and debt service requirements as a result of
issuing the notes.
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Our substantial debt has important consequences, including:
- our ability to borrow additional amounts for working capital, capital
expenditures or other purposes is limited,
- a substantial portion of our cash flow from operations is required to make
debt service payments, and
- our leverage could limit our ability to capitalize on significant business
opportunities and our flexibility to react to changes in general economic
conditions, competitive pressures and adverse changes in government
regulation.
We cannot assure you that our cash flow and capital resources will be
sufficient to repay the notes and any indebtedness we may incur in the future,
or that we will be successful in obtaining alternative financing. If we are
unable to repay our debts, we may be forced to reduce or delay the completion or
expansion of our networks, sell some of our assets, obtain additional equity
capital or refinance or restructure our debt. Please refer to the section in
this prospectus entitled "--Restrictions imposed by our debt agreement may
significantly limit our business strategy and increase the risk of default under
our debt obligations." If we are unable to meet our debt service obligations or
comply with our covenants, we will default under our existing debt agreements.
To avoid a default, we may need waivers from third parties, which might not be
granted. You should also read the information we have included in this
prospectus in the section entitled "Description of the Notes."
RESTRICTIONS IMPOSED BY OUR DEBT AGREEMENT MAY SIGNIFICANTLY LIMIT OUR BUSINESS
STRATEGY AND INCREASE THE RISK OF DEFAULT UNDER OUR DEBT OBLIGATIONS.
The indenture for the notes contains a number of significant covenants.
These covenants limit our ability to, among other things:
- borrow additional money,
- make capital expenditures and other investments,
- pay dividends,
- merge, consolidate, or dispose of our assets, and
- enter into transactions with related entities.
If we fail to comply with these covenants we will default under the
indenture. A default, if not waived, could result in acceleration of our
indebtedness, in which case the debt would become immediately due and payable.
If this occurs, we may not be able to repay our debt or borrow sufficient funds
to refinance it. Even if new financing is available, it may not be on terms that
are acceptable to us. Complying with these covenants may cause us to take
actions that we otherwise would not take, or not take actions that we otherwise
would take. Please refer to the section in this prospectus entitled "Description
of the Notes."
WE MAY NEED BUT MAY NOT BE ABLE TO RAISE THE SUBSTANTIAL ADDITIONAL FINANCING
THAT WILL BE REQUIRED TO SATISFY OUR LONG-TERM BUSINESS OBJECTIVES, WHICH WOULD
FORCE US TO SIGNIFICANTLY CURTAIL OUR BUSINESS OBJECTIVES AND MAY MATERIALLY AND
ADVERSELY AFFECT OUR RESULTS FROM OPERATIONS.
Many of our joint ventures operate businesses that are capital intensive and
require the investment of significant amounts of capital in order to construct
and develop operational systems and market their services. As a result, we will
require substantial additional financing to satisfy our long-term business
objectives, including our on-going working capital, acquisition and expansion
requirements. We may seek to raise this additional capital through the public or
private sale of debt or equity securities. We cannot assure you that additional
financing will be available to us on acceptable terms, if at all. If
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we incur additional debt, we may become subject to additional or more
restrictive financial covenants and ratios. If adequate additional funds are not
available, we may be required to curtail significantly our long-term business
objectives and our results from operations may be materially and adversely
affected. Please refer to the sections in this prospectus entitled "--We have
substantial debt which may limit our ability to borrow, restrict the use of our
cash flows and constrain our business strategy and we may not be able to meet
our debt obligations" and "--Restrictions imposed by our debt agreement may
significantly limit our business strategy and increase the risk of default under
our debt obligations."
WE MAY BE MATERIALLY AND ADVERSELY AFFECTED BY COMPETITION FROM LARGER GLOBAL
COMMUNICATIONS COMPANIES OR THE EMERGENCE OF COMPETING TECHNOLOGIES IN OUR
CURRENT OR FUTURE MARKETS.
We operate in businesses which are highly competitive and we compete with
many other well-known communications and media companies, many of which have
established operating infrastructures and have substantially greater financial,
management and other resources than us.
We also face potential competition from competing technologies which could
emerge over time in Eastern Europe, the republics of the former Soviet Union and
other selected emerging markets and compete directly with our operations. For
example, we believe that we will not be able to effectively compete for our
traditional paging customers in markets where GSM technology is combined with
calling party pays and prepaid calling card service. Similarly, we cannot assure
you that PLD Telekom's nationwide cellular network in Kazakhstan will be able to
compete with the development of the newly-introduced GSM technology in this
market.
In addition, each of the principal partners in PLD Telekom's operating
businesses have interests that may conflict with those of PLD and in certain
instances could compete directly with PLD Telekom and its networks. This
competition could seriously undermine the local support for PLD Telekom's
networks, affect PLD Telekom's results of operations in these countries and
jeopardize our ability to fully realize the value of our economic investments in
these countries. See "--We do not fully control certain of our joint ventures'
operations, strategies and financial decisions and cannot assure you that we
will be able to maximize our return on our investments" and "--Our dependence on
certain local operators, interconnect parties or local customers may materially
and adversely affect our operations." For example, PLD Telekom's partner in PLD
Telekom's operating business in St. Petersburg has recently completed the
installation of a fiber optic network in St. Petersburg which could provide
serious competition to PLD Telekom's network in this area. The cellular network
of PLD Telekom's operating business in Kazakhstan directly competes with the
public switched telephone network of Kazakhtelekom, PLD Telekom's partner in
this operating business, and a recently established GSM mobile phone service
joint venture in which Kazakhtelekom has an interest. PLD Telekom's long
distance network in Moscow is in direct competition with the long distance
national network operated by Rostelecom, PLD Telekom's partner in its Moscow
operating business.
In addition, we do not expect to maintain or to be granted exclusive
licenses to operate our communications businesses in any of the markets where we
currently provide or plan to provide our services.
WE MAY NOT BE ABLE TO ATTRACT CONSUMERS TO OUR SERVICES, WHICH WOULD NEGATIVELY
IMPACT OUR OPERATING RESULTS.
Our operating results are dependent upon our ability to attract and maintain
subscribers to our cable, paging and telephony systems and the sale of
commercial advertising time on our radio stations. These in turn depend on the
following factors, several of which are beyond our control:
- the general economic conditions in the markets where our cable, telephone
systems, paging and radio stations are located,
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- the relative popularity of our systems, including our radio stations,
- the demographic characteristics of the potential subscribers to our
systems and audience of our radio stations,
- the technical attractiveness to customers of the equipment and service of
our systems, and
- the activities of our competitors.
WE CANNOT ASSURE YOU THAT WE WILL SUCCESSFULLY COMPLETE THE CONSTRUCTION OF OUR
SYSTEMS, WHICH WOULD JEOPARDIZE LICENSES FOR OUR SYSTEMS OR PROVIDE
OPPORTUNITIES TO OUR COMPETITORS.
Most of our joint ventures require substantial construction of new systems
and additions to the physical plants of existing systems. We cannot assure you
that we will complete construction on time or within our budget. Construction
projects may be adversely affected by cost overruns and delays not within our
control or the control of our subcontractors, such as those caused by
governmental changes and material or equipment shortages or delays in delivery
of material or equipment. Our failure to complete construction of a
communications system on a timely basis could jeopardize the franchise or
license for our system or provide opportunities to our competitors. Cost
overruns may obligate us to incur additional debt. Please refer to the section
in this prospectus entitled "--We may need but may not be able to raise the
substantial additional financing that will be required to construct and develop
operational systems and market our services, which would adversely affect our
long-term business strategy."
WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT AND MANAGE THE GROWTH OF OUR
VENTURES, WHICH WOULD AFFECT OUR GROWTH STRATEGY.
Many of our ventures are either in developmental stages or have only
recently commenced operations and we have incurred significant operating losses
to date. We are currently pursuing additional investments in a variety of
communications businesses both in our existing markets and in additional
markets. In implementing and managing our strategy of growing our businesses, we
must:
- assess the strengths and weaknesses of development opportunities,
- evaluate the costs and uncertain returns of developing and constructing
the facilities for operating systems, and
- integrate and manage the operations of our existing and additional
systems.
We cannot assure you that we will successfully implement our growth
strategy.
THE GOVERNMENT LICENSES ON WHICH WE DEPEND TO OPERATE MANY OF OUR BUSINESSES
COULD BE CANCELED OR NOT RENEWED, WHICH WOULD IMPAIR THE DEVELOPMENT OF OUR
SERVICES.
Our joint ventures' operations are subject to governmental regulation and
approvals in the markets in which we operate. We cannot assure you that we will
retain or obtain the necessary approvals to operate existing or future
businesses in any of the markets in which we operate or are seeking to establish
our business. Our joint ventures operate under licenses that are issued for
limited periods. Some of these licenses expire over the next several years, and
some are renewable annually. Our failure to renew these licenses may have a
material adverse effect on our operations. Seven licenses held or used by our
joint ventures will expire during 1999. For most of the licenses held or used by
our joint ventures, no statutory or regulatory presumption exists for renewal by
the current license holder and we cannot assure you that these licenses will be
renewed upon the expiration of their current terms.
Additionally, some of the licenses pursuant to which our businesses operate
contain network build-out milestones. Our failure to renew any of these licenses
or meet these milestones could result
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in the loss of these licenses, which may have a material adverse effect on our
operations. In addition, we cannot assure you that our joint ventures will
obtain the necessary approvals to operate additional cable television, fixed
telephony or paging systems or radio broadcast stations in any of the markets in
which we are seeking to establish our business. PLD Telekom has exceeded the
number of lines which the main license of its operating business in St.
Petersburg allows it to operate in St. Petersburg and the surrounding region and
we cannot assure you that the Russian licensing authorities will not terminate
or renegotiate this license or otherwise force PLD Telekom to reduce the number
of its subscribers or impose other penalties on PLD Telekom.
WE MAY BE LIABLE FOR SUBSTANTIAL PENALTIES IF WE DO NOT FOLLOW BURDENSOME
CURRENCY LICENSING REQUIREMENTS.
Our joint ventures often require specific licenses from the central banks of
many of the countries in which they operate for certain types of foreign
currency loans, leases and investments. Our joint ventures' failure to obtain
currency licenses could result in the imposition of fines and penalties,
significant delays in delivering equipment to our operating businesses and
resulting difficulties in generating cash flows from our operating businesses.
The documentary requirements for obtaining the currency licenses are burdensome
and we cannot assure you that the licensing entity will not impose additional,
substantive requirements for the grant of a license or deny a request for a
license on an arbitrary basis. Furthermore, the time typically taken by the
relevant central banks to issue these licenses can be lengthy, in some cases up
to one year or more.
WE DO NOT FULLY CONTROL CERTAIN OF OUR JOINT VENTURES' OPERATIONS, STRATEGIES
AND FINANCIAL DECISIONS AND CANNOT ASSURE YOU THAT WE WILL BE ABLE TO MAXIMIZE
OUR RETURN ON OUR INVESTMENTS.
We have invested in virtually all of our joint ventures with local partners.
In certain cases, the degree of our voting power and the voting power and veto
rights of our joint venture partners may limit us from effectively controlling
the operations, strategies and financial decisions of the joint ventures in
which we have an ownership interest. In addition, in certain cases, we may be
dependent on the continuing cooperation of our partners in the joint ventures
and any significant disagreements among the participants could have a material
adverse effect on our ventures. Furthermore, in some markets where we conduct or
may in the future conduct business, certain decisions of a joint venture also
require governmental approval. As a result, we cannot assure you that we will be
able to maximize our return on all of our investments.
In addition, in many instances, our partners include governmental entities
or affiliates of a governmental entity. This poses a number of risks, including:
- the possibility of decreased governmental support or enthusiasm for the
venture as a result of a change of government or government officials,
- a change of policy by the government, and
- the ability of the governmental entities to exert undue control or
influence over the project in the event of a dispute or otherwise.
In addition, to the extent our joint ventures become profitable and generate
sufficient cash flows in the future, we cannot assure you that the joint
ventures will pay dividends or return capital at any time.
Moreover, our equity interests in these investments generally are not freely
transferable. Therefore, we cannot assure you of our ability to realize economic
benefits through the sale of our interests in our joint ventures.
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OUR DEPENDENCE ON LOCAL OPERATORS, INTERCONNECT PARTIES OR LOCAL CUSTOMERS MAY
MATERIALLY AND ADVERSELY AFFECT OUR OPERATIONS.
We are dependent on local operators or interconnect parties for a
significant portion of our operations. For example, we have recently been
notified by the Chinese telecommunications operator with which we operate our
Chinese telecommunications joint ventures that a department of the Chinese
government had requested termination of two of our telecommunications joint
ventures. See "Metromedia International Group." Also, PLD Telekom's operating
business in St. Petersburg is dependent on Russian operators for the completion
of most of its calls. We cannot assure you that this operating business will
continue to have access to these operators' networks or that we will be able to
have access to these networks with favorable tariffs. The loss of access to
these networks or increases in tariffs could have a material adverse effect upon
PLD Telekom. PLD Telekom's operating business in Kazakhstan is also entitled to
interconnection free of charge to networks operated by Kazakhtelekom, the
Kazakhstan public switched telephone network operator, for the completion of its
local, long distance and international calls. The loss of, or any significant
limitation on, its access to this network could have a material adverse effect
on PLD Telekom. Further, Kazakhtelekom may try to use its authority to endeavor
to assess interconnection charges on PLD Telekom's operating business in
Kazakhstan, which may materially impact this operating business' profitability.
We are also dependent on local operators or interconnect parties' facilities
for certain of our operations. For example, PLD Telekom's operating business in
St. Petersburg is dependent on Russian operators' buildings, ducts and tunnels
in order to house its exchanges and to reach its customers. The loss of access
to these facilities or the availability of access only on unfavorable terms
could have a material adverse effect upon PLD Telekom. Similarly, PLD Telekom's
operating business in Moscow is also dependent upon the facilities of local
operators for the operation of its existing network in Moscow and to terminate
certain traffic to users. The loss of the right to use these facilities could
have a material adverse effect on PLD Telekom.
Certain customers account for a significant portion of the total revenues of
certain of PLD Telekom's operations and the loss of these customers would
materially and adversely affect PLD Telekom's results of operations.
In addition, several of PLD Telekom's customers, interconnect parties or
local operators experience liquidity problems from time to time. PLD Telekom's
dependence on these parties may make it vulnerable to their liquidity problems,
both in terms of pressure for financial support for the expansion of their
operations and facilities, and in PLD Telekom's ability to achieve prompt
settlement of accounts.
WE CANNOT ASSURE YOU THAT OUR EQUIPMENT WILL BE APPROVED BY THE AUTHORITIES
REGULATING THE MARKETS IN WHICH WE OPERATE, WHICH COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR OPERATIONS IN THESE MARKETS.
Many of our operations or proposed operations are dependent upon approval of
our equipment by the communications authorities of the markets in which we and
our joint ventures operate or plan to operate. We cannot assure you that our
equipment in any of these markets will be approved. The failure to obtain
approval for our equipment could have a materially adverse effect on many of our
proposed operations.
WE MAY NOT BE ABLE TO KEEP PACE WITH THE EMERGENCE OF NEW TECHNOLOGIES AND
CHANGES IN MARKET CONDITIONS WHICH WOULD MATERIALLY AND ADVERSELY AFFECT OUR
RESULTS OF OPERATIONS.
The communications industry has been characterized in recent years by rapid
and significant technological changes and changes in market conditions.
Competitors could introduce new or enhanced technologies with features which
would render our technology obsolete or significantly less marketable. Our
ability to compete successfully will depend to a large extent on our ability to
respond quickly and
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adapt to technological changes and advances in our industry. We cannot assure
you that we will be able to keep pace, or will have the financial resources to
keep pace, with the technological demands of the marketplace. Please refer to
the section in this prospectus entitled "--We may be materially and adversely
affected by competition from larger global communications companies or the
emergence of competing technologies in our current or future markets."
CERTAIN FAILURES TO ADDRESS THE YEAR 2000 PROBLEM MAY CAUSE DISRUPTIONS IN THE
OPERATION OF OUR NETWORKS AND OUR SERVICES TO CUSTOMERS.
Many computer and communications network systems, terminal devices, software
products and manufacturing devices will not function properly in the year 2000
and beyond due to a once-common programming standard that represents years using
two digits. This problem is often referred to as the year 2000 problem. It is
possible that our and our joint venture partners' currently installed computer
and communications network systems, terminal devices, software products and
manufacturing devices or other information technology systems, including
embedded technology, or those of our and our joint venture partners' suppliers,
contractors, interconnect parties or major systems developers working either
alone or in conjunction with other softwares or systems, will not properly
function in the year 2000 because of the year 2000 problem. We are not directly
responsible for the year 2000 readiness of many of our joint ventures and in
some cases have no access to the joint ventures' management regarding these
matters. Russia and the other republics of the former Soviet Union appear to be
substantially behind Western countries in their year 2000 compliance and
readiness. We have been unable to determine with any degree of certainty the
extent to which our interconnect partners in the former Soviet Union are
non-compliant because those parties have generally been reluctant to share this
information. If we or our joint venture partners, or our customers, suppliers,
contractors, interconnect parties and major systems developers are unable to
address their year 2000 issues in a timely manner, a material adverse effect on
our results of operations and financial condition could result. We and our joint
venture partners are currently working to evaluate and resolve the potential
impact of the year 2000 on our processing of date-sensitive information and
network systems. We cannot assure you that the year 2000 problem will only have
a minimal cost impact or that our joint venture partners and other companies
will convert their systems on a timely basis and that their failure to do so
will not have an adverse effect on our systems.
METROMEDIA COMPANY EFFECTIVELY CONTROLS METROMEDIA INTERNATIONAL GROUP AND HAS
THE POWER TO INFLUENCE THE DIRECTION OF OUR OPERATIONS AND PREVENT A CHANGE OF
CONTROL.
Metromedia Company and its affiliates collectively own approximately 26% of
the outstanding shares of common stock of Metromedia International Group and are
our largest stockholders. They have nominated or designated a majority of the
members of the board of directors. Metromedia International Group's charter and
Delaware law provide that the majority of the members of the board of directors
will nominate the directors for election to the board of directors. However, for
the foreseeable future it is likely that directors designated or nominated by
Metromedia Company will continue to constitute a majority of the members of the
board of directors. As a result, Metromedia Company will likely control the
direction of future operations of Metromedia International Group, including
decisions regarding acquisitions and other business opportunities, the
declaration of dividends and the issuance of additional shares of capital stock
and other securities. This concentration of ownership may have the effect of
delaying, deferring or preventing a change of control of Metromedia
International Group. Our certificate of incorporation and by-laws also contain
provisions which may also have the effect of delaying, deferring or preventing a
change of control of Metromedia International Group.
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WE COULD INCUR ENVIRONMENTAL LIABILITIES AS A RESULT OF OUR CURRENT OPERATIONS
AND PAST DIVESTITURES, THE COST OF WHICH COULD MATERIALLY AFFECT OUR RESULTS OF
OPERATIONS.
We have been in operation since 1929 through our predecessors and, over the
years, have operated in diverse industries, including equipment, sporting goods
and furniture manufacturing, sheet metal processing and trucking. We have
divested almost all of our non-communications and non-media-related operations.
However, in the course of these divestitures, we have retained certain
indemnification obligations for environmental cleanup matters and, in one case,
a contaminated parcel at which we have undertaken cleanup activities. In other
cases, particularly for operations that we divested in the past, we could incur
unanticipated environmental cleanup obligations, to the extent they may exist or
arise in the future, as a result of changes in legal requirements that have
occurred since these divestitures or otherwise. Because some divestitures may
have occurred many years ago, we cannot assure you that environmental matters
will not arise in the future that could have a material adverse effect on our
results of operations or financial condition.
WE OPERATE IN COUNTRIES WITH SIGNIFICANT POLITICAL, SOCIAL AND ECONOMIC
UNCERTAINTIES, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR OPERATIONS IN
THESE AREAS.
We operate in countries in Eastern Europe, the republics of the former
Soviet Union, China and other selected emerging markets. These countries face
significant political, social and economic uncertainties which could have a
material adverse effect on our operations in these areas. These uncertainties
include:
- possible internal military conflicts,
- civil unrest fueled by economic and social crises in those countries,
- political tensions between national and local governments which often
result in the enactment of conflicting legislation at various levels and
may result in political instability,
- bureaucratic infighting between government agencies with unclear and
overlapping jurisdictions,
- high unemployment, high inflation, high foreign debt, weak currencies and
the possibility of widespread bankruptcies,
- unstable governments,
- pervasive regulatory control of the state over the telecommunications
industry (see "--Laws restricting foreign investments in the
telecommunications industry could adversely affect our operations in these
countries" and "--Chinese governmental authorities are causing the
termination of certain of our joint ventures, which could have negative
effects on our financial position and results of operations."),
- uncertainties over whether many of the countries in which we operate will
continue to receive the substantial financial assistance they have
received from several foreign governments and international organizations
which helps to support their economic development,
- the failure by government entities to meet their outstanding foreign debt
repayment obligations, and
- the risk of increased support for a renewal of centralized authority and
increased nationalism resulting in possible restrictions on foreign
ownership and/or discrimination against foreign owned businesses.
We cannot assure you that the pursuit of economic reforms by the governments
of any of these countries will continue or prove to be ultimately effective,
especially in the event of a change in
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leadership, social or political disruption or other circumstances affecting
economic, political or social conditions. See "Metromedia International Group."
WE FACE ENHANCED ECONOMIC, LEGAL AND PHYSICAL RISKS BY OPERATING ABROAD.
We have invested substantially all of our resources in operations outside of
the United States and plan to make additional international investments in the
near future. We run a number of risks by investing in foreign countries
including:
- loss of revenue, property and equipment from expropriation,
nationalization, war, insurrection, terrorism and other political risks
(see "--Laws restricting foreign investments in the telecommunications
industry could adversely affect our operations in these countries" and
"Chinese governmental authorities are causing the termination of certain
of our joint ventures, which could have negative effects on our financial
position and results of operations."),
- increases in taxes and governmental royalties and involuntary changes to
the licenses issued by, or contracts with, foreign governments or their
affiliated commercial enterprises,
- official data published by the governments of many of the countries in
which we operate is substantially less reliable than that published by
Western countries,
- changes in foreign and domestic laws and policies that govern operations
of overseas-based companies,
- amendments to, or different interpretations or implementations of, foreign
tax laws and regulations that could adversely affect the profitability
after tax of our joint ventures and subsidiaries,
- criminal organizations in certain of the countries in which we operate
that could threaten and intimidate our businesses. We cannot assure you
that pressures from criminal organizations will not increase in the future
and have a material adverse effect on our operations, and
- high levels of corruption and non-compliance with the law exists in many
of the countries in which we operate businesses. This problem
significantly hurts economic growth in these countries and our ability to
compete on an even basis with other parties.
See "Metromedia International Group."
LAWS RESTRICTING FOREIGN INVESTMENTS IN THE TELECOMMUNICATIONS INDUSTRY COULD
ADVERSELY AFFECT OUR OPERATIONS IN THESE COUNTRIES.
We may also be materially and adversely affected by laws restricting foreign
investment in the field of communications. Some countries in which we operate,
including the Russian Federation and China, have extensive restrictions on
foreign investments in the communications field. There is no way of predicting
whether additional ownership limitations will be enacted in any of these
markets, or whether any of these laws, if enacted, would force us to reduce or
restructure our ownership interest in any of our ventures. If additional
ownership limitations are enacted in any of these markets and we are required to
reduce or restructure our ownership interests in any ventures, it is unclear how
this reduction or restructuring would be implemented, or what impact this
reduction or restructuring would have on us or on our financial condition or
results of operations.
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Current Chinese laws and regulations prohibit foreign companies and joint
ventures in which they participate from providing telephony services to
customers in China and generally limit the role that foreign companies or their
joint ventures may play in the telecommunications industry. Since mid-1998,
there has been uncertainty regarding possible significant changes in the
regulation of, and policy concerning, foreign participation in and financing of
the telecommunications industry in China and the continued viability of the
structure that we currently use for our investments in the Chinese
telecommunications industry. If the Chinese laws or regulations change and
restrict further the participation of foreign companies in the Chinese
telecommunications market or the Chinese authorities challenge the validity of
our operations in China:
- our licenses to operate in China could be invalidated,
- the legal validity of our contracts could be challenged which would
deprive us of avenues of legal recourse,
- we could be exposed to fines or criminal sanctions, or
- we could not obtain financing within China or abroad.
See "--Chinese governmental authorities are causing the termination of
certain of our joint ventures, which could have negative effects on our
financial position and results of operations."
The Russian Federation has periodically proposed legislation that would
limit the ownership percentage that foreign companies can have in radio and
television businesses and/or limit the number of radio and television businesses
that any company could own in a single market. While this proposed legislation
has not been enacted, it is possible that this legislation could be enacted in
Russia and that other countries in Eastern Europe and the republics of the
former Soviet Union may enact similar legislation which could have a material
adverse effect on our business operations, financial condition of prospects.
CURRENCY CONTROL RESTRICTIONS IN OUR MARKETS MAY HAVE A NEGATIVE EFFECT ON OUR
BUSINESS.
The existence of currency control restrictions in certain of our markets may
make it difficult for us to convert or repatriate our foreign earnings and
adversely affect our ability to pay overhead expenses, meet our debt obligations
and continue to expand our communications business. Our joint ventures often
require specific licenses from the central banks of many of the countries in
which they operate for certain types of foreign currency loans, leases and
investments. The joint ventures' failure to obtain these currency licenses could
result in the imposition of fines and penalties, significant delays in
purchasing equipment and resulting difficulties in generating cash flows. The
documentary requirements for obtaining the currency licenses are burdensome and
we cannot assure you that the licensing entity will not impose additional,
substantive requirements for the grant of a license or deny a request for a
license on an arbitrary basis. Furthermore, the time typically taken by the
relevant central banks to issue these licenses can be lengthy, in some cases up
to one year or more.
RECENT ECONOMIC DIFFICULTIES IN THE RUSSIAN FEDERATION AND OTHER EMERGING
MARKETS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR OPERATIONS IN THESE
COUNTRIES.
In 1998, a number of emerging market economies suffered significant economic
and financial difficulties resulting in liquidity crises, devaluation of
currencies, higher interest rates and reduced opportunities for financing. At
this time, the prospects for recovery for the economies of the Russian
Federation and other republics of the former Soviet Union and Eastern Europe
negatively affected by the economic crisis remain unclear. The economic crises
has resulted in a number of defaults by borrowers in the Russian Federation and
other countries and a reduced level of financing available to investors in these
countries. The devaluation of many of the currencies in the region has also
negatively affected the U.S. dollar value of the revenues generated by some of
our joint ventures and may lead to
21
<PAGE>
certain additional restrictions on the convertibility of some local currencies.
We expect that these problems will negatively affect the financial performance
of some of our cable television, telephony, radio broadcasting and paging
ventures.
HIGH INFLATION IN OUR MARKETS MAY HAVE A NEGATIVE EFFECT ON OUR BUSINESS.
Some of our subsidiaries and joint ventures operate in countries where the
inflation rate is extremely high. Since the break-up of the Soviet Union, the
economies of many of the former republics have been characterized by high rates
of inflation. Inflation in Russia increased dramatically following the August
1998 financial crisis and there are increased risks of inflation in Kazakhstan.
The inflation rates in Belarus have been at hyperinflationary levels for some
years and as a result, the currency has essentially lost all intrinsic value.
Our operating results will be hurt if we are unable to increase our prices
enough to offset any increase in the rate of inflation, or if anti-inflationary
legislation holding down prices is enacted.
FLUCTUATIONS IN CURRENCY EXCHANGE RATES IN THE COUNTRIES IN WHICH WE OPERATE
COULD NEGATIVELY IMPACT OUR RESULTS OF OPERATIONS IN THESE COUNTRIES.
The value of the currencies in the countries in which we operate tends to
fluctuate, sometimes significantly. For example, during 1998 and in the early
part of 1999, the value of the Russian Rouble has been under considerable
economic and political pressure and has suffered significant declines against
the U.S. dollar and other currencies. We currently do not hedge against exchange
rate risk and therefore could be negatively impacted by declines in exchange
rates between the time one of our joint ventures receives its funds in local
currency and the time it distributes these funds in U.S. dollars to us.
THE TAX RISKS OF INVESTING IN THE MARKETS IN WHICH WE OPERATE CAN BE SUBSTANTIAL
AND CAN MAKE EFFECTIVE TAX PLANNING DIFFICULT, WHICH WOULD MATERIALLY AFFECT OUR
FINANCIAL CONDITION.
Taxes payable by our joint ventures are substantial and we may be unable to
obtain the benefits of tax treaties due to:
- the documentary and other requirements imposed by the government
authorities,
- the unfamiliarity of those administering the tax system with the
international tax treaty system of their country, or their unwillingness
to recognize the treaty system, and
- the absence of applicable tax treaties in many of the countries in which
we operate.
Our tax planning initiatives to reduce our overall tax obligations may be
negated or impaired by the need to deal with these issues. Furthermore, the
taxation systems in the countries in which we operate are at an early stage of
development and are subject to varying interpretations, frequent changes and
inconsistent and arbitrary enforcement at the federal, regional and local
levels. In certain instances, new taxes and tax regulations have been given
retroactive effect, which makes effective tax planning difficult.
THE COMMERCIAL AND CORPORATE LEGAL STRUCTURES ARE STILL DEVELOPING IN SOME OF
OUR TARGET MARKETS WHICH CREATES UNCERTAINTIES AS TO THE PROTECTION OF OUR
RIGHTS AND OPERATIONS IN THESE MARKETS.
Commercial and corporate laws in the countries in which we operate are
significantly less developed or clear than comparable laws in the United States
and countries of Western Europe and are subject to frequent changes, preemption
and reinterpretation by local or administrative regulations, by administrative
officials and, in the case of Eastern Europe and the republics of the former
Soviet Union, by new governments. There are also often inconsistencies among
laws, presidential decrees and governmental and ministerial orders and
resolutions, and conflicts between local, regional and national laws and
regulations. In some cases, laws are imposed with retroactive force and punitive
penalties. In
22
<PAGE>
other cases, laws go unenforced. The result has been considerable legal
confusion which creates significant obstacles to creating and operating our
joint ventures. We cannot assure you that the uncertainties associated with the
existing and future laws and regulations in our markets will not have a material
adverse effect on our ability to conduct our business and to generate profits.
See "Metromedia International Group."
There is also significant uncertainty as to the extent to which local
parties and entities, particularly government authorities, in these markets will
respect contractual and other rights and also the extent to which the "rule of
law" has taken hold and will be upheld in each of these countries. The courts in
many of these markets often do not have the experience, resources or authority
to resolve significant economic disputes and enforce their decisions and may not
be insulated from political considerations and other outside pressures. We
cannot assure you that the licenses held by our businesses or the contracts
providing our businesses access to the airwaves or other rights or agreements
essential for operations will not be significantly modified, revoked or canceled
without justification. If that happens, our ability to seek legal redress may be
substantially delayed or even unavailable in these cases. See "Metromedia
International Group."
RUSSIAN LAW MAY HOLD US LIABLE FOR THE DEBTS OF OUR SUBSIDIARIES, WHICH COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL CONDITION.
Generally, under the Civil Code of the Russian Federation and the Law of the
Russian Federation on Joint Stock Companies, shareholders in a joint stock
company are not liable for the obligations of the joint stock company, and only
bear the risk of loss of their investment. However, if a parent company has the
capability under its charter or by contract to direct the decision-making of a
subsidiary company, the parent company will bear joint and several
responsibility for transactions concluded by its subsidiary in carrying out its
direction. In addition, a parent company capable of directing the actions of its
subsidiary is secondarily liable for its subsidiary's debts if the subsidiary
becomes insolvent or bankrupt as a result of the action or inaction of its
parent. In this instance, other shareholders of the subsidiary could claim
compensation for the subsidiary's losses from the parent company which caused
the subsidiary to take action or fail to take action, knowing that this action
or failure to take action would result in losses. It is possible that we may be
deemed to be this type of parent company of some of our subsidiaries, and we
could therefore be liable in some cases for the debt of these subsidiaries,
which could have a material adverse effect on us.
WE OPERATE IN COUNTRIES WHERE THE LAWS MAY NOT ADEQUATELY PROTECT OUR
SHAREHOLDER RIGHTS, WHICH WOULD PREVENT US FROM REALIZING FULLY THE ECONOMIC
BENEFITS OF OUR INVESTMENTS IN THESE COUNTRIES.
Shareholders have limited rights and legal protections under the laws of
many of the countries in which we operate. The concept of fiduciary duties of
management or directors owed to their companies is also new and is not well
developed. In some cases, the officers of a company may take actions without
regard to or in contravention of the directions of the shareholders or the board
of directors appointed by the shareholders.
In other cases, a shareholder's ownership interest may be diluted without
its knowledge or approval or even erased from the shareholders' ownership
registry. We cannot assure you that we could obtain legal redress as a
shareholder for any such action in the court systems of these countries.
WE MAY DEFAULT UNDER OUR SNAPPER CREDIT FACILITY, WHICH COULD MATERIALLY AND
ADVERSELY AFFECT OUR BUSINESS STRATEGY AND RESULTS OF OPERATION.
Snapper has defaulted in compliance with financial covenants under its
credit facilities and, although these defaults have been waived, we cannot
assure you that it will not default again under its credit facility. Any default
could materially and adversely affect Snapper and our results of operations.
23
<PAGE>
See "--We have substantial debt which may limit our ability to borrow, restrict
the use of our cash flows and constrain our business strategy and we may not be
able to meet our debt obligations."
WE ARE INVOLVED IN LEGAL PROCEEDINGS, WHICH COULD ADVERSELY AFFECT OUR FINANCIAL
CONDITION.
We are involved in several legal proceedings in connection with our
investment in RDM Sports Group, Inc.
If we are unsuccessful in defending against the allegations made in these
proceedings, an award of the magnitude being sought in these legal proceedings
would have a material adverse affect on our financial condition and results of
operations. In addition, we cannot assure you that we will not determine that
the advantages of entering into a settlement outweigh the risk and expense of
protracted litigation or that ultimately we will be successful in defending
against these allegations. See "Metromedia International Group."
THE HOLDERS OF THE NOTES WILL SUFFER CERTAIN NEGATIVE TAX CONSEQUENCES AND THEIR
CLAIMS MAY BE LIMITED IN CERTAIN RESPECTS BECAUSE THE NOTES ARE ISSUED AT AN
ORIGINAL ISSUE DISCOUNT PRICE.
We will issue the notes at a discount from their principal amount at
maturity. As a result, the holders will be required to include amounts in gross
income for federal income tax purposes in advance of receipt of the cash
payments to which the income is attributable. Please refer to the section in
this prospectus entitled "Material United States Federal Income Tax
Considerations" for a more detailed discussion of the federal income tax
consequences to the holders of the notes resulting from the purchase, ownership
or disposition of these notes.
Under the indenture for the notes, if the maturity of the notes is
accelerated, the holders of the notes will be entitled to recover only the
amount which may be declared due and payable pursuant to the indenture, which
will be less than the principal amount at maturity of these notes. Please refer
to the section in this prospectus entitled "Description of the Notes."
If a bankruptcy case is commenced by or against us under the U.S. Bankruptcy
Code, the claim of a holder of notes on the principal amount of the notes may be
limited to an amount equal to the sum of (1) the issue price of the notes and
(2) that portion of the original issue discount, as determined on the basis of
this issue price, which is not deemed to constitute "unmatured interest" for
purposes of the U.S. Bankruptcy Code. Any original issue discount that was not
amortized as of any such bankruptcy filing would constitute "unmatured
interest."
WE MAY NOT BE ABLE TO REPAY THE NOTES UPON A CHANGE OF CONTROL.
If a change of control of Metromedia International Group occurs, the holders
of the notes would be entitled to require us to make an offer to repurchase
their notes at a purchase price equal to 101% of their accreted value or
principal amount, as the case may be, plus accrued but unpaid interest. The
exercise by the holders of their right to require these repurchases could cause
an event of default under our other indebtedness, even if the change of control
in itself does not, due to the financial effect of these repurchases on us.
Our ability to pay cash to the holders upon these repurchases may be limited
by our then financial resources. We cannot assure you that sufficient funds will
be available when necessary to make the required repurchases. Our inability to
repurchase all of the tendered notes would constitute an event of default under
the indenture for the notes. The provisions of the indenture may not afford
holders of the notes the right to require us to repurchase their notes in the
event of a highly-leveraged transaction that may adversely affect these holders
if this transaction is not defined as a change of control under the indenture
for the notes. Please refer to the section in this prospectus entitled
"Description of the Notes."
24
<PAGE>
A COURT COULD DECLARE THE NOTES VOID, JUNIOR IN RIGHT OF PAYMENT OR TAKE OTHER
ACTIONS DETRIMENTAL TO YOU.
An unpaid creditor or representative of creditors, such as a trustee in
bankruptcy or Metromedia International Group as a debtor-in-possession in a
bankruptcy proceeding, could file a lawsuit claiming that the issuance of the
notes constituted a fraudulent conveyance. If the court were to make such a
finding, it could:
- void our obligations under the notes,
- declare the notes junior in right of payment to other indebtedness, or
- take other actions detrimental to you as a holder of the notes.
To make such a determination, a court would have to find that:
- we did not receive fair consideration or reasonably equivalent value for
the notes, and that,
- at the time the notes were issued, we were insolvent or rendered insolvent
by the issuance of the notes; were engaged in a business or transaction
for which our remaining assets constituted unreasonably small capital; or
intended to incur, or believed that we would incur, debts beyond our
ability to pay such debts as they matured.
The measure of insolvency for these purposes will vary depending upon the
law of the jurisdiction and upon the valuation assumptions and the methodology
applied by the court.
Moreover, regardless of solvency, a court could void an incurrence of
indebtedness, including the notes, if it determined that the transaction was
made with intent to hinder, delay or defraud creditors, or a court could declare
the indebtedness, including the notes, junior in right of payment to the claims
of all existing and future creditors on similar grounds.
YOU MAY FIND IT DIFFICULT TO SELL YOUR EXCHANGE NOTES.
The exchange notes will constitute a new issue of securities with no
established trading market, and we cannot assure you as to:
- the development of any market for the exchange notes,
- the liquidity of any market for the exchange notes that may develop,
- your ability to sell your exchange notes, or
- the price at which you would be able to sell your exchange notes.
If a market for the exchange notes were to exist, the exchange notes could
trade at prices that may be higher or lower than their principal amount or
purchase price, depending on many factors, including prevailing interest rates,
the market for similar debentures and the financial performance of Metromedia
International Group. Historically, the market for non-investment grade debt has
been subject to disruptions that have caused substantial volatility in the
prices of securities similar to the exchange notes. We cannot assure you that
the market for the exchange notes, if any, will not be subject to similar
disruptions. Any disruption in the market for these notes may adversely affect
you as a holder of the exchange notes.
THE ISSUANCE OF THE EXCHANGE NOTES MAY ADVERSELY AFFECT THE MARKET FOR THE OLD
NOTES.
If old notes are tendered for exchange and accepted in the exchange offer,
the trading market for the untendered and tendered but unaccepted old notes
could be adversely affected. Please refer to the section in this prospectus
entitled "--Your failure to participate in the exchange offer will have adverse
consequences."
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<PAGE>
YOUR FAILURE TO PARTICIPATE IN THE EXCHANGE OFFER WILL HAVE ADVERSE
CONSEQUENCES.
The old notes were not registered under the Securities Act or under the
securities laws of any state and you may not resell them, offer them for resale
or otherwise transfer them unless they are subsequently registered or resold
under an exemption from the registration requirements of the Securities Act and
applicable state securities laws. If you do not exchange your old notes for
exchange notes pursuant to this exchange offer, or if you do not properly tender
your old notes in this exchange offer, you will not be able to resell, offer to
resell or otherwise transfer the old notes unless they are registered under the
Securities Act or unless you resell them, offer to resell or otherwise transfer
them under an exemption from the registration requirements of, or in a
transaction not subject to, the Securities Act. In addition, you will no longer
be able to obligate us to register the old notes under Securities Act.
CERTAIN PERSONS WHO PARTICIPATE IN THE EXCHANGE OFFER MUST DELIVER A PROSPECTUS
IN CONNECTION WITH RESALES OF THE EXCHANGE NOTES.
Based on certain no-action letters issued by the staff of the Securities and
Exchange Commission, we believe that you may offer for resale, resell or
otherwise transfer the exchange notes without compliance with the registration
and prospectus delivery requirements of the Securities Act. However, in some
instances described in this prospectus under "The Exchange Offer," you will
remain obligated to comply with the registration and prospectus delivery
requirements of the Securities Act to transfer your exchange notes. In these
cases, if you transfer any exchange note without delivering a prospectus meeting
the requirements of the Securities Act or without an exemption from registration
of your exchange notes under this Act, you may incur liability under the
Securities Act. We do not and will not assume or indemnify you against this
liability.
OUR FUTURE RESULTS OF OPERATIONS MAY BE SUBSTANTIALLY DIFFERENT FROM OUR
STATEMENTS ABOUT OUR FUTURE PROSPECTS AND YOU SHOULD NOT UNDULY RELY ON THESE
STATEMENTS.
Any statements in this prospectus about our expectations, beliefs, plans,
objectives, assumptions or future events or performance are not historical facts
and are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements are often but not always made through the use
of words or phrases like "believes," "expects," "may," "will," "should" or
"anticipates" or the negative of these words or phrases or other variations on
these words or phrases or comparable terminology, or by discussions of strategy
that involves risks and uncertainties.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements or industry results to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements. These risks, uncertainties and other factors
include, among others:
- general economic and business conditions, which will, among other things,
impact demand for our products and services,
- industry capacity, which tends to increase during strong years of the
business cycle,
- changes in public taste, industry trends and demographic changes,
- competition from other communications companies, which may affect our
ability to generate revenues,
- political, social and economic conditions and changes in laws, rules and
regulations or their administration or interpretation, particularly in
Eastern Europe, the former Soviet Union, China and other selected emerging
markets, which may affect our results of operations,
26
<PAGE>
- timely completion of construction projects for new systems for the joint
ventures in which we have invested, which may impact the costs of these
projects,
- developing legal structures in Eastern Europe, the former Soviet Union,
China and other selected emerging markets, which may affect our ability to
enforce our legal rights,
- cooperation of local partners for our communications investments in
Eastern Europe, the former Soviet Union, China and other selected emerging
markets, which may affect our results of operations,
- exchange rate fluctuations,
- license renewals for our communications investments in Eastern Europe, the
former Soviet Union, China and other selected emerging markets,
- the loss of any significant customers,
- changes in business strategy or development plans,
- the quality of management,
- the availability of qualified personnel,
- changes in or the failure to comply with government regulations, and
- other factors referenced in this prospectus.
Accordingly, any forward-looking statement is qualified in its entirety by
reference to these risks, uncertainties and other factors and you should not
place any undue reliance on them. Furthermore, any forward-looking statement
speaks only as of the date on which it is made. New factors emerge from time to
time and it is not possible for us to predict which will arise. In addition, we
cannot assess the impact of each factor on our business or the extent to which
any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statement.
Furthermore, this document constitutes a Year 2000 Readiness Disclosure
Statement, and the statements in this prospectus are subject to the Year 2000
Information and Readiness Disclosure Act and we hereby claim the protection of
this Act for this document and all the information contained in it.
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USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of our exchange
notes in exchange for our outstanding old notes. We are making this exchange
offer solely in connection with our merger with PLD Telekom. In consideration
for issuing our exchange notes, we will receive old notes in aggregate accreted
value equal to the accreted value on the exchange notes.
CAPITALIZATION
The following table sets forth the capitalization of Metromedia
International Group as of June 30, 1999 (1) as reported, and (2) on a pro forma
basis as adjusted to reflect our merger with PLD Telekom, the restructuring of
PLD Telekom's obligations and the purchase of the Technocom Limited minority
interests. The table should be read in conjunction with the consollidated
financial statements of Metromedia International Group and PLD Telekom and their
related notes thereto incorporated by reference in this prospectus and the
unaudited pro forma combined condensed financial information, which appears on
pages 34 to 41.
<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
--------------------------
ACTUAL PRO FORMA
------------ ------------
<S> <C> <C>
(IN THOUSANDS)
Cash and cash equivalents........................................................... $ 101,948 $ 96,914
------------ ------------
------------ ------------
Debt (including current portion):
Snapper Term Loan................................................................... $ 4,500 $ 4,500
Snapper Revolving Credit Facility due November 2003................................. 38,564 38,564
10.5% Metromedia senior discount notes due 2007..................................... -- 159,410
10.5% Travelers note................................................................ -- 4,920
PLD Telekom supplier financing and note payable..................................... -- 15,413
Other long-term debt, including capital leases...................................... 1,595 5,439
------------ ------------
Total debt.......................................................................... 44,659 228,246
Stockholders' equity:
7.25% cumulative convertible preferred stock........................................ 207,000 207,000
Common stock........................................................................ 69,162 90,412
Paid-in surplus..................................................................... 1,012,987 1,155,285
Accumulated deficit................................................................. (887,674) (887,674)
Accumulated other comprehensive loss................................................ (5,565) (5,565)
------------ ------------
Total stockholders' equity.......................................................... 395,910 559,458
------------ ------------
Total capitalization................................................................ $ 440,569 $ 787,704
------------ ------------
------------ ------------
</TABLE>
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METROMEDIA INTERNATIONAL GROUP
We are a global communications company. Through our communications group, we
are engaged in the development and operation of a variety of communications
businesses in Eastern Europe, the republics of the former Soviet Union, the
People's Republic of China and other selected emerging markets. These businesses
include telephony, cable television, paging and radio broadcasting. We also own
Snapper, Inc., which manufactures premium-priced power lawnmowers, lawn
tractors, garden tillers, snow throwers and related parts and accessories under
the Snapper-Registered Trademark- brand.
Our objective is to establish ourselves as a major multiple-market provider
of modern communications services in Eastern Europe, the former Soviet Union and
other selected emerging markets.
At June 30, 1999, we owned interests in and participated with partners in
the management of joint ventures that had 48 operational systems. These
operational systems consisted of 12 cable television systems, two GSM cellular
telephone systems, one joint venture that is building out an operational GSM
system and providing financing, technical assistance and consulting services to
the local system operator, one international and long distance telephony
provider, two wireless local loop operator, 13 paging systems and 17 radio
broadcasting stations. In addition, we have interests in and participate with
partners in the management of several joint ventures that, as of June 30, 1999,
had four pre-operational systems. In Eastern Europe and the former Soviet Union,
we generally own 50% or more of the operating joint ventures in which we invest.
On the date of this prospectus, we consummated a merger with PLD Telekom, a
major provider of local, long distance and international telecommunications
services in the Russian Federation, Kazakhstan and Belarus. Please refer to the
section in this prospectus entitled "About Our Merger with PLD Telekom."
Our joint ventures experienced significant growth in 1998. At the end of
1998, we had approximately 520,182 subscribers compared to 305,198 at the end of
1997, which represents an increase of approximately 70%. The total combined
revenues of our communications group's consolidated and unconsolidated joint
ventures for the years ended December 31, 1998, 1997 and 1996 were $130.1
million, $91.2 million and $57.2 million, respectively. As many of our joint
ventures are not consolidated in our results of operations, our communications
group reported consolidated revenues of $30.2 million for the year ended
December 31, 1998, or approximately 12.6% of our total reported revenues for the
year ended December 31, 1998. We expect that this percentage will increase as
our communications group's joint ventures grow their businesses.
Recent adverse economic conditions in the Russian Federation and Eastern
Europe and the uncertainties associated with the governmental policies to
address these conditions could affect our cable television, paging and radio
broadcasting businesses in Russia, Belarus and other emerging countries. The
recent slowdown in growth in China and possible significant changes in the
regulation of foreign participation in and financing of the telecommunications
industry in China could affect the ability of our Chinese joint ventures to
generate revenue, cash flows or net income. Please refer to the section in this
document entitled "Risk Factors."
Because legal restrictions in China prohibit foreign participation in the
operation or ownership in the telecommunications sector, our joint ventures in
China provide financing, technical advice, consulting and other services for the
construction and development of telephony networks for China United
Telecommunications Incorporated, known as China Unicom, a Chinese
telecommunications operator. The completed networks are operated by China
Unicom. In return, we receive payments from China Unicom based on the
distributable cash flow generated by the networks.
Ningbo Ya Mei Telecommunications, Ltd., one of our two joint ventures in
Ningbo Municipality, China, has received a letter from China Unicom stating that
the supervisory department of the Chinese
29
<PAGE>
government had requested that China Unicom terminate the project with Ningbo Ya
Mei. China Unicom subsequently informed us that the notification also applies to
our other joint venture in Ningbo Municipality. The notification from China
Unicom requested that negotiations begin immediately regarding the amounts to be
paid to Ningbo Ya Mei, including return of investment made and appropriate
compensation and other matters related to the winding up of the joint venture's
activities as a result of this notice. Negotiations regarding the terms of the
termination have begun and are continuing. The content of the negotiations
includes determining the investment principal of our Ningbo joint ventures,
appropriate compensation and other matters related to termination of contracts.
The letter further stated that due to technical reasons which were not
specified, the cash distribution plan for the first half of 1999 had not been
decided, and that China Unicom also expected to discuss this subject with Ningbo
Ya Mei. As a result, we cannot currently determine the amount of compensation
that our Ningbo joint ventures will receive.
While there can be no assurance that China Unicom will provide similar
letters to our other two sino-sino-foreign telephony-related joint ventures, we
expect that these joint ventures will also be the subject of project termination
negotiations. China Unicom has suspended cooperation on further development of
networks with these joint ventures and we believe that this action reflects
China Unicom's intention to negotiate the termination of its relationship with
these joint ventures as well. We cannot yet predict the effect on us of the
Ningbo joint ventures' negotiations and the expected winding up of our other two
telephony-related joint ventures, but we believe such negotiations, if adversely
concluded, or the failure to make scheduled cash distributions, could have a
material adverse effect on our financial position and results of operations.
Depending on the amount of compensation we receive, we will record a non cash
charge equal to the difference between the sum of the carrying values of our
investment and advances made to joint ventures plus goodwill less the cash
compensation we receive from the joint ventures which China Unicom has paid. Our
investment in and advances to joint ventures and goodwill balance at June 30,
1999 were approximately $71 million and $67 million respectively. We are
currently evaluating other investment opportunities in China and recently
announced the establishment of a new joint venture in China to develop and
operate an e-commerce system.
We owned Snapper before the shift in our business focus to a global
communications company. Accordingly, we view Snapper as a non-core asset and
manage Snapper in order to maximize stockholder value. Snapper manufactures
Snapper brand power lawn and garden equipment for sale to both residential and
commercial customers. The residential equipment includes self-propelled and
push-type walk-behind lawnmowers, rear-engine riding lawnmowers, garden
tractors, zero-turn radius lawn equipment, garden tillers, snow throwers, and
related parts and accessories. The commercial mowing equipment includes
commercial quality self-propelled walk-behind lawnmowers, and wide-area and
front-mount zero-turn radius lawn equipment.
Snapper products are premium-priced, generally selling at retail from $300
to $10,500. Snapper sells to and supports directly an approximately 5,000-dealer
network for the distribution of its products. Snapper also sells its products
through foreign distributors.
A large percentage of the residential and commercial sales of lawn and
garden equipment are made during a 17-week period from early spring to
mid-summer. Although some sales are made to the dealers and distributors prior
and subsequent to this period, the largest volume of sales is made during this
time. The majority of revenues during the late fall and winter periods are
related to snow thrower shipments. Snapper has an agreement with a financial
institution which makes floor-plan financing for Snapper products available to
dealers. If there is a default by a dealer, Snapper is obligated to repurchase
any new and unused equipment recovered from the dealership. At December 31,
1998, there was approximately $96.4 million outstanding under this floor-plan
financing arrangement. We have guaranteed Snapper's payment obligations under
this arrangement.
30
<PAGE>
Snapper also makes available, through General Electric Credit Corporation, a
retail customer revolving credit plan. This credit plan allows consumers to pay
for Snapper products over time. Consumers also receive Snapper credit cards
which can be used to purchase additional Snapper products.
Snapper manufactures its products in McDonough, Georgia, at facilities
totaling approximately 1.0 million square feet. Excluding engines, transmission
and tires, Snapper manufactures a substantial portion of the component parts for
its products. Most of the parts and material for Snapper's products are
commercially available from a number of sources.
For the year ended December 31, 1998, Snapper reported revenues of $210.1
million, or approximately 87.4% of our total consolidated revenues for the year
ended December 31, 1998. We expect that this percentage will decrease as the
communications group's consolidated joint ventures grow their businesses.
On September 23, 1999, we agreed to settle our outstanding litigation with
the plaintiffs in SIDNEY H. SAPSOWITZ AND SID SAPSOWITZ & ASSOCIATES, INC. V.
JOHN W. KLUGE, STUART SUBOTNICK, METROMEDIA INTERNATIONAL GROUP, INC., ORION
PICTURES CORPORATION, LEONARD WHITE ET AL. described in greater detail in our
Annual Report on Form 10-K/A for the fiscal year ended December 31, 1998
incorporated by reference in this prospectus. On September 23, 1999, the jury in
this litigation returned a verdict of $4.5 million in compensatory damages and
$3.4 million in other damages against us. Before the conclusion of the
proceedings relating to punitive damages, we agreed to a settlement with the
plaintiffs. Under the terms of the settlement, we will be obligated to pay $5
million immediately, an additional $5 million on September 30, 2000 and an
additional $4 million on September 30, 2001. This settlement fully resolves all
litigation among us and the other parties in this litigation. We will record a
$12.8 million charge against discontinued operations in our third quarter
results of operation as a result of this settlement.
31
<PAGE>
ABOUT OUR MERGER WITH PLD TELEKOM
We are making this exchange offer in connection with the consummation on the
date of this prospectus of our merger with PLD Telekom. In the merger, PLD
Telekom became a wholly owned subsidiary of Metromedia International Group.
PLD Telekom, through its operating subsidiaries, is a major provider of
local, long distance and international telecommunications services in the
Russian Federation, Kazakhstan and Belarus.
PLD Telekom's objective is to be a leading participant in the targeted
development of telecommunications infrastructure, products and services in the
emerging markets of the Russian Federation and other countries of the former
Soviet Union.
Its five principal operating businesses are:
- PeterStar Company Limited: a provider of integrated local, long distance
and international telecommunications services in St. Petersburg through a
fully digital fiber optic network;
- Technocom Limited: a provider, through Teleport-TP, of dedicated
international telecommunications services to Russian and foreign
businesses in Moscow and an operator of a satellite-based pan-Russian long
distance network;
- Baltic Communications Limited: a provider of dedicated international
telecommunications services in St. Petersburg;
- ALTEL (formerly BECET International): a provider of a national cellular
service in Kazakhstan; and
- Belarus-Netherlands Belcel Joint Venture: a provider of the only national
cellular service in Belarus.
In addition, PLD Telekom is developing a portfolio of international long
distance products and services under the name "PLDncompass" targeted at carriers
and corporate customers in the United States, the United Kingdom and Europe
which require telecommunications services to and from the countries of the
former Soviet Union.
The fostering of existing, and the creation of new, partnerships with local
and regional partners is crucial to the long-term success of PLD Telekom in this
environment. In its operating businesses, PLD Telekom's partners include:
- Petersburg Telephone Network: the local telephone system operator in St.
Petersburg;
- St. Petersburg Intercity & International Telephone: the gateway for
national and international long distance calls to and from St. Petersburg,
which, together with Petersburg Telephone Network, holds an indirect 14%
interest in PeterStar Company Limited;
- Kazakhtelekom: the state-owned national telecommunications operator in
Kazakhstan and the holder of a 50% interest in ALTEL; and
- AO Rostelecom: the primary long distance and international carrier in the
Russian Federation and a 44% stockholder in Teleport-TP.
In the merger, each share of common stock of PLD Telekom was exchanged for
shares of our common stock. Each share of preferred stock of PLD Telekom was
redeemed for cash at a redemption price of Cdn. $1.00 per share. Each
outstanding option and warrant to acquire shares of PLD Telekom was converted
into options and warrants to purchase a number of shares of common stock of
Metromedia International Group to be determined based on the exchange ratio
described above.
