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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 22, 1999
REGISTRATION NO. 333-78405
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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NTL COMMUNICATIONS CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
DELAWARE 4899 52-1822078
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
(212) 906-8440
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
</TABLE>
<TABLE>
<S> <C>
RICHARD J. LUBASCH, ESQ. COPY TO:
EXECUTIVE VICE PRESIDENT, THOMAS H. KENNEDY, ESQ.
GENERAL COUNSEL AND SECRETARY SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
NTL INCORPORATED 919 THIRD AVENUE
110 EAST 59TH STREET NEW YORK, NEW YORK 10022
NEW YORK, NEW YORK 10022 (212) 735-3000
(212) 906-8440
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE 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. [ ]
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THE REGISTRANT 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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE 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 changed. We may
not deliver these securities until the Registration Statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Prospectus
Subject to completion, dated July 22, 1999
Offer to Exchange
NTL COMMUNICATIONS CORP.
9 3/4% SENIOR DEFERRED COUPON NOTES DUE 2009 [NTL LOGO]
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- We are offering to exchange an aggregate principal amount at maturity of
up to L330,000,000 of our new 9 3/4% series B senior deferred coupon
notes due 2009 for a like amount of our old 9 3/4% senior deferred coupon
notes due 2009.
- The exchange offer expires at 5:00 p.m., London time, on August 20, 1999,
unless we extend it.
- The exchange of outstanding old notes for new notes will not be a taxable
event for United States federal income tax purposes. See "Federal Income
Tax Considerations" on page for more information.
- We will apply to list the new notes on the Luxembourg Stock Exchange.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF RISK FACTORS
THAT YOU SHOULD CONSIDER BEFORE DECIDING TO TENDER YOUR OLD NOTES.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is July 22, 1999.
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Until October 22, 1999, which is 90 days after the date of this prospectus,
if you are a dealer effecting transactions in the new notes, whether or not you
participate in the exchange offer, you may be required to deliver a prospectus.
This obligation is in addition to your obligation if you are a dealer to deliver
a prospectus when acting as an underwriter and with respect to any unsold
allotments or subscriptions.
------------------------
You should rely only on the information contained in this prospectus. We
have not authorized any other person to provide you with different information.
If anyone provides you with different or inconsistent information, you should
not rely on it. We are not making an offer of the new notes in any jurisdiction
where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus is accurate as of the date on the front cover of
this prospectus only. Our business, financial condition, results of operations
and prospects may have changed since that date.
------------------------
In this prospectus, references to "pounds sterling," "L" "pence" or "p" are
to the lawful currency of the United Kingdom and references to "U.S. dollars,"
"dollars," "$" or "c" are to the lawful currency of the United States. For your
convenience only we have translated some pound sterling amounts into U.S.
dollars and some U.S. dollar amounts into pounds sterling. We are not making any
representation to you regarding those translated amounts. Unless we otherwise
clearly indicate, the translations of pounds sterling into U.S. dollars have
been made at $1.6116 per L1.00, the noon buying rate in The City of New York for
cable transfers in pounds sterling as certified for customers purposes by the
Federal Reserve Bank of New York on March 31, 1999. On July 21, 1999, the noon
buying rate was $1.5766 per L1.00.
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PROSPECTUS SUMMARY
This summary highlights information about us and the exchange offer which
is contained elsewhere or incorporated by reference in this prospectus. This
summary may not contain all the information that is important to you. You should
read the entire prospectus, including the financial statements and related
notes, before making a decision to exchange your old notes. When we refer to NTL
in this prospectus, we mean NTL Communications Corp. and its consolidated
subsidiaries, except where we make it clear that we are only referring to NTL
Communications Corp.
On April 1, 1999, we completed a corporate restructuring to create a
holding company structure and we became a subsidiary of the new holding company
NTL Incorporated and changed our name to NTL Communications Corp. The annual
report referred to in this prospectus will not reflect the name change effected
earlier this year.