32
<PAGE>
In connection with the consummation of our merger with PLD Telekom, the
holders of $123,000,000 in principal amount of PLD Telekom's 14% senior discount
notes due 2004 and the holders of $25,000,000 in principal amount of PLD
Telekom's 9% convertible subordinated notes due 2006 have exchanged their PLD
Telekom notes and all accrued but unpaid interest on these notes through the
date of the merger for an aggregate of $163,084,182 in accreted value, or
$210,631,376, in principal amount at maturity, of Metromedia International
Group's old notes. It was a condition to the exchange of the PLD Telekom notes
that the registration statement of which this prospectus is a part be declared
effective by the Securities and Exchange Commission.
Also, in connection with the completion of our merger with PLD Telekom, PLD
Telekom repaid The Travelers Insurance Company and The Travelers Indemnity
Company $8.5 million of amounts due under their revolving credit and warrant
agreement dated November 26, 1997 with PLD Telekom. PLD Telekom has agreed to
repay Travelers the remaining $4.92 million due under this agreement on August
30, 2000. At the closing of the merger, Travelers was issued 100,000 shares of
PLD Telekom common stock that were converted into shares of our common stock at
the exchange ratio described above in the merger. Travelers was also issued
10-year warrants to purchase 700,000 shares of our common stock with an exercise
price to be determined in December 2000 between $10.00 and $15.00 per share.
However, if the amount outstanding has not fully been repaid by August 30, 2000,
then the exercise price of the warrants will be reset to $.01. Travelers will
maintain its existing security interests in certain PLD Telekom assets and its
debt will be guaranteed by Metromedia International Group and three of PLD
Telekom's subsidiaries.
Also in connection with our merger with PLD Telekom, PLD Telekom purchased
all of the shares of Technocom Limited from its existing minority shareholders
for an aggregate purchase price of $12.6 million. Technocom Limited is now
wholly owned by PLD Telekom.
33
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The following Unaudited Pro Forma Combining Balance Sheet of Metromedia
International Group as of June 30, 1999 and Unaudited Pro Forma Combining
Statements of Operations for the six months ended June 30, 1999 and the year
ended December 31, 1998 illustrate the effect of the merger and the
restructuring of PLD Telekom's obligations and purchase of the Technocom Limited
minority interests. The Unaudited Pro Forma Combining Balance Sheet assumes that
the transactions referred to above are completed as of June 30, 1999 and the
Unaudited Pro Forma Combining Statements of Operations assumes that the
transactions referred to above have been completed as of the beginning of the
periods presented.
Under the terms of the transaction, the holders of PLD Telekom common stock
will receive shares of Metromedia International Group common stock on the basis
of an exchange ratio that values each share of PLD Telekom common stock at $3.50
per share if the average Metromedia International Group price per share is
between $5.25 and $6.25 at closing. If the average price of Metromedia
International Group common stock exceeds $6.25 per share, each share of PLD
Telekom common stock will be exchanged for .56 shares of Metromedia
International Group common stock, not to exceed $4.48 per share of Metromedia
International Group common stock. If the average price of Metromedia
International Group common stock is less than $5.25 per share, each share of PLD
Telekom common stock will be exchangeable for .6667 shares of Metromedia
International Group common stock, subject to termination and "top-up" rights.
We have prepared these Unaudited Pro Forma Combining Financial Statements
assuming an exchange ratio of .56 (which assumes an average price of Metromedia
International Group common stock in excess of $6.25 but less than $8.00) and a
stock price of $6.93. The actual exchange ratio will be determined on the date
of determination in accordance with the formulas set forth in the merger
agreement. See "About our Merger with PLD Telekom."
ACCOUNTING TREATMENT
We will record the merger as a purchase transaction. For accounting
purposes, Metromedia International Group will be deemed to be the surviving
corporation in the merger.
The pro forma adjustments are based upon currently available information and
upon assumptions that management of each of Metromedia International Group and
PLD Telekom believes are reasonable. We will account for the merger based upon
the estimated fair market value of the net tangible and intangible assets
acquired at the date of acquisition. The adjustments included in the Unaudited
Pro Forma Combining Financial Statements represent the preliminary determination
of these adjustments based upon available information. We cannot assure you that
the actual adjustments will not differ significantly from the pro forma
adjustments reflected in the pro forma financial information.
The Unaudited Pro Forma Combining Financial Statements are not necessarily
indicative of either future results of operations or results that might have
been achieved if the foregoing transactions had been consummated as of the
indicated dates. The Unaudited Pro Forma Combining Financial Statements should
be read in conjunction with the historical financial statements of Metromedia
International Group and PLD Telekom, together with the related notes thereto. We
have incorporated those historical financial statements in this document by
reference.
34
<PAGE>
METROMEDIA INTERNATIONAL GROUP, INC.
UNAUDITED PRO FORMA COMBINING BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, 1999
-------------------------------------------------------
PRO FORMA
MERGER AND
DEBT METROMEDIA
METROMEDIA PLD RESTRUCTURING PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
----------- ---------- ----------------- -----------
<S> <C> <C> <C> <C>
Cash and cash equivalents.............................. $ 101,948 $ 7,882 $ (6,741)(1) $ 96,914
(8,500)(1)
(12,595)(1)
(300)(1)
15,220(2)
Accounts receivable.................................... 39,256 14,094 -- 53,350
Inventories............................................ 56,356 3,557 -- 59,913
Other current assets................................... 9,592 13,984 (3,014)(3) 20,562
----------- ---------- ----------------- -----------
Current assets..................................... 207,152 39,517 (15,930) 230,739
Escrow funds........................................... -- 15,220 (15,220)(2) --
Investments in and advances to Joint Ventures.......... 156,199 8,607 -- 164,806
Property, plant and equipment, net..................... 34,209 172,171 -- 206,380
Intangibles............................................ 157,743 107,231 (35,364)(1) 359,952
130,342(1)
Other assets........................................... 4,229 8,414 (5,884)(1) 6,759
----------- ---------- ----------------- -----------
Total assets....................................... $ 559,532 $ 351,160 $ 57,944 $ 968,636
----------- ---------- ----------------- -----------
----------- ---------- ----------------- -----------
Accounts payable and accrued expenses.................. $ 83,838 $ 35,109 $ 6,000(1) $ 111,791
(12,560)(1)
(582)(1)
(14)(3)
Short-term debt........................................ 886 30,283 (6,450)(1) 8,299
(13,420)(1)
(3,000)(3)
Other current liabilities.............................. -- 10,908 -- 10,908
----------- ---------- ----------------- -----------
Current liabilities................................ 84,724 76,300 (30,026) 130,998
Long-term debt......................................... 43,773 150,095 (138,251)(1) 219,947
4,920(1)
159,410(1)
Other liabilities...................................... 4,807 -- -- 4,807
----------- ---------- ----------------- -----------
Total liabilities.................................. 133,304 226,395 (3,947) 355,752
----------- ---------- ----------------- -----------
Minority interest...................................... 30,318 23,108 -- 53,426
Stockholders' equity:
7 1/4% cumulative convertible preferred stock........ 207,000 -- -- 207,000
Preferred stock...................................... -- 4 (4)(1) --
Common stock......................................... 69,162 378 (378)(1) 90,412
21,250(1)
Paid-in surplus........................................ 1,012,987 245,332 (245,332)(1) 1,155,285
126,013(1)
4,228(1)
8,697(1)
3,360(1)
Accumulated deficit.................................... (887,674) (144,057) 144,057(1) (887,674)
Accumulated other comprehensive loss................... (5,565) -- -- (5,565)
----------- ---------- ----------------- -----------
Total stockholders' equity............................. 395,910 101,657 61,891 559,458
----------- ---------- ----------------- -----------
Total liabilities and stockholders' equity......... $ 559,532 $ 351,160 $ 57,944 $ 968,636
----------- ---------- ----------------- -----------
----------- ---------- ----------------- -----------
</TABLE>
See accompanying notes to unaudited pro forma combining financial statements.
35
<PAGE>
METROMEDIA INTERNATIONAL GROUP, INC.
UNAUDITED PRO FORMA COMBINING STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1999
--------------------------------------------------------
PRO FORMA
MERGER AND
METROMEDIA DEBT METROMEDIA
HISTORICAL PLD RESTRUCTURING PRO FORMA
(13) HISTORICAL ADJUSTMENTS COMBINED
------------- ---------- ---------------- -----------
<S> <C> <C> <C> <C>
Revenues............................................... $ 132,647 $ 57,328 $ -- $ 189,975
Cost and expenses:
Cost of sales and operating expenses................. 79,572 17,483 -- 97,055
Selling, general and administrative.................. 60,602 26,450 -- 87,052
Depreciation and amortization........................ 8,587 16,520 (1,004)(7) 30,620
6,517(8)
------------- ---------- ------- -----------
Operating loss......................................... (16,114) (3,125) (5,513) (24,752)
Other income (expense):
Interest expense..................................... (6,929) (14,367) 11,880(4) (15,754)
(8,369)(4)
1,289(5)
1,014(6)
(258)(6)
(14)(11)
Interest income...................................... 4,246 489 (669)(10) 4,052
(14)(11)
Equity in losses of unconsolidated investees......... (5,933) (430) -- (6,363)
Other................................................ (2,794) 110 -- (2,684)
------------- ---------- ------- -----------
Loss before income tax expense and minority interest... (27,524) (17,323) (654) (45,501)
Income tax expense..................................... (205) (4,723) -- (4,928)
Minority interest...................................... 4,852 (2,087) -- 2,765
------------- ---------- ------- -----------
Net loss............................................... (22,877) (24,133) (654) (47,664)
Cumulative convertible preferred stock dividend
requirement.......................................... (7,504) -- -- (7,504)
------------- ---------- ------- -----------
Net loss attributable to common stockholders........... $ (30,381) $ (24,133) $ (654) $ (55,168)
------------- ---------- ------- -----------
------------- ---------- ------- -----------
Weighted average number of common shares-- Basic
(12)................................................. 69,137 37,847 90,387
------------- ---------- -----------
------------- ---------- -----------
Loss per common share--Basic:
Net loss attributable to common stockholders........... $ (0.44) $ (0.64) $ (0.61)
------------- ---------- -----------
------------- ---------- -----------
</TABLE>
See accompanying notes to unaudited pro forma combining financial statements.
36
<PAGE>
METROMEDIA INTERNATIONAL GROUP, INC.
UNAUDITED PRO FORMA COMBINING STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
------------------------------------------------------
PRO FORMA
MERGER AND
METROMEDIA DEBT METROMEDIA
HISTORICAL PLD RESTRUCTURING PRO FORMA
(13) HISTORICAL ADJUSTMENTS COMBINED
------------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
Revenues...................................................... $ 240,292 $ 145,360 $ -- $ 385,652
Cost and expenses:
Cost of sales and operating expenses........................ 155,916 45,348 -- 201,264
Selling, general and administrative......................... 153,327 63,993 -- 217,320
Depreciation and amortization............................... 20,588 26,071 (1,080)(7) 58,613
13,034(8)
Nonrecurring charge......................................... 40,317 -- 40,317
------------- ----------- ------------- -----------
Operating income (loss)....................................... (129,856) 9,948 (11,954) (131,862)
Other income (expense):
Interest expense............................................ (16,331) (23,732) 20,760(4) (33,906)
(16,738)(4)
35(5)
2,617(6)
(517)(6)
Interest income............................................. 12,746 2,384 (1,309) 10) 13,821
Equity in losses of unconsolidated investees................ (18,151) (958) -- (19,109)
Other......................................................... 5,390 (11,203) -- (5,813)
------------- ----------- ------------- -----------
Loss before income tax benefit (expense) and minority
interest.................................................... (146,202) (23,561) (7,106) (176,869)
Income tax benefit (expense).................................. 358 (9,864) -- (9,506)
Minority interest............................................. 9,858 (9,386) (2,038)(9) (1,566)
------------- ----------- ------------- -----------
Loss from continuing operations............................... (135,986) (42,811) (9,144) (187,941)
Cumulative convertible preferred stock dividend requirement... (15,008) -- -- (15,008)
------------- ----------- ------------- -----------
Loss from continuing operations attributable to common
stockholders................................................ $ (150,994) $ (42,811) $ (9,144) $(202,949)
------------- ----------- ------------- -----------
------------- ----------- ------------- -----------
Weighted average number of common
shares--Basic (12).......................................... 68,955 35,274 90,205
------------- ----------- -----------
------------- ----------- -----------
Loss per common share--Basic:
Loss from continuing operations attributable to common
stockholders................................................ $ (2.19) $ (1.21) $ (2.25)
------------- ----------- -----------
------------- ----------- -----------
</TABLE>
See accompanying notes to unaudited pro forma combining financial statements.
37
<PAGE>
METROMEDIA INTERNATIONAL GROUP, INC.
NOTES TO UNAUDITED PRO FORMA COMBINING FINANCIAL STATEMENTS
- ------------------------
(1) Reflects the acquisition by Metromedia International Group of PLD Telekom at
June 30, 1999 as follows:
(i) the issuance of 21.25 million common shares of Metromedia International
Group using an exchange ratio of .56 shares of Metromedia International
Group for each share of PLD Telekom since the price of Metromedia
International Group stock is greater than $6.25 and less than or equal
to $8.00;
(ii) the exchange by holders of PLD Telekom's 14.0% senior discount notes
due 2004 with carrying value of $111,751,000 and 9.0% subordinated
convertible notes with a carrying value of $26,500,000 together with
accrued interest payable of $12,560,000 (together, the PLD notes) for
Metromedia International Group's 10.5% senior discount notes due 2007
with a value of $159,410,000. Under the terms of the transactions,
holders of PLD Telekom's 14.0% senior discount notes will receive
Metromedia International Group 10.5% senior discount notes with an
accreted value of $123.0 million and holders of PLD Telekom's 9.0%
subordinated convertible notes will receive Metromedia International
Group 10.5% senior discount notes with an accreted value of $23.85
million. Additionally, the holders of the PLD Telekom 14.0% senior
discount notes and 9.0% subordinated convertible notes will receive
Metromedia International Group 10.5% senior discount notes with an
accreted value of $12.56 million as payment for accrued interest
payable on such notes.
(iii) the repayment of $6.45 million of News America notes payable and
$582,000 of interest payable for $6.741 million. Under the terms of the
transaction, News America has agreed to retroactively reduce the
interest rate it has charged to PLD Telekom from 20% per year to 10%
per year, thereby resulting in a reduction of the accrued interest
payable;
(iv) the purchase of the equity interests of the two minority shareholders
of Technocom Limited. Under the terms of the transaction, the minority
shareholders of Technocom Limited have agreed to sell their interests
in Technocom Limited to PLD Telekom for a purchase price of
$12,595,000;
(v) the payment of $8.5 million of $13.42 million of the loans owed to
Travelers. Under the terms of the transaction, Travelers has agreed to
accept $8.5 million of the principal amount owed by PLD Telekom at
closing and to defer repayment of the remaining $4.92 million of
principal amount owed by PLD Telekom until the earlier of August 30,
2000 or one year from the closing date of the transaction;
(vi) the redemption of PLD Telekom's Series II and Series III preferred
stock for cash;
(vii) the value of warrants to purchase 700,000 shares of Metromedia
International Group common stock issued to Travelers in exchange for
outstanding warrants. Such value has been determined using the
Black-Scholes method assuming 72.5% volatility, a risk free interest
rate of 5.2% and an average exercise period of 10 years;
(viii) the value of options exchanged for outstanding PLD Telekom options.
Such value has been determined using the Black-Scholes method assuming
72.5% volatility, a risk free interest rate of 5.07% and an average
exercise period of 3 years;
(ix) the value of warrants exchanged for outstanding PLD Telekom warrants.
Such value has been determined using the Black-Scholes method assuming
72.5% volatility, a risk free interest rate of 5.02% and average
exercise period of 2 years;
38
<PAGE>
METROMEDIA INTERNATIONAL GROUP, INC.
NOTES TO UNAUDITED PRO FORMA COMBINING FINANCIAL STATEMENTS (CONTINUED)
(x) estimated transaction costs; and
(xi) the elimination of historical net assets acquired comprised of PLD
Telekom's historical stockholders' equity, historical debt and related
interest either repaid or refinanced in the merger reduced by goodwill
and deferred financing fees (in thousands, except per share
information).
<TABLE>
<S> <C> <C>
Issuance of Common Stock
PLD Telekom shares outstanding at June 30, 1999
adjusted for 100,000 shares to be issued to
Travelers........................................... 37,947
Number of shares issued to acquire PLD Telekom........ 21,250
Per share price....................................... $ 6.93
---------
Value of shares issued.................................. $ 147,263
Value of debt exchanged................................. 159,410
Repayment of News America notes payable and interest.... 6,741
Payment for minority interests of Technocom Limited..... 12,595
Partial repayment of loans owed to Travelers............ 8,500
Payment for PLD Telekom preferred stock................. 300
Value of warrants issued to Travelers................... 4,228
Value of options exchanged.............................. 8,697
Value of warrants exchanged............................. 3,360
Estimated transaction costs............................. 6,000
---------
Purchase price.......................................... 357,094
Less Net Assets Acquired
PLD Telekom Historical Stockholders' Equity........... 101,657
PLD Telekom Historical Debt and Related Interest
Repaid or Refinanced................................ 166,343
PLD Telekom Historical Goodwill....................... (35,364)
PLD Telekom Historical Deferred Financing Fees........ (5,884)
---------
226,752
---------
Excess of cost over historical net assets acquired...... $ 130,342
---------
---------
</TABLE>
For illustrative purposes, Metromedia International Group has made a
preliminary allocation of excess cost over estimated net assets acquired to
goodwill as PLD Telekom's assets and liabilities are estimated to
approximate fair value. The final allocation of purchase price to assets and
liabilities acquired will depend upon the final purchase price as determined
by the final exchange ratio and the amount of debt and related interest to
be repaid or refinanced and the final estimates of fair values of assets and
liabilities of PLD Telekom at the closing date. Metromedia International
Group will undertake a study to determine the fair values of assets and
liabilities acquired and will allocate the purchase price accordingly.
Metromedia International Group believes that the carrying value of current
assets and current liabilities approximates fair value and that the excess
of cost over historical net assets acquired will be allocated to property
and equipment, telecommunication licenses and goodwill. However, there can
be no assurance that the actual allocation will not differ significantly
from the pro forma allocation.
(2) Reflects removal of restrictions on escrowed funds in connection with the
exchange of the PLD Telekom notes.
39
<PAGE>
METROMEDIA INTERNATIONAL GROUP, INC.
NOTES TO UNAUDITED PRO FORMA COMBINING FINANCIAL STATEMENTS (CONTINUED)
(3) Reflects elimination of bridge loan provided to PLD Telekom by Metromedia
together with accrued interest.
(4) Reflects the elimination of historical interest expense attributable to the
PLD notes and the recording of interest expense for the Metromedia
International Group 10.5% senior discount notes.
(5) Reflects the elimination of historical interest expense attributable to the
News America notes payable.
(6) Reflects the elimination of interest expense attributable to the $13.42
million of Travelers' 12.0% revolving credit notes and accrual of interest
on $4.92 million of Travelers' notes at 10.5%.
(7) Reflects the elimination of amortization of historical PLD Telekom goodwill.
(8) Reflects amortization expense of the excess of cost over historical net
assets acquired in the merger by use of the straight-line method over 10
years. Should the allocation of such excess of cost over historical net
assets acquired differ significantly as described in note 1 above,
amortization expense could increase since the lives of assets other than
goodwill may be shorter.
(9) Reflects reversal of minority interest income recorded by PLD Telekom as a
result of the allocation of a portion of the 1998 net loss of Technocom
Limited to the minority. In connection with the acquisition of the minority
interest, the pro-forma assumes that the minority interest was acquired at
the beginning of the period (January 1, 1998). As such, the entry reflects
the reversal of the 1998 credit for allocation of losses to the minority
interest. As of December 31, 1998, the minority interest was fully depleted
and no such allocation of the Technocom Limited loss has been made
subsequent to December 31, 1998.
(10) Reflects elimination of interest income on cash used in connection with
payments of certain PLD Telekom debt and purchase of minority interests of
Technocom Limited.
(11) Reflects elimination of interest income and expense on bridge financing
facility provided to PLD Telekom by Metromedia International Group.
(12) The average common shares outstanding used in calculating pro forma loss
per common share from continuing operations are calculated assuming that the
estimated number of shares of Metromedia International Group common stock to
be issued in the merger were outstanding from the beginning of the periods
presented. Options and warrants to purchase shares of common stock as well
as shares of common stock issuable upon conversion of Metromedia
International Group's convertible preferred stock were not included in
computing pro forma diluted earnings per common share because their
inclusion would result in a smaller loss per common share.
(13) Ningbo Ya Mei Telecommunications, Ltd., one of Metromedia International
Group's two telecommunications joint ventures in Ningbo Municipality, China,
has received a letter from China Unicom stating that the supervisory
department of the Chinese government had requested that China Unicom
terminate the project with Ningbo Ya Mei. China Unicom subsequently informed
Metromedia International Group that the notification also applies to
Metromedia International Group's other joint venture in Ningbo Municipality.
The notification from China Unicom requested that negotiations begin
immediately regarding the amounts to be paid to Ningbo Ya Mei, including
return of investment made and appropriate compensation and other matters
related to the winding up of the joint venture's activities as a result of
this notice. Negotiations regarding the terms of the termination have begun
and are continuing. The content of the negotiations includes determining the
investment principal of Metromedia International Group's Ningbo joint
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METROMEDIA INTERNATIONAL GROUP, INC.
NOTES TO UNAUDITED PRO FORMA COMBINING FINANCIAL STATEMENTS (CONTINUED)
ventures, appropriate compensation and other matters related to termination
of contracts. The letter further stated that due to technical reasons which
were not specified, the cash distribution plan for the first half of 1999
had not been decided, and that China Unicom also expected to discuss this
subject with Ningbo Ya Mei. As a result, Metromedia International Group
cannot currently determine the amount of compensation that its Ningbo joint
ventures will receive.
While there can be no assurance that China Unicom will provide similar
letters to Metromedia International Group's other two sino-sino-foreign
telephony-related joint ventures, Metromedia International Group expects
that these joint ventures will also be the subject of project termination
negotiations. Metromedia International Group cannot yet predict the effect
on it of the Ningbo joint ventures' negotiations and the expected winding up
of Metromedia International Group's other two telephony-related joint
ventures, but Metromedia International Group believes such negotiations, if
adversely concluded, or the failure to make scheduled cash distributions,
could have a material adverse effect on its financial position and results
of operations. Depending on the amount of compensation it receives,
Metromedia International Group will record a non cash charge equal to the
difference between the sum of the carrying values of its investment and
advances made to joint ventures plus goodwill less the cash compensation it
receives from the joint ventures which China Unicom has paid. Metromedia
International Group's investment in and advances to joint ventures and
goodwill balance at June 30, 1999 were approximately $71 million and $67
million, respectively. No adjustment has been made to the unaudited pro
forma combined financial statements to writedown goodwill relating to
Metromedia International Group's telecommunications joint ventures in China.
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THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
We are making this exchange offer in connection with our agreement to merge
with PLD Telekom. In connection with the completion of the merger, the holders
of $123,000,000 in principal amount of PLD Telekom's 14% senior discount notes
and the holders of $25,000,000 in principal amount of PLD Telekom's 9%
convertible subordinated notes exchanged their notes and all accrued but unpaid
interest on these notes through the date of the merger for an aggregate of
$163,084,182 in accreted value, or $210,631,376 in principal amount at maturity,
of our old notes. It was a condition to this exchange that the registration
statement of which this prospectus is a part be declared effective by the
Securities and Exchange Commission. This prospectus, together with the letter of
transmittal, is first being sent on or about , 1999 to all holders
of our old notes known to us.
TERMS OF THE EXCHANGE OFFER
We are offering to exchange our exchange notes for a like aggregate
principal amount at maturity of our old notes.
The exchange notes that we propose to issue in this exchange offer will be
substantially identical to our old notes except that, unlike our old notes, the
exchange notes will have no transfer restrictions or registration rights. You
should read the description of the exchange notes in the section in this
prospectus entitled "Description of the Notes."
We reserve the right in our sole discretion to purchase or make offers for
any old notes that remain outstanding following the expiration or termination of
this exchange offer and, to the extent permitted by applicable law, to purchase
old notes in the open market or privately negotiated transactions, one or more
additional tender or exchange offers or otherwise. The terms and prices of these
purchases or offers could differ significantly from the terms of this exchange
offer. In addition, nothing in this exchange offer will prevent us from
exercising our right to discharge our obligations on the old notes by depositing
certain securities with the trustee and otherwise.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
This exchange offer will expire at 5:00 p.m., New York City time, on ,
1999, unless we extend it in our reasonable discretion. The expiration date of
this exchange offer will be at least 20 business days after the commencement of
the exchange offer in accordance with Rule 14e-1(a) under the Securities
Exchange Act of 1934.
We expressly reserve the right to delay acceptance of any old notes, extend
or terminate this exchange offer and not accept any old notes that we have not
previously accepted if any of the conditions described below under "--Conditions
to the Exchange Offer" have not been satisfied or waived by us. We will notify
the exchange agent of any extension by oral notice promptly confirmed in writing
or by written notice. We will also notify the holders of the old notes by
mailing an announcement or by a press release or other public announcement
communicated before 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date unless applicable laws require us
to do otherwise.
We also expressly reserve the right to amend the terms of this exchange
offer in any manner. If we make any material change, we will promptly disclose
this change in a manner reasonably calculated to inform the holders of our old
notes of the change including providing public announcement or giving oral or
written notice to these holders. A material change in the terms of this exchange
offer could include a change in the timing of the exchange offer, a change in
the exchange agent and other similar changes in the terms of this exchange
offer. If we make any material change to this exchange offer, we will disclose
this change by means of a post-effective amendment to the registration statement
which includes this prospectus and will distribute an amended or supplemented
prospectus to each registered
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holder of old notes. In addition, we will extend this exchange offer for an
additional five to ten business days as required by the Securities Exchange Act
of 1934, depending on the significance of the amendment, if the exchange offer
would otherwise expire during that period. We will promptly notify the exchange
agent by oral notice, promptly confirmed in writing, or written notice of any
delay in acceptance, extension, termination or amendment of this exchange offer.
PROCEDURES FOR TENDERING OLD NOTES
PROPER EXECUTION AND DELIVERY OF LETTERS OF TRANSMITTAL
To tender your old notes in this exchange offer, you must use ONE OF THE
THREE alternative procedures described below:
(1) REGULAR DELIVERY PROCEDURE: Complete, sign and date the letter of
transmittal, or a facsimile of the letter of transmittal. Have the
signatures on the letter of transmittal guaranteed if required by the
letter of transmittal. Mail or otherwise deliver the letter of
transmittal or the facsimile together with the certificates representing
the old notes being tendered and any other required documents to the
exchange agent on or before 5:00 p.m., New York City time, on the
expiration date.
(2) BOOK-ENTRY DELIVERY PROCEDURE: Send a timely confirmation of a
book-entry transfer of your old notes, if this procedure is available,
into the exchange agent's account at The Depository Trust Company
pursuant to the procedures for book-entry transfer described under
"--Book-Entry Delivery Procedure" below, on or before 5:00 p.m., New York
City time, on the expiration date.
(3) GUARANTEED DELIVERY PROCEDURE: If time will not permit you to complete
your tender by using the procedures described in (1) or (2) above before
the expiration date, comply with the guaranteed delivery procedure
described under "--Guaranteed Delivery Procedure" below.
The method of delivery of the old notes, the letter of transmittal and all
other required documents is at your election and risk. Instead of delivery by
mail, we recommend that you use an overnight or hand-delivery service. If you
choose the mail, we recommend that you use registered mail, properly insured,
with return receipt requested. In all cases, YOU SHOULD ALLOW SUFFICIENT TIME TO
ASSURE TIMELY DELIVERY. You should not send any letters of transmittal or old
notes to us. You must deliver all documents to the exchange agent at its address
provided below. You may also request your broker, dealer, commercial bank, trust
company or nominee to tender your old notes on your behalf.
Only a holder of old notes may tender old notes in this exchange offer. A
holder is any person in whose name old notes are registered on our books or any
other person who has obtained a properly completed bond power from the
registered holder.
If you are the beneficial owner of old notes that are registered in the name
of a broker, dealer, commercial bank, trust company or other nominee and you
wish to tender your notes, you must contact this registered holder promptly and
instruct this registered holder to tender these notes on your behalf. If you
wish to tender these notes on your own behalf, you must, before completing and
executing the letter of transmittal and delivering your old notes, either make
appropriate arrangements to register the ownership of these notes in your name
or obtain a properly completed bond power from the registered holder. The
transfer of registered ownership may take considerable time.
You must have any signatures on a letter of transmittal or a notice of
withdrawal guaranteed by:
(1) a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.,
(2) a commercial bank or trust company having an office or correspondent in
the United States, or
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(3) an eligible guarantor institution within the meaning of Rule 17Ad-15
under the Securities Exchange Act of 1934,
UNLESS the old notes are tendered:
(1) by a registered holder or by a participant in The Depository Trust
Company whose name appears on a security position listing as the owner,
who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the letter of transmittal and only if
the exchange notes are being issued directly to this registered holder or
deposited into this participant's account at The Depository Trust
Company, or
(2) for the account of a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the
United States or an eligible guarantor institution within the meaning of
Rule 17Ad-15 under the Securities Exchange Act of 1934.
If the letter of transmittal or any bond powers are signed by:
(1) The recordholder(s) of the old notes tendered: the signature must
correspond with the name(s) written on the face of the old notes without
alteration, enlargement or any change whatsoever.
(2) A participant in The Depository Trust Company: the signature must
correspond with the name as it appears on the security position listing
as the holder of the old notes.
(3) A person other than the registered holder of any old notes: these old
notes must be endorsed or accompanied by bond powers and a proxy that
authorize this person to tender the old notes on behalf of the registered
holder, in satisfactory form to us as determined in our sole discretion,
in each case, as the name of the registered holder or holders appears on
the old notes.
(4) Trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or
representative capacity: these persons should so indicate when signing.
Unless waived by us, evidence satisfactory to us of their authority to so
act must also be submitted with the letter of transmittal.
To effectively tender notes through The Depository Trust Company, the
financial institution that is a participant in The Depository Trust Company will
electronically transmit its acceptance through the Automatic Tender Offer
Program. The Depository Trust Company will then edit and verify the acceptance
and send an agent's message to the exchange agent for its acceptance. An agent's
message is a message transmitted by The Depository Trust Company to the exchange
agent stating that The Depository Trust Company has received an express
acknowledgment from the participant in The Depository Trust Company tendering
the notes that this participant has received and agrees to be bound by the terms
of the letter of transmittal, and that we may enforce this agreement against
this participant.
BOOK-ENTRY DELIVERY PROCEDURE
Any financial institution that is a participant in The Depository Trust
Company's systems may make book-entry deliveries of old notes by causing The
Depository Trust Company to transfer these old notes into the exchange agent's
account at The Depository Trust Company in accordance with The Depository Trust
Company's procedures for transfer. To effectively tender notes through The
Depository Trust Company, the financial institution that is a participant in The
Depository Trust Company will electronically transmit its acceptance through the
Automatic Tender Offer Program. The Depository Trust Company will then edit and
verify the acceptance and send an agent's message to the exchange agent for its
acceptance. The exchange agent will make a request to establish an account for
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the old notes at The Depository Trust Company for purposes of the exchange offer
within two business days after the date of this prospectus.
A delivery of old notes through a book-entry transfer into the exchange
agent's account at The Depository Trust Company will only be effective if an
agent's message or the letter of transmittal or a facsimile of the letter of
transmittal with any required signature guarantees and any other required
documents is transmitted to and received by the exchange agent at the address
indicated below under "--Exchange Agent" on or before the expiration date unless
the guaranteed delivery procedure described below is complied with. DELIVERY OF
DOCUMENTS TO THE DEPOSITORY TRUST COMPANY DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
GUARANTEED DELIVERY PROCEDURE
If you are a registered holder of old notes and desire to tender your notes,
and (1) these notes are not immediately available, (2) time will not permit your
notes or other required documents to reach the exchange agent before the
expiration date, or (3) the procedures for book-entry transfer cannot be
completed on a timely basis and an agent's message delivered, you may still
tender in this exchange offer if:
(1) you tender through a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the
United States, or an eligible guarantor institution within the meaning of
Rule 17Ad-15 under the Securities Exchange Act of 1934,
(2) on or before the expiration date, the exchange agent receives a properly
completed and duly executed letter of transmittal or facsimile of the
letter of transmittal, and a notice of guaranteed delivery, substantially
in the form provided by us, with your name and address as holder of the
old notes and the amount of notes tendered, stating that the tender is
being made by this letter and notice and guaranteeing that within five
business days after the expiration date the certificates for all the old
notes tendered, in proper form for transfer, or a book-entry confirmation
with an agent's message, as the case may be, and any other documents
required by the letter of transmittal will be deposited by the eligible
institution with the exchange agent, and
(3) the certificates for all your tendered old notes in proper form for
transfer or a book-entry confirmation as the case may be, and all other
documents required by the letter of transmittal are received by the
exchange agent within five business days after the expiration date.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
Your tender of old notes will constitute an agreement between you and us
governed by the terms and conditions provided in this prospectus and in the
letter of transmittal.
We will be deemed to have received your tender and consent as of the date
when your duly signed letter of transmittal accompanied by your old notes
tendered, or a timely confirmation of a book-entry transfer of these notes into
the exchange agent's account at The Depository Trust Company with an agent's
message, or a notice of guaranteed delivery from an eligible institution is
received by the exchange agent.
All questions as to the validity, form, eligibility, including time of
receipt, acceptance and withdrawal tenders will be determined by us in our sole
discretion. Our determination will be final and binding.
We reserve the absolute right to reject any and all old notes not properly
tendered or any old notes which, if accepted, would, in our opinion or our
counsel's opinion, be unlawful. We also reserve the absolute right to waive any
conditions of this exchange offer or irregularities or defects in tender as
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to particular notes. Our interpretation of the terms and conditions of this
exchange offer, including the instructions in the letter of transmittal, will be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of old notes must be cured within such time as we
shall determine. We, the exchange agent or any other person will be under no
duty to give notification of defects or irregularities with respect to tenders
of old notes. We and the exchange agent or any other person will incur no
liability for any failure to give notification of these defects or
irregularities. Tenders of old notes will not be deemed to have been made until
such irregularities have been cured or waived. The exchange agent will return
without cost to their holders any old notes that are not properly tendered and
as to which the defects or irregularities have not been cured or waived as
promptly as practicable following the expiration date.
If all the conditions to the exchange offer are satisfied or waived on the
expiration date, we will accept all old notes properly tendered and will issue
the exchange notes promptly thereafter. Please refer to the section of this
prospectus entitled "--Conditions to the Exchange Offer" below. For purposes of
this exchange offer, old notes will be deemed to have been accepted as validly
tendered for exchange when, as and if we give oral or written notice of
acceptance to the exchange agent.
We will issue the exchange notes in exchange for the old notes tendered
pursuant to a notice of guaranteed delivery by an eligible institution only
against delivery to the exchange agent of the letter of transmittal, the
tendered old notes and any other required documents, or the receipt by the
exchange agent of a timely confirmation of a book-entry transfer of old notes
into the exchange agent's account at The Depository Trust Company with an
agent's message, in each case, in form satisfactory to us and the exchange
agent.
If any tendered old notes are not accepted for any reason provided by the
terms and conditions of this exchange offer or if old notes are submitted for a
greater principal amount than the holder desires to exchange, the unaccepted or
non-exchanged old notes will be returned without expense to the tendering
holder, or, in the case of old notes tendered by book-entry transfer procedures
described below, will be credited to an account maintained with the book-entry
transfer facility, as promptly as practicable after withdrawal, rejection of
tender or the expiration or termination of the exchange offer.
We reserve the right, in our sole discretion, to transfer or assign to any
person, in whole or from time to time in part, any old note beneficially owned
by us following this exchange offer. No transfer or assignment will relieve us
of our obligations under this exchange offer.
By tendering into this exchange offer, you will irrevocably appoint our
designees as your attorney-in-fact and proxy with full power of substitution and
resubstitution to the full extent of your rights on the notes tendered. This
proxy will be considered coupled with an interest in the tendered notes. This
appointment will be effective only when, and to the extent that we accept your
notes in this exchange offer. All prior proxies on these notes will then be
revoked and you will not be entitled to give any subsequent proxy. Any proxy
that you may give subsequently will not be deemed effective. Our designees will
be empowered to exercise all voting and other rights of the holders as they may
deem proper at any meeting of note holders or otherwise. The old notes will be
validly tendered only if we are able to exercise full voting rights on the
notes, including voting at any meeting of the note holders, and full rights to
consent to any action taken by the note holders.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, you may withdraw tenders of
old notes at any time before 5:00 p.m., New York City time, on the expiration
date.
For a withdrawal to be effective, you must send a written or facsimile
transmission notice of withdrawal to the exchange agent before 5:00 p.m., New
York City time, on the expiration date at the address provided below under
"--Exchange Agent" and before acceptance of your tendered notes for exchange by
us.
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Any notice of withdrawal must:
(1) specify the name of the person having tendered the old notes to be
withdrawn,
(2) identify the notes to be withdrawn, including, if applicable, the
registration number or numbers and total principal amount of these notes,
(3) be signed by the person having tendered the old notes to be withdrawn in
the same manner as the original signature on the letter of transmittal by
which these notes were tendered, including any required signature
guarantees, or be accompanied by documents of transfer sufficient to
permit the trustee for the old notes to register the transfer of these
notes into the name of the person having made the original tender and
withdrawing the tender,
(4) specify the name in which any of these old notes are to be registered,
if this name is different from that of the person having tendered the old
notes to be withdrawn, and
(5) if applicable because the old notes have been tendered though the
book-entry procedure, specify the name and number of the participant's
account at The Depository Trust Company to be credited, if different than
that of the person having tendered the old notes to be withdrawn.
We will determine all questions as to the validity, form and eligibility,
including time of receipt, of all notices of withdrawal and our determination
will be final and binding on all parties. Old notes that are withdrawn will be
deemed not to have been validly tendered for exchange in this exchange offer.
The exchange agent will return without cost to their holders all old notes
that have been tendered for exchange and are not exchanged for any reason, as
promptly as practicable after withdrawal, rejection of tender or expiration or
termination of this exchange offer.
You may retender properly withdrawn old notes in this exchange offer by
following one of the procedures described under "--Procedures for Tendering Old
Notes" above at any time on or before the expiration date.
CONDITIONS TO THE EXCHANGE OFFER
We will complete this exchange offer only if:
(1) there is no action or proceeding instituted or threatened in any court
or before any governmental agency or body that in our judgment would
reasonably be expected to prohibit, prevent or otherwise impair our
ability to proceed with this exchange offer,
(2) there is no change in the laws and regulations which, in our judgment,
would reasonably be expected to impair our ability to proceed with this
exchange offer,
(3) there is no change in the current interpretation of the staff of the
Securities and Exchange Commission which permits resales of the exchange
notes,
(4) there is no stop order issued by the Securities and Exchange Commission
or any state securities authority suspending the effectiveness of the
registration statement which includes this prospectus or the
qualification of the indenture for our exchange notes under the Trust
Indenture Act of 1939 and there are no proceedings initiated or, to our
knowledge, threatened for that purpose, and
(5) we obtain all governmental approvals that we deem in our sole discretion
necessary to complete this exchange offer.
These conditions are for our sole benefit. We may assert any one of them
regardless of the circumstances giving rise to it and may also waive any one of
them, in whole or in part, at any time and from time to time, if we determine in
our reasonable discretion that it has not been satisfied, subject to applicable
law. We will not be deemed to have waived our rights to assert or waive these
conditions if
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we fail at any time to exercise any of them. Each of these rights will be deemed
an ongoing right which we may assert at any time and from time to time.
If we determine that we may terminate this exchange offer because any of
these conditions is not satisfied, we may:
(1) refuse to accept and return to their holders any old notes that have
been tendered,
(2) extend the exchange offer and retain all notes tendered before the
expiration date, subject to the rights of the holders of these notes to
withdraw their tenders, or
(3) waive any condition that has not been satisfied and accept all properly
tendered notes that have not been withdrawn or otherwise amend the terms
of this exchange offer in any respect as provided under the section in
this prospectus entitled "--Expiration Date; Extensions; Amendments;
Termination."
ACCOUNTING TREATMENT
We will record the exchange notes at the same carrying value as the old
notes as reflected in our accounting records on the date of the exchange.
Accordingly, we will not recognize any gain or loss for accounting purposes. We
will amortize the costs of the exchange offer and the unamortized expenses
related to the issuance of the exchange notes over the term of the exchange
notes.
EXCHANGE AGENT
We have appointed U.S. Bank Trust National Association as exchange agent for
this exchange offer. You should direct all questions and requests for assistance
on the procedures for tendering and all requests for additional copies of this
prospectus or the letter of transmittal to the exchange agent as follows:
By mail or by hand/overnight delivery:
U.S. Bank Trust National Association
180 East 5th Street
St. Paul, MN 55101
Attention: Specialized Finance Department
Facsimile Transmission: (651) 244-1537
Confirm by Telephone: (800) 934-6802
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FEES AND EXPENSES
We will bear the expenses of soliciting tenders in this exchange offer,
including fees and expenses of the exchange agent and trustee and accounting,
legal, printing and related fees and expenses.
We will not make any payments to brokers, dealers or other persons
soliciting acceptances of this exchange offer. However, we will pay the exchange
agent reasonable and customary fees for its services and will reimburse the
exchange agent for its reasonable out-of-pocket expenses in connection with this
exchange offer. We will also pay brokerage houses and other custodians, nominees
and fiduciaries their reasonable out-of-pocket expenses for forwarding copies of
the prospectus, letters of transmittal and related documents to the beneficial
owners of the old and for handling or forwarding tenders for exchange to their
customers.
We will pay all transfer taxes, if any, applicable to the exchange of old
notes pursuant to this exchange offer. However, tendering holders will pay the
amount of any transfer taxes, whether imposed on the registered holder or any
other persons, if:
(1) certificates representing exchange notes or old notes for principal
amounts not tendered or accepted for exchange are to be delivered to, or
are to be registered or issued in the name of, any person other than the
registered holder of the notes tendered,
(2) tendered old notes are registered in the name of any person other than
the person signing the letter of transmittal, or
(3) a transfer tax is payable for any reason other than the exchange of the
old notes in this exchange offer.
If you do not submit satisfactory evidence of the payment of any of these
taxes or of any exemption from this payment with the letter of transmittal, we
will bill you directly the amount of these transfer taxes.
YOUR FAILURE TO PARTICIPATE IN THE EXCHANGE OFFER WILL HAVE ADVERSE CONSEQUENCES
The old notes were not registered under the Securities Act or under the
securities laws of any state and you may not resell them, offer them for resale
or otherwise transfer them unless they are subsequently registered or resold
under an exemption from the registration requirements of the Securities Act and
applicable state securities laws. If you do not exchange your old notes for
exchange notes pursuant to this exchange offer, or if you do not properly tender
your old notes in this exchange offer, you will not be able to resell, offer to
resell or otherwise transfer the old notes unless they are registered under the
Securities Act or unless you resell them, offer to resell or otherwise transfer
them under an exemption from the registration requirements of, or in a
transaction not subject to, the Securities Act. In addition, you will no longer
be able to obligate us to register the old notes under the Securities Act.
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DESCRIPTION OF THE NOTES
GENERAL
The form and terms of the exchange notes are the same as the form and terms
of the old notes, except that the exchange notes have been registered under the
Securities Act, will not bear legends restricting their transfer and will not be
entitled to registration rights. You should carefully read the following
description of the exchange notes.
We will issue the exchange notes under the indenture with U.S. Bank Trust
National Association, as trustee. The terms of the exchange notes will include
those stated in the indenture and those made part of the indenture by reference
to the Trust Indenture Act. The following description of the terms of the
exchange notes does not restate the indenture or the Trust Indenture Act in
their entirety. You should read the indenture and the Trust Indenture Act
because they, and not this description, will define your rights as a holder of
exchange notes. We have filed a copy of the indenture as an exhibit to the
registration statement which includes this prospectus.
We use certain capitalized terms in this description which we define below
in the section entitled "--Certain Definitions." Throughout this description,
the term Metromedia International Group refers only to Metromedia International
Group, Inc. and not to any of its subsidiaries.
Only Restricted Subsidiaries will be bound by the restrictive covenants of
the indenture for the exchange notes. These covenants will not apply to our
Unrestricted Subsidiaries. Please refer to the section in this prospectus
entitled "--Certain Covenants." Under certain circumstances, we will be able to
designate existing or future Subsidiaries as Unrestricted Subsidiaries. On the
date of this prospectus, there are 92 Unrestricted Subsidiaries.
TERMS OF THE NOTES
FORM OF THE NOTES
We will issue the exchange notes in fully registered form, without interest
coupon, in denominations of $1,000 principal amount and any integral multiple of
$1,000 principal amount. The notes will be represented by one or more registered
notes in global form and in certain circumstances may be represented by notes in
definitive certificated form. Please refer to the section in this prospectus
entitled "--Book Entry, Delivery and Form."
MATURITY DATE
The notes will mature on , 2007.
INTEREST RATE
We will issue the notes at a discount to their aggregate principal amount at
maturity. The notes will accrete in value until , 2002, 2 1/2 years from
the old notes' issue date, at the rate of 10 1/2% per year, compounded
semi-annually, to an aggregate principal amount of $1,291.55 per note on ,
2002, 2 1/2 years from the old notes' issue date. The notes will not accrue
interest in cash before , 2002, 2 1/2 years from the old notes'
issue date. After this date, the notes will pay interest at the rate of 10 1/2%
per year, payable semi-annually in cash and in arrears to the holders of record
on or immediately preceding the interest payment date on
and of each year, commencing , 2002, 3 years from
the old notes' issue date. All references to the principal amount of the notes
in this description are references to the principal amount of these notes at
final maturity.
We will compute the interest on the notes on the basis of a 360-day year
comprised of twelve 30-day months.
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We will pay the principal of, premium, if any, and interest on the notes at
our office or agency located in the Borough of Manhattan, in the city of New
York. Initially, this office will be the corporate trust office of the trustee
in the city of New York. You will also be able to exchange or register the
transfer of your notes at this office. At our option, we may also pay interest
by check mailed to you as a holder at the address indicated for you in our note
register. We will not charge you any service charge for any registration of
transfer or exchange of your notes but may require you to pay a sum sufficient
to cover any transfer taxes or other similar governmental charges payable in
connection with this transfer.
RANKING
The notes will:
(1) be general senior unsecured obligations of Metromedia International
Group,
(2) rank senior in right of payment to all existing and future indebtedness
of Metromedia International Group that ranks junior in right of payment
to the notes,
(3) rank equal in right of payment to all existing and future indebtedness
of Metromedia International Group that ranks equal in right of payment to
the notes,
(4) be effectively junior in right of payment to all existing and future
secured indebtedness and liabilities of Metromedia International Group,
(5) not be guaranteed by any of our Subsidiaries, and
(6) be effectively junior in right of payment to any of our Subsidiaries'
existing or future indebtedness, whether or not secured.
At June 30, 1999, on a pro forma basis, after giving effect to the issuance
of the old notes, Metromedia International Group and its Restricted Subsidiaries
would have had $68.8 million of indebtedness outstanding, other than the notes.
OPTIONAL REDEMPTION
We will not be able to redeem the notes before , 2002, 2 1/2 years
from the old notes' issue date. We will be able to redeem the notes at any time
thereafter, at our sole option, in whole or in part. If we exercise this right,
we will redeem your notes at a redemption price equal to their principal amount,
plus accrued and unpaid interest, if any, to but excluding the date of
redemption. The holders of record on a record date for the payment of interest
will however retain the right to receive the interest due on the interest
payment date on the notes redeemed.
If we decide to redeem the notes in part only, the trustee will select the
notes to be redeemed on a pro rata basis, by lot or by any other method as the
trustee in its sole discretion will deem to be fair and appropriate. No note of
$1,000 in principal amount or less will be redeemed in part. If any note is
redeemed in part only, we will indicate in the notice of redemption for this
note the portion of the principal amount of the note to be redeemed. We will
then cancel the original note and issue to the holder a new note in principal
amount equal to the unredeemed portion of the original note.
The notes will not have the benefit of any sinking fund.
CHANGE OF CONTROL
If a change of control of Metromedia International Group occurs, each holder
of notes will have the right to require us to repurchase all or any part of his
or her notes at a repurchase price in cash equal to:
(1) In the case of a repurchase of notes before , 2002: 101% of
the accreted value of the notes, to the date of repurchase, or
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(2) In the case of a repurchase of notes after , 2002: 101% of
the principal amount of the notes, plus accrued and unpaid interest, if
any, to the date of repurchase.
Notwithstanding the above, the interest due on a given interest payment date
on notes being repurchased will be payable to the holder of record of these
notes on the record date for this interest payment date.
A change of control of Metromedia International Group will occur for
purposes of the indenture only upon:
(1) the sale, lease, exchange or other transfer other than by way of merger
or consolidation, in one or a series of related transactions, by
Metromedia International Group of all or substantially all of the assets
of Metromedia International Group and its Restricted Subsidiaries taken
as a whole to any person within the meaning of Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, other than a Wholly Owned
Subsidiary,
(2) a merger or consolidation in which the shareholders of Metromedia
International Group immediately before the merger or consolidation do not
hold a majority of the voting power of Metromedia International Group
immediately after the merger or consolidation,
(3) any person within the meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, other than one or more permitted
holders, becoming the beneficial owner, directly or indirectly, of more
than 50% of the total voting power of all classes of Voting Stock of
Metromedia International Group or its successor; for purposes of this
definition, the permitted holders are Metromedia Company, its Related
Parties and any Person controlling, controlled by, or under common
control with, Metromedia Company,
(4) the first day on which a majority of the members of the board of
directors of Metromedia International Group are not continuing directors;
for purposes of this definition, the continuing directors are (i) any of
the persons that serve as directors on the board of directors of
Metromedia International Group on the date of issuance of the old notes
and (ii) any new director whose election or appointment to the board of
directors of Metromedia International Group or whose nomination for
election by the stockholders of Metromedia International Group was
approved by the continuing directors then in office; provided that
continuing directors shall in no event, whether pursuant to clause (i) or
(ii), include the persons nominated by News America Incorporated to serve
as directors under our agreement to merge with PLD Telekom, or
(5) the liquidation or dissolution of, or the adoption by the stockholders
of a plan for the liquidation or dissolution of, Metromedia International
Group, other than in a transaction which complies with the "Certain
Covenants--Merger and Consolidation" covenant described below.
A change of control of Metromedia International Group will not occur however
for purposes of the indenture upon the sale, disposition or other transfer in
one or a series of related transactions of all or substantially all of the
assets or Voting Stock of our subsidiary Snapper, Inc. or all or any portion of
the PLD Assets. Any Asset Sale of any of the PLD Assets will be governed only by
the "Certain Covenants--Limitation on Sales of Assets" covenant described below.
Beneficial ownership in this change of control definition has the meaning
given to this term in Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934, except that a person will be deemed to have beneficial ownership of all
shares that this person has the right to acquire, whether this right is
exercisable immediately or only after the passage of time.
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Within 30 days following any change of control event described above, we
will mail a notice to each holder of notes with a copy to the trustee stating:
(1) that a change of control has occurred and that the holder has the right
to require us to repurchase his or her notes at the repurchase price
indicated above,
(2) the date of the repurchase, which will be no earlier than 30 days nor
later than 60 days from the date the change of control notice is mailed,
and
(3) the procedures that we determine will have to be followed by the holders
of notes to have their notes repurchased.
We will comply with the requirements of Section 14(e) of the Securities
Exchange Act of 1934 and any other securities laws or regulations that apply in
connection with the repurchase of notes upon a change of control. If the
provisions of any applicable securities laws or regulations conflict with the
indenture for the notes, we will comply with these securities laws and
regulations and will not be deemed to have breached our obligations under the
indenture by virtue of complying with these laws and regulations.
The rights afforded to holders of notes upon a change of control of
Metromedia International Group may have negative consequences or involve certain
risks, including:
(1) Our future indebtedness may contain prohibitions of certain events that
would constitute a change of control under the indenture for the notes or
require this indebtedness to be repurchased upon a change of control.
Moreover, the exercise by the holders of their right to require us to
repurchase their notes could cause a default under this indebtedness,
even if the change of control itself does not, due to the financial
effect of this repurchase on Metromedia International Group.
(2) Our ability to pay cash to the holders upon a repurchase may be limited
by our then existing financial resources. We cannot assure you that we
will have sufficient funds available when necessary to make any required
purchases.
(3) The provisions of the indenture may not afford holders of the notes the
right to require us to repurchase their notes in the event of a highly
leveraged transaction that may adversely affect them if the transaction
does not qualify as a change of control under the indenture.
(4) These change of control provisions may deter certain mergers, tender
offers and takeover attempts involving Metromedia International Group by
increasing the capital required to effectuate these transactions.
(5) The definition of change of control includes a disposition of all or
substantially all of the assets of Metromedia International Group and its
Restricted Subsidiaries. The meaning of the phrase "all or substantially
all" varies according to the facts and circumstances of the subject
transaction, has no clearly established meaning under New York law, which
is the choice of law under the indenture, and is subject to judicial
interpretation. Accordingly, in certain circumstances there may be a
degree of uncertainty in ascertaining whether a particular transaction
would involve a disposition of all or substantially all of the assets of
a person. Therefore it may be unclear as to whether a change of control
has occurred and whether Metromedia International Group is required to
make an offer to repurchase the notes as described above.
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CERTAIN COVENANTS
The indenture for the notes limits our ability to do the following:
LIMITATION ON INDEBTEDNESS.
The indenture for the notes limits our ability to incur additional
indebtedness unless we satisfy a Consolidated Leverage Ratio.
Under the indenture, we may not, and may not permit any of our Restricted
Subsidiaries to, directly or indirectly, Incur any additional Indebtedness or
issue Disqualified Capital Stock. In addition, we will not permit any of our
Restricted Subsidiaries to issue any shares of Preferred Stock. The indenture
gives us and our Restricted Subsidiaries the ability to Incur additional
Indebtedness or issue Disqualified Capital Stock or Preferred Stock only if on
the date of Incurrence or issuance, our Consolidated Leverage Ratio at the end
of our most recently completed fiscal quarter would be:
(1) equal to or less than 5.5 to 1.0 if before June 30, 2002, or
(2) less than 5.0 to 1.0 if on or after June 30, 2002.
The calculation of the Consolidated Leverage Ratio must give effect, on a
pro forma basis, to the Incurrence of this additional Indebtedness, or issuance
of this additional Disqualified Capital Stock or Preferred Stock as if they had
been Incurred or issued at the beginning of the reference period and, to the
extent provided in the definition of Consolidated Leverage Ratio, to the use of
the proceeds from this Incurrence of Indebtedness, or issuance of Disqualified
Capital Stock or Preferred Stock.
However, except with respect to the PLD Companies, these limitations imposed
by the indenture do not prohibit:
(1) Existing Indebtedness of Metromedia International Group or any of its
Restricted Subsidiaries,
(2) the Incurrence by Metromedia International Group or any of its
Restricted Subsidiaries of Indebtedness consisting of Capital Lease
Obligations, Purchase Money Obligations or other obligations Incurred for
the purpose of financing all or any part of the purchase price,
development, acquisition, delivery, construction or improvement of real
or personal property, tangible or intangible, used or to be used in a
Related Business, including Capital Stock of a Person engaged in a
Related Business, or a Credit Facility entered into or debt securities
issued for the purpose of providing this financing, PROVIDED that this
Indebtedness, inclusive of the interest portion thereof and reasonable
costs of financing, does not exceed the lesser of the Fair Market Value
or the purchase price and related costs of design, development,
acquisition, delivery (including carriage, insurance, customs duties,
value-added taxes and other importation fees and expenses), construction
or improvement of these assets or property at the time of its Incurrence,
(3) the Incurrence by Metromedia International Group of Indebtedness in an
aggregate principal amount that may not exceed two (2) times the sum of
the Net Cash Proceeds that it receives after the date of the indenture in
connection with any Public Equity Offerings or sale of Capital Stock,
other than Disqualified Capital Stock, to any Strategic Investor to the
extent that these Net Cash Proceeds have not been used to make Restricted
Payments pursuant to paragraph (c)(ii) of the "--Limitation on Restricted
Payments" covenant or paragraph (2) of the list of permitted payments
under the "--Limitation on Restricted Payments" covenant; PROVIDED that
this Indebtedness does not mature before the end of six months following
the Stated Maturity of the notes,
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(4) the Incurrence by Metromedia International Group or any of its
Subsidiaries of any Indebtedness entered into in the ordinary course of
business:
(a) pursuant to Interest Rate Agreements entered into to protect
Metromedia International Group or any of its Subsidiaries against
fluctuations in interest rates in respect of Indebtedness of
Metromedia International Group or any of its Subsidiaries so long as
the notional principal amount of these Interest Rate Agreements does
not exceed the aggregate principal amount of the Indebtedness then
outstanding to which these Interest Rate Agreements relate, or
(b) under any Currency Hedging Agreement entered into to protect
Metromedia International Group or any of its Subsidiaries against
fluctuations in the value of any currency and not for speculative
purposes,
(5) ordinary course performance bonds, letters of credit and appeal and
surety bonds entered into not in connection with borrowed money,
(6) inter-company Indebtedness owed to Metromedia International Group or any
of its Restricted Subsidiaries or any Guarantee by Metromedia
International Group or any of its Restricted Subsidiaries of any
Indebtedness permitted to be Incurred under the indenture,
(7) the Incurrence by Metromedia International Group or any of its
Restricted Subsidiaries of additional Indebtedness so long as the
aggregate principal amount of this additional Indebtedness does not
exceed $200 million at any one time outstanding, and
(8) Permitted Refinancing Indebtedness of any Indebtedness permitted by
paragraphs (1) through (7) above.
In the event that Indebtedness meets the criteria of more than one of the
types of Indebtedness described in the foregoing paragraphs (1) through (8)
above, we may, in our sole discretion, classify this item of Indebtedness as
having been Incurred under one of these paragraphs and, except as specifically
provided otherwise, will only be required to include the amount and type of this
Indebtedness as having been Incurred pursuant to this paragraph.
LIMITATION ON PLD INDEBTEDNESS.
Notwithstanding the restrictions under the "--Limitation on Indebtedness"
covenant described above, none of the PLD Companies are permitted to, directly
or indirectly, Incur any additional Indebtedness or any Guarantees of any
Indebtedness.
These limitations imposed by the indenture do not prohibit however:
(1) Existing Indebtedness of the PLD Companies,
(2) the Incurrence by the PLD Companies of Indebtedness consisting of
Capital Lease Obligations, Purchase Money Obligations or other
obligations Incurred for the purpose of financing all or any part of the
purchase price, development, acquisition, delivery, construction or
improvement of real or personal property, tangible or intangible, used or
to be used in a Related Business other than any business specified in
clause (5) of the definition of Related Business, or a Credit Facility
entered into or debt securities issued for the purpose of providing this
financing, PROVIDED that this Indebtedness, inclusive of the interest
portion of this Indebtedness and reasonable costs of financing, does not
exceed the lesser of the Fair Market Value or the purchase price and
related costs of design, development, acquisition, delivery (including
carriage, insurance, customs duties, value-added taxes and other
importation fees and expenses), construction or improvement of these
assets or property at the time of its Incurrence,
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(3) the Incurrence by the PLD Companies of any Indebtedness entered into in
the ordinary course of business:
(a) pursuant to Interest Rate Agreements entered into to protect the PLD
Companies against fluctuations in interest rates in respect of
Indebtedness of any of the PLD Companies so long as the notional
principal amount of these Interest Rate Agreements does not exceed
the aggregate principal amount of the Indebtedness then outstanding
to which these Interest Rate Agreements relate, or
(b) under any Currency Hedging Agreements entered into to protect the PLD
Companies against fluctuations in the value of any currency and not
for speculative purposes,
(4) ordinary course performance bonds, letters of credit and appeal and
surety bonds entered into not in connection with borrowed money,
(5) the Incurrence of Indebtedness between any of the PLD Companies or any
Guarantee by any PLD Company of any Indebtedness permitted to be Incurred
by any other PLD Company under the indenture,
(6) the Incurrence by the PLD Companies of additional Indebtedness so long
as the aggregate principal amount of this additional Indebtedness does
not exceed $25 million at any one time outstanding, and
(7) Permitted Refinancing Indebtedness of any Indebtedness permitted to be
incurred by paragraphs (1) through (6) above.
In the event that Indebtedness meets the criteria of more than one of the
types of Indebtedness described in paragraphs (1) through (7) above, we may, in
our sole discretion, classify this item of Indebtedness as having been Incurred
under one of these paragraphs and, except as specifically provided otherwise,
will only be required to include the amount and type of this Indebtedness as
having been Incurred pursuant to this paragraph.
LIMITATION ON RESTRICTED PAYMENTS.
The indenture for the notes limits our ability to make certain payments and
other distributions in excess of certain amounts.
Under the indenture, we may not, and may not permit any of our Restricted
Subsidiaries to, make any of the following (each, a "Restricted Payment"):
(1) declare or pay any dividends on, or make any distribution on or in
respect of Capital Stock of Metromedia International Group or any of its
Restricted Subsidiaries, except for dividends or distributions payable
solely in Qualified Capital Stock or options, warrants or other rights to
acquire Qualified Capital Stock,
(2) purchase, redeem or otherwise acquire or retire for value any Capital
Stock of Metromedia International Group,
(3) make any principal payment on, or purchase, redeem, defease, retire or
otherwise acquire for value, before any scheduled principal payment or
maturity, any Subordinated Indebtedness, or
(4) make any Investment in any Person
UNLESS, in each case and after giving effect to any Restricted Payment
described in paragraphs (1) through (4) above:
(a) no default or event of default under the indenture shall have occurred
and be continuing or would result from this Restricted Payment,
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(b) Metromedia International Group would be able to Incur at least $1.00 of
additional Indebtedness pursuant to the Consolidated Leverage Ratio test
under the "--Limitation on Indebtedness" covenant described above, and
(c) on a pro forma basis, the aggregate amount of all Restricted Payments
made on or after the date of issuance of the notes (the amount expended
for that purpose if other than in cash being the Fair Market Value of the
property) does not exceed, without duplication, the sum of:
(i) 100% of the Cumulative Consolidated Operating Cash Flow of
Metromedia International Group and its consolidated Subsidiaries
LESS a minority equity interest in this Consolidated Operating Cash
Flow in the event a minority interest has not already been deducted
from the Consolidated Operating Cash Flow LESS 150% of the
Cumulative Consolidated Interest Expense, PLUS
(ii) 100% of the aggregate Net Cash Proceeds received from the issue or
sale of Qualified Capital Stock or any options, warrants or rights
to purchase Qualified Capital Stock from Metromedia International
Group to the extent not utilized to Incur Indebtedness under
paragraph (3) of the exceptions to the "--Limitation on
Indebtedness" covenant described above, PLUS
(iii) 100% of the aggregate Net Cash Proceeds received upon the exercise
of any options, warrants or rights to purchase Qualified Capital
Stock of Metromedia International Group, PLUS
(iv) 100% of the aggregate Net Cash Proceeds received from the
conversion or exchange of debt securities or Disqualified Capital
Stock into Qualified Capital Stock of Metromedia International
Group PLUS, to the extent these debt securities or Disqualified
Capital Stock were issued after the date of issuance of the notes,
the Net Cash Proceeds from their original issuance; PLUS
(v) in the case of the disposition or repayment of any Investment
constituting a Restricted Payment, an amount equal to the lesser of
(x) the cash return of capital resulting from sale proceeds,
dividends, distributions, interest payments, return of capital or
principal, management fees or other transfers of assets to
Metromedia International Group or any of its Restricted Subsidiaries
or (y) the initial amount of the Investment; LESS
(vi) any amounts paid or payments made pursuant to any of paragraphs
(2), (3), (5) and (6) below.
The indenture does not prohibit however, so long as no default or event of
default under the indenture has occurred and is continuing or would be caused as
a result of these payments:
(1) the payment of any dividend within 60 days after the date of
declaration, if, on the date of its declaration, this dividend would have
complied with paragraph (c) above,
(2) the repurchase, redemption, or other acquisition or retirement for value
of any shares of any class of Qualified Capital Stock of Metromedia
International Group in exchange for, or out of the Net Cash Proceeds of,
a substantially concurrent sale of Qualified Capital Stock of Metromedia
International Group,
(3) the repurchase, redemption, defeasance, retirement, refinancing,
acquisition for value or payment of principal of any Subordinated
Indebtedness in exchange for, or out of the Net Cash Proceeds of, a
substantially concurrent sale of Permitted Refinancing Indebtedness,
(4) the payment of any dividend or other distribution by a Restricted
Subsidiary of Metromedia International Group to holders of its Equity
Interests on a pro rata basis,
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(5) the repurchase, redemption or other acquisition or retirement for value
of any Qualified Capital Stock of Metromedia International Group or any
of its Restricted Subsidiaries held by a member of the management of
Metromedia International Group or of its Restricted Subsidiary, PROVIDED
that the aggregate amount of these repurchases in any calendar year does
not exceed $1 million in any twelve-month period, plus the aggregate cash
proceeds provided to Metromedia International Group during this period
from any reissuance of Qualified Capital Stock to management,
(6) Investments in any Person engaged, or to be engaged, principally in a
Related Business on the date of the Investment,
(7) Investments by Restricted Subsidiaries which are lessees or buyers of
Telecommunications Assets under Telecommunications Assets Agreements in
transactions in which the monetary consideration for these
Telecommunications Assets is paid immediately or is payable over time;
PROVIDED that these Investments are made as a sublease or installment
sale of the Telecommunications Assets subject to the Telecommunications
Asset Agreement to which the Restricted Subsidiary is party as lessee or
buyer,
(8) Payments made under any tax sharing agreement between or among
Metromedia International Group and its Restricted Subsidiaries,
(9) payments of dividends on Metromedia International Group's convertible
preferred stock in an aggregate amount not to exceed $15.1 million in any
calendar year, and
(10) payments to Metromedia Company and any of its Affiliates for reasonable
legal, tax, accounting, financial advisory and other management services
in the ordinary course of business, subject to the approval of the
disinterested members of the board of directors of Metromedia
International Group.
LIMITATION ON AFFILIATE TRANSACTIONS.
The indenture for the notes limits our ability to engage in certain
transactions with our affiliates unless we satisfy certain conditions.
Under the indenture, we may not, and may not permit any of our Restricted
Subsidiaries to, enter into or conduct any transaction, including the purchase,
sale, lease or exchange of any property or the rendering of any service, with
any Affiliate of Metromedia International Group (each, an "Affiliate
Transaction") UNLESS:
(1) the terms of this Affiliate Transaction are materially no less favorable
in the aggregate, to us or our Restricted Subsidiary, as the case may be,
than those that would have been obtained at the time of the transaction
in a comparable transaction by Metromedia International Group or its
Restricted Subsidiary, as the case may be, on an arm's-length basis with
a Person who is not an Affiliate, and
(2) we deliver to the trustee for the notes:
(a) in the event that an Affiliate Transaction or a series of related
Affiliate Transactions involves an aggregate amount in excess of $5
million, a resolution of the board of directors of Metromedia
International Group certifying that the terms of this transaction
comply with the requirements of paragraph (1) above and have been
approved by a majority of the disinterested members of the board of
directors, or
(b) in the event that an Affiliate Transaction or a series of related
Affiliate Transactions involves an aggregate amount in excess of $10
million, a written opinion from an investment banking firm as to the
fairness of this transaction to Metromedia International
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Group or the relevant Restricted Subsidiary, as the case may be, from
a financial point of view.
These limitations imposed by the indenture do not prohibit however:
(1) compensation or employee benefit arrangements, in each case, in the
ordinary course of business,
(2) any transaction solely between Metromedia International Group and a
Restricted Subsidiary or between Restricted Subsidiaries,
(3) any transaction with a Person engaged in a Related Business that is an
Affiliate solely because we have, directly or indirectly, an Equity
Interest in this Person,
(4) the payment of reasonable and customary fees to members of the board of
directors of Metromedia International Group who are not employees of
Metromedia International Group,
(5) any sale of Equity Interests of Metromedia International Group, other
than Disqualified Capital Stock, to Affiliates of Metromedia
International Group,
(6) any transaction permitted under the covenant "--Limitation on Restricted
Payments,"
(7) advances to employees of Metromedia International Group or any of its
Subsidiaries in the ordinary course of business in an aggregate amount
not to exceed $2 million,
(8) any transaction with any officer or director of Metromedia International
Group or any of its Subsidiaries in the ordinary course of business not
involving in excess of $100,000 in any one case and in an aggregate
amount not to exceed $2 million, and
(9) any Affiliate Transaction and any replacement of an Affiliate
Transaction in effect or approved by the board of directors of Metromedia
International Group at the time of the date of issuance of the old notes.
CREATION OF ADDITIONAL PLD ASSETS
Under the indenture, we agreed that from May 18, 1999 through the second
anniversary of the date of issuance of the old notes, at least $15.0 million of
additional PLD Assets that would be classified as "property and equipment" on
PLD Telekom's consolidated balance sheet, including capacity in transatlantic
and European cables, will be acquired by one or more of the PLD Companies,
whether or not using Purchase Money Obligations. These assets are referred to as
the "Additional PLD Assets."
In addition, to the extent we acquire Pivotel Assets or properties before
this date, without using Purchase Money Obligations, these assets will
constitute Additional PLD Assets.
LIMITATION ON LIENS.
The indenture for the notes limits our ability to incur liens or other
security interests with exceptions for certain permitted liens or security
interests.
Under the indenture, we may not, and may not permit any of our Restricted
Subsidiaries to, directly or indirectly, Incur, assume, suffer to exist or
affirm any Lien of any kind upon any property or assets of Metromedia
International Group or any Restricted Subsidiary unless contemporaneously
therewith effective provision is made to secure the Indebtedness due under the
indenture and the notes equally and ratably with the obligations so secured by
this Lien with a Lien on the same properties and assets securing the obligations
secured by this Lien for so long as these obligations are so secured.
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These limitations imposed by the indenture will not prohibit us from
Incurring, assuming, suffering to exist or affirming any Permitted Liens or PLD
Company Permitted Liens.
In addition, none of the PLD Companies will, directly or indirectly, Incur,
assume, suffer to exist or affirm any Lien of any kind upon any PLD Asset,
unless contemporaneously therewith effective provision is made to secure the
Indebtedness due under the indenture and the notes equally and ratably with the
obligations so secured by this Lien with a Lien on the same properties and
assets securing the obligations secured by this Lien for so long as these
obligations are so secured. These limitations will not prohibit any PLD Company
from Incurring, assuming, suffering to exist or affirming any PLD Company
Permitted Liens.
LIMITATION ON SALES OF ASSETS.
The indenture for the notes limits our ability to make sales of assets and
governs our use of the proceeds from any authorized asset sale.
Under the indenture, we may not, and may not permit any of our Restricted
Subsidiaries to engage in any Asset Sale UNLESS:
(1) we or our Restricted Subsidiaries receive consideration at least equal
to the Fair Market Value, including as to the value of all non-cash
consideration, of the assets subject to the Asset Sale, and
(2) at least 80% of the consideration that we or our Restricted Subsidiaries
receive from the Asset Sale is in the form of cash paid at the closing of
the transaction, marketable securities or comparable consideration.
For the purpose of this covenant, we will deem to be cash, but not Net
Proceeds of an Asset Sale, the assumption by the transferee of Indebtedness of
Metromedia International Group or of any of its Restricted Subsidiaries as shown
on their most recent balance sheet or in the notes to the balance sheet, and the
release of Metromedia International Group and its Restricted Subsidiaries from
all liability on this Indebtedness. In addition, if we or any of our Restricted
Subsidiaries receive securities or other noncash property or assets as proceeds
of an Asset Sale, these securities or other noncash proceeds will not be treated
as Net Proceeds of an Asset Sale unless and until we receive cash or Cash
Equivalents from a sale, repayment, exchange or other return of capital on,
these securities or other noncash properties and then, only to the extent of the
cash or Cash Equivalents received.
If we complete an Asset Sale involving PLD Assets we will, after applying
the net proceeds from this Asset Sale to repay and permanently reduce other
Existing Indebtedness that by its terms requires this repayment from the
proceeds of the Asset Sale, be required to use 50% of the Net Proceeds allocable
to the PLD Assets involved in this Asset Sale to make an offer to repurchase the
notes at a repurchase price in cash equal to 100% of the accreted value of the
notes on the repurchase date if the repurchase date is before , 2002 or
100% of the principal amount at maturity of the notes, plus accrued but unpaid
interest, if any, to the repurchase date if the repruchase date is after
, 2002. We will not, however, be required to make any offer to
repurchase the notes in an amount of less than $10 million. If 50% of the Net
Proceeds from the Asset Sale involving PLD Assets are less than $10 million,
these Net Proceeds will constitute excess proceeds. Once these excess proceeds
exceed $10 million, we will be required to use these excess proceeds to make an
offer to repurchase the notes at 100% of their accreted value if the repurchase
date is before , 2002 or 100% of the principal amount at maturity of the
notes, plus accrued but unpaid interest, if any, to the repurchase date if the
repurchase date is after , 2002.
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We will be permitted to apply the Net Proceeds from an Asset Sale or the Net
Proceeds from an Asset Sale of PLD Assets that remain following the offer to
purchase described above to:
(1) repay the notes, any Existing Indebtedness or any Permitted Refinancing
Indebtedness of any Existing Indebtedness or any Indebtedness that is
equal in right of payment to the notes if required by the terms of this
Indebtedness, or
(2) reinvest in assets of a Related Business,
PROVIDED that:
(a) we apply the Net Proceeds from an Asset Sale involving PLD Assets
that remain after the offer to purchase described above, if any,
within 365 days of the date of their receipt, and
(b) we apply the Net Proceeds from an Asset Sale involving assets other
than PLD Assets within two years of the date of their receipt.
The Net Proceeds from an Asset Sale that we do not use as indicated above
during the periods described above will become excess proceeds. Once these
excess proceeds exceed $10 million in the aggregate after application of the
proceeds as described above, we will be required to make an offer to repurchase
the notes. We will offer to repurchase the notes at a price in cash equal to
100% of the accreted value of the notes on the repurchase date if the repurchase
date is before , 2002, and 100% of the principal amount of the notes plus
accrued and unpaid interest, if any, to the repurchase date if this date is
after , 2002. We will be allowed to use all Net Proceeds that remain
after this offer and any other use provided in this covenant for other general
corporate purposes not prohibited by the indenture for the notes. If the excess
proceeds do not exceed $10 million in the aggregate, this lesser amount will be
carried forward for purposes of determining whether an offer for the notes is
required with respect to the Net Proceeds from any subsequent Asset Sale.
If the aggregate principal amount or accreted value of the notes that are
validly tendered and not withdrawn in connection with a repurchase offer exceed
the funds available for this repurchase, the trustee for the notes will select
the notes that will be repurchased on a pro rata basis and make any adjustments
as may be deemed appropriate so that only notes in denominations of $1,000 or
integral multiples of $1,000 will be repurchased. Holders whose notes are
repurchased only in part will be issued new notes equal in principal amount at
maturity to the unpurchased portion of the notes surrendered.
If the aggregate repurchase price of the notes tendered pursuant to the
offer is less than the Net Proceeds allotted to the purchase of the notes, we
will apply the remaining Net Proceeds for other general corporate purposes not
prohibited by the indenture for the notes.
We will comply, to the extent applicable, with the requirements of Section
14(e) of the Securities Exchange Act of 1934 and any other securities laws or
regulations in connection with the purchase of notes pursuant to the indenture.
If the provisions of any securities laws or regulations conflict with the
provisions of this covenant, we will comply with the applicable securities laws
and regulations and will not be deemed to have breached our obligations under
the indenture by complying with these laws and regulations.
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.
The indenture for the notes limits our ability to engage in Sale and
Leaseback transactions.
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Under the indenture, we may not, and may not permit any of our Restricted
Subsidiaries to, directly or indirectly, enter into any Sale and Leaseback
Transaction of any of our properties or assets UNLESS:
(1) the consideration received at the time of the Sale and Leaseback
Transaction is at least equal to the Fair Market Value of these
properties or assets,
(2) the sale or transfer of the properties or assets to be leased is treated
as an Asset Sale and complies with the "--Limitation on Sales of Assets"
covenant above, and
(3) we or our Restricted Subsidiary would be entitled to Incur additional
Indebtedness under the "--Limitation on Indebtedness" covenant above.
The limitations imposed by the indenture will not prohibit any Sale and
Leaseback Transaction if:
(1) the lease is for a period, including renewal rights, not in excess of
three years,
(2) the transaction is solely between Metromedia International Group and any
Restricted Subsidiary or one of its Restricted Subsidiaries and any other
Restricted Subsidiaries, and
(3) the transaction is completed within 180 days of the acquisition by
Metromedia International Group or any of its Subsidiaries of the
properties or assets or entered into within 180 days after the purchase
or substantial completion of the construction of the properties or assets
or 270 days in the event that the only condition delaying the completion
of the purchase or the completion of the construction is the receipt of
applicable regulatory approvals.
LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES.
The indenture for the notes does not allow us to create or cause or suffer
to exist or become effective encumbrances or restrictions on the ability of our
Restricted Subsidiaries to make distributions to us.
Under the indenture, we may not, and may not permit our Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends or make any other distributions to us or any of our
Restricted Subsidiaries on its Capital Stock or with respect to any other
interests or participation in, or measured by, its profits,
(2) pay any Indebtedness owed to us or any of our Restricted Subsidiaries,
or
(3) sell, lease or otherwise transfer any of its properties or assets to us
or any of our Restricted Subsidiaries.
However, these limitations imposed by the indenture do not prohibit the
creation or existence of any encumbrance or restrictions under:
(1) Existing Indebtedness of Metromedia International Group and its
Subsidiaries,
(2) any applicable laws and regulations,
(3) any agreement in effect at the time of the acquisition of any Person by
Metromedia International Group or any of its Restricted Subsidiaries,
which agreement was not entered into in connection with, as a result of,
or in anticipation of, this acquisition,
(4) any agreement entered into in connection with Permitted Liens,
(5) any agreement for the sale of assets, or
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(6) any agreement that extends, renews, refinances or replaces the
agreements containing the encumbrances or restrictions in paragraphs (1)
through (5) above, provided that these provisions are no less favorable
to Metromedia International Group.
MERGER AND CONSOLIDATION.
The indenture for the notes limits our ability to engage in certain mergers,
consolidations or other business combinations.
Under the indenture, we may not, directly or indirectly, consolidate with or
merge with or into, or sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of our assets to, any Person, UNLESS:
(1) the resulting, surviving or transferee Person is Metromedia
International Group or a corporation organized and existing under the
laws of the United States of America, any state of the United States of
America or the District of Columbia,
(2) the surviving entity expressly assumes, by supplemental indenture
executed and delivered to the trustee for the notes, in form reasonably
satisfactory to the trustee, all of our obligations under the notes and
the indenture for the notes,
(3) except for a transaction with a Wholly Owned Subsidiary, immediately
after giving effect to this consolidation, merger or transfer, the
surviving entity would be able to Incur at least an additional $1.00 of
Indebtedness under the Consolidated Leverage Ratio test contained in the
"--Limitation on Indebtedness" covenant above,
(4) we shall have delivered to the trustee for the notes an Officers'
Certificate and an opinion of counsel, each stating that the
consolidation, merger or transfer and the supplemental indenture, if any,
comply with the indenture for the notes, and
(5) immediately before and immediately after giving effect to this
consolidation, merger or transfer, no default or event of default under
the indenture has occurred and is continuing.
The surviving entity will succeed to, and be substituted for, and may
exercise every right and power of, Metromedia International Group under the
indenture for the notes. However, in the case of a lease of all or substantially
all of our assets, we will not be released from the obligation to pay the
principal of and interest on the notes.
Notwithstanding the above, any of our Restricted Subsidiaries may
consolidate with, merge into or transfer all or part of its properties and
assets to Metromedia International Group or one of its Wholly Owned Subsidiaries
if no other parties are either directly or indirectly involved in this
transaction. We may also merge with an Affiliate with no Indebtedness
incorporated solely for the purpose of reincorporating Metromedia International
Group in another jurisdiction in the United States of America, any state of the
United States of America or the District of Columbia to realize tax or other
benefits.
For purposes of the foregoing, the transfer, by assignment, sale or
otherwise, of all or substantially all of the properties and assets of one or
more Subsidiaries, our interest in which constitutes all or substantially all of
our properties and assets, shall be deemed to be the transfer of all or
substantially all of our properties and assets.
EVENTS OF DEFAULT
We will be in default under the indenture for the notes if:
(1) we fail to make a payment of interest on any note when due for 30 days,
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(2) we fail to pay the principal of any note when due at its Stated
Maturity, upon optional redemption, a required repurchase, declaration or
otherwise,
(3) we or any of our Restricted Subsidiaries fail to comply with our
obligations under the "Certain Covenants--Merger and Consolidation"
covenant above,
(4) we or any of our Restricted Subsidiaries fail to comply for 30 days
after receiving notice from the holders of the notes with any of our
obligations under the covenants described under "Change of Control" or
under "Certain Covenants" above, in each case, other than a failure to
purchase notes which will constitute an event of default under paragraph
(2) above,
(5) we or any of our Restricted Subsidiaries fail to comply for 60 days
after receiving notice from the holders of the notes with our other
obligations and duties contained in the indenture for the notes,
(6) we or any of our Restricted Subsidiaries fail to pay, waive or cure the
failure to pay any Indebtedness within any applicable grace period after
final maturity or this Indebtedness is accelerated by its holders because
of a default and the total amount of this Indebtedness unpaid or
accelerated exceeds $15.0 million (the "cross acceleration provision"),
(7) we or any Significant Subsidiary become bankrupt or insolvent or enter
into a reorganization (the "bankruptcy provisions"), or
(8) any final judgment or decree for the payment of money in excess of $15.0
million net of applicable insurance coverage, provided that the insurance
carriers have acknowledged coverage, is rendered against us or a
Significant Subsidiary and remains unpaid, unvacated, undischarged or
unstayed for a period of 60 days after this judgment becomes final and
non-appealable (the "judgment default provision").
We will not be deemed in default under paragraphs (4) and (5) until the
trustee for the notes or the holders of more than 25% in aggregate principal
amount of the outstanding notes notify us of the default and we do not cure this
default within the time specified in paragraphs (4) and (5) after receipt of
this notice.
If we are in default under the indenture, the trustee for the notes or the
holders of at least 25% in aggregate principal amount of the outstanding notes
may declare the principal of and accrued and unpaid interest, if any, on all the
notes to be immediately due and payable by sending us and the trustee a notice
of acceleration. The principal amount and accrued and unpaid interest, if any,
or, if before , 2002, the accreted value of the notes, will be due and
payable immediately. No notice of acceleration will be required to accelerate
the payment on the notes if the event of default relates to certain events of
bankruptcy, insolvency or reorganization. The acceleration will be automatic for
these events. Under certain circumstances, the holders of a majority in
aggregate principal amount of the outstanding notes may rescind this
acceleration and its consequences.
If we are in default under the indenture, the trustee will generally have no
obligation to exercise any of the rights or powers and to perform any duty under
the indenture at the request or direction of any of the holders unless these
holders have offered to the trustee reasonable indemnity or security against any
loss, liability or expense. Holders may enforce directly their right to receive
payment of principal, accreted value or interest when due on their notes.
However, holders may not pursue directly any remedy with respect to any other
rights under the indenture or the notes UNLESS:
(1) the holders have previously given the trustee notice that an event of
default under the indenture has occurred and is continuing,
(2) holders of at least 25% in aggregate principal amount of the outstanding
notes have requested the trustee to pursue the remedy,
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(3) these holders have offered the trustee reasonable security or indemnity
against any loss, liability or expense,
(4) the trustee has not complied with these holders' request within 60 days
after the receipt of the request and the offer of security or indemnity,
and
(5) the holders of a majority in aggregate principal amount of the
outstanding notes have not given the trustee a direction that, in the
opinion of the trustee, is inconsistent with their request within this
60-day period.
The holders of a majority in aggregate principal amount of outstanding notes
have the right, under certain circumstances, to direct the time, method and
place of conducting any proceeding for any remedy available to the trustee or of
exercising any trust or power conferred on the trustee. The trustee, however,
may refuse to follow any direction that conflicts with law or the indenture or
that the trustee determines is unduly prejudicial to the rights of any other
holder or that would involve the trustee in personal liability. Before taking
any action under the indenture, the trustee will be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking this action.
If the trustee knows that a default has occurred and is continuing, the
trustee must mail to each holder a notice of the default within 90 days after it
occurs. Except in the case of a default in the payment of principal of or
interest on any notes, the trustee may withhold notice if and so long as a
committee of its trust officers in good faith determines that withholding notice
is in the interest of the holders. In addition, we are required to deliver to
the trustee within 120 days after the end of each fiscal year a certificate
indicating whether we know of any default under the indenture that occurred
during the previous year. We are also required to deliver to the trustee, within
30 days after their occurrence, written notice of any events which would
constitute certain defaults, their status and what action we are taking or
propose to take in respect of these defaults.
AMENDMENTS AND WAIVERS
We may amend the indenture with the consent of the holders of a majority in
aggregate principal amount of the notes then outstanding. Any past default or
failure to comply with any provisions of the indenture may be waived with the
consent of the holders of a majority in aggregate principal amount of the notes
then outstanding.
We need the consent of each holder of a note affected to amend the indenture
to:
(1) reduce the principal amount of notes whose holders must consent to an
amendment to the indenture,
(2) reduce the stated rate of or extend the stated time for payment of
interest on any note,
(3) reduce the principal of or extend the Stated Maturity of any note,
(4) make any note payable in money other than that stated in the note,
(5) impair the right of any holder to receive payment of principal of and
interest on his or her notes on or after the due dates for these payments
or to institute suit for the enforcement of any payment on or with
respect to his or her notes,
(6) make any change in the amendment provisions which require each holder's
consent or in the waiver provisions, or
(7) cause the notes to be junior in right of payment to any other
Indebtedness.
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We do not need any holder's consent to amend the indenture to:
(1) cure any ambiguity, omission, defect or inconsistency,
(2) provide for the assumption by a successor corporation of the obligations
of Metromedia International Group under the indenture in accordance with
the terms of the indenture,
(3) provide for uncertificated notes in addition to or in place of
certificated notes,
(4) secure the notes,
(5) add to the covenants of Metromedia International Group for the benefit
of the holders or surrender any right or power conferred upon Metromedia
International Group,
(6) make any change that does not adversely affect the rights of any holder,
or
(7) comply with any requirement of the Securities and Exchange Commission in
connection with the qualification of the indenture under the Trust
Indenture Act of 1939.
We do not need the consent of the holders to approve the particular form of
any proposed amendment. The holders will only need to consent to the substance
of the proposed amendment. We will notify the holders of any amendment to the
indenture after if has become effective and will briefly describe the amendment
in the notice. However, our failure to give this notice to all the holders or
any defect in the notice will not impair or affect the validity of the
amendment.
DEFEASANCE
We may terminate almost all of our obligations under the notes and the
indenture through legal defeasance or terminate our obligations under the
covenants for the notes and the indenture through covenant defeasance.
Under a legal defeasance, we may terminate all of our obligations except for
our obligations:
(1) with respect to the defeasance trust,
(2) to register the transfer or exchange of notes,
(3) to replace mutilated, destroyed, lost or stolen notes, and
(4) to maintain a registrar and paying agent for the notes.
Under a covenant defeasance, we may terminate our obligations under:
(1) all the covenants described in the covenant section above, except our
merger and consolidation covenant,
(2) the operation of the cross acceleration provision,
(3) the bankruptcy provision of the indenture with respect to Significant
Subsidiaries,
(4) the judgment default provision described under "Events of Default"
above, and
(5) the limitations contained in paragraph (3) under "Certain
Covenants--Merger and Consolidation" above.
We will be able to exercise the legal defeasance option notwithstanding our
prior exercise of the covenant defeasance option. If we exercise the legal
defeasance option, holders will not be able to accelerate the payment of the
notes because of an event of default. If we exercise the covenant defeasance
option, holders will not be able to accelerate the payment of the notes because
of an event of default specified in paragraphs (4), (5), (6) and (7) (with
respect only to Significant Subsidiaries), or
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(8) under "Events of Default" above or because of our failure to comply with
paragraph (3) under "Certain Covenants--Merger and Consolidation" above.
We must irrevocably deposit in a defeasance trust with the trustee money or
U.S. government obligations for the payment of principal, premium, if any, and
interest on the notes to redemption or maturity, as the case may be, in order to
exercise either defeasance options. We must also comply with certain other
conditions including the delivery to the trustee of an opinion of counsel to the
effect that holders of the notes will not recognize income, gain or loss for
federal income tax purposes as a result of this deposit and defeasance and will
be subject to federal income tax on the same amount and in the same manner and
at the same times as would have been the case if this deposit and defeasance had
not occurred. In the case of legal defeasance only, this opinion of counsel will
have to be based on a ruling of the Internal Revenue Service or other change in
applicable federal income tax law.
CONCERNING THE TRUSTEE
U.S. Bank Trust National Association is serving as trustee for the notes. We
have also appointed U.S. Bank Trust National Association to serve as registrar
and paying agent for the notes.
GOVERNING LAW
The laws of the State of New York govern the indenture and the notes.
CERTAIN DEFINITIONS
"AFFILIATE" of any specified Person means any other Person, directly or
indirectly, controlling, controlled by or under direct or indirect common
control with this specified Person. For purposes of this definition, "control"
when used with respect to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of this Person, whether through the ownership of voting securities, by
agreement or otherwise; and the terms "controlling," "controlled by" and "under
common control with" have the meanings correlative to the foregoing; provided,
that the ability to vote 10% or more of the Voting Stock of this Person will
constitute "control" under the indenture.
"ASSET SALE" means any sale, issuance, conveyance, transfer, lease or other
disposition, directly or indirectly, in one or a series of transactions, of:
(1) any Capital Stock of any Subsidiary,
(2) all or substantially all of the properties and assets of any division or
line of business of Metromedia International Group or its Subsidiaries,
or
(3) any other properties and assets of Metromedia International Group or any
of its Subsidiaries other than in the ordinary course of business.
The term "ASSET SALE" however will not include any sale or transfer of
properties and assets (i) by Metromedia International Group to any of its
Restricted Subsidiaries or by any of its Restricted Subsidiaries to Metromedia
International Group or any other Restricted Subsidiary, (ii) that constitute
obsolete equipment in the ordinary course of business, (iii) the Fair Market
Value of which in the aggregate does not exceed $10 million in any transaction
or series of related transactions, (iv) that is made in accordance with the
provisions under the "--Limitation on Restricted Payments" covenant above, (v)
which constitutes the granting of any Permitted Lien or (vi) that are
transferred in exchange for Related Assets.
"ATTRIBUTABLE INDEBTEDNESS" means with respect to any Sale and Leaseback
Transaction of any Person, as at the time of determination, the greater of (i)
the capitalized amount in respect of such transaction that would appear on the
balance sheet of such Person in accordance with generally
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accepted accounting principles and (ii) the present value (discounted at a rate
consistent with accounting guidelines, as determined in good faith by such
Person) of the payments during the remaining term of the lease (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended) or until the earliest date on which the lessee may
terminate such lease without penalty or upon payment of a penalty (in which case
the rental payments shall include such penalty).
"AVERAGE LIFE TO STATED MATURITY" means, when applied to any Indebtedness at
any date, the number of years obtained by dividing (1) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment,
sinking fund, serial maturity or other required scheduled payment of principal,
including payment at final maturity, in respect thereof, by (ii) the number of
years calculated to the nearest one-twelfth that will elapse between such date
and the making of such payment, by (2) the then outstanding aggregate principal
amount of this Indebtedness.
"CAPITAL STOCK" means:
(1) with respect to any Person that is a corporation, any and all shares,
interests, participations or other equivalents, however designated and
whether or not voting, of corporate stock, including each class of common
stock and preferred stock of that Person, and
(2) with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interest of that Person.
"CAPITAL LEASE OBLIGATIONS" means any obligation of a Person and its
Subsidiaries on a consolidated basis under any capital lease of real or personal
property that is required to be classified and accounted for as a capital lease
obligation for financial reporting purposes in accordance with generally
accepted accounting principles.
"CASH EQUIVALENTS" means:
(1) securities issued or directly and fully guaranteed or insured by the
United States Government or any agency or instrumentality thereof, having
maturities of not more than one year from the date of acquisition,
(2) marketable general obligations issued by any state of the United States
of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a
credit rating of "A" or better from either Standard & Poor's Ratings
Group or Moody's Investors Service, Inc.,
(3) certificates of deposit, time deposits, Eurodollar time deposits,
overnight bank deposits or bankers' acceptances having maturities of not
more than one year from the date of acquisition thereof issued by any
commercial bank the long-term debt of which is rated at the time of
acquisition thereof at least "A" or the equivalent thereof by Standard &
Poor's Rating Group, or "A" or the equivalent thereof by Moody's
Investors Service, Inc., and having capital and surplus in excess of $500
million,
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in paragraphs (1), (2) and
(3) entered into with any bank meeting the qualifications specified in
paragraph (3) above,
(5) commercial paper rated at the time of acquisition thereof at least "A-2"
or the equivalent thereof by Standard & Poor's Rating Group or "P-2" or
the equivalent thereof by Moody's Investors Service, Inc., or carrying an
equivalent rating by a nationally recognized rating agency, if both of
the two named rating agencies cease publishing ratings of investments,
and in either case maturing within 270 days after the date of their
acquisition, and
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(6) interests in any investment company which invests solely in instruments
of the type specified in paragraphs (1) through (5) above.
"CONSOLIDATED INCOME TAX EXPENSE" for any period means the aggregate amounts
of the provisions of income taxes of Metromedia International Group and its
Subsidiaries for this period calculated on a consolidated basis in accordance
with generally accepted accounting principles.
"CONSOLIDATED INTEREST EXPENSE" for any Person means, without duplication,
for any period, THE SUM OF:
(1) the interest expense of this Person and its Subsidiaries for this
period, on a consolidated basis in accordance with generally accepted
accounting principles, including without limitation:
(i) amortization of debt discount,
(ii) the net costs associated with Interest Rate Agreements and Currency
Hedging Agreements,
(iii) the interest portion of any deferred payment obligation, and
(iv) accrued interest,
PLUS
(2) the interest component of Capital Lease Obligations paid, accrued,
and/or scheduled to be paid or accrued by this Person and its
consolidated Subsidiaries,
PLUS
(3) the aggregate amount for that period of cash dividends paid on any
Disqualified Capital Stock or Preferred Stock of that Person and its
consolidated Subsidiaries,
in each case, on a consolidated basis in accordance with generally accepted
accounting principles.
"CONSOLIDATED LEVERAGE RATIO" means, as to any Person, the ratio of:
(1) the total consolidated Indebtedness of Metromedia International Group
and its consolidated Subsidiaries as of the date of calculation (the
"Determination Date") to
(2) two times the Consolidated Operating Cash Flow of Metromedia
International Group and its consolidated Subsidiaries for the most recent
two fiscal quarters for which financial information is available (the
"Reference Period") immediately preceding the Determination Date.
For purposes of this definition, the Consolidated Operating Cash Flow will
be calculated in accordance with generally accepted accounting principles and on
a pro forma basis to:
(1) include the results of any Person that is a consolidated Subsidiary on
the Determination Date or that would become a consolidated Subsidiary in
connection with the transaction that requires the determination of the
Consolidated Operating Cash Flow,
(2) exclude any Person that is not a consolidated Subsidiary on the
Determination Date or that would cease to be a consolidated Subsidiary in
connection with the transaction that requires the determination of the
Consolidated Operating Cash Flow, and
(3) include or exclude, as the case may be, the results of any operating
business acquired or disposed of by Metromedia International Group or a
consolidated Subsidiary in the Reference Period.
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"CONSOLIDATED NET INCOME" means, for any period, the net income (loss) of
Metromedia International Group and its consolidated Subsidiaries determined in
accordance with generally accepted accounting principles; PROVIDED, HOWEVER,
that there shall not be included in such Consolidated Net Income: (i) any net
income (loss) of any Person if such Person is not a Subsidiary, except that (A)
subject to the limitations contained in (iv) below, Metromedia International
Group's equity in the net income of any such Person for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to Metromedia
International Group or a Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to a Restricted
Subsidiary, to the limitations contained in clause (iii) below) and (B)
Metromedia International Group's equity in a net loss of any such Person (other
than an Unrestricted Subsidiary) for such period shall be included in
determining such Consolidated Net Income to the extent such loss has been funded
with cash from Metromedia International Group or a Restricted Subsidiary; (ii)
any net income (loss) of any Person acquired by Metromedia International Group
or a Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition; (iii) any net income of any Restricted Subsidiary
if such Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to Metromedia International
Group, except that (A) subject to the limitations contained in (iv) below,
Metromedia International Group's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash that could have been distributed by such
Restricted Subsidiary during such period to Metromedia International Group or
another Restricted Subsidiary as a dividend (subject, in the case of a dividend
or other distribution to another Restricted Subsidiary, to the limitation
contained in this clause) and (B) Metromedia International Group's equity in a
net loss of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income; (iv) any gain (loss) realized upon the
sale or other disposition of any property, plant or equipment of Metromedia
International Group or its consolidated Subsidiaries (including pursuant to any
Sale and Leaseback Transaction) which is not sold or otherwise disposed of in
the ordinary course of business and any gain (loss) realized upon the sale or
other disposition of any Capital Stock of any Person; (v) any extraordinary gain
or loss and (vi) the cumulative effect of a change in accounting principles.
"CONSOLIDATED OPERATING CASH FLOW" means, with respect to any period, the
Consolidated Net Income for this period increased, to the extent that any of the
following items were deducted in calculating the Consolidated Net Income but
without duplication, by:
(1) the Consolidated Income Tax Expense for this period,
(2) the Consolidated Interest Expense for this period, whether paid or
accrued and whether or not capitalized, and
(3) depreciation, amortization, minority interest and any other non-cash
items for this period other than any non-cash item which requires the
accrual of, or reserve for, cash charges for any future period, of
Metromedia International Group and any of its consolidated Subsidiaries.
"CREDIT FACILITY" means one or more credit agreements, loan agreements or
similar facilities, secured or unsecured, entered into from time to time by
Metromedia International Group or any of its Restricted Subsidiaries, and
including any related notes, Guarantees, collateral documents, instruments and
agreements executed in connection therewith, as the same may be amended,
supplemented, modified, restated, refinanced or replaced from time to time.
"CUMULATIVE CONSOLIDATED OPERATING CASH FLOW" and "CUMULATIVE CONSOLIDATED
INTEREST EXPENSE" means, on any date of determination, the cumulative
Consolidated Operating Cash Flow and Consolidated Interest Expense, as the case
may be, realized during the period commencing on the date
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of issuance of the notes and ending on the last day of the most recent fiscal
quarter immediately preceding the date of determination for which consolidated
financial information is available.
"CURRENCY HEDGING AGREEMENT" means in respect of any Person, any foreign
exchange contract, currency swap agreement or other similar agreement to which
such Person is a party or a beneficiary and entered into for hedging purposes
only.
"DISQUALIFIED CAPITAL STOCK" means, with respect to any Person, any Capital
Stock of this Person which by its terms or by the terms of any security into
which it is convertible or for which it is exchangeable or upon the happening of
any event or the passage of time (1) matures or becomes mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (2) becomes exchangeable for
Indebtedness at the option of the holder of this Indebtedness or (3) becomes
redeemable at the option of the holder of this Capital Stock, in whole or in
part, in each case on or before the Stated Maturity of the notes, PROVIDED,
that:
(a) only the portion of Capital Stock which so matures or becomes so
redeemable or exchangeable on or before the Stated Maturity of the notes
will be deemed to be Disqualified Capital Stock, and
(b) any Capital Stock that would not constitute Disqualified Capital Stock
but for its provisions giving its holders the right to require this
Person to repurchase or redeem such Capital Stock upon the occurrence of
any "asset sale" or "change of control" occurring before the Stated
Maturity of the notes will not constitute Disqualified Capital Stock if
the "asset sale" or "change of control' provisions applicable to this
Capital Stock are no more favorable to the holders of this Capital Stock
than the provisions described under the "-- Change of Control" and
"Certain Covenants--Limitation on Sales of Assets" covenants described
above and if these provisions specifically provide that this Person will
not repurchase or redeem this Capital Stock pursuant to these provisions
before the repurchase by Metromedia International Group of the notes as
are required to be repurchased under the "--Change of Control" and
"Certain Covenants--Limitation on Sales of Assets" covenants described
above.
"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.
"EXISTING INDEBTEDNESS" of a Person means Indebtedness of this Person in
existence on the date of issuance of the notes, until these amounts are repaid.
"FAIR MARKET VALUE" means, with respect to any asset or property, the sale
value that would be reasonably expected to be obtained in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy. For purposes of
the indenture for the notes, the Fair Market Value of any asset or property will
be determined by the board of directors of Metromedia International Group acting
in good faith and will be evidenced by a resolution of the board of directors.
"GUARANTEE" means any obligation, contingent or otherwise, of any Person
directly or indirectly
guaranteeing any Indebtedness of any other Person and any obligation, direct or
indirect, contingent or otherwise, of this Person (1) to purchase or pay or
advance or supply funds for the purchase or payment of, this Indebtedness of
this other Person, whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise, or (2)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect this obligee against loss in
respect of this Indebtedness, in whole or in part; PROVIDED, HOWEVER, 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.
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"INCUR" means create, incur, assume, suffer to exist or otherwise become
liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a
Person existing at the time this Person becomes a Restricted Subsidiary, whether
by merger, consolidation, acquisition or otherwise, will be deemed to be
Incurred by this Restricted Subsidiary at the time it becomes a Restricted
Subsidiary. "Incurrence" will have a correlative meaning.
"INDEBTEDNESS" means at any time (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person,
and whether or not contingent,
(1) any obligation of such Person for money borrowed,
(2) any obligation of such Person evidenced by bonds, debentures, notes,
guarantees or other similar instruments, including, without limitation,
any such obligations incurred in connection with acquisition of property,
assets or businesses, excluding trade accounts payable made in the
ordinary course of business,
(3) any reimbursement obligation of such Person with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account
of such Person,
(4) any obligation of such Person issued or assumed as the deferred purchase
price of property or services (but excluding trade accounts payable or
liabilities or obligations arising in the ordinary course of business,
which in either case are not more than 60 days overdue or which are being
contested in good faith),
(5) any Capital Lease Obligation of such Person,
(6) the maximum fixed redemption or repurchase price of Disqualified Capital
Stock of such Person and, to the extent held by other Persons, the
maximum fixed redemption or repurchase price of Disqualified Capital
Stock of such Person's Restricted Subsidiaries at the time of
determination,
(7) the notional amount of any interest hedging obligations or exchange rate
obligations of such Person at the time of determination,
(8) any Attributable Indebtedness with respect to any Sale and Leaseback
Transaction to which such Person is a party and
(9) any obligation of the type referred to in clauses (1) through (8) of
this definition of another Person and all dividends and distributions of
another Person the payment of which, in either case, such Person has
guaranteed or is responsible or liable, directly or indirectly, as
obligor, guarantor or otherwise. For purposes of the preceding sentence,
the maximum fixed repurchase price of any Disqualified Capital Stock that
does not have a fixed repurchase price shall be calculated in accordance
with the terms of such Disqualified Capital Stock as if such Disqualified
Capital Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant hereto; PROVIDED that if such
Disqualified Capital Stock is not then permitted to be repurchased, the
repurchase price shall be the book value of such Disqualified Capital
Stock. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as
described above and the maximum liability of any guarantees at such date;
PROVIDED that for purposes of calculating the amount of the notes
outstanding at any date, such amount shall be the accreted value thereof
as of such date unless cash interest has commenced to accrue pursuant to
the terms of the notes, in which case the amount of the notes outstanding
will be determined pursuant to the terms of the notes.
"INTEREST RATE AGREEMENT" means with respect to any Person, any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap
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agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedge agreement or other similar agreement or arrangement as to which this
Person is a party or a beneficiary.
"INVESTMENT" means, with respect to any Person, all investments by that
Person in other Persons, including Affiliates, in the form of direct or indirect
loans, including Guarantees of Indebtedness or other obligations, advances or
capital contributions, 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 generally accepted accounting principles. Investments will not
include commissions, travel and similar advances to directors, officers and
employees made in the ordinary course of business. If Metromedia International
Group or any of its Restricted Subsidiaries sells or otherwise disposes of any
Equity Interests or any direct or indirect Subsidiary such that, after giving
effect to that sale or disposition, that Person is no longer a Subsidiary of
Metromedia International Group or its Restricted Subsidiaries, Metromedia
International Group will be deemed to have made an Investment on the date of
that sale or disposition equal to the Fair Market Value of the Equity Interests
of that Subsidiary not sold or disposed of.
"JOINT VENTURE" means a Telecommunications Company of which less than 50
percent of the Voting Stock is held by PLD Telekom, provided that the
Telecommunications Business of this Person is principally conducted in the
Russian Federation, Kazakhstan, Belarus or any other country in the Commonwealth
of Independent States.
"LEASING COMPANY" means a special purpose Cypriot or U.S. corporation which
is a wholly owned Subsidiary of Metromedia International Group organized for the
limited purpose of acquiring Telecommunications Assets and leasing these
Telecommunications Assets to direct or indirect Subsidiaries of PLD Telekom
pursuant to Telecommunications Asset Agreements and/or making investments in a
Telecommunications Company primarily engaged or proposing to engage in the
Telecommunications Business in the Russian Federation, Kazakhstan, Belarus or
any other country in the Commonwealth of Independent States.
"LIEN" means, with respect to any asset, any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind in respect of this asset,
including any conditional sale or other title retention agreement or lease in
the nature of a Lien.
"NET CASH PROCEEDS," with respect to any issuance or sale of Capital Stock,
means the cash proceeds of this issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with this issuance or sale and net of taxes paid or payable as a
result of this issuance or sale.
"NET PROCEEDS" from an Asset Sale means cash or Cash Equivalent payments
received, including any cash or Cash Equivalent payments received by way of
deferred payment of principal pursuant to a note or installment receivable or
otherwise, but only as and when received, but excluding any other consideration
received in the form of assumption by the acquiring person of Indebtedness or
other obligations relating to the properties or assets that are the subject of
the Asset Sale or received in any other noncash form from the Asset Sale, in
each case net of:
(1) all legal, accounting, investment banking, title and recording tax
expenses, commission and other fees and expenses incurred, and all
federal, state, provincial, foreign and local taxes required to be paid
or accrued as a liability under generally accepted accounting principles,
as a consequence of such Asset Sale,
(2) all payments made on any Indebtedness which is secured by any assets
subject to such Asset Sale, in accordance with the terms of any Lien upon
such assets, or which must by its terms, or in order to obtain a
necessary consent to such Asset Sale, or by applicable law be repaid out
of the proceeds from such Asset Sale,
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(3) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such
Asset Sale,
(4) the deduction of appropriate amounts to be provided by the seller as a
reserve against any liabilities associated with the assets disposed of in
such Asset Sale and retained by Metromedia International Group or any
Restricted Subsidiary after such Asset Sale, and
(5) employee severance and termination costs.
"OFFICERS' CERTIFICATE" means a certificate signed by any two of the
Chairman of the board of directors, the President, any Vice President, the
Treasurer or the Secretary of Metromedia International Group.
"PERMITTED LIENS" means:
(1) any Lien existing on the date of the Indenture,
(2) any Lien arising in connection with court judgements, taxes, workmen's
compensation, zoning restrictions, easements and rights of way that do
not materially impair operation of the business, performance bids,
contracts, leases, statutory obligations, surety and appeal bonds,
letters of credit and other obligations incurred in the ordinary course
of business, and
(3) any Lien securing obligations in connection with Indebtedness permitted
under clauses (2), (4), (5), (7) and (8) (with respect to clause (8), to
the extent the Indebtedness to which the Permitted Refinancing
Indebtedness relates was secured) of the paragraph on permitted
Indebtedness under the "--Limitations on Indebtedness" covenant above.
"PERMITTED REFINANCING INDEBTEDNESS" means any amendments, supplements,
modifications, deferrals, renewals, extensions, substitutions, refundings,
defeasance, refinancings or replacements (collectively, a "refinancing") of any
Indebtedness, including successive refinancings, so long as:
(1) the borrower under these refinancings is Metromedia International Group
or, if not Metromedia International Group, the same as the borrower or
its successor of the Indebtedness being refinanced,
(2) the aggregate principal amount or accreted value of the new Indebtedness
does not exceed the sum of:
(i) the aggregate principal amount or accreted value being refinanced,
(ii) the accrued interest represented thereby,
(iii) the amount of expenses of Metromedia International Group or the
borrower Incurred in connection with this refinancing, and
(iv) the lesser of (x) the stated amount of any premium or other payment
required to be paid in connection with this refinancing pursuant to
the terms of the Indebtedness being refinanced and (y) the amount
of premium actually paid at that time to refinance the
Indebtedness, and
(3) in the case of any refinancing of Subordinated Indebtedness, this new
Indebtedness is made subordinated to the notes at least to the same
extent as the Indebtedness being refinanced and this refinancing does not
reduce the Average Life to Stated Maturity or the Stated Maturity of this
Subordinated Indebtedness.
"PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, incorporated or unincorporated association, joint-stock
company, trust, unincorporated organization, government or other agency or
political subdivision thereof or any other entity.
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"PIVOTEL ASSETS" means the Pivotel telecommunications switches and nodes
located in New York, USA, and London, England, capacity in transatlantic and
European cables, upgraded switches in St. Petersburg and Moscow and related
telecommunications equipment.
"PLD ASSETS" means all of the assets (including shares of Capital Stock of
any Subsidiary and ALTEL) owned by PLD Telekom, ALTEL or any direct or indirect
Subsidiary of PLD Telekom on the date of issuance of our old notes, accounts
receivable generated by these assets and the Additional PLD Assets.
"PLD COMPANIES" means PLD Telekom Inc., its direct and indirect Subsidiaries
(including, without limitation, PeterStar Company Limited, Baltic Communications
Limited, Technocom Limited and CPY Yellow Pages Limited) and ALTEL.
"PLD COMPANY PERMITTED LIENS" means:
(1) any Lien existing on the date of the indenture,
(2) any Lien arising in connection with court judgments, taxes, workmen's
compensation, zoning restrictions, easements and rights of way that do
not materially impair operation of the business, performance bids,
contracts, leases, statutory allegations, surety and appeal bonds,
letters of credit and other obligations incurred in the ordinary course
of business, and
(3) any Lien securing obligations in connection with Indebtedness permitted
under clauses (2), (3), (4), (6) and (7) (with respect to clause (7), to
the extent the Indebtedness to which the Permitted Refinancing
Indebtedness relates was secured) of the paragraph on permitted PLD
Indebtedness under the "--Limitations on PLD Indebtedness" covenant
above.
"PREFERRED STOCK" means any Equity Interest of any class or classes of a
Person, however designated, which is preferred as to the payment of dividends,
or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution, over Equity Interests of any other class of this
Person.
"PUBLIC EQUITY OFFERING" means an underwritten sale of Capital Stock,
excluding Disqualified Capital Stock, of Metromedia International Group with
gross proceeds to Metromedia International Group of at least $25 million.
"PURCHASE MONEY OBLIGATION" of any Person means any Indebtedness that is
secured by a Lien on assets related to the business of this Person and any
additions, replacements, modifications and accessions of these assets, which are
purchased by this Person at any time after the notes are issued; PROVIDED that:
(1) the security agreement or conditional sale or other title retention
contract pursuant to which the Lien on these assets is created is entered
into within 180 days after the purchase or substantial completion of the
construction of these assets and is at all times confined solely to the
assets so purchased or acquired, any additions, replacements,
modifications and accessions to these assets and any proceeds and
products from these assets,
(2) at no time will the aggregate principal amount of the outstanding
Indebtedness secured by the Lien be increased except in connection with
the purchase of additions and accessions to these assets and except in
respect of commitment or facility fees or other similar fees and other
similar obligations in respect of the Incurrence of this Indebtedness,
and
(3) either:
(i) the aggregate outstanding principal amount of Indebtedness secured
by the Lien, determined on a per asset basis in the case of any
additions and accessions, will not at the time the security
agreement or other contract pursuant to which the Lien is created is
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entered into exceed 90% of the purchase price to this Person of the
assets subject to the Lien, or
(ii) the Indebtedness secured by the Lien will be with recourse solely
to the assets so purchased or acquired, any additions,
replacements, modifications and accessions to these assets and any
proceeds and products from these assets.
"QUALIFIED CAPITAL STOCK" means any and all Capital Stock of a Person other
than Disqualified Capital Stock.