ABOUT NTL
We are a leading broadband communications company in the United Kingdom,
providing residential, business and carrier customers with a broad array of
competitive communications products and services, including the following:
- residential services, including telephony, cable television, personal
computer and television-based Internet access services and interactive
services;
- national telecoms services, including business telecoms, national and
international carrier telecommunications, Internet services and satellite
communications services; and
- broadcast transmission and tower services including digital and analog
television and radio broadcast transmission services, wireless network
management and tower site rental services.
RECENT DEVELOPMENTS
ACQUISITION OF AUSTRALIAN NATIONAL TRANSMISSION NETWORK
On April 30, 1999, a subsidiary of NTL Incorporated acquired the Australian
National Transmission Network at a purchase price of approximately $407.0
million. While NTL Incorporated ultimately intends to finance the purchase price
by a separate financing, the funds necessary to pay the purchase price for the
Australian network were obtained, from a distribution by us to NTL Incorporated.
REDEMPTION OF EXISTING CONVERTIBLE NOTES
On May 26, 1999, we announced that we were calling for redemption all of
our convertible subordinated notes due 2008 issued in June 1996. The redemption
date was June 25, 1999 and the redemption price was 104.9%. All of those notes
were converted into NTL Incorporated common stock at the applicable conversion
price of $37.875 per share of common stock.
NTL WINS IRISH CABLELINK BID
In May 1999, we announced our first broadband venture outside the United
Kingdom with the acquisition of Cablelink Limited, Ireland's largest cable
television provider. Telecom Eireann and Radio Telefis Eireann announced NTL as
the successful
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bidder after a competitive tendering process. In July 1999, we acquired
Cablelink for approximately 535 million Irish Pounds (approximately US$730
million). We secured a bridge facility for the full purchase price.
FRANCE TELECOM INVESTMENT IN NTL INCORPORATED
On July 15, 1999, our parent, NTL Incorporated announced that it reached an
agreement with France Telecom regarding strategic business opportunities in the
United Kingdom. As part of this agreement, France Telecom agreed to make an
initial investment of $1 billion in NTL Incorporated. Under the terms of this
agreement, France Telecom will purchase 750,000 shares of NTL Incorporated's 5%
preferred stock, convertible into NTL Incorporated common stock at $125 per
share, subject to adjustment, and 2,702,703 shares of NTL Incorporated common
stock at $92.50 per share. Closing of this purchase is subject to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other
customary closing conditions and it is expected to occur by the end of July
1999.
The agreement between the companies contemplates further significant
investments by France Telecom in NTL Incorporated, so that NTL Incorporated can
complete its current discussions with respect to a possible transaction with
Cable & Wireless Communications plc.
STRATEGIC ACQUISITION DISCUSSIONS
On July 15, 1999, NTL Incorporated confirmed media reports that it was
discussing with Cable and Wireless plc a possible transaction by which certain
assets of Cable & Wireless Communications plc would be merged with NTL
Incorporated.
On July 18, 1999, NTL Incorporated and Cable and Wireless plc announced
that they entered into exclusive negotiations with a view to concluding an
agreement for a possible merger of Cable & Wireless Communications plc's cable
and consumer telephony business with NTL Incorporated. The possible merger would
occur along with the additional equity investment in NTL Incorporated by France
Telecom. At this time, there can be no assurance that a merger or the additional
equity investment will be concluded and, if so, on terms and conditions that are
favorable to us.
NTL INCORPORATED ACQUIRES CERTAIN BRITISH TELECOMMUNICATIONS CABLE FRANCHISES
On July 18, 1999, NTL Incorporated announced that it acquired certain
broadband cable franchises from British Telecommunications plc. The franchises
are located in Westminster and Milton Keynes and cover approximately 210,000
homes, approximately 189,000 of which are passed by broadband networks. The
acquisitions increase NTL Incorporated's total franchise homes in the United
Kingdom and Ireland to more than 5.8 million homes.
NTL Incorporated expects to invest approximately L15 million to upgrade the
networks for digital cable, interactive service and high speed Internet access.