"QUALIFIED JOINT VENTURE" means a Joint Venture in which PLD Telekom owns
directly or indirectly Voting Stock and any future Joint Venture in which PLD
Telekom owns 20% or more of the Voting Stock.
"RELATED ASSETS" means any asset or property used by or in or in connection
with a Related Business.
"RELATED BUSINESS" means when used in reference to any Person, that this
Person is engaged primarily in the business of, or providing services related to
the business of, (1) the transmission of voice, video or data, including but not
limited to, local and long-distance wireline and wireless telephone services and
internet services, (2) multi-channel television services, including wireline and
wireless cable television service, (3) broadcast radio, (4) paging, (5) lawn and
garden products and related services and (6) in the case of paragraphs (1)
through (5) above, the construction of any related facilities or any businesses
reasonably related thereto, which determination will be made in good faith by
the board of directors of Metromedia International Group.
"RELATED PARTIES" means (1) any officer or other member of management
employed by Metromedia Company or any Subsidiary as of the date of issuance of
the notes; (2) family members or relatives of the persons described in clause
(1); (3) any trusts created for the sole benefit of the persons described in
clause (1) or (2); or (4) in the event of the incompetence or death of any of
the persons described in clause (1), this person's estate, executor,
administrator, committee or other personal representatives or beneficiaries.
"RESTRICTED SUBSIDIARY" means (1) Metromedia International
Telecommunications, Inc., Snapper Inc. and all other direct or wholly owned
subsidiaries of Metromedia International Group that are incorporated in any
State of the United States, (2) Paging One Services, GmbH (Austria), Romsat
Cable TV & Radio, SA (Romania) and Radio Balaton Juventus, Kft. (Hungary), to
the extent each of these entities constitutes Subsidiaries and (3) each of the
PLD Companies.
"SALE AND LEASEBACK TRANSACTION" means with respect to any Person, any
direct or indirect arrangement pursuant to which property is sold or transferred
by such Person or a Restricted Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Restricted Subsidiaries.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "Significant
Subsidiary" of Metromedia International Group within the meaning of Rule 1-02
under Regulation S-X promulgated by the Commission.
"STATED MATURITY" means, when used with respect to any Indebtedness or any
installment of interest on any Indebtedness, the date specified in this
Indebtedness as the fixed date on which the payment of interest or principal was
scheduled to be paid in the original documentation governing the Indebtedness.
The Stated Maturity will not include any provision for the contingent obligation
to repay, redeem or repurchase the interest or repurchase the interest or
principal of this Indebtedness before the date originally scheduled for their
payment.
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"STRATEGIC INVESTOR" means any Person that is, or a controlled Affiliate of
any Person that is, engaged principally in a Related Business.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of Metromedia
International Group or any Restricted Subsidiary, whether outstanding on the
date of issuance of the notes or thereafter Incurred, which expressly is
subordinate or junior in right of payment to the notes pursuant to a written
agreement.
"SUBSIDIARY" of any Person means any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock entitled, without regard to the occurrence of any contingency, to
vote in the election of directors, managers, trustees or similar governing body
of this corporation, association or other business entity is at the time owned
or controlled, directly or indirectly, by (1) this Person, (2) this Person and
one or more Subsidiaries of this Person or (3) one or more Subsidiaries of this
Person. Unless otherwise specified herein, each reference to a Subsidiary will
refer to a Subsidiary of Metromedia International Group.
"TELECOMMUNICATIONS ASSETS" means, with respect to any Person, assets,
including, without limitation, rights of way, trademarks and licenses and
licenses to use copyrighted material, that are utilized by this Person, directly
or indirectly, in a Telecommunications Business. Telecommunications Assets also
include stock, joint venture or partnership interest in another Person, provided
that substantially all of the assets of this other Person consist of
Telecommunications Assets. The determination of what constitutes
Telecommunications Assets will be made by the board of directors of Metromedia
International Group.
"TELECOMMUNICATIONS ASSET AGREEMENT" means a lease or installment sale
agreement where title is transferred to the buyer pursuant to which a Leasing
Company leases or sells, in a transaction in which the monetary consideration is
paid immediately or is payable over time, Telecommunications Assets that consist
of equipment and rights acquired in connection with the lease or sale thereof,
including, without limitation, software licenses, to a Restricted Subsidiary or
Qualified Joint Venture in the Russian Federation, Kazakhstan, Belarus or any
other country in the Commonwealth of Independent States.
"TELECOMMUNICATIONS BUSINESS" means the business of (1) transmitting, or
providing services relating to the transmission of, voice, video or data through
owned or leased transmission facilities, (2) creating, developing or marketing
communications related network equipment, software and other devices for use in
(1) above or (3) evaluating, participating or pursuing any other activity or
opportunity that is related to those specified in (1) or (2) above and includes,
without limitation, any business in which PLD Telekom and its direct and
indirect Subsidiaries are currently engaged.
"TELECOMMUNICATIONS COMPANY" means any Person substantially all of the
assets of which consist of Telecommunications Assets.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of Metromedia International
Group that is not a Restricted Subsidiary or at the time of determination is
designated an Unrestricted Subsidiary by the Board of Directors of Metromedia
International Group in the manner provided below, and any Subsidiary of an
Unrestricted Subsidiary.
The board of directors of Metromedia International Group may designate any
of the Subsidiaries of Metromedia International Group, including any newly
acquired or newly formed Subsidiary, to be an Unrestricted Subsidiary unless
this Subsidiary or any of its Subsidiaries owns any Capital Stock or
Indebtedness of, or owns or holds any Lien on any property of, Metromedia
International Group or any Restricted Subsidiary of Metromedia International
Group that is not a Subsidiary of the Subsidiary to be so designated; PROVIDED,
HOWEVER, that either (1) the Subsidiary to be so designated has total
consolidated assets of $1.0 million or less or (2) if this Subsidiary has
consolidated assets greater than
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$1.0 million, then the Restricted Payments to or with respect to this Subsidiary
would be permitted under "Certain Covenants--Limitation on Restricted Payments."
The board of directors of Metromedia International Group may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that
immediately after giving effect to this designation (1) Metromedia International
Group could Incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Leverage Ratio test under "Certain Covenants--Limitation on
Indebtedness" and (2) no default under the indenture shall have occurred and be
continuing. Any designation by the board of directors of Metromedia
International Group will be evidenced to the trustee by promptly filing with the
trustee a copy of the board resolution giving effect to this designation and an
Officers' Certificate certifying that this designation complied with these
provisions.
"VOTING STOCK" of a Person means securities of any class or classes of
Capital Stock in such Person entitling the holders thereof, whether at all times
or at the times that such class of Capital Stock has voting power by reason of
the happening of any contingency, to vote in the election of members of the
board of directors or comparable body of such Person.
"WHOLLY OWNED SUBSIDIARY" means a Restricted Subsidiary of Metromedia
International Group, all of the Capital Stock of which, other than directors'
qualifying shares and shares that, under applicable law, are required to be held
by third persons, is owned by Metromedia International Group or another Wholly
Owned Subsidiary.
BOOK-ENTRY, DELIVERY AND FORM
Except as described below, we will initially issue the notes in the form of
one or more registered exchange notes in global form without coupons. We will
deposit each global note on the date of the closing of this exchange offer with,
or on behalf of, The Depository Trust Company in New York, New York, and
register the notes in the name of The Depository Trust Company or its nominee,
or will leave these notes in the custody of the trustee.
DEPOSITORY PROCEDURES
For your convenience, we are providing you with a description of the
operations and procedures of The Depository Trust Company. The operations and
procedures of The Depository Trust Company are solely within the control of its
settlement system however and may change from time to time. We are not
responsible for these operations and procedures and urge you to contact The
Depository Trust Company or its participants directly to discuss these matters.
The Depository Trust Company has advised us that it is a limited-purpose
trust company created to hold securities for its participating organizations and
to facilitate the clearance and settlement of transactions in those securities
between its participants through electronic book-entry changes in the accounts
of these participants. These direct participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Access to The Depository Trust Company's system is also
indirectly available to other entities that clear through or maintain a direct
or indirect, custodial relationship with a direct participant. The Depository
Trust Company may hold securities beneficially owned by other persons only
through its participants and these other persons' ownership interest and
transfer of ownership interest will be recorded only on the records of the
participants and not on the records of The Depository Trust Company.
The Depository Trust Company has also advised us that, pursuant to its
procedures, (1) upon deposit of the global notes, it will credit the accounts of
the direct participants with an interest in the global notes, and (2) it will
maintain records of the ownership interests of these direct participants in the
global notes and the transfer of ownership interests by and between direct
participants. The Depository Trust Company will not maintain records of the
ownership interests of, or the transfer of
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ownership interests by and between, indirect participants or other owners of
beneficial interests in the global notes. Both direct and indirect participants
must maintain their own records of ownership interests of, and the transfer of
ownership interests by and between, indirect participants and other owners of
beneficial interests in the global notes.
Investors in the global notes may hold their interests in the notes directly
through The Depository Trust Company if they are direct participants in The
Depository Trust Company or indirectly through organizations that are direct
participants in The Depository Trust Company. All interests in a global note may
be subject to the procedures and requirements of The Depository Trust Company.
The laws of some states require that certain persons take physical delivery
in definitive certificated form the securities that they own. This may limit or
curtail the ability to transfer beneficial interests in a global note to these
persons. Because The Depository Trust Company can act only on behalf of direct
participants, which in turn act on behalf of indirect participants and others,
the ability of a person having a beneficial interest in a global note to pledge
its interest to persons or entities that are not direct participants in The
Depository Trust Company or to otherwise take actions in respect of its
interest, may be affected by the lack of physical certificates evidencing such
interests.
Except as described below, owners of interests in the global notes will not
have notes registered in their names, will not receive physical delivery of
notes in certificated form and will not be considered the registered owners or
holders thereof under the indenture for any purpose.
Payments with respect to the principal of and interest on any notes
represented by a global note registered in the name of The Depository Trust
Company or its nominee on the applicable record date will be payable by the
trustee to or at the direction of The Depository Trust Company or its nominee in
its capacity as the registered holder of the global note representing these
notes under the indenture. Under the terms of the indenture, we and the trustee
will treat the persons in whose names the notes are registered, including notes
represented by global notes, as the owners of the notes for the purpose of
receiving payments and for any and all other purposes whatsoever. Payments in
respect of the principal and interest on global notes registered in the name of
The Depository Trust Company or its nominee will be payable by the trustee to
The Depository Trust Company or its nominee as the registered holder under the
indenture. Consequently, none of us, the trustee or any of our agents, or the
trustee's agents has or will have any responsibility or liability for (1) any
aspect of The Depository Trust Company's records or any direct or indirect
participant's records relating to or payments made on account of beneficial
ownership interests in the global notes or for maintaining, supervising or
reviewing any of The Depository Trust Company's records or any direct or
indirect participant's records relating to the beneficial ownership interests in
any global note or (2) any other matter relating to the actions and practices of
The Depository Trust Company or any of its direct or indirect participants.
The Depository Trust Company has advised us that its current practice, upon
receipt of any payment in respect of securities such as the notes, including
principal and interest, is to credit the accounts of the relevant participants
with the payment on the payment date, in amounts proportionate to their
respective holdings in the principal amount of beneficial interest in the
security as shown on its records, unless it has reasons to believe that it will
not receive payment on the payment date. Payments by the direct and indirect
participants to the beneficial owners of interests in the global note will be
governed by standing instructions and customary practice and will be the
responsibility of the direct or indirect participants and will not be the
responsibility of The Depository Trust Company, the trustee or us.
None of us or the trustee will be liable for any delay by The Depository
Trust Company or any direct or indirect participant in identifying the
beneficial owners of the notes and we and the trustee may conclusively rely on,
and will be protected in relying on, instructions from The Depository Trust
Company for all purposes, including with respect to the registration and
delivery, and the respective principal amounts, of the notes.
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Transfers between participants in The Depository Trust Company will be
effected in accordance with The Depository Trust Company's procedures, and will
be settled in same day funds.
The Depository Trust Company has advised us that it will take any action
permitted to be taken by a holder of notes only at the direction of one or more
participants to whose account The Depository Trust Company has credited the
interests in the global notes and only in respect of the portion of the
aggregate principal amount of the notes as to which the participant or
participants has or have given such direction. However, if there is an event of
default with respect to the notes, The Depository Trust Company reserves the
right to exchange the global notes for legended notes in certificated form and
to distribute them to its participants.
Although The Depository Trust Company has agreed to these procedures to
facilitate transfers of interests in the global notes among participants in The
Depository Trust Company, it is under no obligation to perform or to continue to
perform these procedures and may discontinue them at any time. None of us, the
trustee or any of our or the trustee's respective agents will have any
responsibility for the performance by The Depository Trust Company and its
direct or indirect participants of their respective obligations under the rules
and procedures governing their operations.
EXCHANGE OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES
A global note will be exchangeable for definitive notes in registered
certificated form if:
(1) The Depository Trust Company notifies us that it is unwilling or unable
to continue as depository for the global notes and we fail to appoint a
successor depository within 90 days,
(2) The Depository Trust Company ceases to be a clearing agency registered
under the Securities Exchange Act of 1934,
(3) we elect to cause the issuance of the certificated notes upon a notice
to the trustee,
(4) a default or event of default under the indenture for the notes has
occurred and is continuing, or
(5) a request to that effect is made but only upon prior written notice
given to the trustee by or on behalf of The Depository Trust Company in
accordance with the indenture.
In all cases, certificated notes delivered in exchange for any global note
or beneficial interests in a global note will be registered in the names, and
issued in any approved denominations, requested by or on behalf of the
depositary, in accordance with its customary procedures.
EXCHANGE OF CERTIFICATED NOTES FOR BOOK-ENTRY NOTES
Notes issued in certificated form may not be exchanged for beneficial
interests in any global note unless the transferor first delivers to the trustee
a written certificate, in the form provided in the indenture, to the effect that
this transfer will comply with the appropriate transfer restrictions applicable
to the notes.
SAME DAY SETTLEMENT
We expect that the interests in the global notes will be eligible to trade
in The Depository Trust Company's Same-Day Funds Settlement System. As a result,
secondary market trading activity in these interests will settle in immediately
available funds, subject in all cases to the rules and procedures of The
Depository Trust Company and its participants. We expect that secondary trading
in any certificated notes will also be settled in immediately available funds.
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PAYMENT
The indenture requires that payments in respect of the notes represented by
global notes, including principal and interest, be made by wire transfer of
immediately available funds to the accounts specified by the holder of the
global notes. With respect to notes in certificated form, we will make all
payments of principal and interest on the notes at our office or agency
maintained for that purpose within the city and state of New York. This office
will initially be the office of the paying agent maintained for that purpose. At
our option however, we may make these payments by check mailed to the holders of
notes at their respective addresses provided in the register of holders of
notes. However, we are required to make all payments of principal and interest
on notes in certificated form the holders of which have given us wire transfer
instructions, by wire transfer of immediately available funds to the accounts
specified by these holders.
YEAR 2000
The Depository Trust Company has advised us that its management is aware
that some computer applications, systems, and the like for processing data that
are dependent upon calendar dates, including dates before, on and after January
1, 2000, may encounter year 2000 problems. The Depository Trust Company has
informed its participants and other members of the financial community that it
has developed and is implementing a program so that its systems, as the same
relate to the timely payment of distributions, including principal and interest
payments, to security holders, book-entry deliveries and settlement of trades
within The Depository Trust Company, continue to function appropriately. This
program includes a technical assessment and a remediation plan, each of which is
complete. Additionally, The Depository Trust Company's plan includes a testing
phase, which is expected to be completed within the appropriate time frames.
However, The Depository Trust Company's ability to perform properly its services
is also dependent upon other parties, including issuers and their agents, as
well as third party vendors from whom The Depository Trust Company licenses
software and hardware, and third party vendors on whom The Depository Trust
Company relies for information or the provision of services, including
telecommunication and electrical utility service providers, among others. The
Depository Trust Company has informed its participants and other members of the
financial community that it is contacting and will continue to contact third
party vendors from whom The Depository Trust Company acquires services to:
- impress upon them the importance of these services being year 2000
compliant, and
- determine the extent of their efforts for year 2000 remediation and, as
appropriate, testing of their services.
In addition, The Depository Trust Company is in the process of developing
contingency plans as it deems appropriate. According to The Depository Trust
Company, the foregoing information with respect to The Depository Trust Company
has been provided to its participants and other members of the financial
community for informational purposes only and is not intended to serve as a
representation, warranty or contract modification of any kind.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Paul, Weiss, Rifkin, Wharton & Garrison, the following
description sets forth the material anticipated United States federal income tax
consequences of the exchange offer that may be relevant to holders of old notes
who are United States persons. The description does not cover special rules that
may apply to some holders, including insurance companies, tax-exempt
organizations, financial institutions or broker-dealers, holders whose
functional currency is not the United States dollar, and persons holding the old
or exchange notes as part of a "straddle," "hedge," "constructive sale" or
"conversion transaction," and investors who are not United States persons. In
addition, this description does not address the tax consequences of the law of
any state, locality or foreign jurisdiction. The description is based upon
currently existing provisions of the Internal Revenue Code of 1986, existing and
proposed Treasury regulations promulgated under the Internal Revenue Code and
current administrative rulings and court decisions. All of the foregoing are
subject to change and any such change could affect the continuing validity of
this description.
For purposes of this description, "United States person" means a beneficial
owner of the notes who or that:
(1) is a citizen or resident of the United States,
(2) is a corporation, partnership or other entity created or organized in or
under the laws of the United States or a political subdivision thereof,
(3) is an estate the income of which is subject to U.S. federal income
taxation regardless of its source,
(4) is a trust if (A) a U.S. court is able to exercise supervision over the
administration of the trust and (B) one or more U.S. fiduciaries have
authority to control all substantial decisions of the trust, or
(5) is otherwise subject to U.S. federal income tax on a net income basis in
respect of the notes.
THE FOLLOWING DESCRIPTION IS GENERAL IN NATURE AND IS NOT ADDRESSED TO ANY
PARTICULAR HOLDER. THE TAX TREATMENT MAY VARY DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES TO YOU OF THE EXCHANGE OFFER AND THE OWNERSHIP OF
THE OLD OR EXCHANGE NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE,
LOCAL OR FOREIGN TAX LAWS.
EXCHANGE OF NOTES
The exchange of old notes for exchange notes pursuant to the exchange offer
will not be treated as an exchange or otherwise as a taxable event to holders.
Consequently:
(1) no gain or loss will be realized by a holder upon receipt of an exchange
note,
(2) the holding period of the exchange note will include the holding period
of the old note exchanged therefor, and
(3) the adjusted tax basis of the exchange note will be the same as the
adjusted tax basis of the old note, including any income recognized in
connection with the exchange of old notes for the accrued but unpaid
interest on the PLD Telekom notes, exchanged therefor immediately before
the exchange.
CONSEQUENCES OF OWNERSHIP OF EXCHANGE NOTES
ORIGINAL ISSUE DISCOUNT
The exchange notes will have original issue discount for federal income tax
purposes, except in the circumstances described below in "--Amortizable Bond
Premium". Each holder of exchange notes, whether a cash or accrual method
taxpayer, will be required to include in income this original issue
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discount as it accrues, in advance of the receipt of some or all of the related
cash payments. The amount of original issue discount on an exchange note is the
excess of its stated redemption price at maturity over the issue price of the
exchange note. The stated redemption price at maturity is the sum of all
payments to be made on the exchange note, whether denominated as interest or
principal. Because the exchange notes are treated for federal income tax
purposes as if they were the same as the old notes, the amount of original issue
discount on an exchange note will be calculated as if the exchange note and the
old note were a single note that was issued at the time the old note was issued,
for an issue price equal to the issue price of the old note, and any accrued
original issue discount on the old note at the time of the exchange offer will
carry over and be treated as accrued original issue discount on the exchange
notes. The issue price of each old note will be determined as described below
under "--Issue Price."
The amount of original issue discount includable in income by the holder of
a note is the sum of the "daily portions" of original issue discount with
respect to the note for each day during the taxable year or portion of the
taxable year on which this holder held the note, reduced as described in "--
Acquisition Premium". The daily portion is determined by allocating to each day
in any accrual period a pro rata portion of the original issue discount
allocable to that accrual period. The accrual periods for a note will be periods
that are each selected by the holder of the note that are no longer than one
year, provided that each scheduled payment occurs either on the final day of an
accrual period or on the first day of an accrual period. The amount of original
issue discount allocable to any accrual period other than the initial short
accrual period, if any, and the final accrual period is an amount equal to the
product of the note's adjusted issue price at the beginning of the accrual
period and its yield to maturity determined on the basis of compounding at the
close of each accrual period and properly adjusted for the length of the accrual
period. The amount of original issue discount allocable to the final accrual
period is the difference between the amount payable at maturity and the adjusted
issue price of the note at the beginning of the final accrual period. The amount
of original issue discount allocable to any initial short accrual period may
generally be computed under any reasonable method. The yield to maturity is the
discount rate that, when used in computing the present value of all payments to
be made under the notes, produces an amount equal to the issue price of the
notes. The adjusted issue price of the note at the start of any accrual period
is equal to its issue price increased by the accrued original issue discount for
each prior accrual period and reduced by any prior payments with respect to the
note. Metromedia International Group is required to report the amount of
original issue discount accrued on notes held of record by persons other than
corporations and other exempt holders of notes, which may be based on accrual
periods other than those chosen by the holders of notes.
The holder's tax basis in a note will be increased by the amount of original
issue discount on the note that is included in the holder's income pursuant to
these rules, and will be decreased by the amount of any payments made with
respect to the note.
ISSUE PRICE
The issue price of an old note depends, in part, on whether the old notes
are, or the PLD Telekom notes exchanged for the old notes were, publicly traded.
In general, the old notes or the PLD Telekom notes will be treated as publicly
traded if, at any time during the 60-day period ending 30 days after the issue
date of the old notes, a substantial amount of the old notes or the PLD Telekom
notes are traded on an established market, as defined in Treasury regulations.
Subject to certain exceptions, the old notes or the PLD Telekom notes will be
treated as traded on an established market if:
(1) either is listed on certain securities exchanges, interdealer quotation
systems, or designated foreign exchanges or boards of trade,
(2) either is traded on certain boards of trade that are designated as
contract markets or on interbank markets,
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(3) either appears on a system on general circulation that provides a
reasonable basis to determine fair market value by disseminating either
recent price quotations of identified brokers, dealers or traders, or
actual prices of recent sales transactions, or
(4) price quotations are readily available from brokers, dealers or traders.
If the old notes or the PLD Telekom notes are traded on an established
market, the issue price of an old note will be the fair market value of
the old note or the PLD Telekom note for which it is issued, as the case
may be, on the issue date as determined by this trading.
The issue price of an old note that is neither publicly traded nor issued
for a PLD Telekom note so traded will be its stated principal amount. Note that
this method could produce an issue price for the old notes that is materially
different from the issue price determined in the situation where either the PLD
Telekom notes or the old notes are publicly traded.
APPLICABLE HIGH YIELD DISCOUNT OBLIGATIONS
If the exchange notes are treated as having significant original issue
discount, the exchange notes will be subject to the applicable high yield
discount obligation rules of the Internal Revenue Code. The exchange notes will
have significant original issue discount if the amount includible in gross
income of a holder during the first 5 years of the term of the exchange note
exceeds the sum of:
(1) the aggregate cash interest paid during this 5-year period and
(2) the product of the issue price of the exchange note times its yield to
maturity.
If the exchange notes are determined to be subject to the applicable high
yield discount obligation rules, our deductions with respect to original issue
discount will be suspended until these amounts are actually paid, and the
disqualified portion of the original issue discount will be permanently
nondeductible. The disqualified portion of the original issue discount is the
portion that is attributable to the yield on such exchange note in excess of the
applicable federal rate plus 600 basis points. These rules generally do not
affect the amount, timing or character of a holder's income; however, domestic
corporate holders may be eligible for a dividends-received deduction with
respect to their inclusion in income of the disqualified portion if this amount,
if paid with respect to stock, would have been a dividend (i.e., among other
things, would have been out of earnings and profits). The availability of the
dividends-received deduction is subject to a number of complex limitations.
MARKET DISCOUNT
A debt instrument is acquired with market discount:
(1) in the case of debt instruments issued without original issue discount,
if the purchase price is less than its principal amount or
(2) in the case of debt instruments issued with original issue discount, if
the purchase price is less than its revised issue price, taking into
account original issue discount includable in income of all previous
holders of the debt instrument, and disregarding any reduction on account
of acquisition premium.
Although the issue is not entirely clear, if the exchange of PLD Telekom
notes for the old notes qualified as a tax-free reorganization, any accrued
market discount with respect to the PLD Telekom notes should carry over and be
treated as accrued market discount with respect to the old notes received in
exchange. Any accrued market discount on the old notes will be carried over and
be treated as accrued market discount with respect to the exchange notes.
Upon any disposition, including a gift or payment at maturity, of an
exchange note other than in connection with certain nonrecognition transactions,
the lesser of:
(1) any gain on such disposition or appreciation, in the case of a gift, or
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(2) the sum of the portion of the market discount that accrued while the
exchange note was held by such holder, including any market discount that
accrued while such holder held the old note, and any market discount that
carried over from the PLD Telekom note will be treated as ordinary
interest income at the time of the disposition.
The amount of market discount treated as having accrued as of any particular
time will be determined either on a ratable basis, or, if the holder so elects,
on a constant interest method. Unless a holder makes the election described
below to include market discount in income on a current basis, the holder may be
required to defer a portion of any interest expense that may otherwise be
deductible on any indebtedness incurred or maintained to purchase or carry the
exchange note until the holder disposes of the exchange note.
In lieu of including accrued market discount in income at the time of
disposition of an exchange note, a holder may elect to include market discount
in income currently. The election to include market discount in income
currently, once made, is irrevocable and applies to all market discount
obligations acquired on or after the first day of the first taxable year to
which the election applies and may not be revoked without the consent of the
Internal Revenue Service.
ACQUISITION PREMIUM
If a holder's tax basis in an exchange note:
(1) exceeds the adjusted issue price of the exchange note, and
(2) is less than or equal to the stated redemption price at maturity reduced
by any payments made on the exchange note, this excess will be considered
acquisition premium.
Such a holder is permitted to reduce the amount of original issue discount
required to be included in gross income by an amount equal to the original issue
discount otherwise includible multiplied by a fraction, the numerator of which
is the amount of acquisition premium and the denominator of which is the excess
of the sum of all amounts payable on the exchange notes after the acquisition
date over the adjusted issue price. Alternatively, a holder may elect to
amortize acquisition premium on a constant yield basis, treating the holder's
basis in the exchange note as the exchange note's issue price.
AMORTIZABLE BOND PREMIUM
If a holder's tax basis in an exchange note exceeds the sum of all amounts
payable on the exchange note after the acquisition date, the exchange note will
not be treated as issued with original issue discount, and this excess would be
treated as amortizable bond premium. The holder may elect to amortize the excess
over the period from the acquisition date of the exchange note to the maturity
date. Amortizable bond premium allocable to a period may be treated as a bond
premium deduction to the extent that the holder's total interest inclusions in
prior periods exceed the total amount treated by the holder as a bond premium
deduction on the exchange note in prior periods. Any excess over such total
interest inclusions is carried forward to the next accrual period. A holder that
elects to amortize bond premium must reduce its adjusted basis in the exchange
note by the amount of allowable amortization. An election to amortize bond
premium applies to the amortizable bond premium on all taxable bonds held during
or after the holder's taxable year for which the election is made and may be
revoked only with the consent of the Internal Revenue Service.
SALE, EXCHANGE OR RETIREMENT OF EXCHANGE NOTES
A holder of exchange notes will recognize gain or loss upon the sale,
redemption, retirement or other disposition of the exchange notes; this gain or
loss will generally be equal to the difference between:
(1) the amount of cash and the fair market value of property received and
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(2) the holder's adjusted tax basis in the exchange notes, including any
accrued original issue discount or market discount previously included in
income by the holder and reduced by any previous payments with respect to
the exchange notes and any amortizable bond premium applied to reduce
interest on the exchange note.
Subject to the market discount rules discussed above, gain or loss
recognized will be capital gain or loss and will be long term capital gain or
loss if the holder's holding period, including any holding period attributable
to the holder's former ownership of PLD Telekom notes if the exchange of PLD
Telekom notes for old notes qualified as a tax-free reorganization, exceeds one
year. Net capital gains of individuals are subject to tax at lower rates than
items of ordinary income. The deductibility of capital losses is subject to
limitations.
REPORTING REQUIREMENTS
We will provide annual information statements to holders of the exchange
notes and to the Internal Revenue Service, setting forth the amount of original
issue discount determined to be attributable to the exchange notes for that
year.
BACKUP WITHHOLDING
Under certain circumstances, the failure of a holder of exchange notes to
provide sufficient information to establish that the holder is exempt from the
backup withholding provisions of the Internal Revenue Code will subject the
holder to backup withholding at a rate of 31 percent on payments of principal
and interest on the exchange notes, and the proceeds from a disposition of the
exchange notes. In general, backup withholding applies if a noncorporate holder
fails to furnish a correct taxpayer identification number, fails to report
interest income in full, or fails to certify that such holder has provided a
correct taxpayer identification number and that the holder is not subject to
withholding. An individual's taxpayer identification number is such person's
Social Security number. Any amount withheld from a payment to a holder under the
backup withholding rules will be allowed as a credit against such holder's
United States federal income tax liability and may entitle the holder to a
refund, provided the required information is furnished to the Internal Revenue
Service.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account pursuant
to the exchange offer in exchange for old notes acquired by it as a result of
market making or other trading activities may be deemed to be an underwriter
within the meaning of the Securities Act and, therefore, must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales, offers to resell or other transfers of the exchange notes received by
it in the exchange offer. Accordingly, each such broker-dealer must acknowledge
that it will deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of these exchange notes. The letter of transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
underwriter within the meaning of the Securities Act. This prospectus, as it may
be amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of exchange notes received in exchange for old notes
where these old notes were acquired as a result of market-making activities or
other trading activities.
We will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by a broker-dealer for its own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the exchange notes or a combination of these methods
of resale, at market prices prevailing at the time of resale, at prices related
to these prevailing market prices or negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such exchange notes. Any
broker-dealer that resells exchange notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of these exchange notes may be deemed to be an
underwriter within the meaning of the Securities Act and any profit of any such
resale of exchange notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The letter of transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an underwriter within the meaning of the Securities Act.
LEGAL MATTERS
Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York, has passed
upon certain legal matters, including certain tax matters on our behalf, with
respect to the notes.
EXPERTS
The consolidated financial statements of Metromedia International Group,
Inc. and its subsidiaries at December 31, 1998 and 1997 and for each of the
years in the three-year period ended December 31, 1998, have been audited by
KPMG LLP, independent certified public accountants, as set forth in their report
with respect to these consolidated financial statements. These consolidated
financial statements are included in our annual report on Form 10-K/A for the
year ended December 31, 1998, and are incorporated by reference in this
prospectus in reliance upon the report given and upon the authority of such firm
as experts in accounting and auditing.
The consolidated financial statements of PLD Telekom Inc. and subsidiaries
as of December 31, 1998 and 1997 and for the years then ended, have been audited
by KPMG LLP, independent certified public accountants, as set forth in their
report with respect to these consolidated financial statements. The report of
KPMG LLP covering the December 31, 1998 consolidated financial statements
contains an explanatory paragraph that states that PLD Telekom Inc.'s recurring
losses, working capital deficiency, and lack of sufficient funds to meet its
current debt obligations raise substantial doubt about the entity's ability to
continue as a going concern. The consolidated financial statements do not
include
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any adjustments that might result from the outcome of that uncertainty. These
consolidated financial statements are included in PLD Telekom Inc.'s annual
report on Form 10-K/A for the year ended December 31, 1998, and are incorporated
by reference in this prospectus in reliance upon the report given and upon the
authority of said firm as experts in accounting and auditing.
The consolidated statements of operations, shareholders' equity and cash
flows of PLD Telekom Inc. and subsidiaries for the year ended December 31, 1996,
have been audited by KPMG LLP, chartered accountants, as set forth in their
report with respect to these consolidated financial statements. These
consolidated financial statements are included in PLD Telekom Inc.'s annual
report on Form 10-K/A for the year ended December 31, 1998, and are incorporated
by reference in this prospectus in reliance upon the report given and upon the
authority of said firm as experts in accounting and auditing.
The financial statements of PLD Capital Asset (U.S.) Inc. as of December 31,
1998 and for the year then ended, have been audited by KPMG LLP, independent
certified public accountants, as set forth in their report with respect to these
financial statements. The report of KPMG LLP covering the December 31, 1998
financial statements contains an explanatory paragraph that states that PLD
Capital Asset (U.S.) Inc.'s parent, PLD Telekom Inc., does not presently have
sufficient funds on hand to meet its current debt obligations. PLD Telekom
Inc.'s failure to make payment in full when required could result in a
cross-default under and acceleration of other debt obligations for which PLD
Capital Asset (U.S.) Inc. is a guarantor. These factors raise substantial doubt
about the entity's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
that uncertainty. These financial statements are included in PLD Telekom Inc.'s
annual report on Form 10-K/A for the year ended December 31, 1998, and are
incorporated by reference in this prospectus in reliance upon the report given
and upon the authority of said firm as experts in accounting and auditing.
The financial statements of Baltic Communications Limited as of December 31,
1998 and 1997 and for the years ended December 31, 1998 and 1997 and the nine
months ended December 31, 1996, have been audited by KPMG, independent auditors,
as set forth in their report with respect to these financial statements. The
report of KPMG covering the December 31, 1998 financial statements contains an
explanatory paragraph that states that Baltic Communications Limited's parent,
PLD Telekom Inc., does not presently have sufficient funds on hand to meet its
current debt obligations. Baltic Communications Limited is a guarantor of such
obligations. PLD Telekom Inc.'s failure to make payments in full when required
could result in a claim being made against Baltic Communications Limited under
its guaranty and a cross-default under and acceleration of other debt
obligations for which Baltic Communications Limited is also a guarantor. These
factors raise substantial doubt about the entity's ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of that uncertainty. These financial statements
are included in PLD Telekom Inc.'s annual report on Form 10-K/A for the year
ended December 31, 1998, and are incorporated by reference in this prospectus in
reliance upon the report given and upon the authority of said firm as experts in
accounting and auditing.
The consolidated financial statements of NWE Capital (Cyprus) Ltd. and
subsidiaries as of December 31, 1998 and 1997 and for each of the years in the
three-year period ended December 31, 1998, have been audited by KPMG,
independent auditors, as set forth in their report with respect to these
consolidated financial statements. The report of KPMG covering the December 31,
1998 consolidated financial statements contains an explanatory paragraph that
states that NWE Capital (Cyprus) Ltd.'s parent, PLD Telekom Inc., does not
presently have sufficient funds on hand to meet its current debt obligations.
PLD Telekom Inc.'s failure to make payments in full when required could result
in a cross default under and acceleration of other debt obligations for which
NWE Capital (Cyprus) Ltd. is a guarantor. These factors raise substantial doubt
about the entity's ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might
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<PAGE>
result from the outcome of that uncertainty. These consolidated financial
statements are included in PLD Telekom Inc.'s annual report on Form 10-K/A for
the year ended December 31, 1998, and are incorporated by reference in this
prospectus in reliance upon the report given and upon the authority of said firm
as experts in accounting and auditing.
The consolidated financial statements of Technocom Limited and subsidiaries
as of December 31, 1998 and 1997 and for each of the years in the three-year
period ended December 31, 1998, have been audited by KPMG, chartered
accountants, as set forth in their report with respect to these consolidated
financial statements. The report of KPMG covering the December 31, 1998
consolidated financial statements contains an explanatory paragraph that states
that Technocom Limited's recurring losses, working capital deficiency and lack
of sufficient funds on hand to meet its current obligations raise substantial
doubt about the entity's ability to continue as a going concern. The
consolidated financial statements do not include any adjustments that might
result from the outcome of that uncertainty. These consolidated financial
statements are included in PLD Telekom Inc.'s annual report on Form 10-K/A for
the year ended December 31, 1998, and are incorporated by reference in this
prospectus in reliance upon the report given and upon the authority of said firm
as experts in accounting and auditing.
The consolidated financial statements of Wireless Technology Corporations
Limited and subsidiary as of December 31, 1998 and 1997 and for each of the
years in the three-year period ended December 31, 1998, have been audited by
KPMG, independent auditors, as set forth in their report with respect to these
consolidated financial statements. The report of KPMG covering the December 31,
1998 consolidated financial statements contains an explanatory paragraph that
states that Wireless Technology Corporation Limited's parent, PLD Telekom Inc.,
does not presently have sufficient funds on hand to meet its current debt
obligations. Wireless Technology Corporations Limited is a guarantor of such
obligations. PLD Telekom Inc.'s failure to make payment in full when required
could result in a claim being made against Wireless Technology Corporations
Limited under its guaranty and a cross-default under and acceleration of other
debt obligations for which Wireless Technology Corporations Limited is also a
guarantor. These factors raise substantial doubt about the entity's ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of that uncertainty.
These consolidated financial statements are included in PLD Telekom Inc.'s
annual report on Form 10-K/A for the year ended December 31, 1998, and are
incorporated by reference in this prospectus in reliance upon the report given
and upon the authority of said firm as experts in accounting and auditing.
The financial statements of PLD Asset Leasing Limited as of December 31,
1997 and 1996 and for each of the years in the two-year period ended December
31, 1997 have been audited by Moore Stephens, chartered accountants, as set
forth in their report with respect to these financial statements. These
financial statements are included in PLD Telekom Inc.'s annual report on Form
10-K/A for the year ended December 31, 1998, and are incorporated by reference
in this prospectus in reliance upon the report given and upon the authority of
said firm as experts in accounting and auditing.
AVAILABLE INFORMATION
This prospectus summarizes material provisions of contracts and other
documents and may not contain all the information that you may find important.
Therefore, you should review the full text of these documents. We have filed a
registration statement on Form S-4 with the Securities and Exchange Commission
covering the exchange notes to be issued by Metromedia International Group in
this exchange offer, and this prospectus is part of our registration statement.
We have included copies of these contracts and other documents as exhibits to
our registration statement. For further information on Metromedia International
Group and the notes, you should refer to our registration statement and its
exhibits.
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We are currently subject to the periodic reporting and other informational
requirements of the Securities Exchange Act of 1934. Accordingly, we file
reports, proxy statements and other information with the Securities and Exchange
Commission. You can inspect and copy any document that we file at the Securities
and Exchange Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and also at the regional offices of the Securities and
Exchange Commission located at 7 World Trade Center, Suite 1300, New York, New
York 10048 and the Citicorp Center at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Reports, proxy statements and other information
regarding issuers that file electronically with the Securities and Exchange
Commission, including our filings, are also available to the public from the
Securities and Exchange web site at http://www.sec.gov.
DOCUMENTS INCORPORATED BY REFERENCE
THE SECURITIES AND EXCHANGE COMMISSION ALLOWS US TO "INCORPORATE BY
REFERENCE" THE INFORMATION WE FILE WITH THEM, WHICH MEANS THAT WE CAN DISCLOSE
IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT US TO YOU THAT IS NOT
INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS BY REFERRING YOU TO THOSE
DOCUMENTS.
The information incorporated by reference is considered to be part of this
prospectus. Information that we file later with the Securities and Exchange
Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any filing we will make
with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 following the date of this
prospectus and prior to the expiration date of this exchange offer:
METROMEDIA INTERNATIONAL GROUP
(1) Annual Report on Form 10-K/A (Amendment No. 2) of Metromedia
International Group (file no. 001-5706) filed on August 31, 1999 for the
fiscal year ended December 31, 1998;
(2) Quarterly Report on Form 10-Q/A (Amendment No. 1) of Metromedia
International Group (file no. 001-5706) filed on August 31, 1999 for the
fiscal quarter ended March 31, 1999;
(3) Quarterly Report on Form 10-Q/A (Amendment No. 1) of Metromedia
International Group (file no. 001-5706) filed on August 31, 1999 for the
fiscal quarter ended June 30, 1999;
(4) Current Report on Form 8-K dated May 18, 1999 (file no. 001-5706) filed
on May 20, 1999; and
(5) Current Report on Form 8-K dated August 4, 1999 (file no. 001-5706)
filed on August 4, 1999.
(6) Current Report on Form 8-K dated September 24, 1999 (file no. 001-5706)
filed on September 24, 1999.
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PLD TELEKOM
(1) Annual Report on Form 10-K/A (Amendment No. 2) of PLD Telekom (file no.
000-20444) filed on August 31, 1999 for the fiscal year ended December
31, 1998;
(2) Quarterly Report on Form 10-Q/A (Amendment No. 2) of PLD Telekom (file
no. 000-20444) filed on August 31, 1999 for the fiscal quarter ended
March 31, 1999;
(3) Quarterly Report on Form 10-Q/A (Amendment No. 1) of PLD Telekom (file
no. 000-20444) filed on August 31, 1999 for the fiscal quarter ended June
30, 1999;
(4) Current Report on Form 8-K/A (Amendment No. 1) dated May 18, 1999 (file
no. 000-20444) filed on August 30, 1999.
This prospectus incorporates important business and financial information
about Metromedia International Group, Inc. that is included in our annual report
for the fiscal year ended December 31, 1998, as amended, and our quarterly
reports for the fiscal quarters ended March 31, 1999 and June 30, 1999, as
amended. This prospectus also incorporates important business and financial
information about PLD Telekom Inc. that is included in PLD Telekom Inc.'s annual
report for the fiscal year ended December 31, 1998, as amended, and PLD Telekom
Inc.'s quarterly reports for the fiscal quarters ended March 31, 1999 and June
30, 1999, as amended. These documents are being delivered to you with this
prospectus. We urge you to read these documents in their entirety. This
prospectus also incorporates documents by reference that are not presented in,
or delivered with, this prospectus. Copies of these documents, other than
exhibits to these documents that are not specifically incorporated by reference
in these documents, are available without charge to any person to whom this
prospectus is delivered, upon written or oral request to Metromedia
International Group, Inc., One Meadowlands Plaza, East Rutherford, NJ 07073;
Attention: General Counsel; tel: (201) 531-8000, or to PLD Telekom Inc., 505
Park Avenue, 21st Floor, New York, New York 10022; Attention: Secretary; Tel.:
(212) 527-3800.
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METROMEDIA INTERNATIONAL GROUP, INC.
EXCHANGE OFFER FOR $210,631,376 OF ITS
SERIES A 10 1/2% SENIOR DISCOUNT NOTES DUE 2007
------------------
PROSPECTUS
, 1999
------------------------
No person has been authorized to give any information or to make any
representation other than those contained in this prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offer to buy
these securities in any circumstances in which this offer or solicitation is
unlawful. Neither the delivery of this prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of Metromedia International Group since the date of this
prospectus or that the information contained in this prospectus is correct as of
any time subsequent to its date.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the Delaware General Corporation Law provides that a
Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that the person is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by the person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no cause to believe the person's conduct was
unlawful.
Section 145(b) of the Delaware General Corporation Law provides that a
Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that the person acted in any of the capacities described
above, against expenses (including attorneys' fees) actually and reasonably
incurred by the person in connection with the defense or settlement of this
action or suit if the person acted under similar standards as those described
above, except that no indemnification may be made in respect of any claim, issue
or matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which such action or
suit was brought shall determine that, despite the adjudication of liability but
in view of all the circumstances of the case, this person is fairly and
reasonably entitled to be indemnified for these expenses which the court shall
deem proper.
Section 145 of the Delaware General Corporation Law further provides that to
the extent a present or former director or officer of a corporation has been
successful in the defense of any action, suit or proceeding referred to above or
in the defense of any claim, issue, or matter therein, this person must be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by this person in connection therewith. Section 145 also provides that
this indemnification shall not be deemed exclusive of any other rights to which
the party seeking indemnification may be entitled and that the corporation may
purchase and maintain insurance on behalf of a director, officer, employee or
agent of the corporation or, at the corporation's request, as such in another
corporation, partnership, trust or other enterprise against any liability
asserted against this person or incurred by this person in any such capacity or
arising out of this person's status as such whether or not the corporation would
have the power to indemnify this person against these liabilities under section
145 of the Delaware General Corporation Law.
Section 102(b)(7) of the Delaware General Corporation Law provides that a
corporation in its certificate of incorporation may eliminate or limit personal
liability of members of its board of directors or governing body to the
corporation or its stockholders for monetary damages for breach of a director's
fiduciary duty. However, no such provision may eliminate or limit the liability
of a director for breaching his duty of loyalty, failing to act in good faith,
engaging in intentional misconduct or knowingly violating a law, unlawfully
paying a dividend or approving a stock repurchase which was illegal, or
obtaining an improper personal benefit. A provision of this type has no effect
on the availability of equitable remedies, such as injunction or rescission, for
breach of fiduciary duty.
In accordance with section 145 of the Delaware General Corporation Law,
Metromedia International Group's restated certificate of incorporation provides
that Metromedia International Group will indemnify its officers and directors
against, among other things, any and all judgments,
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<PAGE>
fines, penalties, amounts paid in settlements and expenses paid or incurred by
virtue of the fact that this officer or director was acting in that capacity to
the extent not prohibited by law. In addition, as permitted by Section 102(b)(7)
of the Delaware General Corporation Law, Metromedia International Group's
restated certificate of incorporation contains a provision limiting the personal
liability of its directors for violations of their fiduciary duties to the
fullest extent permitted by the Delaware General Corporation Law. The general
effect of this provision is to eliminate a director's personal liability for
monetary damages for actions involving a breach of his or her fiduciary duty of
care, including any action involving gross negligence. Also, in accordance with
the Delaware General Corporation Law and pursuant to its restated certificate of
incorporation, Metromedia International Group is authorized to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of Metromedia International Group, is or was serving at its
request as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against this person and incurred by this person in that capacity, or
arising out of this person's status as such, whether or not Metromedia
International Group would have the power to indemnify this person against
liability under the Delaware General Corporation law.
Metromedia International Group has entered into agreements with certain of
its directors and officers which require it to indemnify each of these directors
and officers against, and to advance expenses incurred by each of them in the
defense of, any claim arising out of their employment to the fullest extent
permitted under law. These indemnification agreements also provide, among other
things, for (1) advancement by Metromedia International Group of expenses
incurred by the director or officer in defending certain litigation, (2) the
appointment of an independent legal counsel to determine whether the director or
officer is entitled to indemnity and (3) the continued maintenance by Metromedia
International Group of directors' and officers' liability insurance providing
each director or officer who is a party to any such agreement with $5 million of
primary coverage and an excess policy providing $5 million of additional
coverage. These indemnification agreements were approved by Metromedia
International Group's stockholders at their 1993 annual meeting.
Metromedia International Group is a party to a management agreement with
Metromedia Company dated November 1, 1995 pursuant to which Metromedia Company
provides it with management services, including legal, insurance, payroll and
financial accounting systems and cash management, tax and benefit plans in
return for a management fee. Metromedia International Group is also obligated to
reimburse Metromedia Company for all its out-of-pocket costs and expenses
incurred and advances paid by Metromedia Company in connection with the
agreement. Metromedia International Group has also agreed to indemnify and hold
harmless Metromedia Company from and against any and all damages, liabilities,
losses, claims, actions, suits, proceedings, fees, costs or expenses (including
reasonable attorneys' fees and other costs and expenses to any suit, proceeding
or investigation of any kind) imposed on, incurred by or asserted against
Metromedia Company in connection with the management agreement.
Under the indenture for the notes, the holders of these notes have agreed to
waive all liability for any obligations incurred by Metromedia International
Group under the notes or the indenture or for any claim based on, in respect of
or by reason of such obligations or their creation, against any incorporator,
director, officer, employee, stockholder or controlling person, as such, of
Metromedia International Group, and have agreed to the release of these persons
from any such liability.
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<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
2.1*** Agreement and Plan of Merger, dated as of May 18, 1999, by and among Metromedia International Group,
Moscow Communications, Inc. and PLD Telekom Inc. (incorporated by reference from Metromedia
International Group's current report on Form 8-K filed with the Securities and Exchange Commission
for the event dated May 18, 1999).
2.3*** Amended and Restated Agreement and Plan of Merger dated as of September 27, 1995 by and among The
Actava Group Inc., Orion Pictures Corporation, MCEG Sterling Incorporated, Metromedia International
Telecommunications, Inc., OPG Merger Corp. and MITI Merger Corp. and exhibits thereto (incorporated
by reference from Metromedia International Group's current report on Form 8-K for the event occurring
on September 27, 1995).
2.5*** Agreement and Plan of Merger dated as of January 31, 1996 by and among Metromedia International
Group, Inc., The Samuel Goldwyn Company and SGC Merger Corp. and exhibits thereto (incorporated by
reference from Metromedia International Group's current report on Form 8-K for the event dated
January 31, 1996).
3.1*** Restated Certificate of Incorporation of Metromedia International Group, Inc. (incorporated by
reference from Metromedia International Group's Registration Statement on Form S-3 (Registration No.
33-63853)).
3.2*** Restated By-laws of Metromedia International Group, Inc. (incorporated by reference from Metromedia
International Group's Registration Statement on Form S-3 (Registration No. 33-63853)).
3.3*** Certificate of Amendment to the Restated Certificate of Incorporation of Metromedia International
Group, Inc. (incorporated by reference from Metromedia International Group's Schedule 14A, dated
August 6, 1996, for the annual meeting of stockholders dated August 29, 1996).
4.10* Form of Indenture for the 10 1/2% Senior Discount Notes due 2007 of Metromedia International Group,
between Metromedia International Group and U.S. Bank Trust National Association as Trustee.
4.11* Form of Series A and B 10 1/2% Senior Discount Notes due 2007 of Metromedia International Group.
5.1* Opinion of Paul, Weiss, Rifkind, Wharton & Garrison regarding the legality of the notes under New
York law.
8.1* Opinion of Paul, Weiss, Rifkind, Wharton & Garrison regarding certain federal income tax matters.
10.1*** 1982 Stock Option Plan of The Actava Group Inc. (incorporated by reference from Metromedia
International Group's proxy statement dated March 31, 1982).
10.2*** 1989 Stock Option Plan of The Actava Group Inc. (incorporated by reference from Metromedia
International Group's proxy statement dated March 31, 1989).
10.3*** 1969 Restricted Stock Plan of The Actava Group Inc. (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1990).
10.4*** 1991 Non-Employee Director Stock Option Plan (incorporated by reference from Metromedia International
Group's Annual Report on From 10-K for the year ended December 31, 1991).
10.5*** Amendment to 1991 Non-Employee Director Stock Option Plan (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1992).
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.6*** Snapper Power Equipment Profit Sharing Plan (incorporated by reference from Metromedia International
Group's Annual Report on Form 10-K for the year ended December 31, 1987).
10.7*** Retirement Plan executed November 1, 1990, as amended effective January 1, 1989 (incorporated by
reference from Metromedia International Group's Annual Report on Form 10-K for the year ended
December 31, 1990).
10.8*** Supplemental Retirement Plan of The Actava Group Inc. (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1983).
10.9*** Supplemental Executive Medical Reimbursement Plan (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1990).
10.10*** Amendment to Supplemental Retirement Plan of The Actava Group Inc., effective April 1, 1992
(incorporated by reference from Metromedia International Group's Annual Report on Form 10-K for the
year ended December 31, 1991).
10.11*** 1992 Officer and Director Stock Purchase Plan (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1991).
10.12*** Form of Restricted Purchase Agreement between certain officers of The Actava Group Inc. and The
Actava Group Inc. (incorporated by reference from Metromedia International Group's Annual Report on
Form 10-K for the year ended December 31, 1991).
10.14*** Form of Indemnification Agreement between Actava and certain of its directors and executive officers
(incorporated by reference from Metromedia International Group's Annual Report on Form 10-K for the
year ended December 31, 1993).
10.21*** Environmental Indemnity Agreement dated as of December 6, 1994 between The Actava Group Inc. and
Roadmaster (incorporated by reference from Metromedia International Groups Annual Report on Form 10-K
for the year ended December 31, 1994).
10.37*** Management Agreement dated November 1, 1995 between Metromedia Company and Metromedia International
Group, Inc. (incorporated by reference from Metromedia International Group's Annual Report on Form
10-K for the year ended December 31, 1995).
10.38*** The Metromedia International Group, Inc. 1996 Incentive Stock Plan (incorporated by reference from
Metromedia International Group's Proxy Statement dated August 6, 1996).
10.39*** License Agreement dated November 1, 1995 between Metromedia Company and Metromedia International
Group, Inc. (incorporated by reference from Metromedia International Group's Annual Report on Form
10-K for the year ended December 31, 1995).
10.41*** Metromedia International Telecommunications, Inc. 1994 Stock Plan (incorporated by reference from
Metromedia International Group's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996).
10.45*** Loan and Security Agreement, dated November 11, 1998 among Snapper, Inc. the lenders named therein
and Fleet Capital Corporation, as agent (incorporated by reference from Metromedia International
Group's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998).
10.46*** Limited Guaranty Agreement dated November 11, 1998 by Metromedia International Group, Inc. in favor
of Fleet Capital Corporation (incorporated by reference from Metromedia International Group's Annual
Report on Form 10-K for the year ended December 31, 1998).
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.47*** Amendment No. 1 to License Agreement dated June 13, 1996 between Metromedia Company and Metromedia
International Group, Inc. (incorporated by reference from Metromedia International Group's Annual
Report on Form 10-K for the year ended December 31, 1996).
10.48*** Amendment No. 1 to Management Agreement dated as of January 1, 1997 between Metromedia Company and
Metromedia International Group, Inc. (incorporated by reference from Metromedia International Group's
Annual Report on Form 10-K for the year ended December 31, 1996).
10.49*** Amended and Restated Agreement and Plan of Merger, dated as of May 17, 1996 between Metromedia
International Group, Inc., MPCA Merger Corp. and Bradley Krevoy and Steven Stabler and Motion Picture
Corporation of America (incorporated by reference from Metromedia International Group's Annual Report
on Form 10-K for the year ended December 31, 1996).
10.50*** Asset Purchase Agreement dated as of December 17, 1997 (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1997).
10.51*** Voting Agreement, dated as of May 18, 1999, by and among Metromedia International Group, News America
Incorporated, News PLD LLC and Metromedia Company (incorporated by reference from Metromedia
International Group's Current Report on Form 8-K for the event dated May 18, 1999).
10.52*** Registration Rights Agreement, dated as of May 18, 1999, among Metromedia International Group, News
America Incorporated and News PLD LLC (incorporated by reference from Metromedia International
Group's Current Report on Form 8-K for the event dated May 18, 1999).
10.53*** Agreement to Consent and Exchange, dated as of May 18, 1999, by and among Metromedia International
Group, PLD Telekom Inc. and certain note holders named therein (incorporated by reference from
Metromedia International Group's Current Report on Form 8-K for the event dated May 18, 1999).
10.54*** Letter Agreement, dated as of May 18, 1999, by and among Metromedia International Group, The
Travelers Insurance Company and The Travelers Indemnity Company (incorporated by reference from
Metromedia International Group's Current Report on Form 8-K for the event dated May 18, 1999).
10.55*** Letter Agreement, dated as of May 18, 1999, between Metromedia International Group and News America
Incorporated (incorporated by reference from Metromedia International Group's Current Report on Form
8-K for the event dated May 18, 1999).
10.56*** Modification Agreement, dated as of May 18, 1999, among PLD Telekom, Metromedia International Group,
Technocom Limited, Plicom Limited, Elite International Limited, Mark Klabin and Boris Antoniuk
(incorporated by reference from Metromedia International Group's Current Report on Form 8-K for the
event dated May 18, 1999).
10.57*** Modification Agreement, dated as of May 18, 1999, among PLD Telekom, Metromedia International Group,
Technocom Limited, Elite International Limited and Boris Antoniuk (incorporated by reference from
Metromedia International Group's Current Report on Form 8-K for the event dated May 18, 1999).
10.58*** Bridge Loan Agreement, dated as of May 18, 1999, between PLD Telekom Inc. and Metromedia
International Group (incorporated by reference from Metromedia International Group's Current Report
on Form 8-K for the event dated May 18, 1999).
10.59*** Pledge Agreement, dated as of May 18, 1999, between Metromedia International Group and PLD Telekom
Inc. (incorporated by reference from Metromedia International Group's Current Report on Form 8-K for
the event dated May 18, 1999).
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
12.1*** Statement Regarding Computation of Ratios of Earnings to Fixed Charges.
21.1*** List of Subsidiaries of Metromedia International Group, Inc. (incorporated by reference from
Metromedia International Group's Annual Report on Form 10-K for the fiscal year ended March 31,
1996).
23.1* Consent of KPMG LLP.
23.2* Consent of KPMG LLP.
23.3* Consent of KPMG LLP.
23.4* Consent of KPMG LLP.
23.5* Consent of KPMG.
23.6* Consent of KPMG.
23.7* Consent of KPMG.
23.8* Consent of KPMG.
23.9* Consent of Moore Stephens.
23.10* Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in the opinion filed as Exhibit 5.1 to
this Registration Statement).
23.11* Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in the opinion filed as Exhibit 8.1 to
this Registration Statement).
24.1*** Power of Attorney.
25.1*** Statement of Eligibility of U.S. Bank Trust National Association, as Trustee, on Form T-1 with
respect to the Indenture between Metromedia International Group and U.S. Bank Trust National
Association, as Trustee.
99.1* Form of Letter of Transmittal.
99.2* Form of Notice of Guaranteed Delivery.
99.3* Form of Exchange Agent Agreement.
</TABLE>
- ------------------------
* Filed herewith
*** Previously Filed
(b) Financial Data Schedules
Schedule II--Condensed financial information of the registrant, and Schedule
V--Valuation and qualifying accounts are incorporated by reference from
Metromedia International Group's annual report on Form 10-K for the fiscal year
ended December 31, 1998.
ITEM 22. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 20, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
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<PAGE>
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the Securities
Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrants hereby undertake as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
Metromedia International Group undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other Items of the applicable form.
The undersigned registrants undertake that every prospectus (i) that is
filed pursuant to the paragraph immediately preceding, or (ii) that purports to
meet the requirements of section 10(a)(3) of the Securities Act of 1933 and is
used in connection with an offering of securities subject to Rule 415, will be
filed as part of an amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes: (i) to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This undertaking includes information contained in
documents filed subsequent to the effective date of this registration statement
through the date of responding to the request.
II-7
<PAGE>
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction and the
company being acquired involved therein, that was not the subject of and
included in this registration statement when it became effective.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 2 to registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York on the 24th day of September, 1999.
<TABLE>
<S> <C> <C>
METROMEDIA INTERNATIONAL GROUP, INC.
By: /s/ SILVIA KESSEL
------------------------------------------
Name: Silvia Kessel
Title: Executive Vice President,
Chief Financial Officer,
Treasurer and Director
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons in the
capacities indicated, on September 24, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S>
*
- ------------------------------ Chairman of the Board of
John W. Kluge Directors
Vice Chairman of the Board
* of Directors, President
- ------------------------------ and Chief Executive
Stuart Subotnick Officer (Principal
Executive Officer)
Executive Vice President,
/s/ SILVIA KESSEL Chief Financial Officer,
- ------------------------------ Treasurer and Director
Silvia Kessel (Principal Financial
Officer)
* Executive Vice President,
- ------------------------------ General Counsel,
Arnold L. Wadler Secretary and Director
*
- ------------------------------ Vice President (Principal
Vincent D. Sasso, Jr. Accounting Officer)
*
- ------------------------------ Director
John P. Imlay, Jr.
*
- ------------------------------ Director
Clark A. Johnson
</TABLE>
II-9
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S>
*
- ------------------------------ Director
Carl E. Sanders
*
- ------------------------------ Director
Richard J. Sherwin
*
- ------------------------------ Director
Leonard White
</TABLE>
<TABLE>
<S> <C>
*By: /s/ SILVIA KESSEL
-------------------------------
Name: Silvia Kessel
Title: Attorney-in-Fact
</TABLE>
II-10
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
2.1*** Agreement and Plan of Merger, dated as of May 18, 1999, by and among Metromedia International Group,
Moscow Communications, Inc. and PLD Telekom Inc. (incorporated by reference from Metromedia
International Group's current report on Form 8-K filed with the Securities and Exchange Commission
for the event dated May 18, 1999).
2.3*** Amended and Restated Agreement and Plan of Merger dated as of September 27, 1995 by and among The
Actava Group Inc., Orion Pictures Corporation, MCEG Sterling Incorporated, Metromedia International
Telecommunications, Inc., OPG Merger Corp. and MITI Merger Corp. and exhibits thereto (incorporated
by reference from Metromedia International Group's current report on Form 8-K for the event occurring
on September 27, 1995).
2.5*** Agreement and Plan of Merger dated as of January 31, 1996 by and among Metromedia International
Group, Inc., The Samuel Goldwyn Company and SGC Merger Corp. and exhibits thereto (incorporated by
reference from Metromedia International Group's current report on Form 8-K for the event dated
January 31, 1996).
3.1*** Restated Certificate of Incorporation of Metromedia International Group, Inc. (incorporated by
reference from Metromedia International Group's Registration Statement on Form S-3 (Registration No.
33-63853)).
3.2*** Restated By-laws of Metromedia International Group, Inc. (incorporated by reference from Metromedia
International Group's Registration Statement on Form S-3 (Registration No. 33-63853)).
3.3*** Certificate of Amendment to the Restated Certificate of Incorporation of Metromedia International
Group, Inc. (incorporated by reference from Metromedia International Group's Schedule 14A, dated
August 6, 1996, for the annual meeting of stockholders dated August 29, 1996.
4.10* Form of Indenture for the 10 1/2% Senior Discount Notes due 2007 of Metromedia International Group,
between Metromedia International Group and U.S. Bank Trust National Association as Trustee.
4.11* Form of Series A and B 10 1/2% Senior Discount Notes due 2007 of Metromedia International Group.
5.1* Opinion of Paul, Weiss, Rifkind, Wharton & Garrison regarding the legality of the notes under New
York law.
8.1* Opinion of Paul, Weiss, Rifkind, Wharton & Garrison regarding certain federal income tax matters.
10.1*** 1982 Stock Option Plan of The Actava Group Inc. (incorporated by reference from Metromedia
International Group's proxy statement dated March 31, 1982).
10.2*** 1989 Stock Option Plan of The Actava Group Inc. (incorporated by reference from Metromedia
International Group's proxy statement dated March 31, 1989).
10.3*** 1969 Restricted Stock Plan of The Actava Group Inc. (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1990).
10.4*** 1991 Non-Employee Director Stock Option Plan (incorporated by reference from Metromedia International
Group's Annual Report on From 10-K for the year ended December 31, 1991).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.5*** Amendment to 1991 Non-Employee Director Stock Option Plan (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1992).
10.6*** Snapper Power Equipment Profit Sharing Plan (incorporated by reference from Metromedia International
Group's Annual Report on Form 10-K for the year ended December 31, 1987).
10.7*** Retirement Plan executed November 1, 1990, as amended effective January 1, 1989 (incorporated by
reference from Metromedia International Group's Annual Report on Form 10-K for the year ended
December 31, 1990).
10.8*** Supplemental Retirement Plan of The Actava Group Inc. (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1983).
10.9*** Supplemental Executive Medical Reimbursement Plan (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1990).
10.10*** Amendment to Supplemental Retirement Plan of The Actava Group Inc., effective April 1, 1992
(incorporated by reference from Metromedia International Group's Annual Report on Form 10-K for the
year ended December 31, 1991).
10.11*** 1992 Officer and Director Stock Purchase Plan (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1991).
10.12*** Form of Restricted Purchase Agreement between certain officers of The Actava Group Inc. and The
Actava Group Inc. (incorporated by reference from Metromedia International Group's Annual Report on
Form 10-K for the year ended December 31, 1991).
10.14*** Form of Indemnification Agreement between Actava and certain of its directors and executive officers
(incorporated by reference from Metromedia International Group's Annual Report on Form 10-K for the
year ended December 31, 1993).
10.21*** Environmental Indemnity Agreement dated as of December 6, 1994 between The Actava Group Inc. and
Roadmaster (incorporated by reference from Metromedia International Groups Annual Report on Form 10-K
for the year ended December 31, 1994).
10.37*** Management Agreement dated November 1, 1995 between Metromedia Company and Metromedia International
Group, Inc. (incorporated by reference from Metromedia International Group's Annual Report on Form
10-K for the year ended December 31, 1995).
10.38*** The Metromedia International Group, Inc. 1996 Incentive Stock Plan (incorporated by reference from
Metromedia International Group's Proxy Statement dated August 6, 1996).
10.39*** License Agreement dated November 1, 1995 between Metromedia Company and Metromedia International
Group, Inc. (incorporated by reference from Metromedia International Group's Annual Report on Form
10-K for the year ended December 31, 1995).
10.41*** Metromedia International Telecommunications, Inc. 1994 Stock Plan (incorporated by reference from
Metromedia International Group's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.45*** Loan and Security Agreement, dated November 11, 1998 among Snapper, Inc. the lenders named therein
and Fleet Capital Corporation, as agent (incorporated by reference from Metromedia International
Group's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998).
10.46*** Limited Guaranty Agreement dated November 11, 1998 by Metromedia International Group, Inc. in favor
of Fleet Capital Corporation (incorporated by reference from Metromedia International Group's Annual
Report on Form 10-K for the year ended December 31, 1998).
10.47*** Amendment No. 1 to License Agreement dated June 13, 1996 between Metromedia Company and Metromedia
International Group, Inc. (incorporated by reference from Metromedia International Group's Annual
Report on Form 10-K for the year ended December 31, 1996).
10.48*** Amendment No. 1 to Management Agreement dated as of January 1, 1997 between Metromedia Company and
Metromedia International Group, Inc. (incorporated by reference from Metromedia International Group's
Annual Report on Form 10-K for the year ended December 31, 1996).
10.49*** Amended and Restated Agreement and Plan of Merger, dated as of May 17, 1996 between Metromedia
International Group, Inc., MPCA Merger Corp. and Bradley Krevoy and Steven Stabler and Motion Picture
Corporation of America (incorporated by reference from Metromedia International Group's Annual Report
on Form 10-K for the year ended December 31, 1996).
10.50*** Asset Purchase Agreement dated as of December 17, 1997 (incorporated by reference from Metromedia
International Group's Annual Report on Form 10-K for the year ended December 31, 1997).
10.51*** Voting Agreement, dated as of May 18, 1999, by and among Metromedia International Group, News America
Incorporated, News PLD LLC and Metromedia Company (incorporated by reference from Metromedia
International Group's Current Report on Form 8-K for the event dated May 18, 1999).
10.52*** Registration Rights Agreement, dated as of May 18, 1999, among Metromedia International Group, News
America Incorporated and News PLD LLC (incorporated by reference from Metromedia International
Group's Current Report on Form 8-K for the event dated May 18, 1999).
10.53*** Agreement to Consent and Exchange, dated as of May 18, 1999, by and among Metromedia International
Group, PLD Telekom Inc. and certain note holders named therein (incorporated by reference from
Metromedia International Group's Current Report on Form 8-K for the event dated May 18, 1999).
10.54*** Letter Agreement, dated as of May 18, 1999, by and among Metromedia International Group, The
Travelers Insurance Company and The Travelers Indemnity Company (incorporated by reference from
Metromedia International Group's Current Report on Form 8-K for the event dated May 18, 1999).
10.55*** Letter Agreement, dated as of May 18, 1999, between Metromedia International Group and News America
Incorporated (incorporated by reference from Metromedia International Group's Current Report on Form
8-K for the event dated May 18, 1999).
10.56*** Modification Agreement, dated as of May 18, 1999, among PLD Telekom, Metromedia International Group,
Technocom Limited, Plicom Limited, Elite International Limited, Mark Klabin and Boris Antoniuk
(incorporated by reference from Metromedia International Group's Current Report on Form 8-K for the
event dated May 18, 1999).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.57*** Modification Agreement, dated as of May 18, 1999, among PLD Telekom, Metromedia International Group,
Technocom Limited, Elite International Limited and Boris Antoniuk (incorporated by reference from
Metromedia International Group's Current Report on Form 8-K for the event dated May 18, 1999).
10.58*** Bridge Loan Agreement, dated as of May 18, 1999, between PLD Telekom Inc. and Metromedia
International Group (incorporated by reference from Metromedia International Group's Current Report
on Form 8-K for the event dated May 18, 1999).
10.59*** Pledge Agreement, dated as of May 18, 1999, between Metromedia International Group and PLD Telekom
Inc. (incorporated by reference from Metromedia International Group's Current Report on Form 8-K for
the event dated May 18, 1999).
12.1*** Statement Regarding Computation of Ratios of Earnings to Fixed Charges.
21.1*** List of Subsidiaries of Metromedia International Group, Inc. (incorporated by reference from
Metromedia International Group's Annual Report on Form 10-K for the fiscal yeart ended March 31,
1996).
23.1* Consent of KPMG LLP.
23.2* Consent of KPMG LLP.
23.3* Consent of KPMG LLP.
23.4* Consent of KPMG LLP.
23.5* Consent of KPMG.
23.6* Consent of KPMG.
23.7* Consent of KPMG.
23.8* Consent of KPMG.
23.9* Consent of Moore Stephens.
23.10* Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in the opinion filed as Exhibit 5.1 to
this Registration Statement).
23.11* Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in the opinion filed as Exhibit 8.1 to
this Registration Statement).
24.1*** Power of Attorney.
25.1*** Statement of Eligibility of U.S. Bank Trust National Association, as Trustee, on Form T-1 with
respect to the Indenture between Metromedia International Group and U.S. Bank Trust National
Association, as Trustee.
99.1* Form of Letter of Transmittal.
99.2* Form of Notice of Guaranteed Delivery.
99.3* Form of Exchange Agent Agreement.
</TABLE>
- ------------------------
* Filed herewith
*** Previously Filed
<PAGE>
EXHIBIT 4.10
METROMEDIA INTERNATIONAL GROUP, INC.
$210,631,376
SERIES A AND SERIES B
10 1/2% SENIOR DISCOUNT NOTES DUE 2007
INDENTURE
Dated as of September , 1999
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE #
<S> <C>
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE......................................................1
SECTION 1.1 DEFINITIONS.........................................................................1
SECTION 1.2 OTHER DEFINITIONS..................................................................20
SECTION 1.3 TRUST INDENTURE ACT DEFINITIONS....................................................20
SECTION 1.4 RULES OF CONSTRUCTION..............................................................21
ARTICLE 2
THE NOTES......................................................................................21
SECTION 2.1 FORM AND DATING....................................................................21
SECTION 2.2 EXECUTION AND AUTHENTICATION.......................................................22
SECTION 2.3 REGISTRAR AND PAYING AGENT.........................................................23
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST................................................23
SECTION 2.5 HOLDER LISTS.......................................................................24
SECTION 2.6 TRANSFER AND EXCHANGE..............................................................24
SECTION 2.7 REPLACEMENT NOTES..................................................................37
SECTION 2.8 OUTSTANDING NOTES..................................................................38
SECTION 2.9 TREASURY NOTES.....................................................................38
SECTION 2.10 TEMPORARY NOTES...................................................................38
SECTION 2.11 CANCELLATION......................................................................39
SECTION 2.12 DEFAULTED INTEREST................................................................39
SECTION 2.13 CUSIP NUMBERS.....................................................................40
ARTICLE 3
REDEMPTION AND PREPAYMENT......................................................................40
SECTION 3.1 NOTICES TO TRUSTEE................................................................40
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.................................................40
SECTION 3.3 NOTICE OF REDEMPTION..............................................................41
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION....................................................42
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.......................................................42
SECTION 3.6 NOTES REDEEMED IN PART............................................................42
SECTION 3.7 OPTIONAL REDEMPTION...............................................................43
SECTION 3.8 MANDATORY REDEMPTION..............................................................43
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION
OF EXCESS PROCEEDS................................................................43
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE #
<S> <C>
ARTICLE 4
COVENANTS......................................................................................45
SECTION 4.1 PAYMENT OF NOTES..................................................................45
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY...................................................46
SECTION 4.3 REPORTS...........................................................................46
SECTION 4.4 COMPLIANCE CERTIFICATE............................................................47
SECTION 4.5 TAXES.............................................................................48
SECTION 4.6 STAY, EXTENSION AND USURY LAWS....................................................48
SECTION 4.7 RESTRICTED PAYMENTS...............................................................48
SECTION 4.8 LIMITATION ON RESTRICTIONS ON
DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES........................................51
SECTION 4.9 LIMITATION ON THE INCURRENCE OF
INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK...................................................................51
SECTION 4.10 LIMITATION ON THE INCURRENCE OF
INDEBTEDNESS BY THE PLD COMPANIES.................................................53
SECTION 4.11 LIMITATION ON ASSET SALES.........................................................55
SECTION 4.12 LIMITATION ON TRANSACTIONS WITH
AFFILIATES........................................................................57
SECTION 4.13 LIMITATION ON LIENS...............................................................58
SECTION 4.14 CORPORATE EXISTENCE...............................................................58
SECTION 4.15 CHANGE OF CONTROL.................................................................58
SECTION 4.16 PAYMENTS FOR CONSENT..............................................................60
SECTION 4.17 MONEY FOR PAYMENTS TO BE HELD IN TRUST............................................60
SECTION 4.18 ADDITIONAL PLD ASSETS.............................................................61
SECTION 4.19 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.....................................62
ARTICLE 5
SUCCESSORS.....................................................................................62
SECTION 5.1 MERGER, CONSOLIDATION, OR SALE OF ASSETS..........................................62
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED.................................................63
ARTICLE 6
DEFAULTS AND REMEDIES..........................................................................64
SECTION 6.1 EVENTS OF DEFAULT.................................................................64
SECTION 6.2 ACCELERATION......................................................................66
SECTION 6.3 OTHER REMEDIES....................................................................66
SECTION 6.4 WAIVER OF PAST DEFAULTS...........................................................66
SECTION 6.5 CONTROL BY MAJORITY...............................................................67
SECTION 6.6 LIMITATION ON SUITS...............................................................67
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE
PAYMENT...........................................................................68
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE #
<S> <C>
SECTION 6.8 COLLECTION SUIT BY TRUSTEE........................................................68
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM..................................................68
SECTION 6.10 PRIORITIES........................................................................69
SECTION 6.11 UNDERTAKING FOR COSTS.............................................................69
ARTICLE 7
TRUSTEE........................................................................................70
SECTION 7.1 DUTIES OF TRUSTEE.................................................................70
SECTION 7.2 RIGHTS OF TRUSTEE.................................................................71
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE......................................................72
SECTION 7.4 TRUSTEE'S DISCLAIMER..............................................................72
SECTION 7.5 NOTICE OF DEFAULTS................................................................73
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS
OF THE NOTES......................................................................73
SECTION 7.7 COMPENSATION AND INDEMNITY........................................................73
SECTION 7.8 REPLACEMENT OF TRUSTEE............................................................74
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC..................................................76
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.....................................................76
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE COMPANY...............................................................76
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE.............................................................76
SECTION 8.1 DISCHARGE OF LIABILITY ON NOTES;
DEFEASANCE........................................................................76
SECTION 8.2 CONDITIONS TO DEFEASANCE..........................................................77
SECTION 8.3 APPLICATION OF TRUST MONEY........................................................79
SECTION 8.4 REPAYMENT TO COMPANY..............................................................79
SECTION 8.5 INDEMNITY FOR U.S. GOVERNMENT
OBLIGATIONS.......................................................................80
SECTION 8.6 REINSTATEMENT.....................................................................80
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER...............................................................80
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES...............................................80
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES..................................................81
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT...............................................83
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.................................................83
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES..................................................84
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC...................................................84
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE #
<S> <C>
ARTICLE 10
SATISFACTION AND DISCHARGE.....................................................................84
SECTION 10.1 SATISFACTION AND DISCHARGE
OF INDENTURE.....................................................................84
SECTION 10.2 APPLICATION OF TRUST MONEY.......................................................85
ARTICLE 11
MISCELLANEOUS..................................................................................86
SECTION 11.1 TRUST INDENTURE ACT CONTROLS.....................................................86
SECTION 11.2 NOTICES..........................................................................86
SECTION 11.3 COMMUNICATION BY HOLDERS OF NOTES WITH
OTHER HOLDERS OF NOTES...........................................................87
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT........................................................................87
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR
OPINION..........................................................................88
SECTION 11.6 RULES BY TRUSTEE AND AGENTS......................................................88
SECTION 11.7 NO PERSONAL LIABILITY OF DIRECTORS,
OFFICERS, EMPLOYEES AND SHAREHOLDERS.............................................88
SECTION 11.8 GOVERNING LAW....................................................................89
SECTION 11.9 CONSENT TO JURISDICTION AND SERVICE..............................................89
SECTION 11.10 NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS.......................................................................89
SECTION 11.11 SUCCESSORS.......................................................................89
SECTION 11.12 SEVERABILITY.....................................................................90
SECTION 11.13 COUNTERPART ORIGINALS......,.....................................................90
SECTION 11.14 TABLE OF CONTENTS, HEADINGS, ETC.................................................90
EXHIBIT A
FORM OF NOTE .................................................................................A-1
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER ..............................................................B-1
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE...............................................................C-1
</TABLE>
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture Act Section
Indenture Section
<TABLE>
<S> <C>
310(a)(1).............................................................................................7.10
(a)(2)................................................................................................7.10
(a)(3)................................................................................................N.A.
(a)(4)................................................................................................N.A.
(a)(5)................................................................................................7.10
(b)...................................................................................................7.10
(c)...................................................................................................N.A.
311(a)................................................................................................7.11
(b)...................................................................................................7.11
(i)(c)................................................................................................N.A.
312(a).................................................................................................2.5
(b)...................................................................................................12.3
(c)...................................................................................................12.3
313(a).................................................................................................7.6
(b)(2).................................................................................................7.7
(c)..............................................................................................7.6; 12.2
(d)....................................................................................................7.6
314(a)...........................................................................................4.3; 12.2
(c)(1)................................................................................................12.4
(c)(2)................................................................................................12.4
(c)(3)................................................................................................N.A.
(e)...................................................................................................12.5
(f)...................................................................................................N.A.
315(a).................................................................................................7.1
(b)..............................................................................................7.5; 12.2
(A)(c).................................................................................................7.1
(d)....................................................................................................7.1
(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
</TABLE>
N.A. means not applicable
*This Cross-Reference Table is not, for any purposes, part of the Indenture.
<PAGE>
INDENTURE, dated as of September __, 1999 by and between
Metromedia International Group, Inc., a Delaware corporation (the "Company") and
U.S. Bank Trust National Association, a national banking association, as
trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the Series
A 10 1/2% Senior Discount Notes due 2007 (the "Series A Notes") and the Series B
10 1/2% Senior Discount Notes due 2007 (the "Series B Notes" and, together with
the Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS
"Accreted Value" means as of the date of determination prior
to March __, 2002, with respect to any Note, the sum of (i) the initial offering
price of this Note and (ii) the portion of the excess of the principal amount of
such Note over such initial offering price which shall have been accreted
thereon through such date, such amount to be so accreted on a daily basis at the
rate of 10 1/2% per annum, compounded semi-annually on each Interest Payment
Date from the Issue Date through the date of determination, computed on the
basis of a 360 day year of twelve 30-day months. The Accreted Value of any Note
on or after March __, 2002 shall be 100% of the principal amount at Stated
Maturity thereof.
"Additional PLD Assets" means at least $15,000,000 worth of
assets which would be classified as "property and equipment" on PLD Telekom's
consolidated balance sheet and which will be acquired by one of the PLD
Companies in the period between May 18, 1999 through the second anniversary of
the Issue Date, and shall specifically include capacity in transatlantic and
European cables.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling, controlled by or under direct or indirect
common control with this specified Person. For purposes of this definition,
"control" when used with respect to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of this Person, whether through the ownership of voting securities, by
agreement or otherwise; and the terms "controlling," "controlled by" and "under
common control with" have the meanings correlative to the foregoing; provided,
that the ability to vote 10% or more of the Voting Stock of this Person will
constitute "control" under this Indenture.
"Agent" means any Registrar, Paying Agent or co-registrar.
<PAGE>
2
"Agreement to Exchange and Consent" means the Agreement to
Exchange and Consent, dated as of May 18, 1999, by and among the Company, PLD
Telekom and certain holders of notes of PLD Telekom named on the signature pages
thereof.
"ALTEL" means ALTEL, a Kazakh closed joint stock company
(known until May 1998 as BECET International).
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary that apply to such transfer or exchange.
"Asset Sale" means any sale, issuance, conveyance, transfer,
lease or other disposition, directly or indirectly, in one or a series of
transactions, of: (i) any Capital Stock of any Subsidiary, (ii) all or
substantially all of the properties and assets of any division or line of
business of the Company or its Subsidiaries, or (iii) any other properties and
assets of the Company or any of its Subsidiaries other than in the ordinary
course of business; provided, however, that the term "Asset Sale" will not
include any sale or transfer of properties and assets (A) by the Company to any
of its Restricted Subsidiaries or by any of its Restricted Subsidiaries to the
Company or any other Restricted Subsidiary, (B) that constitute obsolete
equipment in the ordinary course of business, (C) the Fair Market Value of which
in the aggregate does not exceed $10 million in any transaction or series of
related transactions, (D) that is made in accordance with the provisions of
Section 4.7 herein, (E) which constitutes the granting of any Permitted Lien or
(vi) that are transferred in exchange for Related Assets.
"Attributable Indebtedness" means with respect to any Sale and
Leaseback Transaction of any Person, as at the time of determination, the
greater of (i) the capitalized amount in respect of such transaction that would
appear on the balance sheet of such Person in accordance with GAAP and (ii) the
present value (discounted at a rate consistent with accounting guidelines, as
determined in good faith by such Person) of the payments during the remaining
term of the lease (including any period for which such lease has been extended
or may, at the option of the lessor, be extended) or until the earliest date on
which the lessee may terminate such lease without penalty or upon payment of a
penalty (in which case the rental payments shall include such penalty).
"Average Life to Stated 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 scheduled payment
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
aggregate principal amount of this Indebtedness.
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3
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the board of directors or other
governing body of the Company or, if the Company is owned or managed by a single
entity, the board of directors or other governing body of such entity, or, in
either case, any committee thereof duly authorized to act on behalf of such
board or governing body.
"Board Resolution" means a duly authorized resolution of the
Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Contribution" means any contribution to the equity of
the Company from a direct or indirect parent of the Company for which no
consideration other than the issuance of common stock with no redemption rights
and no special preferences, privileges or voting rights is given.
"Capital Lease Obligations" means any obligation of a Person
and its Subsidiaries on a consolidated basis under any capital lease of real or
personal property that is required to be classified and accounted for as a
capital lease obligation for financial reporting purposes in accordance with
GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents,
however designated and whether or not voting, of corporate stock, including each
class of common stock and Preferred Stock of that Person, and (ii) with respect
to any Person that is not a corporation, any and all partnership, membership or
other Equity Interest of that Person.
"Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States Government or any agency or
instrumentality thereof, having maturities of not more than one year from the
date of acquisition, (ii) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a credit
rating of "A" or better from either Standard & Poor's Ratings Group or Moody's
Investors Service, Inc., (iii) certificates of deposit, time deposits,
Eurodollar time deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition thereof issued
by any commercial bank the long-term debt of which is rated at the time of
acquisition thereof at least "A" or the equivalent thereof by Standard & Poor's
Rating Group, or "A" or the equivalent thereof by Moody's Investors Service,
Inc., and having capital and surplus in excess of $500 million, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types
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4
described in clauses (i), (ii) and (iii) entered into with any bank meeting the
qualifications specified in clause (iii) above, (v) commercial paper rated at
the time of acquisition thereof at least "A-2" or the equivalent thereof by
Standard & Poor's Rating Group or "P-2" or the equivalent thereof by Moody's
Investors Service, Inc., or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of investments, and in either case maturing within 270 days
after the date of their acquisition, and (vi) interests in any investment
company which invests solely in instruments of the type specified in clauses (i)
through (v) above.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, exchange or other transfer other than by way of
merger or consolidation, in one or a series of related transactions, by the
Company of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole to any Person within the meaning of
sections 13(d) and 14(d) of the Exchange Act, other than a Wholly Owned
Subsidiary of the Company; (ii) a merger or consolidation in which the
shareholders of the Company immediately prior to the merger or consolidation do
not hold a majority of the voting power of the Company immediately after the
merger or consolidation; (iii) any person within the meaning of sections 13(d)
and 14(d) of the Exchange Act, other than one or more Permitted Holders becomes
the beneficial owner, directly or indirectly, of more than 50% of the total
voting power of all classes of Voting Stock of the Company or its successor (for
the purposes of this definition, beneficial ownership has the meaning given to
such term in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
will be deemed to have beneficial ownership of all shares that such Person has
the right to acquire, whether this right is exercisable immediately or only
after the passage of time); (iv) the first day on which a majority of the
members of the Board of Directors are not Continuing Directors; or (v) the
liquidation or dissolution of, or the adoption by the stockholders of a plan for
the liquidation or dissolution of, the Company, other than in a transaction
which complies with the provisions set forth in Article 5 herein; PROVIDED,
however, that the sale or disposition or other transfer in one or a series of
related transactions of (x) all or substantially all of the assets or Voting
Stock of Snapper, Inc. ("Snapper") or (y) all or any portion of the PLD Assets
will not be deemed to be a Change of Control under this Indenture. Any Asset
Sale of any of the PLD Assets shall be governed by the conditions set forth in
Section 4.11 herein.
"Company" means Metromedia International Group, Inc., a
Delaware corporation, and any and all successors thereto.
"Consolidated Income Tax Expense" for any period means the
aggregate amounts of the provisions of income taxes of the Company and its
Subsidiaries for this period calculated on a consolidated basis in accordance
with GAAP.
<PAGE>
5
"Consolidated Interest Expense" for any Person means, without
duplication, for any period, the sum of: (i) the interest expense of such Person
and its Subsidiaries for such period, on a consolidated basis in accordance with
GAAP, including without limitation: (A) amortization of debt discount, (B) the
net costs associated with Interest Rate Agreements and Currency Hedging
Agreements, (C) the interest portion of any deferred payment obligation, and (D)
accrued interest, plus (ii) the interest component of Capital Lease Obligations
paid, accrued, and/or scheduled to be paid or accrued by such Person and its
Consolidated Subsidiaries, plus (iii) the aggregate amount for such period of
cash dividends paid on any Disqualified Capital Stock or Preferred Stock of such
Person and its Consolidated Subsidiaries, in each case, on a consolidated basis
in accordance with GAAP.
"Consolidated Leverage Ratio" means, as to any Person, the
ratio of: (i) the total consolidated Indebtedness of the Company and its
Consolidated Subsidiaries as of the date of calculation (the "Determination
Date") to (ii) two times the Consolidated Operating Cash Flow of the Company and
its consolidated Subsidiaries for the most recent two fiscal quarters for which
financial information is available (the "Reference Period") immediately
preceding the Determination Date. For purposes of this definition, the
Consolidated Operating Cash Flow will be calculated in accordance with GAAP and
on a pro forma basis to: (i) include the results of any Person that is a
Consolidated Subsidiary on the Determination Date or that would become a
Consolidated Subsidiary in connection with the transaction that requires the
determination of the Consolidated Operating Cash Flow, (ii) exclude any Person
that is not a Consolidated Subsidiary on the Determination Date or that would
cease to be a Consolidated Subsidiary in connection with the transaction that
requires the determination of the Consolidated Operating Cash Flow, and (iii)
include or exclude, as the case may be, the results of any operating business
acquired or disposed of by the Company or a Consolidated Subsidiary of the
Company in the Reference Period.
"Consolidated Net Income" means, for any period, the net
income (loss) of the Company and its Consolidated Subsidiaries determined in
accordance with GAAP; provided, however, that there shall not be included in
such Consolidated Net Income: (i) any net income (loss) of any Person if such
Person is not a Subsidiary, except that (A) subject to the limitations contained
in (iv) below, the Company's equity in the net income of any such Person for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during such period
to the Company or a Subsidiary of the Company as a dividend or other
distribution (subject, in the case of a dividend or other distribution to a
Restricted Subsidiary, to the limitations contained in clause (iii) below) and
(B) the Company's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in determining such
Consolidated Net Income to the extent such loss has been funded with cash from
the Company or a Restricted Subsidiary; (ii) any net income (loss) of any Person
acquired by the Company or a Subsidiary of the Company in a pooling of
<PAGE>
6
interests transaction for any period prior to the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such Restricted Subsidiary
is subject to restrictions, directly or indirectly, on the payment of dividends
or the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that (A) subject to the limitations contained
in (iv) below, the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash that could have been distributed by such
Restricted Subsidiary during such period to the Company or another Restricted
Subsidiary as a dividend (subject, in the case of a dividend or other
distribution to another Restricted Subsidiary, to the limitation contained in
this clause) and (B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income; (iv) any gain (loss) realized upon the sale or other disposition of
any property, plant or equipment of the Company or its Consolidated Subsidiaries
(including pursuant to any Sale and Leaseback Transaction) which is not sold or
otherwise disposed of in the ordinary course of business and any gain (loss)
realized upon the sale or other disposition of any Capital Stock of any Person;
(v) any extraordinary gain or loss and (vi) the cumulative effect of a change in
accounting principles.
"Consolidated Operating Cash Flow" means, with respect to any
period, the Consolidated Net Income for this period increased, to the extent
that any of the following items were deducted in calculating the Consolidated
Net Income but without duplication, by: (i) the Consolidated Income Tax Expense
for this period, (ii) the Consolidated Interest Expense for this period, whether
paid or accrued and whether or not capitalized, and (iii) depreciation,
amortization, minority interest and any other non-cash items for this period
other than any non-cash item which requires the accrual of, or reserve for, cash
charges for any future period, of the Company and any of its Consolidated
Subsidiaries.
"Consolidated Subsidiary" means, for any Person, each
Restricted Subsidiary of such Person (whether now existing or hereafter created
or acquired) the financial statements of which are consolidated for financial
statement reporting purposes with the financial statements of such Person in
accordance with GAAP.
"Continuing Director" means (i) any of the persons that serve
as directors on the Board of Directors on the Issue Date and (ii) any new
director whose election or appointment to the Board of Directors or whose
nomination for election by the stockholders of the Company was approved by the
Continuing Directors then in office; provided that Continuing Directors shall in
no event, whether pursuant to clause (i) or (ii), include the persons nominated
by News America Incorporated to serve as directors under the Agreement and Plan
of Merger, dated as of May 18, 1999, by and among the Company, Moscow
Communications, Inc. and PLD Telekom.
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7
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 11.2 herein or such other address as
to which the Trustee may give notice to the Company.
"Credit Facility" means one or more credit agreements, loan
agreements or similar facilities, secured or unsecured, entered into from time
to time by the Company or any of its Restricted Subsidiaries, and including any
related notes, Guarantees, collateral documents, instruments and agreements
executed in connection therewith, as the same may be amended, supplemented,
modified, restated, refinanced or replaced from time to time.
"Cumulative Consolidated Operating Cash Flow" and "Cumulative
Consolidated Interest Expense" means, on any date of determination, the
cumulative Consolidated Operating Cash Flow and Consolidated Interest Expense,
as the case may be, realized during the period commencing on the Issue Date and
ending on the last day of the most recent fiscal quarter immediately preceding
the date of determination for which consolidated financial information is
available.
"Currency Hedging Agreement" means, with respect to any
Person, any foreign exchange contract, currency swap agreement or other similar
agreement as to which such Person is a party or beneficiary and entered into for
hedging purposes only.
"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.
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.6 hereof, in
the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto, but may bear the Private Placement Legend, if
applicable.
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.3
hereof as the Depositary with respect to the Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disqualified Capital Stock" means, with respect to any
Person, any Capital Stock of such Person which by its terms or by the terms of
any security into which it is convertible or for which it is exchangeable or
upon the happening of any event or the passage of time (i) matures or becomes
mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (ii)
becomes exchangeable for Indebtedness at the option of the holder of this
Indebtedness or (iii) becomes redeemable at the option of the holder of this
Capital Stock, in whole or in part, in each case on or
<PAGE>
8
before the Stated Maturity of the Notes, provided, that: (A) only the portion of
Capital Stock which so matures or becomes so redeemable or exchangeable on or
before the Stated Maturity of the Notes will be deemed to be Disqualified
Capital Stock, and (B) any Capital Stock that would not constitute Disqualified
Capital Stock but for its provisions giving its holders the right to require
this Person to repurchase or redeem such Capital Stock upon the occurrence of
any "asset sale" or "change of control" occurring before the Stated Maturity of
the Notes will not constitute Disqualified Capital Stock if the "asset sale" or
"change of control' provisions applicable to this Capital Stock are no more
favorable to the holders of this Capital Stock than the provisions of the
covenants under Sections 4.11 and 4.15 herein and if these provisions
specifically provide that this Person will not repurchase or redeem this Capital
Stock pursuant to these provisions before the repurchase by the Company of the
Notes as are required to be repurchased under the covenants under Sections 4.11
and 4.15 herein.
"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 (or any successor Act), and the rules and regulations promulgated
thereunder (or respective successor thereto).
"Exchange Notes" means the Series B Notes issued in the
Registered Exchange Offer pursuant to Section 2.6(f) hereof.
"Exchange Offer Registration Statement" has the meaning set
forth in the Agreement to Exchange and Consent.
"Exchanging Dealer" means any Holder that is a broker or
dealer registered as such under the Exchange Act and elects to exchange for
Unrestricted Notes any Restricted Notes that it acquired for its own account as
a result of market-making activities or other trading activities (but not
directly from the Company or an Affiliate of the Company).
"Existing Indebtedness" of a Person means Indebtedness of such
Person in existence on the Issue Date, until these amounts are repaid.
"Fair Market Value" means, with respect to any asset or
property, the sale value that would be reasonably expected to be obtained in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy.
The Fair Market Value of any asset or property will be determined by the Board
of Directors acting in good faith and will be evidenced by a resolution of the
Board of Directors.
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9
"GAAP" means generally accepted accounting principles 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 the Issue Date.
"Global Note Legend" means the legend set forth in Section
2.6(g)(ii), which is required to be placed on all Global Notes issued under this
Indenture.
"Global Notes" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with this Indenture and bearing the Global
Note Legend.
"Government Securities" means securities that are (i) direct
obligations (or certificates representing an ownership interest in such
obligations) of the United States of America (including any agency or
instrumentality thereof) of the payment of which the full faith and credit of
the United States of America is pledged, (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America or (iii) obligations of a
Person the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any other
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay or advance or supply funds for the purchase or
payment of, such Indebtedness of such other Person, whether arising by virtue of
partnership arrangements, or by agreement 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 of the payment thereof or
to protect such obligee against loss in respect of such Indebtedness, in whole
or in part; provided, however, 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.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under any Interest Rate Agreement or Currency Hedging
Agreement.
"Holder" means a Person in whose name a Note is registered on
the Registrar's or any co-registrar's books.
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10
"Incur" means create, incur, assume, suffer to exist or
otherwise become liable for; provided, however, that any Indebtedness or Capital
Stock of a Person existing at the time such Person becomes a Restricted
Subsidiary, whether by merger, consolidation, acquisition or otherwise, will be
deemed to be Incurred by such Restricted Subsidiary at the time it becomes a
Restricted Subsidiary. "Incurrence" will have a correlative meaning.
"Indebtedness" means at any time (without duplication), with
respect to any Person, whether recourse is to all or a portion of the assets of
such Person, and whether or not contingent, (i) any obligation of such Person
for money borrowed, (ii) any obligation of such Person evidenced by bonds,
debentures, notes, Guarantees or other similar instruments, including, without
limitation, any such obligations incurred in connection with the acquisition of
property, assets or businesses, excluding trade accounts payable made in the
ordinary course of business, (iii) any reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (iv) any obligation of such Person issued
or assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or liabilities or obligations arising in the ordinary
course of business, which in either case are not more than 60 days overdue or
which are being contested in good faith), (v) any Capital Lease Obligation of
such Person, (vi) the maximum fixed redemption or repurchase price of
Disqualified Capital Stock of such Person and, to the extent held by other
Persons, the maximum fixed redemption or repurchase price of Disqualified
Capital Stock of such Person's Restricted Subsidiaries at the time of
determination, (vii) the notional amount of any interest hedging obligations or
exchange rate obligations of such Person at the time of determination, (viii)
any Attributable Indebtedness with respect to any Sale and Leaseback Transaction
to which such Person is a party and (ix) any obligation of the type referred to
in clauses (i) through (viii) of this definition of another Person and all
dividends and distributions of another Person the payment of which, in either
case, such Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise. For purposes of the preceding
sentence, the maximum fixed repurchase price of any Disqualified Capital Stock
that does not have a fixed repurchase price shall be calculated in accordance
with the terms of such Disqualified Capital Stock as if such Disqualified
Capital Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant hereto; provided that if such Disqualified
Capital Stock is not then permitted to be repurchased, the repurchase price
shall be the book value of such Disqualified Capital Stock. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability of any guarantees at such date; provided that for purposes of
calculating the amount of the Notes outstanding at any date, such amount shall
be the Accreted Value thereof as of such date unless cash interest has commenced
to accrue pursuant to the terms of the Notes, in which case the amount of the
Notes outstanding will be determined pursuant to the terms of the Notes.
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11
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Interest Payment Date" shall have the meaning assigned to
such term in the Notes.
"Interest Rate Agreement" means, with respect to any Person,
any interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement to which such Person is a party or
beneficiary.
"Investment" means, with respect to any Person, all
investments by such Person in other Persons, including Affiliates, in the form
of direct or indirect loans, including Guarantees of Indebtedness or other
obligations, advances or capital contributions, 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. Investments will not include
commissions, travel and similar advances to directors, officers and employees
made in the ordinary course of business. If the Company or any of its Restricted
Subsidiaries sells or otherwise disposes of any Equity Interests or any direct
or indirect Subsidiary such that, after giving effect to that sale or
disposition, that Person is no longer a Subsidiary of the Company or its
Restricted Subsidiaries, the Company will be deemed to have made an Investment
on the date of such sale or disposition equal to the Fair Market Value of the
Equity Interests of that Subsidiary not sold or disposed of.
"Issue Date" means the date of first issuance of the Notes
under the Indenture.
"Joint Venture" means a Telecommunications Company of which
less than 50 percent of the Voting Stock is held by PLD Telekom, provided that
the Telecommunications Business of such Telecommunications Company is
principally conducted in the Russian Federation, Kazakhstan, Belarus or any
other country in the Commonwealth of Independent States.
"Leasing Company" means a special purpose Cypriot or U.S.
corporation which is a Wholly Owned Subsidiary of the Company organized for the
limited purpose of acquiring Telecommunications Assets and leasing these
Telecommunications Assets to direct or indirect Subsidiaries of PLD Telekom
pursuant to Telecommunications Asset Agreements and/or making investments in a
Telecommunications Company primarily engaged or proposing to engage in the
<PAGE>
12
Telecommunications Business in the Russian Federation, Kazakhstan, Belarus or
any other country in the Commonwealth of Independent States.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Registered Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, pledge,
security interest, encumbrance, lien or charge of any kind in respect of this
asset, including any conditional sale or other title retention agreement or
lease in the nature of a Lien.
"Net Cash Proceeds," with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result of such issuance or sale.
"Net Proceeds" from an Asset Sale means cash or Cash
Equivalent payments received, including any cash or Cash Equivalent payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received, but
excluding any other consideration received in the form of assumption by the
acquiring person of Indebtedness or other obligations relating to the properties
or assets that are the subject of such Asset Sale or received in any other
noncash form from such Asset Sale, in each case net of: (i) all legal,
accounting, investment banking, title and recording tax expenses, commission and
other fees and expenses incurred, and all federal, state, provincial, foreign
and local taxes required to be paid or accrued as a liability under GAAP, as a
consequence of such Asset Sale, (ii) all payments made on any Indebtedness which
is secured by any assets subject to such Asset Sale, in accordance with the
terms of any Lien upon such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Sale, or by applicable law be repaid
out of the proceeds from such Asset Sale, (iii) all distributions and other
payments required to be made to minority interest holders in Subsidiaries or
joint ventures as a result of such Asset Sale, (iv) the deduction of appropriate
amounts to be provided by the seller as a reserve against any liabilities
associated with the assets disposed of in such Asset Sale and retained by the
Company or any Restricted Subsidiary after such Asset Sale, and (v) employee
severance and termination costs.
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13
"Note Custodian" means the Person specified in Section 2.3
hereof as the Note Custodian with respect to the Global Notes or any successor
entity thereto appointed as Note Custodian hereunder and having become such
pursuant to the applicable provision of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this
Indenture.
"Officer" means the President, the Chief Executive Officer,
any Executive Vice President and the Chief Financial Officer of the Company.
"Officers' Certificate" means a certificate signed by any two
of the Chairman of the Board of Directors, the President, any Vice President,
the Treasurer or the Secretary of the Company.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee and that meets the requirements of
Section 11.5 hereof. The counsel may be an employee of, or counsel to, the
Company, any Subsidiary of the Company, any Affiliate of the Company or the
Trustee.
"pari passu Indebtedness" means Indebtedness of the Company
ranking pari passu in right of payment with the Notes.
"Participant" means, with respect to the Depositary, a Person
who has an account with the Depositary.
"Permitted Holder" means Metromedia Company, a Delaware
general partnership, its Related Parties and any Person controlling, controlled
by, or under common control with, Metromedia Company.
"Permitted Liens" means: (x) any Lien existing on the date of
this Indenture, (y) any Lien arising in connection with court judgements, taxes,
workmen's compensation, zoning restrictions, easements and rights of way that do
not materially impair operation of the business, performance bids, contracts,
leases, statutory obligations, surety and appeal bonds, letters of credit and
other obligations Incurred in the ordinary course of business, and (z) any Lien
securing obligations in connection with Indebtedness permitted under clauses
(c), (e), (f), (h) and (i) (with respect to clause (i) herein, to the extent the
Indebtedness to which the Permitted Refinancing Indebtedness relates was
secured) under Section 4.9 herein.
"Permitted Refinancing Indebtedness" means any amendments,
supplements, modifications, deferrals, renewals, extensions, substitutions,
refundings, defeasance, refinancings or replacements (collectively, a
"refinancing") of any Indebtedness, including successive refinancings, so long
as: (i) the borrower under these refinancings is the Company or, if not the
Company, the same as the borrower
<PAGE>
14
or its successor of the Indebtedness being refinanced, (ii) the aggregate
principal amount or accreted value of the new Indebtedness does not exceed the
sum of: (A) the aggregate principal amount or accreted value being refinanced,
(B) the accrued interest represented thereby, (C) the amount of expenses of the
Company or the borrower Incurred in connection with such refinancing, and (D)
the lesser of (x) the stated amount of any premium or other payment required to
be paid in connection with such refinancing pursuant to the terms of the
Indebtedness being refinanced and (y) the amount of premium actually paid at
such time to refinance the Indebtedness, and (iii) in the case of any
refinancing of Subordinated Indebtedness, such new Indebtedness is made
subordinated to the Notes at least to the same extent as the Indebtedness being
refinanced and such refinancing does not reduce the Average Life to Stated
Maturity or the Stated Maturity of such Subordinated Indebtedness.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, incorporated or unincorporated
association, joint-stock company, trust, unincorporated organization, government
or other agency or political subdivision thereof or any other entity.
"Pivotel Assets" means the Pivotel telecommunications switches
and nodes located in New York, USA, and London, England, capacity in
transatlantic and European cables, upgraded switches in St. Petersburg and
Moscow and related telecommunications equipment.
"PLD Assets" means all of the assets (including shares of
Capital Stock of any Subsidiary or of ALTEL) owned by PLD Telekom, ALTEL or
any direct or indirect Subsidiary of PLD Telekom on the Issue Date, accounts
receivable generated by such assets and the Additional PLD Assets.
"PLD Companies" means PLD Telekom Inc., its direct and
indirect Subsidiaries (including, without limitation, PeterStar Company Limited,
Baltic Communications Limited, Technocom Limited and CPY Yellow Pages Limited)
and ALTEL.
"PLD Company Permitted Liens" means: (x) any Lien existing on
the date hereof, (y) any Lien arising in connection with court judgments, taxes,
workmen's compensation, zoning restrictions, easements and rights of way that do
not materially impair operation of the business, performance bids, contracts,
leases, statutory allegations, surety and appeal bonds, letters of credit and
other obligations incurred in the ordinary course of business, and (z) any Lien
securing obligations in connection with Indebtedness permitted under clauses
(b), (c), (d), (f) and (g) (with respect to clause (g) herein, to the extent the
Indebtedness to which the Permitted Refinancing Indebtedness relates was
secured) under Section 4.10 hereof.
"PLD Telekom" means PLD Telekom Inc., a Delaware corporation.
<PAGE>
15
"Preferred Stock" means any Equity Interest of any class or
classes of a Person (however designated) which is preferred as to payments of
dividends, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution, over Equity Interests of any other class of such
Person.
"Private Placement Legend" means the legend set forth in
Section 2.6(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"Public Equity Offering" means an underwritten sale of Capital
Stock, excluding Disqualified Capital Stock, of the Company with gross proceeds
to the Company of at least $25 million.
"Purchase Money Obligation" of any Person means any
Indebtedness that is secured by a Lien on assets related to the business of such
Person and any additions, replacements, modifications and accessions of such
assets, which are purchased by such Person at any time after the Issue Date;
provided that: (i) the security agreement or conditional sale or other title
retention contract pursuant to which the Lien on such assets is created is
entered into within 180 days after the purchase or substantial completion of the
construction of such assets and is at all times confined solely to the assets so
purchased or acquired, any additions, replacements, modifications and accessions
to such assets and any proceeds and products from such assets, (ii) at no time
will the aggregate principal amount of the outstanding Indebtedness secured by
the Lien be increased except in connection with the purchase of additions and
accessions to such assets and except in respect of commitment or facility fees
or other similar fees and other similar obligations in respect of the Incurrence
of such Indebtedness, and (iii) either: (A) the aggregate outstanding principal
amount of Indebtedness secured by the Lien, determined on a per asset basis in
the case of any additions and accessions, will not at the time the security
agreement or other contract pursuant to which the Lien is created is entered
into exceed 90% of the purchase price to such Person of the assets subject to
the Lien, or (B) the Indebtedness secured by the Lien will be with recourse
solely to the assets so purchased or acquired, any additions, replacements,
modifications and accessions to these assets and any proceeds and products from
these assets.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act.
"Qualified Capital Stock" means any and all Capital Stock of a
Person other than Disqualified Capital Stock.
"Qualified Joint Venture" means a Joint Venture in which PLD
Telekom owns directly or indirectly Voting Stock and any future Joint Venture in
which PLD Telekom owns 20% or more of the Voting Stock.
<PAGE>
16
"Record Date" for the interest payable on any Interest Payment
Date means March 15 or September 15 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Registered Exchange Offer" has the meaning set forth in the
Agreement to Exchange and Consent.
"Registration Statement" means either the Exchange Offer
Registration Statement or the Shelf Registration Statement.
"Related Assets" means any asset or property used by or in or
in connection with a Related Business.
"Related Business" means when used in reference to any Person,
that this Person is engaged primarily in the business of, or providing services
related to the business of, (i) the transmission of voice, video or data,
including but not limited to, local and long-distance wireline and wireless
telephone services and internet services, (ii) multi-channel television
services, including wireline and wireless cable television service, (iii)
broadcast radio, (iv) paging, (v) lawn and garden products and related services
and (vi) in the case of clauses (i) through (v) above, the construction of any
related facilities or any businesses reasonably related thereto, which
determination will be made in good faith by the Board of Directors.
"Related Parties" means (i) any officer or other member of
management employed by Metromedia Company or any Subsidiary as of the Issue
Date; (ii) family members or relatives of the persons described in clause (i);
(iii) any trusts created for the sole benefit of the persons described in clause
(i) or (ii); or (iv) in the event of the incompetence or death of any of the
persons described in clause (i), such person's estate, executor, administrator,
committee or other personal representatives or beneficiaries.
"Responsible Officer," when used with respect to the Trustee,
means the President, the Chairman of the Board or 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.
"Restricted Definitive Note" means a Definitive Note bearing
the Private Placement Legend.
"Restricted Global Note" means a global note in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its
<PAGE>
17
nominee that will be issued in a denomination equal to the outstanding aggregate
principal amount of the Notes sold in a private placement under the Securities
Act.
"Restricted Note" means either a Restricted Definitive Note or
a Restricted Global Note.
"Restricted Subsidiary" means (i) Metromedia International
Telecommunications, Inc., Snapper Inc. and all other direct or wholly owned
subsidiaries of Metromedia International Group that are incorporated in any
State of the United States, (ii) Paging One Services, GmbH (Austria), Romsat
Cable TV & Radio, SA (Romania) and Radio Balaton Juventus, Kft. (Hungary), to
the extent each of these entities constitutes Subsidiaries, and (iii) each of
the PLD Companies.
"Sale and Leaseback Transaction" means with respect to any
Person, any direct or indirect arrangement pursuant to which property is sold or
transferred by such Person or a Restricted Subsidiary of such Person and is
thereafter leased back from the purchaser or transferee thereof by such Person
or one of its Restricted Subsidiaries.
"SEC" means the Securities Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended
(or any successor Act), and the rules and regulations promulgated thereunder (or
respective successor thereto).
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Agreement to Exchange and Consent.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Special Record Date" for the payment of any defaulted
interest means a date fixed by the Company pursuant to Section 2.12 hereof.
"Stated Maturity" means, when used with respect to any
Indebtedness or any installment of interest on any Indebtedness, the date
specified in such Indebtedness as the fixed date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing the Indebtedness. The Stated Maturity will not include any provision
for the contingent obligation to repay, redeem or repurchase the interest or
repurchase the interest or principal of such Indebtedness before the date
originally scheduled for their payment.
"Strategic Investor" means any Person that is, or a controlled
Affiliate of any Person that is, engaged principally in a Related Business.
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18
"Subordinated Indebtedness" means any Indebtedness of the
Company or any Restricted Subsidiary, whether outstanding on the Issue Date or
thereafter Incurred, which expressly is subordinate or junior in right of
payment to the Notes pursuant to a written agreement.
"Subsidiary" of any Person means any corporation, association
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled, without regard to the occurrence of any
contingency, to vote in the election of directors, managers, trustees or similar
governing body of this corporation, association or other business entity is at
the time owned or controlled, directly or indirectly, by (i) this Person, (ii)
this Person and one or more Subsidiaries of this Person or (iii) one or more
Subsidiaries of this Person. Unless otherwise specified herein, each reference
to a Subsidiary will refer to a Subsidiary of the Company.
"Telecommunications Assets" means, with respect to any Person,
assets, including, without limitation, rights of way, trademarks and licenses
and licenses to use copyrighted material, that are utilized by such Person,
directly or indirectly, in a Telecommunications Business. Telecommunications
Assets also include stock, joint venture or partnership interest in another
Person, provided that substantially all of the assets of such other Person
consist of Telecommunications Assets. The determination of what constitutes
Telecommunications Assets will be made by the Board of Directors.
"Telecommunications Asset Agreement" means a lease or
installment sale agreement where title is transferred to the buyer pursuant to
which a Leasing Company leases or sells, in a transaction in which the monetary
consideration is paid immediately or is payable over time, Telecommunications
Assets that consist of equipment and rights acquired in connection with the
lease or sale thereof, including, without limitation, software licenses, to a
Restricted Subsidiary or Qualified Joint Venture in the Russian Federation,
Kazakhstan, Belarus or any other country in the Commonwealth of Independent
States.
"Telecommunications Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased transmission facilities, (ii) creating,
developing or marketing communications related network equipment, software and
other devices for the use described in clause (i) above or (iii) evaluating,
participating or pursuing any other activity or opportunity that is related to
those specified in (i) or (ii) above and includes, without limitation, any
business in which PLD Telekom and its direct and indirect Subsidiaries are
currently engaged; provided that, the determination of what constitutes a
Telecommunications Business shall be made in good faith by the Board of
Directors.
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19
"Telecommunications Company" means any Person substantially
all of the assets of which consist of Telecommunications Assets.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA, except as set forth in Section 9.3.
"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 serving hereunder.
"Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"Unrestricted Global Note" means a permanent Global Note in
the form of Exhibit A attached hereto that bears the Global Note Legend and that
has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of, and registered in the name
of, the Depositary or its nominee, representing a series of Notes that do not
bear the Private Placement Legend.
"Unrestricted Note" means an Unrestricted Definitive Note or
an Unrestricted Global Note or both.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that is not a Restricted Subsidiary, (ii) any Subsidiary of the Company
which at the time of determination is designated an Unrestricted Subsidiary by
the Board of Directors in the manner set forth in Section 4.7 hereof and (iii)
any Subsidiary of an Unrestricted Subsidiary.