In addition, NTL Incorporated will pay British Telecommunications L5 million on
closing and up to L14 million on completion of the upgrade of the Westminster
network. Thereafter, NTL Incorporated will lease the networks from British
Telecommunications on a long term basis for an annual lease payment of
approximately L3.9 million.
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THE EXCHANGE OFFER
Notes offered................. We are offering up to L330,000,000 principal
amount at maturity of new 9 3/4% series B
senior deferred coupon notes due 2009.
The series B notes have been registered under
the Securities Act.
The exchange offer............ We are offering to issue the new notes in
exchange for a like principal amount of your
old notes. For procedures for tendering, see
"The Exchange Offer."
Tenders, expiration date;
withdrawal................. The exchange offer will expire at 5:00 p.m.
London time on August 20, 1999 unless we extend
it. If you decide to tender your old notes in
the exchange offer, you may withdraw them at
any time before August 20, 1999. If we decide
for any reason not to accept any old note for
exchange, it will be returned without expense
to you promptly after the end of the exchange
offer.
United States federal income
tax consequences.............. Your exchange of old notes for new notes in the
exchange offer should not result in any income,
gain or loss to you for federal income tax
purposes. See "Federal Income Tax
Considerations."
Use of proceeds............... We will not receive any proceeds from the
exchange pursuant to the exchange offer.
Exchange agent................ The Chase Manhattan Bank through its offices
specified in this prospectus in London and
Luxembourg is acting as the exchange agent for
the exchange offer. See "The exchange
offer -- exchange agent" and the inside back
cover of this prospectus for the location of
the offices of the exchange agent.
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CONSEQUENCES OF EXCHANGING OLD NOTES IN THE EXCHANGE OFFER
The following summary is based on interpretations by the staff of the SEC
in no action letters issued to third parties. Unless you are an affiliate of
NTL, generally if you exchange your old notes for new notes in the exchange
offer you may offer those new notes for resale, resell those new notes, and
otherwise transfer those new notes without compliance with the registration and
prospectus delivery provisions of the Securities Act. However new notes must be
acquired in the ordinary course of your business. In addition, unless you are a
broker-dealer, you must not engage in, intend to engage in or have any
arrangement or understanding with any person to participate in, a distribution
of new notes.
If you do not exchange your old notes for new notes in the exchange offer,
your old notes will continue to be subject to provisions of the indenture under
which they were issued regarding transfer and exchange of the old notes and the
restrictions on transfer contained in the legend on the old notes. See "Risk
Factors -- If you do not exchange your old notes for new notes you will continue
to hold notes subject to restrictions on transfer," "The exchange offer" and
"Registration rights."
SUMMARY DESCRIPTION OF THE NEW NOTES
The terms of the new notes and the old notes are identical in all material
respects, except for:
(1) the transfer restrictions and registration rights relating to the old
notes, and
(2) some provisions under the registration rights agreements providing for
special interest on the old notes under some circumstances relating to
timing of the exchange offer, which will terminate on completion of the
exchange offer.
Issuer..................... NTL Communications Corp.
Securities offered......... L330,000,000 principal amount at maturity of 9 3/4%
series B senior deferred coupon notes due 2009.
Maturity date.............. April 15, 2009.
Issue price................ L621.10 per L1,000 principal amount at maturity for
each new note.
Yield and Interest......... The issue price of each old note represents a yield
to maturity of 9.75% per annum, computed on a
semi-annual bond equivalent basis. Cash interest
will only accrue on the new notes from April 15,
2004. From April 15, interest on the new notes will
accrue at the rate of 9 3/4% per annum and will be
payable in cash, semi-annually in arrears, on April
15 and October 15, commencing on October 15, 2004.
Optional redemption........ On or after April 15, 2004, the new notes will be
redeemable at our option, in whole at any time or
in part
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on one or more occasions, at the redemption prices
set forth in this prospectus, plus accrued and
unpaid interest, if any, to the date of redemption.
Ranking.................... The new notes will rank senior in right of payment
to all of our subordinated indebtedness and will
rank equal in right of payment with all of our
existing and future unsubordinated obligations. As
of March 31, 1999, we had approximately $3.8
billion of senior debt outstanding. The new notes
will be effectively subordinated to all existing
and future indebtedness and other liabilities of
our subsidiaries with respect to the cash flow and
assets of those subsidiaries. The new notes will
rank senior to all our 7% convertible subordinated
notes due 2008.
Change of control.......... If a change of control triggering event occurs we
will be required to make an offer to purchase all
of the notes at 101% of their principal amount plus
accrued and unpaid interest to the date of
purchase. In the case of repurchases of notes
before April 15, 2004, the purchase price will be
equal to 101% of the accreted value at the date of
repurchase.
We may not have sufficient funds or the financial
resources necessary to satisfy our obligations to
repurchase the notes and other debt that may become
repayable upon a change of control triggering
event.
Covenants.................. The indenture governing the notes contains
covenants relating to, among other things, the
following matters:
- restricted payments;
- incurrence of additional indebtedness and
issuance of preferred stock;
- liens;
- dividend and other payment restrictions affecting
subsidiaries;
- mergers, consolidations and sales of assets;
- transactions with affiliates; and
- reports.
Listing.................... We will apply to list the new notes on the
Luxembourg Stock Exchange.
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Governing law.............. The new notes and the indenture under which the new
notes will be issued are governed exclusively by
the laws of the State of New York.
Trustee, principal paying
agent and registrar..... The Chase Manhattan Bank.
Paying agent and transfer
agent in Luxembourg..... Chase Manhattan Bank Luxembourg S.A.
Listing agent in
Luxembourg.............. Banque Internationale a Luxembourg.
Book-entry transfer
facilities.............. Euroclear and Cedel Bank
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RISK FACTORS
You should consider carefully all of the information in this prospectus and
incorporated by reference in this prospectus. See "Where you can find more
information about us." In particular, you should carefully evaluate the
following risks before tendering your old notes in the exchange offer. However,
the risk factors set forth below, other than the first risk factor, are also
generally applicable to the old notes as well as the new notes.
IF YOU DO NOT EXCHANGE YOUR OLD NOTES FOR NEW NOTES YOU WILL CONTINUE TO HOLD
NOTES SUBJECT TO RESTRICTIONS ON TRANSFER AND WHICH ARE NOT FREELY TRADEABLE
If you do not tender your old notes or you tender your old notes and we do
not accept the tender, your old notes will continue to be subject to their
existing restrictions on transfer and exchange. In general, unless the old notes
are registered under the Securities Act, you cannot offer or sell your old notes
except pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. Except in limited
circumstances which we summarize under "Registration rights" in this prospectus,
we do not have any obligation to register your old notes under the Securities
Act. We do not expect that we will take any action to register the old notes
under the Securities Act unless we are required to do so in those limited
circumstances.
OUR SUBSTANTIAL LEVERAGE COULD ADVERSELY AFFECT OUR FINANCIAL HEALTH AND PREVENT
US FROM FULFILLING OUR OBLIGATION UNDER THE NOTES
We are and, for the foreseeable future will continue to be, highly
leveraged. The agreements which govern our existing indebtedness also allow us
to assume additional debt to finance our working capital and capital expenditure
requirements, finance the construction of our network and finance the
acquisition of assets, licenses and computer software that are used in
connection with a cable business. If our substantial indebtedness adversely
affects our financial health we may not be able to fulfill our obligations under
the notes.
On March 31, 1999, the accreted value of both NTL Incorporated and our
total long-term indebtedness, including NTL Incorporated's 13% senior redeemable
exchangeable preferred stock and adjusted for the issuance of the old notes was
approximately $6.9 billion.
Our substantial indebtedness could adversely affect our financial health
by, among other things:
- increasing our vulnerability to adverse changes in general economic
conditions or increases in prevailing interest rates particularly if any
of our borrowings are at variable interest rates,
- limiting our ability to obtain the additional financing we need to
operate, develop and expand our business, and
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- requiring us to dedicate a substantial portion of our cash flow from
operations to service our debt, which reduces the funds available for
dividends, operations and future business opportunities.