"Voting Stock" of a Person means securities of any class or
classes of Capital Stock in such Person entitling the holders thereof, whether
at all times or at the times that such class of Capital Stock has voting power
by reason of the happening of any contingency, to vote in the election of
members of the board of directors or comparable body of such Person.
"Wholly Owned Subsidiary" of the Company means a Restricted
Subsidiary of the Company, all of the outstanding Capital Stock of which (other
than directors' qualifying shares and shares that, under applicable law, are
required to be held by third persons) shall at the time be owned by the Company
or one or more Wholly Owned Subsidiaries.
<PAGE>
20
SECTION 1.2 OTHER DEFINITIONS
<TABLE>
<CAPTION>
Defined in Term Section
<S> <C>
"Affiliate Transaction" ..............................................................................4.12
"Asset Sale Offer" ...................................................................................4.11
"Authentication Order" ................................................................................2.2
"Change of Control Offer" ............................................................................4.15
"Change of Control Payment" ..........................................................................4.15
"Change of Control Payment Date"..................................................................... 4.15
"Designation" .........................................................................................4.7
"Event of Default" ....................................................................................6.1
"Excess Proceeds" ....................................................................................4.11
"Offer Amount " .......................................................................................3.9
"Offer Period" ........................................................................................3.9
"Paying Agent " .......................................................................................2.3
"Permitted Indebtedness".............................................................................. 4.9
"Purchase Date" .......................................................................................3.9
"Registrar " ..........................................................................................2.3
"Restricted Payments" .................................................................................4.7
"Revocation" ..........................................................................................4.7
</TABLE>
SECTION 1.3 TRUST INDENTURE ACT DEFINITIONS
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:
"Commission" means the SEC;
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Notes means the Company and any successor
obligor on the Notes.
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21
All other terms used but not otherwise defined 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:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural,
and in the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) references to sections of or rules under the
Securities Act shall be deemed to include substitute, replacement or
successor sections or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.1 FORM AND DATING.
(a) General.
The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or usage
or agreements to which the Company is subject. Each Note shall be dated the date
of its authentication. The Notes shall be in denominations of $1,000 and
integral multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby. However, to the extent
<PAGE>
22
any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes.
Notes issued in global form shall be substantially in the form
of Exhibit A attached hereto (including the Global Note Legend thereon and the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes
issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note shall represent such of the aggregate principal amount of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, repurchases and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the
aggregate principal amount of outstanding Notes represented thereby shall be
made by the Trustee or the Note Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.6 hereof.
SECTION 2.2 EXECUTION AND AUTHENTICATION.
Two Officers or one Officer and the Secretary or an Assistant
Secretary of the Company shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer, Secretary or Assistant Secretary whose
signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The Trustee's signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.
The Trustee shall, upon receipt of a written order of the
Company signed by two Officers or one Officer and the Secretary or an Assistant
Secretary of the Company (an "Authentication Order"), authenticate Notes for
original issue up to $210,631,376 in aggregate principal amount. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each
<PAGE>
23
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with Holders, the Company or an Affiliate of the Company.
SECTION 2.3 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("the Registrar") and
an office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may 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 without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture, and such agreement shall
incorporate the provisions of the TIA and implement the provisions of this
Indenture that relate to such Agent. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
The Trustee is authorized to enter into a letter of
representations with DTC in the form provided to the Trustee by the Company and
to act in accordance with such letter.
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee 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
redemption or purchase of the Notes or 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 providing the Paying Agent with sufficient funds to
redeem or purchase the Notes or make any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all such money held by
it to the Trustee and to account for any funds disbursed. The Company at any
time may require a Paying Agent to pay all such money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company or
a Subsidiary) shall have no further liability for the
<PAGE>
24
money it delivered to the Trustee. If the Company or a Subsidiary acts as Paying
Agent, it shall 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 shall serve as
Paying Agent for the Notes.
SECTION 2.5 HOLDER LISTS.
The Trustee shall 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 and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall 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 reasonably require of the names and addresses of, and
the aggregate principal amount of Notes held by, each Holder, and the Company
shall otherwise comply with TIA Section 312(a).
SECTION 2.6 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES.
A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Notes will be exchanged by the Company for Definitive
Notes if (i) the Company delivers to the Trustee a notice from the Depositary
that it is unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either case,
a successor Depositary is not appointed by the Company within 120 days after the
date of such notice from the Depositary or (ii) the Company in its sole
discretion determines that the Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and delivers a written notice to such effect to
the Registrar. Upon the occurrence of either of the preceding events in (i) or
(ii) above, Definitive Notes shall be issued in such names as the Depositary
shall instruct the Trustee. Global Notes also may be exchanged or replaced, in
whole or in part, as provided in Sections 2.7 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.6 or Section 2.7 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided
in this Section 2.6(a); however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.6(b), (c), (d) or (f) hereof.
<PAGE>
25
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE
GLOBAL NOTES.
The transfer and exchange of beneficial interests in the
Global Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein and therein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Notes also shall
require compliance with either subparagraph (i) or (ii) below, as applicable, as
well as one or more of the other following subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME
GLOBAL NOTE. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance
with the transfer restrictions set forth in the Private Placement
Legend. Beneficial interests in any Unrestricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders
or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.6(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL
INTERESTS IN GLOBAL NOTES. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.6(b)(i) above, the transferor of such beneficial interest must
deliver to the Depositary either (A)(1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to
be credited with such increase or (B)(1) a written order from a
Participant or an indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing information
regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above.
Upon consummation of a Registered Exchange Offer by the Company in
accordance with Section 2.6(f) hereof, the requirements of this Section
2.6(b)(ii) shall be deemed to have been satisfied upon receipt by the
Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for transfer
or exchange of beneficial interests in Global Notes contained in this
<PAGE>
26
Indenture and the Notes or otherwise applicable under the Securities
Act, the Trustee shall adjust the principal amount of the relevant
Global Note(s) pursuant to Section 2.6(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER
RESTRICTED GLOBAL NOTE. A beneficial interest in any Restricted Global
Note may be transferred to a Person who takes delivery thereof in the
form of a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.6(b)(ii) above and
the Registrar receives from the transferor a certificate in the form of
Exhibit B hereto, including the certifications in item (1) thereof.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN
A RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note transferred to a Person who takes delivery
thereof in the form of a beneficial interest in a Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.6(b)(ii) above and:
(A) such exchange or transfer is
effected pursuant to the Registered Exchange Offer in accordance with
the Agreement to Exchange and Consent and the holder of the beneficial
interest to be transferred, in the case of an exchange, or the
transferee, in the case of a transfer, makes the certification required
by the Letter of Transmittal or via the Depositary's book-entry system;
(B) such transfer is effected
pursuant to the Shelf Registration Statement in accordance with the
Agreement to Exchange and Consent;
(C) such transfer is effected by an
Exchanging Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Agreement to Exchange and Consent; or
(D) the Registrar receives the
following:
(1) if the holder of such
beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial interest in
an Unrestricted Global Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in
item (1)(a) thereof; or
(2) if the holder of such
beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a
<PAGE>
27
Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (3)(c) or (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Company or the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Company or the Registrar, as
applicable, to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions
on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance
with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.2 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR
DEFINITIVE NOTES.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
TO RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest
in a Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Restricted Definitive Note, then, upon receipt by the Registrar of
the following documentation:
(A) if the holder of such beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note, a certificate
from such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or
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28
Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being
transferred pursuant to an exemption from the registration requirements
of the Securities Act in accordance with Rule 144 under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof; or
(E) if such beneficial interest is being
transferred to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (3)(b) thereof,
upon confirmation of such receipt by the Registrar, the Trustee shall cause the
aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.6(h) hereof, and the Company shall execute and
the Trustee, upon receipt of an Authentication Order in accordance with Section
2.2 hereof, shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.6(c) shall be registered in such name or
names and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or direct Participant. The Trustee shall make
available for delivery such Definitive Notes to the Persons in whose names such
Notes are so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.6(c)(i) shall
bear the Private Placement Legend and shall be subject to all restrictions on
transfer contained therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
TO UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in
a Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected
pursuant to the Registered Exchange Offer in accordance with the
Agreement to Exchange and Consent and the holder of such beneficial
interest in the case of an exchange, or the transferee, in the case of
a transfer, makes the certifications required by Section 4.4 of the
Agreement to Exchange and Consent and in the Letter of Transmittal;
(B) such transfer is effected pursuant to
the Shelf Registration Statement in accordance with the Agreement to
Exchange and Consent;
<PAGE>
29
(C) such transfer is effected by an
Exchanging Dealer pursuant to the Exchange Offer Registration
Statement; or
(D) the Registrar receives the following:
(1) if the holder of such
beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for an Unrestricted
Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(b) thereof;
or
(2) if the holder of such
beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive
Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (3)(c) or (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Company or the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Company or the Registrar, as
applicable, to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions
on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance
with the Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL
NOTES TO UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial
interest in an Unrestricted Global Note proposes to exchange such
beneficial interest for a Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.6(b)(ii) hereof, the Trustee shall cause the
aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.6(h) hereof, and the Company shall
execute and the Trustee shall authenticate and make available for
delivery to the Person designated in the instructions a Definitive Note
in the appropriate principal amount. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.6(c)(iii)
shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest
shall instruct the Registrar through instructions from the Depositary
and the Participant or Indirect Participant. The Trustee shall make
available for delivery such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.6(c)(iii)
shall not bear the Private Placement Legend.
<PAGE>
30
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR
BENEFICIAL INTERESTS.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES. If any Holder of a Restricted
Definitive Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note or to transfer such Restricted
Definitive Notes to a Person who takes delivery thereof in the form of
a beneficial interest in a Restricted Global Note, then, upon receipt
by the Registrar of the following documentation:
(A) if the Holder of such Restricted
Definitive Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive
Note is being transferred to a QIB in accordance with Rule 144A under
the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is
being transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is
being transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 under
the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof; or
(E) if such beneficial interest is
being transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof;
upon confirmation of such receipt by the Registrar, the
Trustee shall cause the aggregate principal amount of the applicable Global Note
to be increased accordingly pursuant to Section 2.6(h) hereof.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL
INTERESTS IN UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted
Definitive Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Restricted Definitive Note to
a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note only if:
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31
(A) such exchange or transfer is
effected pursuant to the Registered Exchange Offer in accordance with
the Agreement to Exchange and Consent and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, makes the
certification required under Section 4.4 of the Agreement to Exchange
and Consent and in the Letter of Transmittal;
(B) such transfer is effected
pursuant to the Shelf Registration Statement in accordance with the
Agreement to Exchange and Consent;
(C) such transfer is effected by an
Exchanging Dealer pursuant to the Exchange Offer Registration
Statement; or
(D) the Registrar receives the
following:
(1) if the Holder of such
Definitive Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or
(2) if the Holder of such
Definitive Notes proposes to transfer such Notes to a Person
who shall take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit B hereto, including the
certifications in item (3)(c) or (4) thereof; and, in each
such case set forth in this subparagraph (D), if the Company
or Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Company or Registrar, as applicable, to the effect that
such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
Upon confirmation by the Registrar of satisfaction of the
conditions of any of the subparagraphs in this Section 2.6(d)(ii), the
Trustee shall cancel the Definitive Notes and increase or cause to be
increased the aggregate principal amount of the Unrestricted Global
Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL
INTERESTS IN UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted
Definitive Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be
<PAGE>
32
increased the aggregate principal amount of one of the Unrestricted
Global Notes. If any such exchange or transfer from a Definitive Note
to a beneficial interest in a Global Note is effected pursuant to this
subparagraph or to subparagraphs (ii)(B) or (ii)(D) above at a time
when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.2 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of Definitive Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE
NOTES. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.6(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.6(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED
DEFINITIVE NOTES. Any Restricted Definitive Note may be transferred to
and registered in the name of Persons who take delivery thereof in the
form of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made
pursuant to Rule 144A under the Securities Act, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including
the certifications in item (1) thereof;
(B) if the transfer will be made
pursuant to Rule 903 or Rule 904 under the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof;
(C) if such beneficial interest is
being transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 under
the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof; or
(D) if such beneficial interest is
being transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof.
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33
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED
DEFINITIVE NOTES. Any Restricted Definitive Note may be exchanged by
the Holder thereof for an Unrestricted Definitive Note or transferred
to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) such exchange or transfer is
effected pursuant to the Registered Exchange Offer in accordance with
the Agreement to Exchange and Consent and the Holder, in the case of
an exchange, or the transferee, in the case of a transfer, makes the
certification required by Section 4.4 of the Agreement to Exchange and
Consent and in the Letter of Transmittal;
(B) any such transfer is effected
pursuant to the Shelf Registration Statement in accordance with the
Agreement to Exchange and Consent;
(C) any such transfer is effected by an
Exchanging Dealer pursuant to the Exchange Offer Registration
Statement; or
(D) the Registrar receives the following:
(1) if the Holder of such
Restricted Definitive Notes proposes to exchange such Notes
for an Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit C hereto, including the
certifications in item (1)(d) thereof; or
(2) if the Holder of such
Restricted Definitive Notes proposes to transfer such Notes to
a Person who shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such Holder
in the form of Exhibit B hereto, including the certifications
in item (3)(c) or (4) thereof; and, in each such case set
forth in this subparagraph (D), if the Company or Registrar so
requests, an Opinion of Counsel in form reasonably acceptable
to the Company or Registrar, as applicable, to the effect that
such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED
DEFINITIVE NOTES. A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note. Upon receipt of a request to
register such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
<PAGE>
34
(f) REGISTERED EXCHANGE OFFER.
Upon the consummation of the Registered Exchange Offer in
accordance with the Agreement to Exchange and Consent, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.2
hereof, the Trustee shall authenticate (i) one or more Unrestricted Global Notes
in an aggregate principal amount equal to the aggregate principal amount of the
beneficial interests in the Restricted Global Notes tendered for acceptance by
Persons that make the certifications required by Section 4.4 of the Agreement to
Exchange and Consent and in the Letter of Transmittal or via the Depositary's
book-entry system, and accepted for exchange in the Registered Exchange Offer
and (ii) Definitive Notes in an aggregate principal amount equal to the
aggregate principal amount of the Restricted Definitive Notes tendered for
acceptance by Persons that make the certifications required by Section 4.4 of
the Agreement to Exchange and Consent and in the Letter of Transmittal, and
accepted for exchange in the Registered Exchange Offer. Concurrently with the
issuance of such Notes, the Trustee shall cause the aggregate principal amount
of the applicable Restricted Global Notes to be reduced accordingly, and the
Company shall execute and the Trustee, upon receipt of an Authentication Order
in accordance with Section 2.2 hereof, shall authenticate and make available for
delivery to the Persons designated by the Holders of Definitive Notes so
accepted Definitive Notes in the appropriate principal amount.
(g) LEGENDS. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraph
(B) below, each Global Note and each Definitive Note (and all Notes
issued in exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, OR (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
<PAGE>
35
AVAILABLE) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES."
(B) Notwithstanding the foregoing, any
Global Note or Definitive Note issued pursuant to subparagraphs
(b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
to this Section 2.6 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear
a legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES.
At such time as all beneficial interests in a particular
Global Note have been exchanged for Definitive Notes or a particular Global Note
has been redeemed, repurchased or canceled in whole and not in part, each such
Global Note shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11 hereof. At any time prior to such cancellation, if
any beneficial interest in a Global Note is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes
represented by such Global Note shall be reduced accordingly and an endorsement
shall be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such reduction, and if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note by the Trustee or by the Depositary at the direction
of the Trustee to reflect such increase.
<PAGE>
36
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND
EXCHANGES.
(i) To permit registrations of transfers and
exchanges, the Company shall, subject to the other provisions of this
Section 2.6, execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made for any
registration of transfer or exchange (except as otherwise expressly
permitted herein), but the Company or the Registrar may require a
Holder to furnish appropriate endorsements and transfer documents and
to pay 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 2.10, 3.6, 3.9, 4.11, 4.15
and 9.5 hereof, which the Company shall pay).
(iii) Neither the Trustee nor the Registrar shall be
required to register the transfer of or exchange any Note selected for
redemption in whole or in part, except the unredeemed portion of any
Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued
upon any registration of transfer or exchange of Global Notes or
Definitive Notes shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon
such registration of transfer or exchange.
(v) None of the Company, the Trustee and the
Registrar shall be required (A) to issue, to register the transfer of
or to exchange any Notes during a period beginning at the opening of
business 15 Business Days before the day of the mailing of a notice of
redemption or repurchase under Section 3.3 or 4.15 hereof, as
applicable, and ending at the close of business on such day, (B) to
register the transfer of or to exchange any Note so selected for
redemption or repurchase in whole or in part, except the unredeemed
portion of any Note being redeemed or repurchased in part or (c) to
register the transfer of or to exchange a Note between a Record Date
and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of
a transfer of any Note, the Trustee, any Agent and the Company shall
deem and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of, premium, if any, and interest on such Note and for all
other purposes, and none of the Trustee, any Agent or the Company shall
be affected by notice to the contrary.
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37
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.2
hereof.
(viii) All certifications, certificates and Opinions
of Counsel required to be submitted to the Registrar pursuant to this
Section 2.6 to effect a registration of transfer or exchange may be
submitted by facsimile.
(ix) Each Holder of a Note agrees to indemnify the
Trustee and the Registrar against any liability that may result from
the transfer, exchange or assignment of such Holder's Note in violation
of any provision of this Indenture and/or applicable United States
federal or state securities law.
(x) Neither the Trustee nor the Registrar shall have
any obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any
interest in any Note (including any transfers between or among
Participants or beneficial owners of interests in any Global Note)
other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if
and when expressly required by the terms of, this Indenture, and to
examine the same to determine substantial compliance as to form with
the express requirements hereof.
SECTION 2.7 REPLACEMENT NOTES
If any mutilated Note is surrendered to the Trustee or if the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall 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 the 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 require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto, and may charge for its expenses (including the fees and expenses of the
Trustee and reasonable attorney's fees and expenses) in replacing a Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
If any mutilated, lost, stolen or destroyed Note has become or
is about to become due and payable, the Company, in its sole discretion, may,
instead of issuing a new Note, pay such Note.
<PAGE>
38
SECTION 2.8 OUTSTANDING NOTES
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it 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 2.8 as not outstanding. Except as set forth in Section 2.9 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 2.7 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the entire principal amount of, premium, if any, and
accrued interest, if any, on, any Note is considered paid under Section 4.1
herein, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay the entire principal amount of, premium, if any, and accrued
but unpaid interest, if any, on, Notes payable on that date, then on and after
that date such Notes shall be deemed to be no longer outstanding and shall cease
to accrue interest.
SECTION 2.9 TREASURY NOTES
In determining whether the Holders of the required aggregate
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,
shall be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded. Notwithstanding the foregoing, Notes that the Company
or any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company offers to purchase or
acquires pursuant to an exchange offer, tender offer or otherwise shall not be
deemed to be owned by the Company or any such Person until legal title to such
Notes passes to the Company or such Person, as the case may be.
SECTION 2.10 TEMPORARY NOTES
Until certificates representing Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for
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temporary Notes and as shall be reasonably acceptable to the Trustee. Without
unreasonable delay, the Company shall prepare and the Trustee, upon receipt of
an Authentication Order in accordance with Section 2.2 hereof, shall
authenticate definitive Notes in exchange for temporary Notes. Until such
exchange, Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11 CANCELLATION
Holders shall surrender Notes for cancellation to the Trustee.
The Company at any time may deliver Notes to the Trustee for cancellation. The
Registrar and Paying Agent, the Company and its Subsidiaries shall forward to
the Trustee any Notes surrendered to them for registration of transfer,
exchange, replacement, cancellation or payment. The Trustee and no one else
shall cancel all Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall destroy canceled Notes (subject
to the record retention requirements of the Exchange Act). Certification of the
destruction of all canceled Notes shall be delivered to the Company. The Company
may not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.
SECTION 2.12 DEFAULTED INTEREST
If the Company defaults in a payment of interest on the Notes,
it shall 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 shall 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 shall fix, with the Trustee's
consent, which shall not be unreasonably withheld, or cause to be fixed each
such Special Record Date and payment date, provided that no such Special Record
Date shall be less than 10 days prior to the related payment date for such
defaulted interest. At least 15 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) shall 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 interest to be paid. The defaulted interest shall be considered paid upon
deposit with the Trustee or the Paying Agent of an amount of money equal to the
aggregate amount proposed to be paid in respect of such defaulted interest, and
interest on such defaulted interest shall thereafter cease to accrue from that
date. The Company may make payment of any defaulted interest in any other lawful
manner not inconsistent with the requirements of any securities exchange or
other trading market on which the securities of the Company are listed or
traded, and upon such notice as may be required by such exchange or trading
market, if, after written notice given by the Company to the Trustee of the
proposed payment, such manner of payment shall be deemed practicable by the
Trustee.
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SECTION 2.13 CUSIP NUMBERS
The Company in issuing the Notes may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use CUSIP numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or the
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP 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 herein, it shall 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 this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the aggregate principal
amount of Notes to be redeemed, (iv) the redemption price and (v) the CUSIP
numbers of the Notes to be redeemed.
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 shall select the outstanding Notes to be redeemed or purchased among
the Holders of the outstanding Notes in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed
or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance
with any other method as the Trustee in its sole discretion considers fair and
appropriate. In the event of partial redemption by lot, the particular Notes to
be redeemed shall 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 shall 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 shall 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
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41
such Holder, even if not a multiple of $1,000, shall 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
Subject to the provisions of Section 3.9 herein, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price and the amount, if any, of
accrued and unpaid interest and premium, if any, on such Notes as of the
redemption date;
(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 shall 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 for, and any accrued and
unpaid interest and premium, if any, on such Notes;
(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;
(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 shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the aggregate principal amount of Notes to be redeemed
and the information to be stated in such notice as provided in the preceding
paragraph; provided further that
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42
such Officers' Certificate may be delivered to the Trustee on a date later than
permitted under this Section 3.3 if such later date is acceptable to the
Trustee. If the Trustee is not the Registrar, the Company shall, concurrently
with any such request, cause the Registrar to deliver to the Trustee a
certificate (upon which the Trustee may rely) setting forth the name of, the
address of, and the aggregate principal amount of Notes held by, each Holder.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION
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. A notice of redemption may not be
conditional.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE
Prior to 12:00 noon New York City time on the redemption date,
the Company shall deposit with the Trustee or with the Paying Agent in
immediately available funds money sufficient to pay the redemption price of, and
accrued and unpaid interest, if any, and premium, if any, on, all Notes to be
redeemed on that date. The Trustee or the Paying Agent shall promptly return to
the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price of, and
accrued and unpaid interest, if any, and premium, if any, on, all Notes to be
redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after a Record Date but on or prior to the related Interest Payment Date,
then any accrued and unpaid interest shall 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 shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall 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
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.2 hereof, the Trustee shall 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.
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43
SECTION 3.7 OPTIONAL REDEMPTION
(a) The Notes shall not be redeemable at the Company's option
prior to March __, 2002. Thereafter, the Notes shall be subject to redemption at
any time at the sole option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days' notice, at a redemption price equal to the
principal amount of the Notes, plus accrued and unpaid interest, if any, and
premium, if any, thereon, to but excluding the date of redemption (subject to
the right of Holders of record on the relevant Record Date to receive interest
due on the relevant Interest Payment Date).
(b) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Section 3.1 through 3.6 herein.
SECTION 3.8 MANDATORY REDEMPTION
The Company shall not be required to make mandatory redemption
or sinking fund payments with respect to the Notes.
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS
In the event that, pursuant to Section 4.11 hereof, the
Company shall be required to commence an Asset Sale Offer, it shall follow the
procedures specified below.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.11 hereof (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after a Record Date and on or
before the related Interest Payment Date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such Record Date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The Asset Sale
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Offer shall be made to all Holders. The notice, which shall govern the terms of
the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.9 and Section 4.11 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the Purchase Date and the purchase price
and accrued and unpaid interest, if any, and premium, if any, on, such Notes as
of the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a Depositary, if
appointed by the Company, or a Paying Agent at the address specified in the
notice at least three days before the Purchase Date;
(f) that Holders shall be entitled to withdraw their election
if the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
aggregate principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased;
(g) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, 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 $1,000,
or integral multiples thereof, shall be purchased); and
(h) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before 12:00 noon New York City time on the Purchase
Date, the Company shall, to the extent lawful, accept for payment, on a pro rata
basis to the extent necessary, the Offer Amount or portions thereof properly
tendered pursuant to
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the Asset Sale Offer, or if less than the Offer Amount has been tendered, all
Notes tendered, and shall deliver, or cause to be delivered, to the Trustee all
Notes or portions thereof so accepted together with an Officers' Certificate
stating that such Notes or portions thereof were accepted for payment by the
Company in accordance with the terms of this Section 3.9 and Section 4.11 and
setting forth the name of each Holder that tendered Notes and the principal
amount of the Notes, as the case may be, or portions thereof tendered by each
such Holder. The Company, the Depositary or the Paying Agent, as the case may
be, shall promptly (but in any case not later than five days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the purchase
price of the Notes tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Note, and the Trustee, upon
receipt of an Authentication Order in accordance with Section 2.2 hereof, shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. Any Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale Offer
on the Purchase Date.
Other than as specifically provided in this Section 3.9, any
purchase pursuant to this Section 3.9 shall be made pursuant to the provisions
of Sections 3.1 through 3.6 hereof.
ARTICLE 4
COVENANTS
SECTION 4.1 PAYMENT OF NOTES
The Company shall pay or cause to be paid 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 shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 12:00 noon 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.
Notwithstanding anything to the contrary in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to the then applicable interest rate on the Notes to the extent
lawful; it shall pay interest
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46
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the same rate to the extent lawful.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY
The Company shall maintain in the Borough of Manhattan, the
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where 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 shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the 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 shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of
the Trustee as one such office or agency of the Company in accordance with
Section 2.3 herein.
SECTION 4.3 REPORTS
(a) Whether or not required by the rules and regulations of
the SEC, so long as any Notes are outstanding, the Company shall furnish to the
Trustee and the Holders of the Notes (i) all quarterly and annual financial
information that would be required to be contained in a filing with the SEC on
Forms 10-Q and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations of
the Company and its consolidated Subsidiaries and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants, and (ii) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such reports, in
each case within the time periods specified in the SEC's rules and regulations.
In addition, following the consummation of the Registered Exchange Offer
contemplated by the Agreement to Exchange and Consent,
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47
whether or not required by the rules and regulations of the SEC, the Company
shall file a copy of all such information and reports with the SEC for public
availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA Section 314(a).
(b) For so long as any Series A Notes remain outstanding (and
regardless of the penultimate sentence of paragraph (a) above), the Company
shall furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
SECTION 4.4 COMPLIANCE CERTIFICATE
(a) The Company shall deliver to the Trustee within 90 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company 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 the Company 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, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.3(a) hereof shall
be accompanied by a written statement of the Company's independent public
accountants (who shall 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 the
Company has violated any provisions of Article 4 or Article 5 herein, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
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(c) The Company shall, 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 shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or 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 covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, 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 (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 4.7 RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividends on, or make any distribution on or in respect of Capital Stock of the
Company or any of its Restricted Subsidiaries (other than dividends or
distributions payable solely in Qualified Capital Stock or options, warrants or
other rights to acquire Qualified Capital Stock); (ii) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company; (iii)
make any principal payment on or purchase, redeem, defease or otherwise acquire
or retire for value, before any scheduled principal payment or maturity, any
Subordinated Indebtedness; or (iv) make any Investment in any Person (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), unless, and after giving
effect thereto:
(A) at the time of and after giving effect to any such
Restricted Payment, no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
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(B) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable period, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Consolidated Leverage
Ratio test under Section 4.9 herein; and
(C) on a pro forma basis, such Restricted Payment, together
with the aggregate amount of all other Restricted Payments made by the Company
and its Restricted Subsidiaries on or after the Issue Date (the amount expended
for that purpose if other than cash being the Fair Market Value of the property)
does not exceed, without duplication, the sum of: (i) 100% of the Cumulative
Consolidated Operating Cash Flow of the Company and its Consolidated
Subsidiaries LESS a minority equity interest in such Consolidated Operating Cash
Flow in the event a minority interest has not already been deducted from the
Consolidated Operating Cash Flow, LESS 150% of the Cumulative Consolidated
Interest Expense; PLUS (ii) 100% of the aggregate Net Cash Proceeds received by
the Company on and after the Issue Date from the issue or sale of Qualified
Capital Stock or any options, warrants or rights to purchase Qualified Capital
Stock from the Company to the extent such Net Cash Proceeds are not utilized to
Incur Indebtedness pursuant to clause (d) of Section 4.9, PLUS (iii) 100% of the
aggregate Net Cash Proceeds received upon the exercise of any options, warrants
or rights to purchase Qualified Capital Stock of the Company; PLUS (iv) 100% of
the aggregate Net Cash Proceeds received from the conversion or exchange of debt
securities or Disqualified Capital Stock into Qualified Capital Stock of the
Company plus, to the extent such debt securities or Disqualified Capital Stock
were issued after the Issue Date, the Net Cash Proceeds from their original
issuance; PLUS (v) in the case of the disposition or repayment of any Investment
constituting a Restricted Payment, an amount equal to the lesser of (x) the cash
return of capital resulting from sale proceeds, dividends, distributions,
interest payments, return of capital or principal, management fees or other
transfers of assets to the Company or any of its Restricted Subsidiaries or (y)
the initial amount of such Investment; LESS (vi) any amounts paid or payments
made pursuant to any of clauses (2), (3), (5) and (6) of Section 4.7(b) below.
(b) So long as no Default of Event of Default has occurred
and is continuing or would be caused as a result of such payments, the
foregoing provisions will not prohibit: (1) the payment of any dividend
within 60 days after the date of declaration, if, at said date of
declaration, such dividend would have complied with the conditions set forth
in Section 4.7(a)(C) above; (2) the repurchase, redemption, or other
acquisition or retirement for value of any shares of any class of Qualified
Capital Stock of the Company in exchange for, or out of the Net Cash Proceeds
of, a substantially concurrent sale of Qualified Capital Stock of the
Company; (3) the repurchase, redemption, defeasance, retirement, refinancing,
acquisition for value or payment of principal of any Subordinated
Indebtedness in exchange for, or out of the Net Cash Proceeds of, a
substantially concurrent sale of Permitted Refinancing Indebtedness; (4) the
payment of any dividend or other distribution by a Restricted
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Subsidiary of the Company to holders of its Equity Interests on a pro rata
basis; (5) the repurchase, redemption or other acquisition or retirement for
value of any Qualified Capital Stock of the Company or any of its Restricted
Subsidiaries held by a member of the Company's or such Restricted Subsidiary's
management, provided that the aggregate amount of such repurchases in any
calendar year shall not exceed $1 million in any twelve-month period, plus the
aggregate cash proceeds provided to the Company during such period from any
reissuance of Qualified Capital Stock to management; (6) Investments in any
Person engaged, or to be engaged, principally in a Related Business on the date
of such Investments; (7) Investments by Restricted Subsidiaries which are
lessees or buyers of Telecommunications Assets under Telecommunications Assets
Agreements in transactions in which the monetary consideration for such
Telecommunications Assets is paid immediately or is payable over time, PROVIDED
that such Investments shall be made as a sublease or installment sale of the
Telecommunications Assets subject to the Telecommunications Asset Agreement to
which such Restricted Subsidiary is party as lessee or buyer; (8) payments made
under any tax sharing agreement between or among the Company and its Restricted
Subsidiaries; (9) payments of dividends on the Company's convertible preferred
stock in an aggregate amount not to exceed $15.1 million in any calendar year;
and (10) payments to Metromedia Company and any of its Affiliates for reasonable
legal, tax, accounting, financial advisory and other management services in the
ordinary course of business, subject to the approval of the disinterested
members of the Board of Directors.
(c) The amount of all Restricted Payments (other than cash)
shall be the Fair Market Value on the date of the Restricted Payment of the
asset(s) or securities proposed to be transferred or issued by the Company (or
such Restricted Subsidiary, as the case may be) pursuant to the Restricted
Payment.
(d) The Board of Directors may designate any Subsidiary of the
Company (including newly created or newly formed Subsidiaries) to be an
Unrestricted Subsidiary (a "Designation") unless this Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any of its Restricted Subsidiaries that
is not a Subsidiary of the Subsidiary to be so designated; PROVIDED, HOWEVER,
that either (1) the Subsidiary to be so designated has total consolidated assets
of $1.0 million or less or (2) if this Subsidiary has consolidated assets
greater than $1.0 million, then the Restricted Payments to or with respect to
this Subsidiary would be permitted under this Section 4.7.
(e) In the event of any such Designation, all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary so designated will be deemed to be an Investment made as of the time
of such Designation and will reduce the amount available for Restricted Payments
under Section 4.7(a) or 4.7(b), as applicable. All such outstanding Investments
will be
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51
deemed to constitute Restricted Payments in an amount equal to the Fair Market
Value of such Investments at the time of such Designation.
(f) The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that immediately
after giving effect to this designation (1) the Company could Incur at least
$1.00 of additional Indebtedness pursuant to the Consolidated Leverage Ratio
test set forth under Section 4.9 hereof and (2) no default under this Indenture
shall have occurred and be continuing. Any designation by the Board of Directors
will be evidenced to the Trustee by promptly filing with the Trustee a copy of
the Board Resolution giving effect to such Designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
SECTION 4.8 LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED
SUBSIDIARIES
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits; (b) pay any Indebtedness owed to the Company or any of
its Restricted Subsidiaries; (c) sell, lease or transfer any of its properties
or assets to the Company or any of its Restricted Subsidiaries.
However, the foregoing restrictions shall not apply to
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness of the Company and its Subsidiaries as in effect on the Issue Date;
(b) any applicable law and regulations; (c) any agreement in effect at the time
of the acquisition of any Person by the Company or any of its Restricted
Subsidiaries, which agreement was not entered into in connection with, as a
result of, or in anticipation of, such acquisition; (d) any agreement entered
into in connection with Permitted Liens; (e) any agreement for the sale of
assets; (f) any agreement that extends, renews, refinances or replaces the
agreements containing the encumbrances or restrictions in the foregoing clauses
(a) through (e) above, provided that such provisions are no less favorable to
the Company.
SECTION 4.9 LIMITATION ON THE INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK
Subject to the provisions of Section 4.10 herein, the Company
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, Incur any additional Indebtedness or issue or Incur any
Disqualified Capital Stock and the Company shall not permit any of its
Restricted Subsidiaries to issue or Incur any shares of Preferred Stock;
provided, however, that the Company and its Restricted
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52
Subsidiaries may Incur additional Indebtedness or issue or Incur shares of
Disqualified Stock or Preferred Stock if on the date of issuance or Incurrence
the Consolidated Leverage Ratio at the end of the Company's most recently ended
fiscal quarter (the "Reference Period") for which a consolidated balance sheet
of the Company is available immediately preceding the date on which such
additional Indebtedness is Incurred or such Preferred Stock is issued or
Incurred would have been equal to or less than 5.5 to 1.0 (if the Reference
Period ends prior to June 30, 2002), or less than 5.0 to 1.0 (if the Reference
Period ends on or subsequent to June 30, 2002), determined on a pro forma basis
(including, a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been Incurred, or the Disqualified Capital Stock or
Preferred Stock had been issued or Incurred, as the case may be, at the
beginning of the Reference Period and, to the extent provided in the definition
of Consolidated Leverage Ratio herein, determined after giving effect to the use
of the proceeds from such Incurrence of Indebtedness or issuance or Incurrence
of Disqualified Capital Stock or Preferred Stock.
Notwithstanding the foregoing, except with respect to the PLD
Companies, the provisions of the paragraph set forth immediately above will not
prohibit the Incurrence of any of the following items of Indebtedness
(collectively, the "Permitted Indebtedness"):
(a) the Incurrence by the Company of Indebtedness
represented by the Notes and the Exchange Notes;
(b) the Incurrence by the Company or any of its
Restricted Subsidiaries of Existing Indebtedness;
(c) the Incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness consisting of Capital Lease Obligations, Purchase
Money Obligations or other obligations Incurred for the purpose of financing all
or any part of the purchase price, development, acquisition, delivery,
construction or improvement of real or personal property, tangible or
intangible, used or to be used in a Related Business (including Capital Stock of
a Person engaged in a Related Business) or a Credit Facility entered into or
debt securities issued for the purpose of providing such financing, PROVIDED
that such Indebtedness (inclusive of the interest portion thereof and reasonable
costs of financing) does not exceed the lesser of Fair Market Value or the
purchase price and related costs of design, development, acquisition, delivery
(including carriage, insurance, customs duties, value-added taxes and other
importation fees and expenses), construction or improvement of such assets or
property at the time of such incurrence;
(d) the Incurrence by the Company of Indebtedness in an
aggregate principal amount not to exceed two (2) times the sum of the Net Cash
Proceeds received by the Company after the date of this Indenture in connection
with any Public Equity Offerings or sale of Capital Stock (other than
Disqualified Capital
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53
Stock) to any Strategic Investor to the extent that such Net Cash Proceeds have
not been used to make Restricted Payments pursuant to Section 4.7(a)(C)(ii) and
Section 4.7(b)(2) hereof, provided that such Indebtedness does not mature prior
to six (6) months following the Stated Maturity of the Notes;
(e) the incurrence by the Company or any of its Subsidiaries
of any Indebtedness entered into in the ordinary course of business (i) pursuant
to Interest Rate Agreements entered into to protect the Company or any of its
Subsidiaries against fluctuations in interest rates in respect of Indebtedness
of the Company or any of its Subsidiaries so long as the notional principal
amount of such Interest Rate Agreements does not exceed the aggregate principal
amount of such Indebtedness then outstanding or (ii) under any Currency Hedging
Agreements entered into to protect the Company or any of its Subsidiaries
against fluctuations in the value of any currency and not for speculative
purposes;
(f) ordinary course performance bonds, letters of credit and
appeal and surety bonds entered into not in connection with borrowed money;
(g) inter-company Indebtedness owed to the Company or any of
its Restricted Subsidiaries or any Guarantee by the Company or any of its
Restricted Subsidiaries of any Indebtedness permitted to be Incurred hereunder;
(h) the Incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness, so long as the aggregate principal
amount of such Indebtedness does not exceed $200 million at any one time
outstanding; and
(i) Permitted Refinancing Indebtedness of any of the
Indebtedness permitted by clauses (b-h) above.
In the event that Indebtedness meets the criteria of more than
one of the types of Indebtedness described in clauses (a) through (i) above, the
Company may, in its sole discretion, classify such Indebtedness as having been
Incurred under one of these clauses and, except as specifically provided
otherwise, will only be required to include the amount and type of such
Indebtedness as having been Incurred pursuant to such clause.
SECTION 4.10 LIMITATION ON THE INCURRENCE OF INDEBTEDNESS BY THE PLD COMPANIES
Notwithstanding the provisions of Section 4.9 herein, none of
the PLD Companies shall directly or indirectly Incur any additional Indebtedness
or any Guarantees of any Indebtedness.
The foregoing limitations shall not, however, prohibit:
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54
(a) Existing Indebtedness of the PLD Companies;
(b) the Incurrence by the PLD Companies of Indebtedness
consisting of Capital Lease Obligations, Purchase Money Obligations, or other
obligations Incurred for the purpose of financing all or any part of the
purchase price, development, acquisition, delivery, construction or improvement
of real or personal property, tangible or intangible, used or to be used in a
Related Business (other than any business specified in clause (v) of the
definition of Related Business) or a Credit Facility entered into or debt
securities issued for the purpose of providing such financing, PROVIDED that
such Indebtedness (inclusive of the interest portion thereof and reasonable
costs of financing) does not exceed the lesser of Fair Market Value or the
purchase price and related costs of design, development, acquisition, delivery
(including carriage, insurance, customs duties, value-added taxes and other
importation fees and expenses), construction or improvement of such assets or
property at the time of such Incurrence;
(c) the Incurrence by the PLD Companies of any Indebtedness
entered into in the ordinary course of business (i) pursuant to Interest Rate
Agreements entered into to protect the PLD Companies against fluctuations in
interest rates in respect of Indebtedness of any of the PLD Companies so long as
the notional principal amount of such Interest Rate Agreements does not exceed
the aggregate principal amount of such Indebtedness then outstanding or (ii)
under any Currency Hedging Agreements entered into to protect the PLD Companies
against fluctuations in the value of any currency and not for speculative
purposes;
(d) ordinary course performance bonds, letters of credit and
appeal and surety bonds entered into not in connection with borrowed money;
(e) Indebtedness between any of the PLD Companies or any
Guarantee by any PLD Company of any Indebtedness permitted to be Incurred by any
other PLD Company hereunder;
(f) the Incurrence by the PLD Companies of additional
Indebtedness, so long as the aggregate principal amount of such Indebtedness
does not exceed $25.0 million at any one time outstanding; and
(g) Permitted Refinancing Indebtedness of any of the
Indebtedness permitted by clauses (a) through (f) above.
In the event that Indebtedness meets the criteria of more than
one of the types of Indebtedness described in clauses (a) through (g) above, the
Company may, in its sole discretion, classify such Indebtedness as having been
Incurred under one of these clauses and, except as specifically provided
otherwise, will only be required to include the amount and type of such
Indebtedness as having been Incurred pursuant to such clause.
<PAGE>
55
SECTION 4.11 LIMITATION ON ASSET SALES
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, engage in any 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 (including as to the value of all non-cash consideration) of the
assets or Capital Stock subject to such Asset Sale and (ii) at least 80% of the
consideration therefor is in the form of cash and/or Cash Equivalents paid at
the closing of such transaction. To the extent that the Company or any of its
Restricted Subsidiaries receives securities or other noncash property or assets
as proceeds of an Asset Sale, such securities or other noncash proceeds shall
not be treated as Net Proceeds of an Asset Sale unless and until the Company or
its Restricted Subsidiary, as the case may be, receives cash or Cash Equivalents
from a sale, repayment, exchange or other return of capital on, such securities
or other noncash property and then only to the extent of the cash or Cash
Equivalents received.
(b) In the event of an Asset Sale involving PLD Assets, the
Company shall, after applying the Net Proceeds therefrom to repay and
permanently reduce other Existing Indebtedness that by its terms requires such
repayment from such Asset Sale, use 50% of the Net Proceeds allocable to the PLD
Assets involved in such Asset Sale to make an offer to purchase the Notes at a
repurchase price in cash equal to 100% of their Accreted Value on the repurchase
date if such repurchase date is before March __, 2002, or 100% of the principal
amount at Stated Maturity of the Notes, plus accrued but unpaid interest, if
any, to the repurchase date if the repurchase date is after March __, 2002;
provided, however, that the Company shall not be required to make an offer to
purchase the Notes under this Section 4.11 in an amount less than $10 million;
provided, further, that to the extent that 50% of the Net Proceeds of an Asset
Sale of PLD Assets are not equal to or do not exceed $10 million, such amount
shall constitute "Excess Proceeds". Once such Excess Proceeds exceed $10
million, the Company shall use such Excess Proceeds to make an offer to
repurchase the Notes at 100% of their Accreted Value if the repurchase date is
before March __, 2002 or 100% of the principal amount at the Stated Maturity of
the Notes, plus accrued but unpaid interest, if any, to the repurchase date if
the repurchase date is after March __, 2002.
(c) The Company or a Restricted Subsidiary will be permitted
to apply the Net Proceeds from an Asset Sale or the Net Proceeds from an Asset
Sale of PLD Assets that remain following the offer to purchase Notes with
proceeds from an Asset Sale of PLD Assets described in clause (b) above, to (i)
repay the Notes, any Existing Indebtedness (or any Permitted Refinancing
Indebtedness thereof) or any PARI PASSU Indebtedness if required by the terms
thereof or (ii) reinvest in assets of a Related Business, provided that (A) in
the case of an Asset Sale of PLD Assets, the Net Proceeds remaining after the
offer to purchase Notes with proceeds from an Asset Sale of PLD Assets described
in clause (b) above, if any, must be applied within 365
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56
days of the date of their receipt and (B) in the case of an Asset Sale of assets
other than PLD Assets, the Net Proceeds therefrom must be applied within 2 years
of the date of their receipt.
(d) To the extent that the Net Proceeds from an Asset Sale are
not so applied within the periods described in (i) and (ii) of clause (c) above
in this Section 4.11, the remaining Net Proceeds shall constitute Excess
Proceeds. When the aggregate amount of Excess Proceeds equals or exceeds $10.0
million (after application of Excess Proceeds to repurchase Notes as described
above in this Section 4.11), the Company shall make a pro rata offer to all
Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal
amount or Accreted Value of the Notes that may be purchased out of the Excess
Proceeds, at a purchase price in cash in an amount equal to 100% of the Accreted
Value thereof on the repurchase date if such date is before March __, 2002, or
equal to 100% of the principal amount at Stated Maturity thereof, plus accrued
and unpaid interest thereon to the date of purchase if such date is after March
__, 2002 (subject to the right of Holders of record on the relevant Record Date
to receive interest due on the relevant Interest Payment Date), in accordance
with the procedures set forth in Section 3.9 of this Indenture. To the extent
that any Excess Proceeds remain after consummation of such Asset Sale Offer, the
Company may use such Excess Proceeds for other general corporate purposes not
otherwise prohibited by this Indenture. If the aggregate principal amount (or
Accreted Value, as applicable) of Notes tendered into such Asset Sale Offer by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be repurchased on a pro rata basis in proportion to the respective
principal amounts at Stated Maturity (or Accreted Values as applicable) of the
Notes in accordance with Section 3.9 of this Indenture. If the aggregate
principal amount (or Accreted Value, as applicable) of Notes tendered into such
Asset Sale Offer by Holders thereof is less than the amount of Excess Proceeds,
the Company may use such remaining Excess Proceeds for other general corporate
purposes not otherwise prohibited by this Indenture. Upon completion of such
Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero for
purposes of the second sentence of this paragraph.
(e) The amount of any Indebtedness (as shown on the Company's
(or such Restricted Subsidiary's, as the case may be) most recent balance sheet
or in the notes to such balance sheet) that is assumed by the transferee of any
such assets pursuant to an agreement that immediately releases the Company and
all of its Restricted Subsidiaries from all liability in respect thereof will be
deemed to be cash and/or Cash Equivalents for purposes of this Section 4.11, but
will not be treated as Net Proceeds of an Asset Sale.
(f) To the extent that the provisions of any securities laws
or regulations shall conflict with this Section 4.11, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section 4.11 by virtue thereof.
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57
SECTION 4.12 LIMITATION ON TRANSACTIONS WITH AFFILIATES
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer,
exchange or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or render any services to, or enter into or make or
amend any transaction, contract, agreement, understanding, loan, advance or
Guarantee with, or for the benefit of, any Affiliate of the Company (each of the
foregoing, an "Affiliate Transaction"), unless (i) such Affiliate Transaction is
on terms that are not materially less favorable, in the aggregate, to the
Company or the relevant Restricted Subsidiary, as applicable, than those that
would have been obtained at the time of the transaction in a comparable
transaction by the Company or such Restricted Subsidiary, as applicable, on an
arm's- length basis with a Person who is not an Affiliate of the Company and
(ii) with respect to any Affiliate Transaction or series of related Affiliate
Transactions (A) involving aggregate consideration in excess of $5.0 million,
the Company delivers to the Trustee a resolution of the Board of Directors
certifying that such Affiliate Transaction is approved by a majority of the
disinterested members of the Board of Directors and that such Affiliate
Transaction complies with clause (i) above and (B) involving aggregate
consideration in excess of $10.0 million, the Company delivers to the Trustee a
written opinion from an investment banking firm as to the fairness to the
Company or the relevant Restricted Subsidiary, as applicable, of such Affiliate
Transaction from a financial point of view.
Notwithstanding the foregoing, the following items shall
not be deemed to be Affiliate Transactions: (i) (a) the entering into,
maintaining or performance of any employment contract, collective bargaining
agreement, benefit plan, program or arrangement, related trust agreement or
any other similar arrangement for or with any employee, officer or director
heretofore or hereafter entered into in the ordinary course of business,
including vacation, health, insurance, deferred compensation, retirement,
savings or other similar plans, (b) the payment of compensation, performance
of indemnification or contribution obligations, or an issuance, grant or
award of stock, options, or other equity-related interests or other
securities, to employees, officers or directors in the ordinary course of
business, (c) any transaction with an officer or director of the Company or
any of its Subsidiaries in the ordinary course of business not involving more
than $100,000 in any one case and in an aggregate amount not to exceed $2.0
million, or (d) advances to employees of the Company or any of its
Subsidiaries in the ordinary course of business in an aggregate amount not to
exceed $2.0 million, (ii) transactions solely between or among the Company
and its Restricted Subsidiaries or among Restricted Subsidiaries, (iii)
payment of reasonable and customary fees to directors who are not employees
of the Company, (iv) any sale or other issuance of Equity Interests (other
than Disqualified Capital Stock) of the Company to Affiliates of the Company,
(v) Affiliate Transactions in effect or approved by the Board of Directors on
the Issue Date, including any replacements or amendments thereto (provided
that the terms of such replacements or amendments are not materially less
favorable to the Company than the terms of such
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58
agreement prior to such amendment), (vi) transactions with any Persons engaged
in a Related Business that is an Affiliate solely because the Company has a
direct or indirect equity interest in such a Person, and (vii) any transaction
that is permitted under Section 4.7 hereof.
SECTION 4.13 LIMITATION ON LIENS
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, Incur, assume, suffer to
exist or affirm any Lien of any kind (other than Permitted Liens and PLD Company
Permitted Liens) upon any of their property or assets, now owned or hereafter
acquired, or upon any income or profits therefrom unless contemporaneously
therewith effective provision is made to secure all Indebtedness due under this
Indenture and the Notes on an equal and ratable basis with the obligations so
secured by such Lien with a Lien on the same properties and assets securing the
obligations secured by such Lien for so long as such obligations are so secured.
In addition to the foregoing, none of the PLD Companies shall directly or
indirectly Incur, assume, suffer to exist or affirm any Lien of any kind (except
for any PLD Company Permitted Liens) upon any PLD Asset, including Additional
PLD Assets, or upon any income or profits therefrom unless contemporaneously
therewith effective provision is made to secure all Indebtedness due under this
Indenture and the Notes on an equal and ratable basis with the obligations so
secured by such Lien with a Lien on the same properties and assets securing the
obligations secured by such Lien for so long as such obligations are so secured.
SECTION 4.14 CORPORATE EXISTENCE
Subject to Article 5 hereof, the Company shall 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 Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Subsidiary and (ii) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its Subsidiaries, if
the Board of Directors shall determine 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 is not adverse in any
material respect to the Holders of the Notes.
SECTION 4.15 CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer
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59
described below (the "Change of Control Offer") at a purchase price in cash
equal to 101% of the Accreted Value of the Notes to the date of repurchase if
such date is on or before March __, 2002 or 101% of the aggregate principal
amount at Stated Maturity of such Notes to the repurchase date if such date is
after March __, 2002 plus accrued and unpaid interest thereon to the date of
repurchase (the "Change of Control Payment") (subject to the right of Holders of
record on the relevant Record Date to receive interest due on the relevant
Interest Payment Date), provided, however, that the Company shall not be
obligated to repurchase Notes pursuant to this covenant in the event that it has
exercised its rights to redeem all of the Notes as described in Section 3.7
hereof. Within 30 days following any Change of Control, the Company will mail a
notice to each Holder (with a copy to the Trustee) stating (1) that a Change of
Control has occurred and that the Holder has the right to require the Company to
repurchase his or her Notes at a purchase price equal to the Change of Control
Payment and in accordance with the procedures required by this Indenture and
described in such notice, (2) the date of the repurchase, which shall be no
earlier than 30 days nor later than 60 days from the date the Change of Control
notice is mailed (the "Change of Control Payment Date"), and (3) the procedures
that the Company determines shall be followed by the Holders of Notes to have
their Notes repurchased.
The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes as a result of a Change of Control. To the extent that the
provisions of any securities laws or regulations conflict with any of the
provisions of this Section 4.15, the Company shall comply with the applicable
securities laws and regulations and will be deemed not to have breached its
obligations under this Section 4.15 by virtue thereof.
(b) On the Change of Control Payment Date, the Company will,
to the extent lawful, (1) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (2) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Notes or portions thereof so tendered and (3) deliver or cause to be delivered
to the Trustee, the Notes so accepted together with an Officers' Certificate
stating the Accreted Value or aggregate principal amount at Stated Maturity of
the Notes or portions thereof being repurchased by the Company. The Paying Agent
shall promptly mail or deliver to each Holder of Notes so tendered the Change of
Control Payment for such Notes, and upon written direction of the Company, the
Trustee shall promptly authenticate and mail or deliver (or cause to be
transferred by book entry) to each Holder a new Note equal in principal amount
to any unpurchased portion of Notes surrendered, if any; provided that each such
new Note shall be in a principal amount of $1,000 or an integral multiple
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
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(c) Notwithstanding anything to the contrary set forth in this
Section 4.15, the Company shall not be required to make a Change of Control
Offer upon the occurrence of 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 Section 4.15, and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer.
SECTION 4.16 PAYMENTS FOR CONSENT
Neither the Company nor any of its Restricted Subsidiaries
shall, 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 of the terms or
provisions of this Indenture or the Notes unless such consideration is offered
to be paid or is paid to all Holders of the Notes that consent, waive or agree
to amend such terms or provisions of this Indenture or the Notes in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
SECTION 4.17 MONEY FOR PAYMENTS TO BE HELD IN TRUST
If the Company shall at any time act as its own Paying Agent,
it shall, on or before each due date of the principal, premium or interest with
respect to the Notes, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal, premium or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee of its action or
failure so to act.
Whenever the Company shall have one or more Paying Agents for
the Notes, it shall, on or before each due date of the principal, premium or
interest with respect to the Notes, deposit with a Paying Agent a sum in same
day funds (or New York Clearing House funds if such deposit is made prior to the
date on which such deposit is required to be made) sufficient to pay the
principal, premium or interest so becoming due (or at the option of the Company,
payment of interest may be mailed by check to the Holders of the Notes at their
respective addresses set forth in the register of Holders of Notes; provided
that all payments with respect to Notes represented by one or more permanent
Global Notes shall be paid by wire transfer of immediately available funds to
the account of the Depositary) such sum to be held in trust for the benefit of
the Persons entitled to such principal, premium or interest and (unless such
Paying Agent is the Trustee) the Company shall promptly notify the Trustee of
such action or any failure so to act.
The Company shall cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will:
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(a) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee written notice of any default by the
Company (or any other obligor upon the Notes) in the making of any payment of
principal, premium or interest;
(c) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all respects
with the provisions of this Indenture relating to the duties, rights and
obligations of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal, premium or
interest with respect to a Note and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company at the written request of the Company or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, shall at the
expense of the Company cause notice to be promptly sent to each Holder that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification, any unclaimed
balance of such money then remaining shall be repaid to the Company.
SECTION 4.18 ADDITIONAL PLD ASSETS
The Company agrees that (i) from May 18, 1999 through the
second anniversary of the Issue Date, the PLD Companies will acquire the
Additional PLD Assets, whether or not using Purchase Money Obligations. To the
extent the
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Company acquired Pivotel Assets or properties prior to such date, without using
Purchase Money Obligations, such assets shall constitute Additional PLD Assets.
SECTION 4.19 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into any Sale and
Leaseback Transaction with respect to any property or assets unless: (a) the
consideration received at the time of the Sale and Leaseback Transaction is at
least equal to the Fair Market Value of the property or assets; (b) the sale or
transfer of such property or assets to be leased is treated as an Asset Sale and
complies with Section 4.11 hereof and (c) the Company or such Restricted
Subsidiary would be entitled to Incur additional Indebtedness under Section 4.9
hereof.
The foregoing restrictions shall not apply to any Sale and
Leaseback Transaction if: (i) the lease is for a period, including renewal
rights, not in excess of three years; (ii) the transaction is solely between
the Company and any of its Restricted Subsidiaries or one of its Restricted
Subsidiaries and any other Restricted Subsidiaries; and (iii) the transaction
is consummated within 180 days of the acquisition by the Company or any of
its Subsidiaries of the property or assets or entered into within 180 days
after the purchase or substantial completion of the construction of such
property or assets or 270 days in the event that the only condition delaying
such consummation of the purchase or the completion of the construction is
the receipt of applicable regulatory approvals.