IN SOME CIRCUMSTANCES INVOLVING A CHANGE OF CONTROL OF NTL, NTL
COMMUNICATIONS WILL BE REQUIRED TO REPURCHASE SOME OF OUR INDEBTEDNESS INCLUDING
THE NOTES -- IF THIS OCCURS, WE MAY NOT HAVE THE FINANCIAL RESOURCES NECESSARY
TO MAKE THOSE REPURCHASES
We may under some circumstances involving a change of control of NTL be
obligated to offer to repurchase outstanding debt securities, including the
notes, before maturity. We cannot assure you that we will have available
financial resources necessary to repurchase those securities in those
circumstances.
THE ANTICIPATED CONSTRUCTION COSTS OF OUR NETWORK WILL INCREASE AS A RESULT OF
OUR RECENT ACQUISITIONS AND WILL REQUIRE SUBSTANTIAL AMOUNTS OF ADDITIONAL
FUNDING
Following our recent acquisitions, our capital expenses and cost of
operations for the development, construction and operation of our combined
telecommunications networks will significantly increase. Given our most recent
acquisitions we estimate that significant amounts of additional funding will be
necessary to meet these capital expenditure and operational requirements.
We cannot be certain that:
- we will be able to obtain additional financing with acceptable terms,
- actual construction costs will meet our expectations,
- we will satisfy conditions precedent to advances under future credit
facilities,
- we will not acquire additional businesses that require additional
capital,
- we will be able to generate sufficient cash from operations to meet
capital requirements, debt service and other obligations when required.
We do not have any firm additional financing plans to address the factors
enumerated above.
WE WILL REQUIRE ADDITIONAL FINANCING BECAUSE WE DO NOT EXPECT TO GENERATE
SUFFICIENT CASH FLOW TO REPAY AT MATURITY THE ENTIRE PRINCIPAL AMOUNT OF OUR
OUTSTANDING INDEBTEDNESS
We anticipate that we will not generate sufficient cash flow from
operations to repay at maturity the entire principal amount of our outstanding
indebtedness, including the notes. Some of the measures we may take to refinance
our debt include:
- refinancing all or portions of that indebtedness,
- seeking modifications to the terms of that indebtedness,
- seeking additional debt financing, which may require us to obtain the
consent of some of our lenders, and
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- seeking additional equity financing.
We cannot be certain that we will succeed in executing any of these
measures.
WE CANNOT BE CERTAIN THAT WE WILL BE SUCCESSFUL IN INTEGRATING ACQUIRED
BUSINESSES INTO OURS, OR THAT WE WILL REALIZE THE BENEFITS WE ANTICIPATE FROM
ANY ACQUISITION
We will continue to consider strategic acquisitions and combinations that
involve operators or owners of licenses to operate cable, telephone, television
or telecommunications systems or services and related businesses. If
consummated, some of these transactions would significantly alter our holdings
and might require us to incur substantial indebtedness or raise additional
equity. We cannot assure you that, with respect to the recent acquisitions, as
well as future acquisitions, if they occur, that we:
- will realize any anticipated benefits,
- will successfully integrate the businesses with our operations, or
- will manage such integration without adversely affecting us.
WE ARE A HOLDING COMPANY THAT IS DEPENDENT UPON CASH FLOW FROM OUR SUBSIDIARIES
TO MEET OUR OBLIGATIONS -- OUR ABILITY TO ACCESS THAT CASH FLOW MAY BE LIMITED
IN SOME CIRCUMSTANCES
We are a holding company with no independent operations or significant
assets other than our investments in and advances to our subsidiaries and
affiliated joint ventures. We depend upon the receipt of sufficient funds from
our subsidiaries and affiliated joint ventures to meet our obligations. The
terms of existing and future indebtedness of our subsidiaries may limit the
payment of dividends, loans and other distributions to us by our subsidiaries.