ARTICLE 5
SUCCESSORS
SECTION 5.1 MERGER, CONSOLIDATION, OR SALE OF ASSETS
(a) The Company shall not, directly or indirectly, consolidate
with or merge with or into (whether or not the Company is the surviving
corporation), or sell, assign, transfer, convey, lease or otherwise dispose of
all or substantially all of its properties or assets, in one or more related
transactions, to another Person unless: (i) the Company is the surviving
corporation or the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment, transfer,
conveyance, lease or other disposition shall have been made is a corporation
organized and existing under the laws of the United States of America, any state
thereof or the District of Columbia; (ii) the Person formed by or surviving any
such consolidation or merger (if other than the Company) or the Person to which
such sale, assignment, transfer, conveyance, lease or other disposition shall
have been made expressly assumes all the obligations of the Company under the
Notes and this Indenture pursuant to a supplemental indenture executed and
delivered to the Trustee,
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in a form reasonably satisfactory to the Trustee; (iii) no Default or Event of
Default (or an event that, with the passing of time or giving of notice or both,
would constitute an Event of Default) shall exist or shall occur immediately
before and immediately after giving effect on a pro forma basis to such
transaction; (iv) except in the case of a transaction with a Wholly Owned
Subsidiary of the Company, the Company or the Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance, lease or other disposition shall have been
made is, immediately after giving effect to such transaction and after giving
pro forma effect thereto and any related financing transactions as if the same
had occurred at the beginning of the applicable period, permitted to Incur at
least $1.00 of additional Indebtedness pursuant to the first paragraph of
Section 4.9 hereof; and (v) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture and the Notes.
(b) For purposes of this Article 5, the transfer (by
assignment, sale or otherwise) of all or substantially all of the properties and
assets of one or more of the Company's Subsidiaries, the Company's interest in
which constitutes all or substantially all of the properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
(c) Notwithstanding (a) and (b) above, any of the Company's
Restricted Subsidiaries may consolidate with, merge into or transfer all or part
of its properties and assets to the Company or one of its Wholly Owned
Subsidiaries if no other parties are either directly or indirectly involved in
such transaction. Notwithstanding clauses (a) and (b) above, the Company may
merge with an Affiliate with no Indebtedness, incorporated solely for the
purpose of reincorporating the Company in another jurisdiction in the United
States of America, any state of the United States of America or the District of
Columbia to realize tax or other benefits.
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1
hereof, the successor Person formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to and (except
in the case of a lease) be substituted for (so that from and after the date of
such consolidation, merger or transfer, the provisions of this Indenture
referring to the "Company" shall refer instead to the successor Person and not
to the Company), and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
herein as the Company, and (except in the case of a lease) the Company shall be
released from the obligations under the Notes and this Indenture except with
respect to any obligations that arise from, or are related to, such transaction.
Notwithstanding the foregoing, the Company shall not be released
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from the obligation to pay the principal of, accrued and unpaid interest, if
any, on, and premium, if any, on, the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT
The following events shall constitute "Events of Defaults" for
purposes of this Indenture:
(i) a default for 30 days in the payment when due of
interest on any Note;
(ii) a default in the payment when due of the
principal of, or premium, if any, on the Notes, whether at Stated
Maturity, upon optional redemption, a required repurchase, declaration
or otherwise;
(iii) the failure by the Company or any of its
Restricted Subsidiaries to comply with its obligations under Article 5
hereof;
(iv) the failure by the Company or any of its
Restricted Subsidiaries to comply for 30 days after receiving notice
from the Holders of at least 25% in aggregate principal amount at
Stated Maturity (or Accreted Value, as applicable) of the outstanding
Notes or from the Trustee on behalf of Holders of such Notes with any
of the Company's or the Restricted Subsidiary's obligations under
Sections 4.7 through 4.13, 4.15 and 4.17 through 4.19 hereof, in each
case, other than a failure to repurchase Notes which will constitute an
Event of Default under clause (ii) above;
(v) the failure by the Company or any of its
Restricted Subsidiaries to comply for 60 days after receiving notice
thereof from the Holders of at least 25% in aggregate principal amount
at Stated Maturity (or Accreted Value, as applicable) of the
outstanding Notes or from the Trustee on behalf of such Holders with
any of its other obligations and duties under this Indenture or the
Notes;
(vi)(a) the failure to pay, waive or cure the
failure to pay, within any applicable grace period, after final
maturity, any Indebtedness 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 by 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
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Guarantee now exists, or is created after the Issue Date, or (b) a default under
any such mortgage, indenture or other instrument evidencing such Indebtedness,
which default results in the acceleration of such Indebtedness prior to its
express maturity and, in each of (a) or (b) above, the amount of any such
Indebtedness, together with the amount of any other such Indebtedness or the
maturity of which has been so accelerated, exceeds $15.0 million;
(vii) the entry against the Company or any of its
Significant Subsidiaries of any final judgment or decree not subject to
appeal for the payment of money in excess of $15.0 million (net of
applicable insurance coverage which is acknowledged in writing by the
insurer), which judgments are not paid, vacated, discharged or stayed
for a period of 60 days after they become final and non-appealable;
(viii) the Company or any of its Significant
Subsidiaries:
(a) commences a voluntary case under any
Bankruptcy Law,
(b) consents to the entry of an order
for relief against it in an involuntary case under any Bankruptcy Law,
(c) consents to the appointment of a
custodian of it or for all or substantially all of its property,
(d) makes a general assignment for the
benefit of its creditors, or
(e) generally is not paying its debts as
they become due; or
(ix) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(a) is for relief against the Company or
any of its Significant Subsidiaries;
(b) appoints a custodian of the Company
or any of its Significant Subsidiaries or for all or substantially all
of the property of the Company or any of its Significant Subsidiaries;
or
(c) orders the liquidation of the
Company or any of its Significant Subsidiaries;
and the order or decree remains unstayed and in effect for 60 consecutive days.
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SECTION 6.2 ACCELERATION
If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount at Stated Maturity
(or Accreted Value, as applicable) of the then outstanding Notes may declare all
the Notes to be due and payable immediately by sending to the Company a notice
of acceleration. Notwithstanding the foregoing, if an Event of Default specified
in clause (viii) or (ix) of Section 6.1 hereof occurs with respect to the
Company, any of its Restricted Subsidiaries that constitutes a Significant
Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, all outstanding Notes shall be due and
payable immediately without further action or notice. The Holders of a majority
in aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.
SECTION 6.3 OTHER REMEDIES
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. 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 shall 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
Holders of not less than a majority in aggregate principal
amount at Stated Maturity (or Accreted Value, as applicable) of the then
outstanding Notes (or, with respect to a provision of this Indenture that may
only be amended by the Holders of not less than 66 2/3% in aggregate principal
amount at Stated Maturity (or Accreted Value, as applicable) of the then
outstanding Notes, the Holders of not less than 66 2/3% in aggregate principal
amount at Stated Maturity (or Accreted Value, as applicable) of the then
outstanding Notes) by written 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, except a continuing Default or Event of Default in the
payment of the principal of, premium or interest on, the Notes (including in
connection with an offer to purchase). Upon any such waiver, such
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Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture, but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
SECTION 6.5 CONTROL BY MAJORITY
Holders of Notes may not enforce this Indenture or the Notes
except as provided herein. Subject to Section 7.1(e) hereof, Holders of a
majority in aggregate principal amount at Stated Maturity (or Accreted Value, as
applicable) of the then outstanding Notes may direct the time, method and place
of conducting any proceeding for exercising any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee. 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 other
Holders of Notes or that may involve 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
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount
at Stated Maturity (or Accreted Value, as applicable) of the then outstanding
Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(e) during such 60-day period the Holders of a majority in
aggregate principal amount at Stated Maturity (or Accreted Value, as applicable)
of the then outstanding Notes do not give the Trustee a direction inconsistent
with the request.
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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.
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal, premium and
interest on the Note, on or after the respective due dates expressed in the Note
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE
If an Event of Default specified in Section 6.1(i) or (ii)
hereof 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 (i)
the whole amount of principal of, premium and interest remaining unpaid on the
Notes and interest on overdue principal and, to the extent lawful, interest and
(ii) such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM
The Trustee 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
shall be entitled and empowered to participate as a member, voting or otherwise,
of any official committee of creditors appointed in such matter and shall 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 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 shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
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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 shall 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 shall pay out the money in the following order:
FIRST: to the Trustee, its agents and counsel for amounts due
under Sections 6.8 and 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 and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal, premium and interest, respectively, and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
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, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.7 hereof, or a suit by Holders of more
than 10% in aggregate principal amount at Stated Maturity (or Accreted Value, as
applicable) of the then outstanding Notes.
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ARTICLE 7
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the occurrence and continuance of an
Event of Default:
(i) the duties of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
(or similar documents) or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee
shall examine the certificates (or similar documents) and opinions to
determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein or otherwise
verify the contents thereof).
(c) The Trustee may not be relieved from liabilities for its
own grossly negligent action, its own grossly 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 7.1;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was grossly negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof.
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(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), (c) and (e) of this Section 7.1.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers or to perform any
duty under this Indenture at the request of any Holders, unless such Holders
shall have offered to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense including reasonable attorneys' fees that
might be incurred by it in compliance with such request or direction.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.2 RIGHTS OF TRUSTEE
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in any such
document. The Trustee shall receive and retain financial reports and statements
of the Company as provided herein, but it shall have no duty to review or
analyze such reports or statements to determine compliance with covenants or
other obligations of the Company.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any such attorney
or agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(g) Prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default which may have occurred, 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, order, approval, bond or other paper or document unless
requested in writing to do so by the Holders representing more than 25% in
aggregate principal amount at Stated Maturity (or Accreted Value, as applicable)
of Notes then outstanding; PROVIDED, HOWEVER, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require indemnity reasonably
satisfactory to it against such cost, expense or liability as a condition to so
proceeding.
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 it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof
SECTION 7.4 TRUSTEE'S DISCLAIMER
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall 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 shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
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SECTION 7.5 NOTICE OF DEFAULTS
(a) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a Default or Event of Default is received by the Trustee at the Corporate
Trust Office of the Trustee, and such notice references the Notes and this
Indenture.
(b) If a Default or Event of Default occurs and is continuing
and if it is known to the Trustee in accordance with the provisions of paragraph
(a) of this Section 7.5, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium, if
any, or interest on any Note (including any failure to redeem Notes called for
redemption or any failure to repurchase Notes that are tendered pursuant to an
Asset Sale Offer and that are required to be repurchased by the terms of this
Indenture), the Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice is
in the interests of the Holders of the Notes.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES
Within 60 days after each May 15th beginning with the May 15th
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall 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
shall comply with TIA Section 313(b)(2). The Trustee shall 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 shall be mailed to the Company and, commencing at the time this
Indenture is qualified under the TIA, filed with the SEC and each stock exchange
on which the Notes are listed in accordance with TIA Section 313(d). The Company
shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
SECTION 7.7 COMPENSATION AND INDEMNITY
The Company shall pay to the Trustee from time to time such
compensation for its services hereunder as the parties shall agree from time to
time. The Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Company shall reimburse the Trustee
promptly upon request for all reasonable disbursements, advances and expenses
incurred or made by it in addition to the compensation for its services. Such
expenses shall include the
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reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company shall indemnify the Trustee and hold it harmless
for, from and 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
shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld or delayed.
The obligations of the Company under this Section 7.7 shall
survive the satisfaction and discharge of this Indenture or the resignation or
removal of the Trustee.
To secure the Company's payment obligations in this Section,
the Trustee shall 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 shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1 (viii) or (ix) 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 shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
SECTION 7.8 REPLACEMENT OF TRUSTEE
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.8.
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The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Notes of a majority in aggregate principal amount at Stated Maturity
(or Accreted Value, as applicable) of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of performing the services
of Trustee hereunder.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the "retiring Trustee"), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in aggregate principal amount at Stated Maturity (or
Accreted Value, as applicable) of the then outstanding Notes may appoint a new
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in aggregate principal amount
at Stated Maturity (or Accreted Value, as applicable) of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the retiring Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.7 hereof. Notwithstanding
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replacement of the Trustee pursuant to this Section 7.8, the Company's
obligations under Section 7.7 hereof shall continue for the benefit of the
retiring Trustee.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION
There shall 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 or the District of Columbia or a subsidiary
of a bank holding corporation that is authorized under such laws to exercise
corporate trustee powers, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of
at least $100.0 million as set forth in its most recent published annual
report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
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 shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1 DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE
(a) When (i) the Company delivers to the Trustee all
outstanding Notes (other than Notes replaced pursuant to Section 2.7) for
cancellation or (ii) all outstanding Notes have become due and payable, whether
at maturity or upon redemption and the Company has irrevocably deposited with
the Trustee or a Paying Agent funds sufficient to pay at maturity or upon
redemption or otherwise, as applicable, all outstanding Notes (other than Notes
replaced pursuant to Section 2.7), including interest thereon to maturity or
such redemption date, and if in either case the Company pays all other sums
payable hereunder by the Company, then this Indenture shall, subject to Sections
8.1(c) and 8.6, cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of
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the Company (accompanied by an Officers' Certificate and an Opinion of Counsel
stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been complied with) and at the
cost and expense of the Company.
(b) Subject to Sections 8.1(c), 8.2 and 8.6, the Company at
any time may terminate (i) all its obligations under the Notes and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.2, 4.3, 4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17, 4.18 and
5.1(a)(iv) and the operation of Sections 6.1(iv), 6.1(v), 6.1(vi), 6.1(vii),
6.1(viii) with respect to Significant Subsidiaries, and 6.1(ix) with respect to
Significant Subsidiaries and the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.1(iii), 6.1(iv) or 6.1(v) ("covenant defeasance option"), but, except
as specified above, the remainder of this Indenture and the Notes shall be
unaffected thereby. The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Notes may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Notes may not
be accelerated because of an Event of Default specified in Sections 6.1(iii),
6.1(iv), 6.1(v), 6.1(vi), 6.1(vii), 6.1(viii) (but only with respect to a
Significant Subsidiary) or 6.1(ix) (but only with respect to a Significant
Subsidiary) or because of the failure of the Company to comply with Section
5.1(a)(iv).
Upon satisfaction of the conditions set forth herein and upon
request of the Company (and at the Company's expense), the Trustee shall
acknowledge in writing the discharge of those obligations that the Company
terminates.
(c) Notwithstanding the provisions of Sections 8.1(a) and (b),
the Company's obligations under Sections 2.3, 2.4, 2.5, 2.6, 2.7, 7.7, 7.8, 8.5
and 8.6 shall survive until the Notes have been paid in full. Thereafter, the
Company's obligations in Sections 7.7 and 8.5 shall survive.
SECTION 8.2 CONDITIONS TO DEFEASANCE.
The Company may exercise its legal defeasance option or its
covenant defeasance option only if:
(i) the Company irrevocably deposits in trust with the
Trustee for the benefit of the Holders money in U.S. dollars or U.S. Government
Obligations or
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a combination thereof for the payment of principal of, premium, if any, on and
interest on the Notes to maturity or redemption, as the case may be and to pay
any amounts due the Trustee under this Indenture and, in addition, the Company
specifies in such Officers' Certificate whether the Notes are being defeased to
maturity or to a particular redemption date;
(ii) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their opinion
that the payments of principal and interest when due and without reinvestment on
the deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay principal of, premium, if any, and interest when due on all
the outstanding Notes to maturity or on the applicable redemption date, as the
case may be;
(iii) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit (other than a Default or Event of
Default with respect to this Indenture resulting from the Incurrence of
Indebtedness, all or a portion of which will be used to defease the Notes
concurrently with such Incurrence);
(iv) such legal defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a Default under this Indenture
or any other material agreement or instrument to which the Company or any of its
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;
(v) the Company shall have delivered to the Trustee an Opinion
of Counsel, subject to such qualifications and exceptions as the Trustee deems
appropriate, to the effect that (A) the Notes and (B) assuming no intervening
bankruptcy of the Company between the date of deposit and the 91st day following
the deposit and that no Holder of the Notes is an insider of the Company, after
the 91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(vi) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company required to register under the
Investment Company Act of 1940;
(vii) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been a
change in the applicable federal income tax law, in either case to the effect
that, and based thereon such
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Opinion of Counsel shall 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;
(viii) in the case of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States 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 amounts, in the
same manner and at the same times as would have been the case if such covenant
defeasance had not occurred; and
(ix) the Company delivers to the Trustee an Officers'
Certificate stating that all conditions precedent to the defeasance and
discharge of the Notes and this Indenture as contemplated by this Article VIII
have been complied with and an Opinion of Counsel stating that the Trustee on
behalf of the Holders will have a valid and perfected exclusive security
interest in the trust funds and that the conditions precedent provided for in
clauses (vii) and (viii), as applicable, of this Section 8.2 have been complied
with.
SECTION 8.3 APPLICATION OF TRUST MONEY.
The Trustee or Paying Agent shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to this Article 8. The Trustee
or Paying Agent shall apply the deposited money and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of
principal of, and premium, if any, on and interest on the Notes.
SECTION 8.4 REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall promptly turn over to
the Company upon request any excess money or Notes held by them upon payment of
all the obligations under this Indenture.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal of or interest on the Notes that remains
unclaimed for two years, and, thereafter, Holders of Notes entitled to the money
must look solely to the Company for payment as general unsecured creditors and
all liability of the Trustee or such Paying Agent with respect to such money
shall cease.
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SECTION 8.5 INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS.
The Company shall pay and shall indemnify the Trustee and any
Paying Agent against any tax, fee or other charge imposed on or assessed against
deposited money and/or U.S. Government Obligations or the principal and interest
received on such money or U.S. Government Obligations.
SECTION 8.6 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with this Article 8 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the obligations of the Company under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article 8 until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with this
Article 8; provided, however, that if the Company has made any payment of
interest or premium on or principal of any Notes because of the reinstatement of
its obligations under this Indenture and the Notes, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES
Notwithstanding Section 9.2 hereof, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder of a Note:
(a) to cure any ambiguity, omission, 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 the Notes by a successor to the Company 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 rights hereunder of any Holder of Notes;
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(e) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
(f) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon the
Company;
(g) to provide for the issuance of the Unrestricted Notes
under the Registered Exchange Offer contemplated by the Agreement to Exchange
and Consent;
(h) to secure the Notes; or
(i) to effect any change to the transfer and exchange
restrictions and security delivery procedures contained in Article 2 in order to
conform with changes in any applicable law or Applicable Procedures.
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 Sections 7.2 and 9.6 hereof, the Trustee shall 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, but the Trustee shall
not be obligated to enter into such amended or supplemental indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES
Except as provided below in this Section 9.2, the Company and
the Trustee, may amend or supplement this Indenture (including Section 3.9 and
4.11 hereof) and the Notes with the consent of the Holders of a majority in
aggregate principal amount at Stated Maturity (or Accreted Value, as applicable)
of the then outstanding Notes voting as a single class (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes), and, subject to Sections 6.4 and 6.7 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
noncompliance with any provision of this Indenture or the Notes may be waived
with the consent of the Holders of a majority in aggregate principal amount at
Stated Maturity (or Accreted Value, as applicable) of the then outstanding Notes
voting as a single class (including consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes).
Notwithstanding the foregoing, without the consent of Holders
of at least 66 2/3% in aggregate principal amount at Stated Maturity (or
Accreted Value, as applicable) of the then outstanding Notes voting as a single
class, the Company and
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the Trustee may not: (i) modify the provisions (including the defined terms used
therein) of Section 4.15 hereof in a manner adverse to the Holders or (ii)
release or modify a Lien granted to the Holders of 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, 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 Sections 7.2 and
9.6 hereof, the Trustee shall join with the Company in the execution of such
amended or supplemental indenture unless such amended or supplemental indenture
directly affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental indenture.
It shall 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 shall be sufficient if such consent approves the
substance thereof. The Company shall notify the Holders of any amendment to the
Indenture after it has become effective, which notice shall briefly describe the
amendment. Notwithstanding the foregoing, the Company's failure to give such
notice to all Holders of the Notes or any defect in such notice will not impair
or affect the validity of the amendment.
After an amendment, supplement or waiver under this Section
9.2 becomes effective, the Company shall 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, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver. Subject to the provisions of this Section 9.2
and Sections 6.4 and 6.7 hereof, the Holders of a majority in aggregate
principal amount at Stated Maturity (or Accreted Value, as applicable) of the
Notes then outstanding voting as a single class may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Notes. However, notwithstanding anything to the contrary in this Indenture,
without the consent of each Holder affected, an amendment or waiver under this
Section 9.2 may not (with respect to any Notes held by a non-consenting Holder):
(a) extend the Stated Maturity on any Note, or reduce the
principal thereof or reduce the rate or extend the time for payment of interest
thereon or reduce any premium payable upon the redemption at the option of the
Company thereof, or change the coin or currency in which, any Note or any
premium or the interest thereon is payable, or impair the right to receive
payment of principal or interest on the Notes on or after the due dates for
these payments or to institute suit for the
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enforcement of any such payment on or after the Stated Maturity thereof (or, in
the case of redemption at the option of the Company, on or after the redemption
date);
(b) reduce the percentage in principal amount at Stated
Maturity (or Accreted Value, as applicable) of Notes outstanding whose Holders
must consent to an amendment, supplement or waiver provided for in this
Indenture;
(c) modify any of the waiver provisions or the provisions
under this Section 9.2 requiring the consent of each Holder for certain
amendments, except to increase any required percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each outstanding Note affected thereby; or
(d) cause the Notes to become subordinate in right of payment
to any other Indebtedness.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment or supplement to this Indenture or the Notes
shall 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 becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder. An amendment or waiver shall
become effective upon receipt by the Trustee of the requisite number of written
consents under Section 9.1 or 9.2 as applicable.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders of Notes entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who held
Notes at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date.
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SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
Trustee shall 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.
If such amendment or supplement does adversely affect such rights, duties,
liabilities or immunities, the Trustee may, but need not, sign it. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.1 hereof) shall be fully
protected in relying upon an Officer's Certificate and an Opinion of Counsel
pursuant to Sections 11.4 and 11.5 hereof as conclusive evidence that such
amended or supplemental indenture is authorized or permitted by this Indenture,
that it is not inconsistent herewith and that such amended or supplemental
indenture is the legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms, subject to customary exceptions.
ARTICLE 10
SATISFACTION AND DISCHARGE
SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE
This Indenture shall be discharged and will cease to be of
further effect as to all Notes issued hereunder, when either
(a) all such Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid and
Notes for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company) have been delivered to the Trustee for
cancellation; or
(b) (i) all such Notes not theretofore delivered to such
Trustee for cancellation have become due and payable by reason of the
making of a notice of redemption, repurchase or otherwise or will
become due and payable
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within one year, and the Company has irrevocably deposited or caused to
be deposited with such Trustee as trust funds in trust an amount of
money sufficient to pay and discharge the entire Indebtedness on such
Notes not theretofore delivered to the Trustee for cancellation for
principal, premium, accrued interest to the date of maturity,
redemption or repurchase;
(ii) no Default or Event of Default with respect to
this Indenture or the Notes shall have occurred and be continuing on
the date of such deposit or shall occur as a result of such deposit and
such deposit will not result in a breach or violation of or constitute
a default under, any other instrument to which the Company is a party
or by which the Company is bound;
(iii) the Company has paid or caused to be paid all
sums payable by it under this Indenture; and
(iv) the Company has delivered irrevocable written
instructions to the Trustee under this Indenture to apply the deposited
money toward the payment of such Notes at maturity or the redemption
date, as the case may be.
In addition, the Company must deliver an Officers' Certificate
and an Opinion of Counsel to the Trustee stating that all conditions precedent
to satisfaction and discharge have been satisfied.
SECTION 10.2 APPLICATION OF TRUST MONEY
Subject to the provisions of the last paragraph of Section
4.17 hereof, all money deposited with the Trustee pursuant to Section 10.1
hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 10.1 hereof by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though such deposit had not occurred pursuant to
Section 10.1 hereof, provided that if the Company has made any payment of
principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
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ARTICLE 11
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties
shall control.
SECTION 11.2 NOTICES
Any notice or communication by the Company 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 others' address:
If to the Company:
Metromedia International Group, Inc.
One Meadowlands Plaza
East Rutherford, N.J. 070706
Attention: Arnold L. Wadler, Esq.
Fax: (201) 551-2803
With a copy (which shall not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Douglas A. Cifu, Esq.
Fax: (212) 757-3990
If to the Trustee:
U.S. Bank Trust National Association
180 East 5th Street
St. Paul, MN 55105
Attention: Corporate Trust Department/Corporate Finance
Fax: (651) 244-0711
The Company or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
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All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt is acknowledged by the sender's
telecopier, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall 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 kept by the Registrar. Any notice or communication shall 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 shall 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, except that any notice or communication to the Trustee shall be
deemed to have been duly given to the Trustee when received at the Corporate
Trust Office of the Trustee.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 11.3 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 shall have the
protection of TIA Section 312(c).
SECTION 11.4 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, except with respect to the initial
authentication of Notes on the date of this Indenture, the Company shall furnish
to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5 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 or complied with; and
<PAGE>
88
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied or complied with.
SECTION 11.5 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)) shall comply with the provisions of
TIA Section 314(e) and shall 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 or they have made such examination or investigation as is necessary to
enable each to express an informed opinion as to whether or not such covenant or
condition has been satisfied or complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied or complied with.
SECTION 11.6 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 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS
No past, present or future director, officer, employee,
incorporator, agent or shareholder of the Company, as such, shall have any
liability for any obligations of the Company under the Notes, this Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
<PAGE>
89
SECTION 11.8 GOVERNING LAW
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 11.9 CONSENT TO JURISDICTION AND SERVICE
To the fullest extent permitted by applicable law, the Company
hereby irrevocably submits to the jurisdiction of any Federal or State court
located in the Borough of Manhattan in The City of New York, New York in any
suit, action or proceeding based on or arising out of or relating to this
Indenture or any Notes or Exchange Notes, and irrevocably agrees that all claims
in respect of such suit or proceeding may be determined in any such court. The
Company irrevocably waives, to the fullest extent permitted by law, any
objection which they may have to the laying of the venue of any such suit,
action or proceeding brought in such a court and any claim that any suit, action
or proceeding brought in such a court has been brought in an inconvenient forum.
The Company agrees that final judgment in any such suit, action or proceeding
brought in such a court shall be conclusive and binding upon the Company and may
be enforced in the courts of any jurisdiction to which the Company is subject by
a suit upon such judgment, provided that service of process is effected upon the
Company in the manner specified herein or as otherwise permitted by law. To the
extent that the Company has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service of
process, attachment prior to judgment, attachment in aid of execution, executor
or otherwise) with respect to itself or its property, the Company hereby
irrevocably waives such immunity in respect of their respective obligations
under this Indenture, to the extent permitted by law.
SECTION 11.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
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 11.11 SUCCESSORS
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
<PAGE>
90
SECTION 11.12 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 11.13 COUNTERPART ORIGINALS
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 11.14 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
Dated as of September ___, 1999
METROMEDIA INTERNATIONAL GROUP, INC.
By:
--------------------------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
(Face of Note)
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
CUSIP _______________
[Series A] [Series B] 10 1/2% Senior Discount Notes due 2007
No. [____________] $[_________]
METROMEDIA INTERNATIONAL GROUP, INC. promises to pay to
[Insert if a Global Note: Cede & Co.][Insert if a Definitive Note:___________]
or registered assigns, the principal sum of ________________ Dollars ($________)
on __________, 2007.
Interest Payment Dates: [__________]and [__________].
Record Dates: [__________] and [__________].
METROMEDIA INTERNATIONAL GROUP, INC.
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By: Dated:
------------------------ -------------------
Name:
Title:
<PAGE>
[FORM OF REVERSE SIDE OF INITIAL NOTE]
[Series A] [Series B] 10 1/2% Senior Discount Notes due 2007
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. Interest
Metromedia International Group, Inc., a Delaware corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
interest on the principal amount of this Note at the rate per annum shown above
from March ___, 2002 until maturity.
The Company shall pay interest semiannually on [________] and
[________] of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each, an "Interest Payment Date"), commencing
[_________] __, 2002. Interest on the Notes shall accrue from the most recent
date to which interest has been paid on the Notes or, if no interest has been
paid, from March ___, 2002. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful. Interest shall be computed on the basis of a 360-day year of twelve
30-day months.
2. Method of Payment
The initial Accreted Value shall increase at the rate of
10 1/2% per annum, compounded semi-annually, until March ___, 2002, to an
aggregate principal amount for all the Notes on March ___, 2002 of
$210,631,376.
By at least 12:00 noon (New York City time) on the date on
which any principal of, premium, if any, or interest on any Note is due and
payable, the Company shall irrevocably deposit with the Paying Agent money in
immediately available funds sufficient to pay such principal, premium, if any,
and/or interest then due. The Company shall pay interest (except defaulted
interest) to the Persons who are registered Holders of Notes at the close of
business on the Record Date even if such Notes are canceled, repurchased or
redeemed after the Record Date and on or before the Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. Holders must surrender Notes to the Paying Agent to collect principal
payments. The Company shall pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public
<PAGE>
and private debts. The Notes shall be payable as to principal, premium, if any,
and interest at the office or agency of the Company maintained for such purpose
within or outside of the City and State of New York, or, at the option of the
Company, payment of interest may be made by check mailed to the Holders at their
addresses set forth in the register of Holders kept by the Registrar, PROVIDED
that payment by wire transfer of immediately available funds shall be required
with respect to principal of, interest and premium, if any, on all Global Notes
and all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent.
3. Paying Agent and Registrar
Initially, U.S. Bank Trust National Association, a national
banking association (the "Trustee"), will act as Trustee, Paying Agent and
Registrar. The Company may appoint and change any Paying Agent or Registrar
without notice to any Holder. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
4. Indenture
The Company issued the Notes under an Indenture dated as of
September ___, 1999 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, 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 (15
U.S.C. section 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). The Notes are subject to all such terms, and Holders are referred to the
Indenture and the Act for a statement of those terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling. The Notes are
obligations of the Company limited to $210,631,376 in aggregate principal
amount.
The Notes are senior unsecured obligations of the Company that
will rank pari passu in right of payment to all existing and future senior
Indebtedness of the Company and senior to all existing and future subordinated
Indebtedness of the Company. The Indenture imposes certain limitations on: the
Incurrence of Indebtedness by the Company, its Restricted Subsidiaries and the
PLD Companies, the payment of dividends and other distributions on the Capital
Stock of the Company and its Restricted Subsidiaries, the purchase or redemption
of Capital Stock of the Company and Capital Stock of such Restricted
Subsidiaries, the Incurrence of Liens by the Company or its Restricted
Subsidiaries, the sale or transfer of assets and Capital Stock by the Company or
its Restricted Subsidiaries, the ability of the Company and its Restricted
Subsidiaries to engage in Sale and Leaseback Transactions, the acquisition of
additional PLD Assets and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and its
<PAGE>
Restricted Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
5. Redemption
Except as set forth below, the Notes will not be redeemable at
the option of the Company prior to March ___, 2002. Thereafter, the Notes shall
be redeemable, at the Company's sole option, in whole or in part, at any time
upon not less than 30 nor more than 60 days prior notice mailed by first-class
mail to each Holder's registered address, at a redemption price equal to the
principal amount of the Notes, plus accrued and unpaid interest, if any, and
premium, if any, thereon, to but excluding the date of redemption (subject to
the right of Holders of record on the relevant Record Date to receive interest
due on the relevant Interest Payment Date).
In the case of any partial redemption, selection of the Notes
for redemption will be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed, or, if the Notes are not so listed, on a pro rata basis, by lot or by
such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate, although no Notes of $1,000 in principal amount or less shall
be redeemed in part. If any Note is to be redeemed in part only, the notice of
redemption relating to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof shall be issued in the name of the Holder thereof upon
cancellation of the original Note.
6. Repurchase Provisions
(a) Upon a Change of Control, each Holder of Notes shall have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's Notes at a purchase price in
cash equal to 101% of the Accreted Value of the Notes to the date of repurchase
if such date is on or before March __, 2002 or 101% of the aggregate principal
amount thereof, plus accrued and unpaid interest, if any, to the date of
repurchase if such date is after March __, 2002 (subject to the right of Holders
of record on the relevant Record Date to receive interest due on the relevant
Interest Payment Date) and, in each case, subject to the terms of the Indenture.
(b) Subject to the terms and conditions set forth in the
Indenture, if the Company or a Restricted Subsidiary consummates any Asset Sale
permitted by the Indenture, when the aggregate amount of Excess Proceeds equals
or exceeds $10,000,000, the Company shall make a pro rata Asset Sale Offer for
all outstanding Notes up to a maximum principal amount at Stated Maturity or
Accreted Value, as applicable (expressed as a multiple of $1,000), of Notes that
may be purchased out of such Excess Proceeds, at a purchase price in cash equal
to 100% of the Accreted Value of such Notes on the Purchase Date if such date is
on or before March ___,
<PAGE>
2002, or 100% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the Purchase Date if such date is after March __, 2002, in
each case, in accordance with the terms and procedures set forth in Sections 3.9
and 4.11 of the Indenture.
7. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. The transfer of Notes
may be registered and Notes may be exchanged in accordance with the Indenture.
The Registrar, the Trustee and the Company may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes and fees required by law or permitted by the Indenture. The Company and
the Registrar need not register the transfer or exchange of (i) any Notes or
portion thereof selected for redemption (except, in the case of a Note to be
redeemed in part, the portion of the Note not to be redeemed) for a period
beginning 15 days before a selection of Notes to be redeemed and ending on the
date of such selection or (ii) any Notes for the period between a Record Date
and the corresponding Interest Payment Date.
8. Persons Deemed Owners
The registered Holder of this Note on the Registrar's books
may be treated as its owner for all purposes under the Indenture.
9. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. Defeasance
Subject to certain conditions set forth 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 U.S.
Government Obligations for the payment of principal and interest on the Notes to
redemption or maturity, as the case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount at Stated
Maturity (or Accreted Value,
<PAGE>
as applicable) of the then outstanding Notes voting as a single class and (ii)
any Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
noncompliance with any provision of the Indenture or the Notes may be waived
with the consent of the Holders of a majority in aggregate principal amount at
Stated Maturity (or Accreted Value, as applicable) of the then outstanding Notes
voting as a single class. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder, the Company and the Trustee may
amend or supplement the Indenture or the Notes to cure any ambiguity, omission,
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 the Holders of the Notes by a successor to the Company, to add
additional covenants or surrender rights and powers conferred on the Company, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act, to make any change that does not adversely affect the
rights of any Holder, to provide for the issuance of Unrestricted Notes under
the Registered Exchange Offer, to secure the Notes or to effect any change to
the transfer and exchange restrictions and security delivery procedures in order
to conform with changes in applicable law or Applicable Procedures.
12. Defaults and Remedies
Under the Indenture, Events of Default include (i) a default
for 30 days in the payment when due of interest on any Note; (ii) a default in
the payment when due of principal of, or premium, if any, on the Notes at
maturity, upon required repurchase, upon redemption, upon declaration or
otherwise; (iii) the failure by the Company or any of its Restricted
Subsidiaries to comply with its obligations under Article 5 of the Indenture,
(iv) the failure by the Company or any of its Restricted Subsidiaries to comply
for 30 days after receiving notice from the Holders of at least 25% in aggregate
principal amount at Stated Maturity (or Accreted Value, as applicable) of the
outstanding Notes or from the Trustee on behalf of such Holders with any of its
obligations under Sections 4.7 through 4.13, 4.15 and 4.17 through 4.19 of the
Indenture, in each case, other than a failure to repurchase Notes which will
constitute an Event of Default under clause (ii) above, (v) the failure by the
Company or any of its Restricted Subsidiaries to comply for 60 days after
receiving notice thereof from the Holders of at least 25% in aggregate principal
amount at Stated Maturity (or Accreted Value, as applicable) of the outstanding
Notes or from the Trustee, on behalf of such Holders, with any of its other
obligations and duties under the Indenture or the Notes, (vi) a default 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 by
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 Issue Date, which
default results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the amount of any such
<PAGE>
Indebtedness, together with the amount of any other such Indebtedness or the
maturity of which has been so accelerated, exceeds $15.0 million, (vii) the
entry against the Company or any of its Significant Subsidiaries of any final
judgment or decree not subject to appeal for the payment of money in excess of
$15.0 million (net of applicable insurance coverage which is acknowledged in
writing by the insurer), which judgments are not paid, vacated, discharged or
stayed for a period of 60 days after they become final and non-appealable or
(viii) certain events of bankruptcy, insolvency or reorganization of the Company
or a Significant Subsidiary. However, a default under clauses (iv) and (v) will
not constitute an Event of Default until the Trustee or the Holders of more than
25% in aggregate principal amount at Stated Maturity (or Accreted Value, as
applicable) of the outstanding Notes notify the Company of the default and the
Company does not cure such default within the time specified in clauses (iv) and
(v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount at Stated Maturity
(or Accreted Value, as applicable) of the outstanding Notes by notice to the
Company and the Trustee may declare the principal of and accrued and unpaid
interest, if any, on all the Notes to be due and payable immediately. Certain
events of bankruptcy or insolvency are Events of Default which will result in
the Notes being due and payable immediately upon the occurrence of such Events
of Default.
Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate principal amount at
Stated Maturity (or Accreted Value, as applicable) of the Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing Default or Event of Default (except a Default
or Event of Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not the Trustee.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder
<PAGE>
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. Authentication
This Note shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually
authenticates this Note.
16. 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
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
17. CUSIP Numbers
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 has directed the Trustee to 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.
18. Governing Law
This Note shall be governed by, and construed in accordance
with, the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
19. Miscellaneous
The Company will furnish to any Holder upon written request
and without charge to the Holder a copy of the Indenture which has in it the
text of this Note.
Requests may be made to:
<PAGE>
Metromedia International Group, Inc.
One Meadowlands Plaza
East Rutherford, NJ 07073-2137
Attention of: Arnold L. Wadler, Esq.
Fax: (201) 531-2803
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (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 Signature:
-------------- -----------------------
(Sign exactly as your name appears on
the face of this Note
Tax Identification No:
----------------
SIGNATURE GUARANTEE:
---------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements include
membership or participation in the
Security Transfer Agent Medallion
Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition
to, or in substitution for, STAMP, all
in accordance with the Securities
Exchange Act of 1934, as amended.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.11 or 4.15 of the Indenture, check the box below:
/ / Section 4.11 / / Section 4.15
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.11 or Section 4.15 of the Indenture, state
the amount you elect to have purchased: $___________
Date: Your Signature:
----------------- -----------------------
(Sign exactly as your name appears on
the face of this Note
Tax Identification No: ----------------
SIGNATURE GUARANTEE:
---------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements include
membership or participation in the
Security Transfer Agent Medallion
Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition
to, or in substitution for, STAMP, all
in accordance with the Securities
Exchange Act of 1934, as amended.
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)/
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Amount
decrease in increase in of this Global Signature of
Principal Principal Amount Note following authorized officer
Amount of this of this Global such decrease of Trustee or
Date Of Exchange Global Note Note (Or Increase) Note Custodian
- ---------------- ------------- ------ -------------- ---------------
<S> <C> <C> <C> <C>
</TABLE>
- --------
(1)/ THIS SHOULD BE INCLUDED ONLY IF THE NOTE IS ISSUED IN GLOBAL FORM.
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Metromedia International Group, Inc.
One Meadowlands Plaza
East Rutherford, NJ 07073-2137
Attention: General Counsel
U.S. Bank Trust National Association
Attention:
Re: 10 1/2% Senior Discount Notes due 2007
Reference is hereby made to the Indenture, dated as of
September __, 1999 (the "Indenture"), between Metromedia International Group,
Inc., as issuer (the "Company") and U.S. Bank Trust National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
_______________, (the "Transferor") owns and proposes to
transfer the Series A Note[s] or interest in such Series A Note[s] specified in
Annex A hereto, in the principal amount of $____________ in such Series A
Note[s] or interests (the "Transfer"), to ____________ (the "Transferee"), as
further specified in Annex A hereto. In connection with the Transfer, the
Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
(1) |_| CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A.
The Transfer is being effected pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further certifies
that the beneficial interest or Definitive Note is being transferred to a Person
that the Transferor reasonably believed and believes is purchasing the
beneficial interest or Definitive Note for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the
<PAGE>
Restricted Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.
(2) |_| CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S.
The Transfer is being effected pursuant to and in accordance
with Rule 903 or Rule 904 under the Securities Act and, accordingly, the
Transferor hereby further certifies that (i) the Transfer is not being made to a
person in the United States and (x) at the time the buy order was originated,
the Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
placement Legend printed on the Global Note and/or the Definitive Note and in
the Indenture and the Securities Act.
(3) |_| CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT
OTHER THAN RULE 144A.
The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Global Notes and
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) |_| such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act; or
(b) |_| such Transfer is being effected to the Company or a
subsidiary thereof; or
<PAGE>
(c) |_| such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act.
(4) |_| CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) |_| CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) |_| CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) |_| CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
<PAGE>
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
---------------------------
[Insert Name of Transferor]
By:
------------------------
Name:
Title:
Dated:
----------------------------
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) |_| a beneficial interest in a Restricted Global Note
(CUSIP ___)
(b) |_| a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) |_| a beneficial interest in:
(i) |_| a Restricted Global Note (CUSIP ___), or
(ii) |_| an Unrestricted Global Note (CUSIP ___); or
(b) |_| a Restricted Definitive Note; or
(c) |_| an Unrestricted Definitive Note,
in each case, in accordance with the terms of the Indenture.
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Metromedia International Group, Inc.
One Meadowlands Plaza
East Rutherford, NJ 07073-2137
Attention: General Counsel
U.S. Bank Trust National Association
Attention:
Re: 10 1/2% Senior Discount Notes due 2007
Reference is hereby made to the Indenture, dated as of
September __, 1999 (the "Indenture"), between Metromedia International Group,
Inc., as issuer (the "Company") and U.S. Bank Trust National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note(s) specified herein, in the principal
amount of $___________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE.
(a) |_| CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies that (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
<PAGE>
(b) |_| CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies that (i) the Definitive
Note is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(c) |_| CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies that (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) |_| CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies that (i) the Unrestricted Definitive Note is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES.
(a) |_| CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted
<PAGE>
Definitive Note is being acquired for the Owner's own account without transfer.
Upon consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued will continue to be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Definitive Note and in the Indenture and the Securities Act.
(b) |_| CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
a Restricted Global Note with an equal principal amount, the Owner hereby
certifies that (i) the beneficial interest is being acquired for the Owner's own
account without transfer and (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act and in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
---------------------------
[Insert Name of Owner]
By:
-----------------------
Name:
Title:
Dated:
-----------------------
<PAGE>
EXHIBIT 4.11
FORM OF NOTE
(Face of Note)
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
CUSIP _______________
[Series A] [Series B] 10 1/2% Senior Discount Notes due 2007
No. [____________] $[_________]
METROMEDIA INTERNATIONAL GROUP, INC. promises to pay to
[Insert if a Global Note: Cede & Co.][Insert if a Definitive Note:___________]
or registered assigns, the principal sum of ________________ Dollars ($________)
on __________, 2007.
Interest Payment Dates: [__________]and [__________].
Record Dates: [__________] and [__________].
METROMEDIA INTERNATIONAL GROUP, INC.
By: ________________________________________
Name:
Title:
By: ________________________________________
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By:__________________ Dated: __________________
Name:
Title:
<PAGE>
2
[FORM OF REVERSE SIDE OF INITIAL NOTE]
[Series A] [Series B] 10 1/2% Senior Discount Notes due 2007
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. Interest
Metromedia International Group, Inc., a Delaware corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
interest on the principal amount of this Note at the rate per annum shown above
from March ___, 2002 until maturity.
The Company shall pay interest semiannually on [________] and
[________] of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each, an "Interest Payment Date"), commencing
[_________] __, 2002. Interest on the Notes shall accrue from the most recent
date to which interest has been paid on the Notes or, if no interest has been
paid, from March ___, 2002. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful. Interest shall be computed on the basis of a 360-day year of twelve
30-day months.
2. Method of Payment
The initial Accreted Value shall increase at the rate of
10 1/2% per annum, compounded semi-annually, until March ___, 2002, to an
aggregate principal amount for all the Notes on March ___, 2002 of
$210,631,376.
By at least 12:00 noon (New York City time) on the date on
which any principal of, premium, if any, or interest on any Note is due and
payable, the Company shall irrevocably deposit with the Paying Agent money in
immediately available funds sufficient to pay such principal, premium, if any,
and/or interest then due. The Company shall pay interest (except defaulted
interest) to the Persons who are registered Holders of Notes at the close of
business on the Record Date even if such Notes are canceled, repurchased or
redeemed after the Record Date and on or before the Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. Holders must surrender Notes to the Paying Agent to collect principal
payments. The Company shall pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public
<PAGE>
3
and private debts. The Notes shall be payable as to principal, premium, if any,
and interest at the office or agency of the Company maintained for such purpose
within or outside of the City and State of New York, or, at the option of the
Company, payment of interest may be made by check mailed to the Holders at their
addresses set forth in the register of Holders kept by the Registrar, PROVIDED
that payment by wire transfer of immediately available funds shall be required
with respect to principal of, interest and premium, if any, on all Global Notes
and all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent.
3. Paying Agent and Registrar
Initially, U.S. Bank Trust National Association, a national
banking association (the "Trustee"), will act as Trustee, Paying Agent and
Registrar. The Company may appoint and change any Paying Agent or Registrar
without notice to any Holder. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
4. Indenture
The Company issued the Notes under an Indenture dated as of
September ___, 1999 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, 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 (15
U.S.C. section 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). The Notes are subject to all such terms, and Holders are referred to the
Indenture and the Act for a statement of those terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling. The Notes are
obligations of the Company limited to $210,631,376 in aggregate principal
amount.
The Notes are senior unsecured obligations of the Company that
will rank pari passu in right of payment to all existing and future senior
Indebtedness of the Company and senior to all existing and future subordinated
Indebtedness of the Company. The Indenture imposes certain limitations on: the
Incurrence of Indebtedness by the Company, its Restricted Subsidiaries and the
PLD Companies, the payment of dividends and other distributions on the Capital
Stock of the Company and its Restricted Subsidiaries, the purchase or redemption
of Capital Stock of the Company and Capital Stock of such Restricted
Subsidiaries, the Incurrence of Liens by the Company or its Restricted
Subsidiaries, the sale or transfer of assets and Capital Stock by the Company or
its Restricted Subsidiaries, the ability of the Company and its Restricted
Subsidiaries to engage in Sale and Leaseback Transactions, the acquisition of
additional PLD Assets and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and its
<PAGE>
4
Restricted Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
5. Redemption
Except as set forth below, the Notes will not be redeemable at
the option of the Company prior to March ___, 2002. Thereafter, the Notes shall
be redeemable, at the Company's sole option, in whole or in part, at any time
upon not less than 30 nor more than 60 days prior notice mailed by first-class
mail to each Holder's registered address, at a redemption price equal to the
principal amount of the Notes, plus accrued and unpaid interest, if any, and
premium, if any, thereon, to but excluding the date of redemption (subject to
the right of Holders of record on the relevant Record Date to receive interest
due on the relevant Interest Payment Date).
In the case of any partial redemption, selection of the Notes
for redemption will be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed, or, if the Notes are not so listed, on a pro rata basis, by lot or by
such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate, although no Notes of $1,000 in principal amount or less shall
be redeemed in part. If any Note is to be redeemed in part only, the notice of
redemption relating to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof shall be issued in the name of the Holder thereof upon
cancellation of the original Note.
6. Repurchase Provisions
(a) Upon a Change of Control, each Holder of Notes shall have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's Notes at a purchase price in
cash equal to 101% of the Accreted Value of the Notes to the date of repurchase
if such date is on or before March __, 2002 or 101% of the aggregate principal
amount thereof, plus accrued and unpaid interest, if any, to the date of
repurchase if such date is after March __, 2002 (subject to the right of Holders
of record on the relevant Record Date to receive interest due on the relevant
Interest Payment Date) and, in each case, subject to the terms of the Indenture.
(b) Subject to the terms and conditions set forth in the
Indenture, if the Company or a Restricted Subsidiary consummates any Asset Sale
permitted by the Indenture, when the aggregate amount of Excess Proceeds equals
or exceeds $10,000,000, the Company shall make a pro rata Asset Sale Offer for
all outstanding Notes up to a maximum principal amount at Stated Maturity or
Accreted Value, as applicable (expressed as a multiple of $1,000), of Notes that
may be purchased out of such Excess Proceeds, at a purchase price in cash equal
to 100% of the Accreted Value of such Notes on the Purchase Date if such date is
on or before March ___,
<PAGE>
5
2002, or 100% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the Purchase Date if such date is after March __, 2002, in
each case, in accordance with the terms and procedures set forth in Sections 3.9
and 4.11 of the Indenture.
7. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. The transfer of Notes
may be registered and Notes may be exchanged in accordance with the Indenture.
The Registrar, the Trustee and the Company may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes and fees required by law or permitted by the Indenture. The Company and
the Registrar need not register the transfer or exchange of (i) any Notes or
portion thereof selected for redemption (except, in the case of a Note to be
redeemed in part, the portion of the Note not to be redeemed) for a period
beginning 15 days before a selection of Notes to be redeemed and ending on the
date of such selection or (ii) any Notes for the period between a Record Date
and the corresponding Interest Payment Date.
8. Persons Deemed Owners
The registered Holder of this Note on the Registrar's books
may be treated as its owner for all purposes under the Indenture.
9. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. Defeasance
Subject to certain conditions set forth 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 U.S.
Government Obligations for the payment of principal and interest on the Notes to
redemption or maturity, as the case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount at Stated
Maturity (or Accreted Value,
<PAGE>
6
as applicable) of the then outstanding Notes voting as a single class and (ii)
any Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
noncompliance with any provision of the Indenture or the Notes may be waived
with the consent of the Holders of a majority in aggregate principal amount at
Stated Maturity (or Accreted Value, as applicable) of the then outstanding Notes
voting as a single class. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder, the Company and the Trustee may
amend or supplement the Indenture or the Notes to cure any ambiguity, omission,
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 the Holders of the Notes by a successor to the Company, to add
additional covenants or surrender rights and powers conferred on the Company, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act, to make any change that does not adversely affect the
rights of any Holder, to provide for the issuance of Unrestricted Notes under
the Registered Exchange Offer, to secure the Notes or to effect any change to
the transfer and exchange restrictions and security delivery procedures in order
to conform with changes in applicable law or Applicable Procedures.
12. Defaults and Remedies
Under the Indenture, Events of Default include (i) a default
for 30 days in the payment when due of interest on any Note; (ii) a default in
the payment when due of principal of, or premium, if any, on the Notes at
maturity, upon required repurchase, upon redemption, upon declaration or
otherwise; (iii) the failure by the Company or any of its Restricted
Subsidiaries to comply with its obligations under Article 5 of the Indenture,
(iv) the failure by the Company or any of its Restricted Subsidiaries to comply
for 30 days after receiving notice from the Holders of at least 25% in aggregate
principal amount at Stated Maturity (or Accreted Value, as applicable) of the
outstanding Notes or from the Trustee on behalf of such Holders with any of its
obligations under Sections 4.7 through 4.13, 4.15 and 4.17 through 4.19 of the
Indenture, in each case, other than a failure to repurchase Notes which will
constitute an Event of Default under clause (ii) above, (v) the failure by the
Company or any of its Restricted Subsidiaries to comply for 60 days after
receiving notice thereof from the Holders of at least 25% in aggregate principal
amount at Stated Maturity (or Accreted Value, as applicable) of the outstanding
Notes or from the Trustee, on behalf of such Holders, with any of its other
obligations and duties under the Indenture or the Notes, (vi) a default 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 by
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 Issue Date, which
default results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the amount of any such
<PAGE>
7
Indebtedness, together with the amount of any other such Indebtedness or the
maturity of which has been so accelerated, exceeds $15.0 million, (vii) the
entry against the Company or any of its Significant Subsidiaries of any final
judgment or decree not subject to appeal for the payment of money in excess of
$15.0 million (net of applicable insurance coverage which is acknowledged in
writing by the insurer), which judgments are not paid, vacated, discharged or
stayed for a period of 60 days after they become final and non-appealable or
(viii) certain events of bankruptcy, insolvency or reorganization of the Company
or a Significant Subsidiary. However, a default under clauses (iv) and (v) will
not constitute an Event of Default until the Trustee or the Holders of more than
25% in aggregate principal amount at Stated Maturity (or Accreted Value, as
applicable) of the outstanding Notes notify the Company of the default and the
Company does not cure such default within the time specified in clauses (iv) and
(v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount at Stated Maturity
(or Accreted Value, as applicable) of the outstanding Notes by notice to the
Company and the Trustee may declare the principal of and accrued and unpaid
interest, if any, on all the Notes to be due and payable immediately. Certain
events of bankruptcy or insolvency are Events of Default which will result in
the Notes being due and payable immediately upon the occurrence of such Events
of Default.
Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate principal amount at
Stated Maturity (or Accreted Value, as applicable) of the Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing Default or Event of Default (except a Default
or Event of Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not the Trustee.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder
<PAGE>
8
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. Authentication
This Note shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually
authenticates this Note.
16. 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
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
17. CUSIP Numbers
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 has directed the Trustee to 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.
18. Governing Law
This Note shall be governed by, and construed in accordance
with, the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
19. Miscellaneous
The Company will furnish to any Holder upon written request
and without charge to the Holder a copy of the Indenture which has in it the
text of this Note.
Requests may be made to:
<PAGE>
9
Metromedia International Group, Inc.
One Meadowlands Plaza
East Rutherford, NJ 07073-2137
Attention of: Arnold L. Wadler, Esq.
Fax: (201) 531-2803
<PAGE>
10
ASSIGNMENT FORM
To assign this Note, fill in the form below: (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 Signature: ___________________________
(Sign exactly as your name appears on the
face of this Note
Tax Identification No: _____________________
SIGNATURE GUARANTEE:
-------------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements include
membership or participation in the
Security Transfer Agent Medallion
Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition
to, or in substitution for, STAMP, all
in accordance with the Securities
Exchange Act of 1934, as amended.
<PAGE>
11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.11 or 4.15 of the Indenture, check the box below:
/ / Section 4.11 / / Section 4.15
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.11 or Section 4.15 of the Indenture, state
the amount you elect to have purchased: $___________
Date: ______________ Your Signature: ______________________
(Sign exactly as your name appears on
the face of this Note
Tax Identification No: ________________
SIGNATURE GUARANTEE:
---------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements include
membership or participation in the
Security Transfer Agent Medallion
Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition
to, or in substitution for, STAMP, all
in accordance with the Securities
Exchange Act of 1934, as amended.
<PAGE>
12
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)/
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Amount
decrease in increase in of this Global Signature of
Principal Principal Amount Note following authorized officer
Amount of this of this Global such decrease of Trustee or
Date of Exchange Global Note Note (or Increase) Note Custodian
- ---------------- ------------- ------ -------------- ---------------
<S> <C> <C> <C> <C>
</TABLE>
- -----------------------
(1)/ THIS SHOULD BE INCLUDED ONLY IF THE NOTE IS ISSUED IN GLOBAL FORM.
<PAGE>
EXHIBIT 5.1
[PAUL, WEISS, RIFKIND, WHARTON & GARRISON LETTERHEAD]
September 24, 1999
Metromedia International Group, Inc.
One Meadowlands Plaza
East Rutherford, New Jersey 07073
Registration Statement on Form S-4
of Metromedia International Group, Inc.
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-4, as amended (File
No.333-79325) (the "Registration Statement"), filed by Metromedia International
Group, Inc., a Delaware corporation (the "Company"), with the Securities and
Exchange Commission (the "Commission") on the date of this letter, as provided
by the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations under the Act, we have been requested by the Company to render our
opinion as to the legality of the securities being registered under the
Registration Statement. The Registration Statement relates to the registration
under the Act of the Company's $210,631,376 aggregate principal amount at
maturity of Series B 10 1/2% Senior Discount Notes due 2007 (the "Exchange
Notes"). The Exchange Notes are to be offered in exchange for the Company's
outstanding $210,631,376 aggregate principal amount at maturity of Series A
10 1/2% Senior Discount Notes due 2007 (the "Initial Notes"). The Initial Notes
will be issued and sold by the Company as part of an offering exempt from
registration under the Act pursuant to an Agreement to Exchange and Consent,
dated as of May 18, 1999, by and among the Company, PLD Telekom Inc. and certain
note holders named therein (the "Agreement to Exchange and Consent"). The
Exchange Notes will be issued by the Company under the Indenture (the
"Indenture") to be entered into by and between the Company and U.S. Bank Trust
National Association, as trustee (the "Trustee"). Capitalized terms used in this
letter and not otherwise defined have the respective meanings given those terms
in the Registration Statement.
In connection with this opinion, we have examined originals, conformed
copies or photocopies, certified or otherwise identified to our satisfaction, of
the following documents (collectively, the "Documents"):
1. the Registration Statement;
2. the form of Indenture included as Exhibit 4.10 to the Registration
Statement;
3. the form of the Exchange Notes included as Exhibit 4.11 to the
Registration Statement; and
4. the Agreement to Exchange and Consent included as Exhibit 10.53 to the
Registration Statement.
In addition, we have examined: (i) those corporate records of the Company as
we have considered appropriate, including copies of its Restated Certificate of
Incorporation, as amended, and Restated By-laws, as in effect on the date of
this letter (collectively, the "Charter Documents"), and certified copies of
resolutions of the board of directors of the Company relating to the Exchange
Notes; and (ii) those other certificates, agreements and documents as we deemed
relevant and necessary as a basis for the opinions expressed below.
In our examination of the documents referred to above, we have assumed,
without independent investigation, (i) the due authorization, execution and
delivery of each of the Documents by each party to them other than the Company,
(ii) the enforceability of the documents reviewed by us against each party to
them other than the Company, (iii) that the Exchange Notes will be substantially
issued as described in the Registration Statement and in the form reviewed by us
and that any information omitted from the form will be properly added, (iv) the
genuineness of all signatures, (v) the authenticity of all documents submitted
to us as originals, (vi) the conformity to the original documents
<PAGE>
of all documents submitted to us as certified, photostatic, reproduced or
conformed copies of validly existing agreements or other documents, (vii) the
authenticity of the latter documents; (viii) that the statements regarding
matters of fact in the certificates, records, agreements, instruments and
documents that we examined are accurate and complete, and (ix) the legal
capacity of all individuals who have executed any of the documents which we
examined.
We have also assumed, without independent investigation, that (i) the
Indenture will be duly authorized, executed and delivered by the Trustee, (ii)
the Indenture will be a valid and binding obligation of the Trustee, (iii) the
Exchange Notes will be issued in accordance with the Indenture as described in
the Registration Statement and (iv) the Exchange Notes will be duly
authenticated by the Trustee in accordance with the Indenture.
In expressing the opinion set forth below, we have relied upon the factual
matters contained in the representations and warranties of the Company made in
the documents and in certificates of officers of the Company and upon
certificates of public officials.
Based on the foregoing, and subject to the stated assumptions, exceptions
and qualifications, we are of the opinion that:
1. The Indenture will represent a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except
as enforceability may be subject to (a) bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, moratorium or other similar laws
affecting creditors' rights generally and (b) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law).
2. When issued, authenticated and delivered in accordance with the terms
of the Indenture, the Exchange Notes will be legal, valid and binding
obligations of the Company enforceable against the Company in accordance
with their terms, except as enforceability may be limited by (a) bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization, moratorium
and other similar laws affecting creditors' rights generally and (b) general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
Our opinions expressed above are limited to the laws of the State of New
York, the General Corporation Law of the State of Delaware and the Federal laws
of the United States of America. Our opinions are rendered only with respect to
the laws, and the rules, regulations and orders under those laws, that are
currently in effect.
We hereby consent to the use of our name in the Registration Statement and
in the prospectus in the Registration Statement as it appears in the caption
"Legal Matters" and to the use of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not thereby admit that we come within
the category of persons whose consent is required by the Act or by the rules and
regulations under the Act.
Very truly yours,
/s/ Paul, Weiss, Rifkind, Wharton &
Garrison
PAUL, WEISS, RIFKIND, WHARTON &
GARRISON
<PAGE>
Exhibit 8.1
[PAUL, WEISS, RIFKIND, WHARTON & GARRISON LETTERHEAD]
September 24, 1999
Metromedia International Group, Inc.
One Meadowlands Plaza
East Rutherford, New Jersey 07073-2131
Amendment No. 2 to Registration Statement On Form S-4
-----------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel for Metromedia Group International, Inc., a
Delaware corporation (the "Company") in connection with the offer to exchange
$210,631,376 aggregate principal amount at maturity of the Company's Series A
10 1/2% Series B Senior Discount Notes due 2007 (the "Exchange Notes"), which
have been registered under the United States Securities Act of 1933, as amended
(the "Securities Act"), for a like aggregate principal amount at maturity of the
Company's outstanding Series A 10 1/2% Senior Discount Notes due 2007 (the
"Exchange Offer").
We are giving this opinion in connection with Amendment No. 2 to the
Registration Statement on Form S-4, as amended (the "Registration
Statement"), relating to the registration by the Company of the Exchange
Notes to be offered in the Exchange Offer, filed by the Company with the
Securities and Exchange Commission (the "Commission") pursuant to the
Securities Act and the rules and regulations of the Commission promulgated
thereunder. Capitalized terms used in this opinion but not
<PAGE>
Metromedia International Group, Inc. 2
otherwise defined shall have the respective meanings ascribed to them in the
Registration Statement.
In rendering our opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such agreements and
other documents as we have deemed relevant and necessary and we have made such
investigations of law as we have deemed appropriate as a basis for the opinion
expressed below. In our examination, we have assumed the authenticity of
original documents, the accuracy of copies and the genuineness of signatures. We
understand and assume that (i) each such agreement represents the valid and
binding obligation of the respective parties thereto, enforceable in accordance
with its respective terms and the entire agreement between the parties with
respect to the subject matter thereof, (ii) the parties to each agreement have
complied, and will comply, with all of their respective covenants, agreements
and undertakings contained therein and (iii) the transactions provided for by
each agreement were and will be carried out in accordance with their terms.
Our opinion is based upon existing United States federal income and
estate tax laws, regulations, administrative pronouncements and judicial
decisions. All such authorities are subject to change, either prospectively or
retroactively, and any such change could affect our opinion.
The opinion set forth herein has no binding effect on the United States
Internal Revenue Service or the courts of the United States. No assurance can be
given that, if the matter were contested, a court would agree with the opinion
set forth herein.
The discussion set forth under the caption "Material United States
Federal Income Tax Considerations" in the Registration Statement constitutes our
opinion with respect to such matters. While that description discusses the
material anticipated United States federal income tax consequences applicable to
certain holders, it does not purport to discuss all United States federal income
tax considerations and our opinion is limited to those United States federal
income tax considerations specifically discussed therein.
In giving the foregoing opinion, we express no opinion other than as to
the federal income tax laws of the United States of America.
We are furnishing this letter in our capacity as counsel to the
Company. This letter is not to be used, circulated, quoted or otherwise referred
to for any other purpose, except as set forth below.
<PAGE>
Metromedia International Group, Inc. 3
We hereby consent to the filing of this opinion as Exhibit 8.1 to the
Registration Statement. In giving this consent, we do not admit that we come
within the category of persons whose consent is required by the Securities Act
or by the rules and regulations promulgated under it.
Very truly yours,
/s/ Paul, Weiss, Rifkind, Wharton & Garrison
--------------------------------------------
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Metromedia International Group, Inc.:
We consent to the use of our report incorporated herein by reference and to
the references to our firm under the headings "Experts" and "Summary
Consolidated Financial Data" in the registration statement.
/s/ KPMG LLP
KPMG LLP
New York, New York
September 24, 1999
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
PLD Telekom Inc.:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the registration
statement.
Our report dated March 30, 1999 contains an explanatory paragraph that
states the Company has suffered recurring losses, has a working capital
deficiency, and does not presently have sufficient funds on hand to meet its
current debt obligations. These factors raise substantial doubt the Company's
ability to continue as a going concern. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/ KPMG LLP
KPMG LLP
New York, New York
September 24, 1999
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
PLD Telekom Inc.:
We consent to the use of our report dated March 21, 1997 incorporated herein
by reference and to the reference to our firm under the heading "Experts" in the
registration statement.
/s/ KPMG LLP
KPMG LLP
Chartered Accountants
Calgary, Canada
September 24, 1999
<PAGE>
EXHIBIT 23.4
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
PLD Capital Asset (U.S.) Inc.:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the registration
statement.
Our report dated March 30, 1999 contains an explanatory paragraph that
states that the Company's parent, PLD Telekom Inc. (PLD) does not presently have
sufficient funds on hand to meet its current debt obligations. PLD's failure to
make payment in full when required could result in a cross-default under and
acceleration of other debt obligations for which the Company is a guarantor.
These factors raise substantial doubt about the Company's ability to continue as
a going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/ KPMG LLP
KPMG LLP
New York, New York
September 24, 1999
<PAGE>
EXHIBIT 23.5
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Baltic Communications Limited:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the registration
statement.
Our report dated March 30, 1999 contains an explanatory paragraph that
states that the Company's parent, PLD Telekom Inc. (PLD) does not presently have
sufficient funds on hand to meet its current debt obligations. The Company is a
guarantor of such obligations. PLD's failure to make payment in full when
required could result in a claim being made against the Company under its
guaranty and a cross-default under and acceleration of other debt obligations
for which the Company is also a guarantor. These factors raise substantial doubt
about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ KPMG
KPMG
St. Petersburg, Russia
September 24, 1999
<PAGE>
EXHIBIT 23.6
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
NWE Capital (Cyprus) Ltd.:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the registration
statement.
Our report dated March 30, 1999 contains an explanatory paragraph that
states that the Company's parent, PLD Telekom Inc. (PLD) does not presently have
sufficient funds on hand to meet its current debt obligations. PLD's failure to
make payment in full when required could result in a cross-default under and
acceleration of other debt obligations for which the Company is a guarantor.
These factors raise substantial doubt about the Company's ability to continue as
a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ KPMG
KPMG
St. Petersburg, Russia
September 24, 1999
<PAGE>
EXHIBIT 23.7
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Technocom Limited:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the registration
statement.
Our report dated March 30, 1999 contains an explanatory paragraph that
states that the Company has suffered recurring losses, has a working capital
deficiency, and does not presently have sufficient funds on hand to meet its
current obligations. These factors raise substantial doubt about the Company's
ability to continue as a going concern. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/ KPMG
KPMG
Chartered Accountants
Dublin, Ireland
September 24, 1999
<PAGE>
EXHIBIT 23.8
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Wireless Technology Corporations Limited.:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the registration
statement.
Our report dated February 17, 1999 contains an explanatory paragraph that
states that the Company's parent, PLD Telekom Inc. (PLD) does not presently have
sufficient funds on hand to meet its current debt obligations. The Company is a
guarantor of such obligations. PLD's failure to make payment in full when
required could result in a claim being made against the Company under its
guaranty and a cross-default under and acceleration of other debt obligations
for which the Company is also a guarantor. These factors raise substantial doubt
about the Company's ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ KPMG
KPMG
Almaty, Kazakhstan
September 24, 1999
<PAGE>
EXHIBIT 23.9
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
PLD Asset Leasing Ltd.
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the registration
statement.
/s/ Moore Stephens
Moore Stephens
Chartered Accountants
Nicosia, Cyprus
September 24, 1999
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
METROMEDIA INTERNATIONAL GROUP, INC.
OFFER TO EXCHANGE $210,631,376 OF ITS
SERIES B 10 1/2% SENIOR DISCOUNT NOTES DUE 2007
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
FOR $210,631,376 OF ITS OUTSTANDING
SERIES A 10 1/2% SENIOR DISCOUNT NOTES DUE 2007
(THE "OLD NOTES")
PURSUANT TO THE PROSPECTUS, DATED , 1999
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
1999 OR SUCH LATER DATE AND TIME TO WHICH THE EXCHANGE OFFER MAY BE EXTENDED
(THE "EXPIRATION DATE").
The Exchange Agent for the Exchange Offer is
U.S. BANK TRUST NATIONAL ASSOCIATION
BY REGISTERED OR CERTIFIED MAIL:
U.S. Bank Trust National Association
180 East 5th Street
St. Paul, MN 55101
Attention: Specialized Finance Department
BY HAND OR OVERNIGHT DELIVERY:
U.S. Bank Trust National Association
180 East 5th Street
St. Paul, MN 55101
Attention: Specialized Finance Department
BY FACSIMILE FOR ELIGIBLE INSTITUTIONS:
(651) 244-1537
FOR CONFIRMATION AND/OR INFORMATION CALL:
(800) 934-6802
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX BELOW
------------------------
List below the Old Notes to which this Letter of Transmittal relates. If the
space provided below is inadequate, the certificate numbers and principal amount
of Old Notes should be listed on a separate signed schedule affixed hereto.
<TABLE>
<CAPTION>
DESCRIPTION OF OLD NOTES (1) (2) (3)
<S> <C> <C> <C>
PRINCIPAL AMOUNT
PRINCIPAL OF OLD NOTES
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE AMOUNT OF TENDERED
(PLEASE FILL IN, IF BLANK) NUMBER(S)* OLD NOTES (IF LESS THAN ALL)**
* Need not be completed by book-entry holders.
** Unless otherwise indicated, the holder will be deemed to have tendered the full aggregate principal amount
represented by such Old Notes.
</TABLE>
<PAGE>
The undersigned acknowledges that he or she has received and reviewed the
Prospectus, dated , 1999 (the "Prospectus"), of Metromedia International
Group, Inc., a Delaware corporation (the "Company"), and this Letter of
Transmittal (the "Letter"), which together constitute the Company's offer (the
"Exchange Offer") to exchange up to $210,631,376 aggregate principal amount of
its Series B 10 1/2% Senior Discount Notes due 2007 (the "Exchange Notes") for a
like principal amount of the Company's issued and outstanding Series A 10 1/2%
Senior Discount Notes due 2007 (collectively, the "Old Notes").
The undersigned has completed the appropriate boxes above and below and
signed this Letter to indicate the action the undersigned desires to take with
respect to the Exchange Offer.
This Letter is to be used either if certificates for Old Notes are to be
forwarded herewith or if delivery of Old Notes is to be made by book-entry
transfer to an account maintained by the Exchange Agent at The Depository Trust
Company, pursuant to the procedures set forth in "The Exchange Offer--Procedures
for Tendering Old Notes" in the Prospectus. Delivery of this Letter and any
other required documents should be made to the Exchange Agent. Delivery of
documents to a book-entry transfer facility does not constitute delivery to the
Exchange Agent.
Holders whose Old Notes are not immediately available or who cannot deliver
their Old Notes and all other documents required hereby to the Exchange Agent on
or prior to the Expiration Date must tender their Old Notes according to the
guaranteed delivery procedure set forth in the Prospectus under the caption "The
Exchange Offer--Procedures for Tendering Old Notes--Guaranteed Delivery
Procedure." See Instruction 1.
/ / CHECK HERE IF OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO
AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ________________ / / The Depository Trust Company
Account Number _________________________________________________________________
Transaction Code Number ________________________________________________________
/ / CHECK HERE IF OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s) ___________________________________________________
Name of Eligible Institution that Guaranteed Delivery __________________________
If delivered by book-entry transfer:
Account Number _________________________________________________________________
Date of execution of Notice of Guaranteed Delivery _____________________________
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: __________________________________________________________________________
Address:________________________________________________________________________
If the undersigned is not a broker-dealer, the undersigned represents that
it is acquiring the Exchange Notes in the ordinary course of business of the
undersigned, that it is not engaged in, and does not intend to engage in, or has
no arrangement or understanding with any person to participate in, a
distribution of Exchange Notes and that it is not an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act"). If the undersigned is a broker-dealer that will
2
<PAGE>
receive Exchange Notes for its own account in exchange for Old Notes that were
acquired as a result of market-making activities or other trading activities, it
may be deemed to be an "underwriter" within the meaning of the Securities Act
and must acknowledge that it will deliver a prospectus meeting the requirements
of the Securities Act in connection with any resale of such Exchange Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
3
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of Old
Notes indicated above. Subject to, and effective upon, the acceptance for
exchange of the Old Notes tendered hereby, the undersigned hereby sells, assigns
and transfers to, or upon the order of, the Company all right, title and
interest in and to such Old Notes as are being tendered hereby.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Old Notes tendered
hereby and that the Company will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim when the same are accepted by the Company. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Company or the Exchange Agent to be necessary or desirable to
complete the sale, assignment and transfer of the Old Notes tendered hereby.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on the Company's belief, based on interpretations by the staff of the
Securities and Exchange Commission (the "SEC") to third parties in unrelated
transactions, that the Exchange Notes issued in exchange for the Old Notes
pursuant to the Exchange Offer may be offered for resale, resold and otherwise
transferred by holders thereof (other than (i) any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act or (ii) any broker-dealer that purchases Notes from the Company to resell
pursuant to Rule 144A under the Securities Act ("Rule 144A") or any other
available exemption) without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such Exchange Notes are
acquired in the ordinary course of such holders' business and such holders have
no arrangement or understanding with any person to participate in the
distribution of such Exchange Notes and are not participating in, and do not
intend to participate in, the distribution of such Exchange Notes. The
undersigned acknowledges that any holder of Old Notes using the Exchange Offer
to participate in a distribution of the Exchange Notes (i) cannot rely on the
position of the staff of the SEC enunciated in its interpretive letter with
respect to Exxon Capital Holdings Corporation (available April 13, 1989) or
similar letters and (ii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with a secondary
resale transaction.
The undersigned represents that (i) the Exchange Notes acquired pursuant to
the Exchange Offer are being obtained in the ordinary course of business of the
person receiving such Exchange Notes, whether or not such person is the holder,
(ii) such holder or such other person has no arrangement or understanding with
any person to participate in the distribution of such Exchange Notes within the
meaning of the Securities Act and is not participating in, and does not intend
to participate in, the distribution of such Exchange Notes within the meaning of
the Securities Act, and (iii) such holder or such other person is not an
"affiliate," as defined in Rule 405 under the Securities Act, of the Company or,
if such holder or such other person is an affiliate, such holder or such other
person will comply with the registration and prospectus delivery requirements of
the Securities Act to the extent applicable.
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer which will receive
Exchange Notes for its own account in exchange for Old Notes that were acquired
as a result of market-making activities or other trading activities, it may be
deemed to be an "underwriter" within the meaning of the Securities Act and it
acknowledges that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale, offer to resell or other transfer
of such Exchange Notes; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
4
<PAGE>
The undersigned, if a California resident, hereby further represents and
warrants that the undersigned (or the beneficial owner of the Old Notes tendered
hereby, if not the undersigned) (i) is a bank, savings and loan association,
trust company, insurance company, investment company registered under the
Investment Company Act of 1940, pension or profit-sharing trust (other than a
pension or profit-sharing trust of the Company, a self-employed individual
retirement plan, or individual retirement account), or a corporation which has a
net worth on a consolidated basis according to its most recent audited financial
statement of not less than $14,000,000, and (ii) is acquiring the Exchange Notes
for its own account for investment purposes (or for the account of the
beneficial owner of such Exchange Notes for investment purposes).
All authority conferred or agreed to be conferred in this Letter and every
obligation of the undersigned hereunder shall be binding upon the successors,
assigns, heirs, executors, administrators, trustees in bankruptcy and legal
representatives of the undersigned and shall not be affected by, and shall
survive, the death or incapacity of the undersigned. This tender may be
withdrawn only in accordance with the procedures set forth in the instructions
contained in this Letter.
The undersigned understands that tenders of the Old Notes pursuant to any
one of the procedures described under "The Exchange Offer--Procedures for
Tendering Old Notes" in the Prospectus and in the instructions hereto will
constitute a binding agreement between the undersigned and the Company in
accordance with the terms and subject to the conditions of the Exchange Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Prospectus under "The Exchange Offer--Conditions to the Exchange Offer," the
Company may not be required to accept for exchange any of the Old Notes
tendered. Old Notes not accepted for exchange or withdrawn will be returned to
the undersigned at the address set forth below unless otherwise indicated under
"Special Delivery Instructions" below.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please issue the Exchange Notes (and, if applicable,
substitute certificates representing Old Notes for any Old Notes not exchanged)
in the name of the undersigned. Similarly, unless otherwise indicated under the
box entitled "Special Delivery Instructions" below, please deliver the Exchange
Notes (and, if applicable, substitute certificates representing Old Notes for
any Old Notes not exchanged) to the undersigned at the address shown above in
the box entitled "Description of Old Notes."
THE BOOK-ENTRY TRANSFER FACILITY, AS THE HOLDER OF RECORD OF CERTAIN OLD
NOTES, HAS GRANTED AUTHORITY TO BOOK-ENTRY TRANSFER FACILITY PARTICIPANTS WHOSE
NAMES APPEAR ON A SECURITY POSITION LISTING WITH RESPECT TO SUCH OLD NOTES AS OF
THE DATE OF TENDER OF SUCH OLD NOTES TO EXECUTE AND DELIVER THE LETTER OF
TRANSMITTAL AS IF THEY WERE THE HOLDERS OF RECORD. ACCORDINGLY, FOR PURPOSES OF
THIS LETTER OF TRANSMITTAL, THE TERM "HOLDER" SHALL BE DEEMED TO INCLUDE SUCH
BOOK-ENTRY TRANSFER FACILITY PARTICIPANTS.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD NOTES"
ABOVE AND SIGNING THIS LETTER AND DELIVERING SUCH NOTES AND THIS LETTER TO THE
EXCHANGE AGENT, WILL BE DEEMED TO HAVE TENDERED THE OLD NOTES AS SET FORTH IN
SUCH BOX ABOVE.
5
<PAGE>
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
Dated: _____________________________________________________________________
<TABLE>
<S> <C>
X
X
SIGNATURE(S) OF OWNER(S)/OR AUTHORIZED
SIGNATORY DATE
</TABLE>
Area Code and Telephone Number _____________________________________________
If a holder is tendering any Old Notes, this Letter must be signed by
the registered holder(s) as the name(s) appear(s) on the certificate(s) for
the Old Notes or by any person(s) authorized to become registered holder(s)
by endorsements and documents transmitted herewith. If signature is by a
trustee, executor, administrator, guardian, officer or other person acting
in a fiduciary or representative capacity, please set forth full title. See
Instruction 3.
Names ______________________________________________________________________
____________________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity: __________________________________________________________________
____________________________________________________________________________
Address ____________________________________________________________________
(INCLUDE ZIP CODE)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution: ___________________________________________________
(AUTHORIZED SIGNATURE)
__________________________________________________________________________
(TITLE)
__________________________________________________________________________
(NAME OF FIRM)
Dated: _____________________________________________________________________
- --------------------------------------------------------------------------------
6
<PAGE>
- -------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Exchange Notes are to be issued
in the name of and sent to someone other than the person or persons whose
signature(s) appear on this Letter above.
Issue: Exchange Notes to:
Name(s): ___________________________________________________________________
(PLEASE TYPE OR PRINT)
_____________________________________
(PLEASE TYPE OR PRINT)
Address: ___________________________________________________________________
_____________________________________
(ZIP CODE)
Social Security Number: ____________________________________________________
(COMPLETE SUBSTITUTE FORM W-9)
- ------------------------------------------------------
- ------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Exchange Notes are to be sent
to someone other than the person or persons whose signature(s) appear(s) on
this Letter above or to such person or persons at an address other than
shown in the box entitled "Description of Old Notes" on this Letter above.
Mail: Exchange Notes to:
Name(s): ___________________________________________________________________
(PLEASE TYPE OR PRINT)
_____________________________________
(PLEASE TYPE OR PRINT)
Address: ___________________________________________________________________
_____________________________________
(ZIP CODE)
- -----------------------------------------------------
IMPORTANT: UNLESS GUARANTEED DELIVERY PROCEDURES ARE COMPLIED WITH, THIS
LETTER OR A FACSIMILE HEREOF OR AN AGENT'S MESSAGE (IN EACH CASE, TOGETHER WITH
THE CERTIFICATE(S) FOR OLD NOTES OR A CONFIRMATION OF BOOK-ENTRY TRANSFER OF
SUCH OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE
EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER AND OLD NOTES; GUARANTEED DELIVERY PROCEDURE.
This Letter is to be used to forward, and must accompany, all certificates
representing Old Notes tendered pursuant to the Exchange Offer unless such
certificates are accompanied by an Agent's Message (as defined below) in which
case you need not submit this Letter to the Exchange Agent. Certificates
representing the Old Notes in proper form for transfer (or a confirmation of
book-entry transfer of such Old Notes into the Exchange Agent's account at the
book-entry transfer facility) must be received by the Exchange Agent at its
address set forth herein on or before the Expiration Date. A tender will not be
deemed to have been timely received when the tendering holder's properly
completed and duly signed Letter or an Agent's Message accompanied by the Old
Notes is mailed prior to the Expiration Date but is received by the Exchange
Agent after the Expiration Date.
The term "Agent's Message" means a message transmitted by The Depository
Trust Company ("DTC") to, and received by, the depositary and forming a part of
a Book-Entry Confirmation, which states that DTC has received an express
acknowledgment from the participant in DTC tendering the Old Notes, that such
participant has received and agrees to be bound by the terms of this Letter and
the Company may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF THIS LETTER, THE OLD NOTES AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDERS, BUT THE DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE
AGENT. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO PERMIT TIMELY DELIVERY.
If a holder desires to tender Old Notes and such holder's Old Notes are not
immediately available or time will not permit such holder's Letter of
Transmittal, Old Notes (or a confirmation of book-entry transfer of Old Notes
into the Exchange Agent's account at the book-entry transfer facility with an
Agent's Message) or other required documents to reach the Exchange Agent on or
before the Expiration Date, such holder may still tender in the Exchange Offer
if:
(a) the tender is made through an Eligible Institution (as defined
below);
(b) prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and Notice of Guaranteed Delivery,
substantially in the form provided by us (by facsimile transmission, mail or
hand delivery), setting forth the holder's name and address as holder of the
Old Notes and the amount of Old Notes tendered, stating that the tender is
being made thereby and guaranteeing that within five business days after the
Expiration Date the certificates for all physically tendered Old Notes, in
proper form for transfer, or a book-entry confirmation with an Agent's
Message, as the case may be, and any other documents required by the Letter
of Transmittal will be deposited by the Eligible Institution with the
Exchange Agent; and
(c) the certificates for all physically tendered Old Notes, in proper
form for transfer, or a book-entry confirmation as the case may be, and all
other documents required by this Letter of Transmittal are received by the
Exchange Agent within five business days after the Expiration Date.
See "The Exchange Offer--Procedures for Tendering Old Notes" in the
Prospectus.
2. WITHDRAWALS.
Any holder who has tendered Old Notes may withdraw the tender by delivering
written notice of withdrawal (which may be sent by telegram, facsimile (receipt
confirmed by telephone and an original delivered by guaranteed overnight
courier)) to the Exchange Agent prior to the close of business on the
8
<PAGE>
Expiration Date and prior to acceptance for exchange thereof by us. For a
withdrawal to be effective, a written notice of withdrawal must (i) specify the
name of the person having tendered the Old Notes to be withdrawn (the
"Depositor"), (ii) identify the Old Notes to be withdrawn (including the
certificate number or numbers and principal amount of such Old Notes), (iii) be
signed by the holder in the same manner as the original signature on the Letter
by which such Old Notes were tendered or as otherwise set forth in Instruction 3
below (including any required signature guarantees), or be accompanied by
documents of transfer sufficient to have the trustee for the Old Notes register
the transfer of such Old Notes into the name of the person having made the
original tender and withdrawing the tender and (iv) specify the name in which
any such Old Notes are to be registered, if different from that of the
Depositor. If Old Notes have been tendered pursuant to the procedure for
book-entry transfer, any notice of withdrawal must specify the name and number
of the participant's account at the book-entry transfer facility to be credited,
if different from that of the Depositor, with the withdrawn Old Notes or
otherwise comply with the book-entry transfer facility's procedures. See "The
Exchange Offer--Withdrawal of Tenders" in the Prospectus.
3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF
SIGNATURES.
If this Letter is signed by the registered holder of the Old Notes tendered
hereby, the signature must correspond with the name as written on the face of
the certificates without alteration, enlargement or any change whatsoever.
If this Letter is signed by a participant in DTC, the signature must
correspond with the name as it appears on the security position listing as the
holder of the Old Notes.
If this Letter or any Old Notes or bond powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing. Unless waived by us, evidence
satisfactory to us of their authority to so act must also be submitted with the
Letter of Transmittal.
If any tendered Old Notes are owned of record by two or more joint owners,
all such owners must sign this Letter.
The signatures on this Letter or a notice of withdrawal, as the case may be,
must be guaranteed by a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc., a commercial bank or
trust company having an office or correspondent in the United States or an
"eligible guarantor" institution within the meaning of Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended (each, an "Eligible Institution"),
unless the Old Notes are tendered: (i) by a registered holder (or by a
participant in DTC whose name appears on a security position listing as the
owner) who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on this Letter and the Exchange Notes are being
issued directly to such registered holder (or deposited into the participant's
account at DTC), or (ii) for the account of an Eligible Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Old Notes should indicate in the applicable box the
name and address to which Exchange Notes issued pursuant to the Exchange Offer
are to be issued or sent, if different from the name or address of the person
signing this Letter. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. If no such instructions are given, any Exchange Notes will be issued
in the name of, and delivered to, the name or address of the person signing this
Letter and any Old Notes not accepted for exchange will be returned to the name
or address of the person signing this Letter.
5. BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9.
Under the federal income tax laws, payments that may be made by the Company
on account of Exchange Notes issued pursuant to the Exchange Offer may be
subject to backup withholding at the rate of
9
<PAGE>
31%. In order to avoid such backup withholding, each tendering holder should
complete and sign the Substitute Form W-9 included in this Letter and either (a)
provide the correct taxpayer identification number ("TIN") and certify, under
penalties of perjury, that the TIN provided is correct and that (i) the holder
has not been notified by the Internal Revenue Service (the "IRS") that the
holder is subject to backup withholding as a result of failure to report all
interest or dividends or (ii) the IRS has notified the holder that the holder is
no longer subject to backup withholding; or (b) provide an adequate basis for
exemption. If the tendering holder has not been issued a TIN and has applied for
one, or intends to apply for one in the near future, such holder should write
"Applied For" in the space provided for the TIN in Part I of the Substitute Form
W-9, sign and date the Substitute Form W-9, and sign the Certificate of Payee
Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I,
the Company (or the Paying Agent under the Indenture governing the Exchange
Notes) shall retain 31% of payments made to the tendering holder during the
sixty (60) day period following the date of the Substitute Form W-9. If the
holder furnishes the Exchange Agent or the Company with his or her TIN within
sixty (60) days after the date of the Substitute Form W-9, the Company (or the
Paying Agent) shall remit such amounts retained during the sixty (60) day period
to the holder and no further amounts shall be retained or withheld from payments
made to the holder thereafter. If, however, the holder has not provided the
Exchange Agent or the Company with his or her TIN within such sixty (60) day
period, the Company (or the Paying Agent) shall remit such previously retained
amounts to the IRS as backup withholding. In general, if a holder is an
individual, the taxpayer identification number is the Social Security number of
such individual. If the Exchange Agent or the Company is not provided with the
correct taxpayer identification number, the holder may be subject to a $50
penalty imposed by the IRS. Certain holders (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In order for a foreign individual to
qualify as an exempt recipient, such holder must submit a statement (generally,
IRS Form W-8), signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Exchange Agent. For
further information concerning backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a taxpayer
identification number if you do not have one and how to complete the Substitute
Form W-9 if Old Notes are registered in more than one name), consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause Old
Notes to be deemed invalidly tendered, but may require the Company (or the
Paying Agent) to withhold 31% of the amount of any payments made on account of
the Exchange Notes. Backup withholding is not an additional federal income tax.
Rather, the federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the transfer
of Old Notes to it or its order pursuant to the Exchange Offer. If, however,
Exchange Notes and/or substitute Old Notes not exchanged or accepted for
exchange are to be delivered to, or are to be registered or issued in the name
of, any person other than the registered holder of the Old Notes tendered
hereby, or if tendered Old Notes are registered in the name of any person other
than the person signing this Letter, or if a transfer tax is imposed for any
reason other than the transfer of Old Notes to the Company or its order pursuant
to the Exchange Offer, the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted herewith, the amount of such transfer taxes will be billed
directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes specified in this Letter.
10
<PAGE>
7. WAIVER OF CONDITIONS.
Conditions enumerated in the Prospectus may be waived by the Company, in
whole or in part, at any time from time to time in its reasonable discretion.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Old Notes, by execution of this Letter, shall
waive any right to receive notice of the acceptance of their Old Notes for
exchange.
Neither the Company nor any other person is obligated to give notice of
defects or irregularities in any tender, nor shall any of them incur any
liability for failure to give any such notice.
9. INADEQUATE SPACE.
If the space provided herein is inadequate, the aggregate principal amount
of Old Notes being tendered and the certificate number or numbers (if available)
should be listed on a separate schedule attached hereto and separately signed by
all parties required to sign this Letter.
10. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES.
If any certificate has been lost, mutilated, destroyed or stolen, the holder
should promptly notify U.S. Bank Trust National Association at the telephone
number indicated above. The holder will then be instructed as to the steps that
must be taken to replace the certificate(s). This Letter of Transmittal and
related documents cannot be processed until the Old Notes have been replaced.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests for
additional copies of the Prospectus and this Letter, may be directed to U.S.
Bank Trust National Association at the address and telephone number indicated
above.
11
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYER'S NAME: METROMEDIA INTERNATIONAL GROUP, INC.
<TABLE>
<S> <C> <C> <C>
SUBSTITUTE PART I--TAXPAYER IDENTIFICATION
NUMBER
FORM W-9 Enter your taxpayer identification --------------------------------
DEPARTMENT OF THE number in the OR appropriate box. Social Security Number
TREASURY For most individuals, this is your OR
INTERNAL REVENUE social security number. If you do
SERVICE not have a number, see Employer --------------------------------
Identification Number how to Employer Identification Number
obtain a "TIN" in the enclosed
Guidelines.
NOTE: If the account is in more
than one name, see the chart on
page 2 of the enclosed Guidelines
to determine what number to give.
PART II--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (SEE ENCLOSED
GUIDELINES)
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
(1) the number shown on this form is my correct Taxpayer
Identification Number (or I am waiting for a number to be issued to
PAYER'S REQUEST FOR me), and
TAXPAYER (2) I am not subject to backup withholding either because I have not
IDENTIFICATION been notified by the Internal Revenue Service (the "IRS") that I am
NUMBER (TIN) AND subject to backup withholding as a result of a failure to report
CERTIFICATION
all interest or dividends or the IRS has notified me that I am
no longer subject to backup withholding.
SIGNATURE DATE
CERTIFICATION GUIDELINES--YOU MUST CROSS OUT ITEM (2) OF THE ABOVE CERTIFICATION IF YOU
HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF
UNDERREPORTING OF INTEREST OR DIVIDENDS ON YOUR TAX RETURN. HOWEVER, IF AFTER BEING
NOTIFIED BY THE IRS THAT YOU WERE SUBJECT TO BACKUP WITHHOLDING YOU RECEIVED ANOTHER
NOTIFICATION FROM THE IRS THAT YOU ARE NO LONGER SUBJECT TO BACKUP WITHHOLDING, DO NOT
CROSS OUT ITEM (2).
</TABLE>
CERTIFICATION OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify, under penalties of perjury, that a Taxpayer Identification Number
has not been issued to me, and that I mailed or delivered an application to
receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administration Office (or I intend to mail or
deliver an application in the near future). I understand that if I do not
provide a Taxpayer Identification Number to the payer, 31 percent of all
payments made to me on account of the Exchange Notes shall be retained until I
provide a Taxpayer Identification Number to the payer and that, if I do not
provide my Taxpayer Identification Number within sixty (60) days, such retained
amounts shall be remitted to the Internal Revenue Service as backup withholding
and 31 percent of all reportable payments made to me thereafter will be withheld
and remitted to the Internal Revenue Service until I provide a Taxpayer
Identification Number.
SIGNATURE__________________________________ DATE ________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU ON ACCOUNT OF THE EXCHANGE NOTES.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
12
<PAGE>
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF OUTSTANDING
SERIES A 10 1/2% SENIOR DISCOUNT NOTES DUE 2007
IN EXCHANGE FOR
SERIES B 10 1/2% SENIOR DISCOUNT NOTES DUE 2007
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OF
METROMEDIA INTERNATIONAL GROUP, INC.
Registered holders of outstanding Series A 10 1/2% Senior Discount Notes due
2007 of Metromedia International Group, Inc. (the "Old Notes") who wish to
tender their Old Notes in exchange for a like principal amount of Series B
10 1/2% Senior Discount Notes due 2007 of Metromedia International Group, Inc.
(the "Exchange Notes") and whose Old Notes are not immediately available or who
cannot deliver their Old Notes and Letter of Transmittal (and any other
documents required by the Letter of Transmittal) to U.S. Bank Trust National
Association (the "Exchange Agent") prior to the Expiration Date, may use this
Notice of Guaranteed Delivery or one substantially equivalent hereto. This
Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile
transmission (receipt confirmed by telephone and an original delivered by
guaranteed overnight courier) or letter to the Exchange Agent. See "The Exchange
Offer--Procedures for Tendering Old Notes" in the Prospectus.
The Exchange Agent for the Exchange Offer is:
U.S. BANK TRUST NATIONAL ASSOCIATION
BY REGISTERED OR CERTIFIED MAIL:
U.S. Bank Trust National Association
180 East 5th Street
St. Paul, MN 55101
Attention: Specialized Finance Department
BY HAND OR OVERNIGHT DELIVERY:
U.S. Bank Trust National Association
180 East 5th Street
St. Paul, MN 55101
Attention: Specialized Finance Department
BY FACSIMILE FOR ELIGIBLE INSTITUTIONS:
(651) 244-1537
FOR CONFIRMATION AND/OR INFORMATION CALL:
(800) 934-6802
Delivery of this Notice of Guaranteed Delivery to an address other than as
set forth above or transmission of instructions via a facsimile transmission to
a number other than as set forth above will not constitute a valid delivery.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by a member firm of a registered national securities exchange or of
the National Association of Securities Dealers, Inc., a commercial bank or trust
company having an office or correspondent in the United States or an eligible
guarantor institution within the meaning of Rule 17Ad-15 under the Securities
Exchange Act of 1934, such signature guarantee must appear in the applicable
space provided on the Letter of Transmittal for Guarantee of Signatures.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders the principal amount of Old Notes indicated
below, upon the terms and subject to the conditions contained in the Prospectus
dated , 1999 of Metromedia International Group, Inc. (the "Prospectus"),
receipt of which is hereby acknowledged.
DESCRIPTION OF SECURITIES TENDERED
<TABLE>
<CAPTION>
NAME AND ADDRESS OF
REGISTERED HOLDER AS IT
APPEARS ON THE SERIES A CERTIFICATE NUMBER(S) OF AGGREGATE PRINCIPAL AMOUNT
10 1/2% SENIOR DISCOUNT OLD REPRESENTED BY PRINCIPAL AMOUNT OF OLD
NOTES DUE 2007 NOTES TENDERED OLD NOTES NOTES TENDERED
- --------------------------- --------------------------- --------------------------- ---------------------------
<S> <C> <C> <C>
(PLEASE PRINT)
- --------------------- --------------------- --------------------- ---------------------
- --------------------- --------------------- --------------------- ---------------------
- --------------------- --------------------- --------------------- ---------------------
- --------------------- --------------------- --------------------- ---------------------
- --------------------- --------------------- --------------------- ---------------------
</TABLE>
<PAGE>
THE FOLLOWING GUARANTEE MUST BE COMPLETED
GUARANTEE OF DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office, branch, agency or
correspondent in the United States, hereby guarantees to deliver to the Exchange
Agent at one of its addresses set forth above, the certificates representing the
Old Notes, together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees, and
any other documents required by the Letter of Transmittal within three New York
Stock Exchange, Inc. trading days after the date of execution of this Notice of
Guaranteed Delivery.
<TABLE>
<S> <C>
Name of Firm:
(Authorized Signature)
Address: Title:
Name:
(Zip Code) (Please type or print)
Area Code and Telephone Number: Date:
</TABLE>
NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. OLD NOTES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT 99.3
EXCHANGE AGENCY AGREEMENT
This Agreement is entered into as of , 1999 between U.S. Bank Trust
National Association, a national banking association, as Exchange Agent (the
"Agent") and Metromedia International Group, Inc. a corporation organized under
the laws of the State of Delaware ("MMG").
MMG and PLD Telekom Inc. ("PLD") have entered into an agreement and plan of
merger, dated as of May 18, 1999 (the "Merger Agreement") pursuant to which a
wholly owned subsidiary of MMG and PLD have agreed to merge (the "Merger"). As a
condition to the Merger, certain PLD noteholders have entered into an Agreement
to Exchange and Consent, dated as of May 18, 1999, with MMG (the "Agreement to
Exchange and Consent") in which certain holders of PLD's outstanding 14% Senior
Discount Notes due 2004 and of PLD's outstanding 9% Convertible Subordinated
Notes due 2006 (collectively, the "PLD Notes") have agreed to exchange their PLD
Notes for Initial Notes (as defined below).
In accordance with the Agreement to Exchange and Consent, MMG proposes to
exchange (the "Exchange Offer") $210,631,376 aggregate principal amount of its
Series B 10 1/2% Senior Discount Notes due 2007 (the "Exchange Notes"), in
exchange for an equal aggregate principal amount of its outstanding Series A
10 1/2% Senior Discount Notes due 2007 (the "Initial Notes"). The terms and
conditions of the Exchange Offer as currently contemplated are set forth in a
prospectus dated , 1999 (the "Prospectus"), proposed to be distributed to
all record holders of the Initial Notes. The Initial Notes and the Exchange
Notes are collectively referred to herein as the "Securities."
The Exchange Offer will terminate at 5:00 p.m. New York City Time on
, 1999, unless extended by MMG in its sole discretion (the "Expiration
Date"). The Exchange Notes are to be issued by MMG pursuant to the terms of an
indenture dated as of , 1999 (the "Indenture") between MMG and U.S.
Bank Trust National Association, as trustee (the "Trustee").
Subject to the provisions hereof, MMG hereby appoints and the Agent hereby
accepts the appointment as Agent for the purposes of receiving, accepting for
delivery and otherwise acting upon tenders of the Initial Notes (the
"Certificates") in accordance with the form of letter of transmittal (the "L/T")
and with the terms and conditions set forth herein and under the caption "The
Exchange Offer" in the Prospectus.
MMG expressly reserves the right to extend, amend or terminate the Exchange
Offer, and not to accept for exchange any Initial Notes not theretofore accepted
for exchange, upon the occurrence of any of the conditions specified in the
Prospectus under the caption "The Exchange Offer--Conditions to the Exchange
Offer." MMG will give oral (confirmed in writing) or written notice of any
extension, amendment, termination or nonacceptance to the Agent as promptly as
practicable.
The Agent has received the following documents in connection with its
appointment (the "Exchange Offer Documents"):
(1) the L/T,
(2) a form of Notice of Guaranteed Delivery,
(3) the Prospectus,
(4) Tax Guidelines,
(5) A cover letter to clients, and
(6) A cover letter to Depository Trust Company participants.
The Agent is authorized and hereby agrees as follows:
(a) to establish an account with respect to the Initial Notes at the
Depository Trust Company ("DTC") for purposes of the Exchange Offer
within two business days after the date of the Prospectus, and any
financial institution that is a participant in DTC's systems shall be
able to
<PAGE>
make book-entry delivery of Initial Notes by causing DTC to transfer such
Initial Notes into the Agent's account in accordance with DTC's procedure
for such transfer;
(b) that tenders of Initial Notes may be made only as set forth in the L/T
and in the section of the Prospectus captioned "The Exchange Offer" and
that Initial Notes shall be considered properly tendered to the Agent
only when tendered in accordance with the procedures set forth herein and
therein;
(c) to address, and deliver by hand or next day courier, a complete set of
the Exchange Offer Documents to each person who, prior to the Expiration
Date, is or becomes a registered holder of Initial Notes promptly after
such person becomes a registered holder of Initial Notes;
(d) to receive all tenders of Initial Notes made pursuant to the Exchange
Offer and stamp the L/ T with the day, month and approximate time of
receipt;
(e) to examine each L/T and Initial Notes received or agent's message (as
defined in the Prospectus) and book-entry transfer, as the case may be,
to determine whether: (i) the L/T and any such other documents are duly
executed and properly completed in accordance with instructions set forth
therein and book-entry confirmations are in due and proper form and
contain the information required to be set forth therein and (ii) the
Initial Notes have otherwise been properly tendered. In each case where
the L/T or any other document has been improperly completed or executed
or book-entry confirmations are not in due and proper form and do not
contain adequate information or any of the certificates for Initial Notes
are not in proper form for transfer or some other irregularity in
connection with the acceptance of the Exchange Offer exists, the Agent
will endeavor to inform the presenters of the need for fulfillment of all
requirements and to take any other action as may be necessary or
advisable to cause such irregularity to be corrected. The Agent shall be
entitled to rely on the electronic messages sent by DTC regarding ATOP
delivery of the Notes to the Agent's account at DTC from the DTC
participants listed on the DTC position listing provided to the Agent;
(f) to take such actions necessary and appropriate to correct any
irregularity or deficiency associated with any tender not in proper
order;
(g) to follow instructions given by the Chief Executive Officer, the
President, any Executive Vice President, any Vice President or any
Assistant Secretary of MMG or any other party designated by such an
officer in writing (the "Designated Officers"), with respect to the
waiver of any irregularities or deficiencies associated with any tender;
(h) to hold all valid tenders subject to further instructions from any
Designated Officer;
(i) to render a report via facsimile, in the form of Exhibit A attached
hereto, on each business day during the Exchange Offer to Stuart
Subotnick, President and Chief Executive Officer at MMG, Silvia Kessel,
Executive Vice President and Chief Financial Officer at MMG, Arnold
Wadler, Executive Vice President, General Counsel and Secretary at MMG,
Mitchell Stier, Assistant General Counsel of MMG, with copies to Douglas
Cifu, Valerie Demont, and John Connon at Paul, Weiss, Rifkind, Wharton &
Garrison as listed on Exhibit C;
(j) to follow and act upon any written amendments, modifications or
supplements to these instructions, any of which may be given to the Agent
by any Designated Officer of MMG or such other person or persons as they
shall designate in writing;
(k) to return to the presenters, in accordance with the provisions of the
L/T, any Initial Notes that were not received in proper order and as to
which the irregularities or deficiencies were not cured or waived;
2
<PAGE>
(l) in the event the Exchange Offer is consummated, to deliver authenticated
Exchange Notes to tendering noteholders, in accordance with the
instructions of such noteholders specified in the respective L/T's, as
soon as practicable after consummation thereof;
(m) to determine that all endorsements, guarantees, signatures, authorities,
stock transfer taxes (if any) and such other requirements are fulfilled
in connection with any request for issuance of the Exchange Notes in a
name other than that of the registered owner of the Initial Notes;
(n) to deliver to, or upon the order of, MMG all Initial Notes received
under the Exchange Offer, together with any related assignment forms and
other documents by first class mail, return receipt requested under a
blanket surety bond protecting the Agent and MMG from loss or liability
arising out of the non-receipt or non-delivery of such Initial Notes or
registered mail insured separately for the replacement value of each such
Initial Notes; and
(o) subject to the other terms and conditions set forth in this Agreement to
take all other actions reasonable and necessary in the good faith
judgment of the Agent, to effect the foregoing matters.
The Agent shall:
(a) have no duties or obligations other than those specifically set forth
herein or as may be subsequently agreed to in writing by you and MMG;
(b) not be required to refer to any documents for the performance of its
obligations hereunder other than this Agreement, the Exchange Offer
Documents; other than such documents, the Agent will not be responsible
or liable for any terms, directions or information in the Prospectus or
any other document or agreement unless the Agent specifically agrees
thereto in writing;
(c) not be required to act on the directions of any person, including the
persons named above, unless MMG provides a corporate resolution to the
Agent or other evidence satisfactory to the Agent of the authority of
such person;
(d) not be required to, and shall make no representations and have no
responsibilities as to, the validity, accuracy, value or genuineness of
(i) the Exchange Offer, (ii) any Certificates, L/Ts or documents prepared
by MMG in connection with the Exchange Offer or (iii) any signatures or
endorsements, other than its own;
(e) not be obligated to take any legal action hereunder that might, in its
judgment, involve any expense or liability, unless it has been furnished
with reasonable indemnity by MMG;
(f) be able to rely on and shall be protected in acting on the written or
oral instructions with respect to any matter relating to its actions as
Agent specifically covered by this Agreement, of any Designated Officer
of MMG;
(g) be able to rely on and shall be protected in acting upon any
certificate, instrument, opinion, notice, letter, telegram or any other
document or security delivered to it and believed by it reasonably and in
good faith to be genuine and to have been signed by the proper party or
parties;
(h) not be responsible for, or liable in any respect on account of, the
identity, authority or rights of any person executing or delivering or
purporting to execute or deliver any document or property under this
Agreement and shall have no responsibility with respect to the use or
application of any property delivered by it pursuant to the provisions
hereof;
(i) be able to consult with counsel satisfactory to it (including counsel
for MMG or staff counsel of the Agent), and the advice or opinion of such
counsel shall be full and complete
3
<PAGE>
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with advice or
opinion of such counsel;
(j) not be called on at any time to advise, and shall not advise, any person
delivering an L/T pursuant to the Exchange Offer as to the value of the
consideration to be received;
(k) not be liable for anything which it may do or refrain from doing in
connection with this Agreement except for its own gross negligence,
willful misconduct or bad faith;
(l) not be bound by any notice or demand, or any waiver or modification of
this Agreement or any of the terms hereof, unless evidenced by a writing
delivered to the Agent signed by the proper authority or authorities and,
if the Agent's duties or rights are affected, unless the Agent shall give
its prior written consent thereto;
(m) have no duty to enforce any obligation of any person to make delivery,
or to direct or cause any delivery to be made, or to enforce any
obligation of any person to perform any other act;
(n) have the right to assume, in the absence of written notice to the
contrary from the proper person or persons, that a fact or an event by
reason of which an action would or might be taken by the Agent does not
exist or has not occurred without incurring liability for any action
taken or omitted, or any action suffered by the Agent to be taken or
omitted, in good faith or in the exercise of the Agent's best judgment,
in reliance upon such assumption; and
(o) not be authorized to pay or offer to pay any concessions, commissions or
solicitation fees to any broker, dealer, bank or other persons or to
engage or utilize any person to solicit tenders.
(p) waive any lien, encumbrance or right of set-off whatsoever that the
Agent may have with respect to funds deposited with the Agent for the
payment of transfer taxes by reason of amounts, if any, borrowed by MMG,
or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with the Agent or for compensation owed to the Agent hereunder.
(q) arrange to comply with all requirements under the tax laws of the United
States, including those relating to missing Tax Identification Numbers,
and file any appropriate reports with the Internal Revenue Service. MMG
understands that the Agent is required to deduct 31% on payments to
holders who have not supplied their correct Taxpayer Identification
Number or required certification. Such funds will be turned over to the
Internal Revenue Service in accordance with applicable regulations.
The Agent shall be entitled to compensation as set forth in Exhibit B
attached hereto.
MMG covenants and agrees to reimburse the Agent for, indemnify it against,
and hold it harmless from any and all reasonable costs and expenses (including
reasonable fees and expenses of one firm of counsel and allocated cost of staff
counsel) that may be paid or incurred or suffered by it or to which it may
become subject without gross negligence, willful misconduct or bad faith on its
part by reason of or as a result of its compliance with the instructions set
forth herein or with any additional or supplemental written or oral instructions
delivered to it pursuant hereto, or which may arise out of or in connection with
the administration and performance of its duties under this Agreement. MMG
agrees to promptly notify the Agent of any extension of the Expiration Date.
This Agreement shall be construed and enforced in accordance with the laws
of the State of New York and shall inure to the benefit of, and the obligations
created hereby shall be binding upon, the successors and assigns of the parties
hereto. The parties agree to submit to the exclusive jurisdiction of the federal
or state courts located in the State of New York, New York County.
Unless otherwise expressly provided herein, all notices, requests, demands
and other communications hereunder shall be in writing, shall be delivered by
hand, facsimile or by First Class Mail, postage prepaid, shall be deemed given
when received and shall be addressed to the Agent and
4
<PAGE>
MMG at the respective addresses listed below or to such other addresses as they
shall designate from time to time in writing, forwarded in like manner.
If to the Agent, to:
U.S. Bank Trust National Association
180 East 5th Street
St. Paul, MN 55101
Attention: Corporate Trust Department /
Corporate Finance
Telephone: (651) 244-0721
Facsimile: (651) 244-0711
If to MMG, to:
Metromedia International Group, Inc.
c/o Metromedia Company
One Meadowlands Plaza
East Rutherford, NJ 07073-2173
Attention: General Counsel
Telephone: (201) 531-8000
Facsimile: (201) 531-2803
with copies to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Telephone: (212) 373-3000
Facsimile: (212) 757-3990
Attention: Douglas A. Cifu, Esq.
Unless terminated earlier by the parties hereto, this Agreement shall
terminate 90 days following the Expiration Date. Notwithstanding the foregoing,
the indemnification and compensation provisions of this Agreement shall survive
the termination of this Agreement. Upon any termination of this Agreement, the
Agent shall promptly deliver to MMG any certificates for Securities, funds or
property then held by the Exchange Agent under this Agreement.
This Agreement shall be binding and effective as of the date hereof.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on their behalf by their officers thereunto duly authorized, all as of
the day and year first above written.
<TABLE>
<S> <C> <C>
U.S. BANK TRUST NATIONAL ASSOCIATION
By:
-----------------------------------------
Name:
Title:
METROMEDIA INTERNATIONAL GROUP, INC.
By:
-----------------------------------------
Name:
Title:
</TABLE>
6
<PAGE>
EXHIBIT A
SAMPLE REPORT
Date: ________________________________
Report Number: _______________________
As of Date: __________________________
Ladies & Gentlemen:
As Exchange Agent for the Exchange Offer dated , 1999, we hereby
render the following report:
<TABLE>
<S> <C>
Principal Amount previously received:
Principal Amount received today:
Principal Amount received against Guaranteed Deliveries:
Principal Amount withdrawn today:
TOTAL PRINCIPAL AMOUNT RECEIVED TO DATE:
</TABLE>
Very truly yours,
Corporate Trust Dept.
<PAGE>
EXHIBIT B
COMPENSATION
The Agent for serving as the Exchange Agent pursuant to this Agreement,
shall receive a fee of $2,500, payable upon commencement of the Exchange Offer,
and the Agent's out-of-pocket expenses incurred in connection with completing
its duties pursuant to this Agreement.
<PAGE>
EXHIBIT C
METROMEDIA INTERNATIONAL GROUP
One Meadowlands Plaza
East Rutherford, NJ 07073-2137
Tel: (201) 531-8000
<TABLE>
<CAPTION>
NAME BUSINESS TELEPHONE NUMBER
- --------------------------------------------------------------------------------------- -------------------------
<S> <C>
Stuart Subotnick....................................................................... Tel: (914) 421-6702
PRESIDENT & CHIEF EXECUTIVE OFFICER Fax: (914) 421-6777
Silvia Kessel.......................................................................... Tel: (212) 606-4387
CHIEF FINANCIAL OFFICER Fax: (212) 606-4337
Arnold L. Wadler....................................................................... Tel: (201) 531-8050
EVP, GENERAL COUNSEL & SECRETARY Fax: (201) 531-2803
Mitchell Stier......................................................................... Tel: (201) 531-8017
ASSISTANT GENERAL COUNSEL Fax: (201) 531-2803
</TABLE>
PAUL, WEISS, RIFKIND, WHARTON AND GARRISON
1285 Avenue of the Americas
24th Floor
New York, NY 10019
Tel: (212) 373-3000
<TABLE>
<CAPTION>
NAME BUSINESS TELEPHONE NUMBER
- --------------------------------------------------------------------------------------- -------------------------
<S> <C>
Douglas A. Cifu........................................................................ Tel: (212) 373-3436
PARTNER Fax: (212) 373-2274
Valerie M. Demont...................................................................... Tel: (212) 373-3076
ASSOCIATE Fax: (212) 373-2315
John Connon............................................................................ Tel: (212) 373-3406
ASSOCIATE Fax: (212) 373-2308
</TABLE>