We depend upon the receipt of sufficient funds from our subsidiaries and
affiliated joint ventures to meet our obligations, including our obligations on
the notes.
Additionally, following the liquidation of a subsidiary or joint venture,
the creditors of that subsidiary or joint venture will generally be entitled to
be paid in full before we are entitled to a distribution of any assets in the
liquidation. The claims of the lenders under our credit facility also rank ahead
of any obligations of our subsidiaries to us. On March 31, 1999, the total
liabilities of our subsidiaries were approximately $2.5 billion.
Our principal fixed assets are cable headends, cable television and
telecommunications distribution equipment, telecommunications switches and
customer equipment, transmission towers, masts and antennas and the sites on
which they are located. These assets are highly specialized and, individually,
may have limited marketability. If secured creditors seize the assets that
secure our debt, these creditors would likely seek to sell the business as a
going concern.
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WE HAVE HISTORICALLY INCURRED LOSSES AND GENERATED NEGATIVE CASH FLOWS AND
CANNOT ASSURE YOU THAT WE WILL BE PROFITABLE IN THE FUTURE
Construction and operating expenditures have resulted in negative cash
flow, which we expect will continue at least until we establish an adequate
customer base. We also expect to incur substantial additional losses. We cannot
assure you that we will achieve or sustain profitability in the future. Failure
to achieve profitability could diminish our ability to sustain our operations
and obtain additional required funds. In addition, a failure to achieve or
sustain profitability would adversely affect our ability to make required
payments on our indebtedness, including the notes.
We had net losses for,
- the three months ended March 31, 1999 of $230.4 million,
and for the years ended December 31,
- 1998: $534.6 million
- 1997: $333.1 million
- 1996: $254.5 million
- 1995: $90.8 million
- 1994: $29.6 million
As of March 31, 1999, our accumulated deficit was $1.5 billion.
WE HAVE HISTORICALLY HAD A DEFICIENCY OF EARNINGS TO FIXED CHARGES AND EARNINGS
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS AND OUR EARNINGS IN THE
FUTURE MAY NOT BE SUFFICIENT TO COVER THOSE FIXED CHARGES, INCLUDING OUR
OBLIGATIONS ON THE NOTES
For the three months ended March 31, 1999 and the years ended December 31,
1998, 1997, 1996, 1995 and 1994, our earnings were insufficient to cover fixed
charges by approximately $240.8 million, $565.7 million, $355.4 million, $257.1
million, $105.4 million and $31.8 million, respectively. Our earnings for the
three months ended March 31, 1999 and the years ended December 31, 1998 and 1997
were insufficient to cover combined fixed charges and preferred stock dividends
by approximately $253.9 million, $584.5 million and $367.4 million,
respectively. Fixed charges consist of interest expense, including capitalized
interest, amortization of fees related to debt financing and rent expense deemed
to be interest. Our earnings in the future may not be sufficient to cover those
fixed charges, including our obligations on the notes.
WE HAVE UTILIZED SOME OF OUR EXISTING FINANCIAL RESOURCES TO DISTRIBUTE FUNDS TO
OUR PARENT TO FINANCE AN ACQUISITION BY OUR PARENT -- OUR PARENT IS UNDER NO
OBLIGATION TO REPAY THE FUNDS TO US
Under our existing indentures including the indenture relating to the
notes, we are permitted to dividend or distribute funds to NTL Incorporated, our
parent up to limits specified in those indentures. A distribution to NTL
Incorporated to finance the purchase of the Australian National Transmission
Network for approximately US$407 million occurred in March, 1999. NTL
Incorporated may, but is not required to, recontribute
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those funds to us. Dividends and distributions to NTL Incorporated, to the
extent permitted, may be made at other times for other purposes.
WE ARE SUBJECT TO SIGNIFICANT COMPETITION, WHICH WE EXPECT TO INTENSIFY, IN EACH
OF OUR BUSINESS AREAS -- IF WE ARE UNABLE TO COMPETE SUCCESSFULLY OUR FINANCIAL
HEALTH COULD BE ADVERSELY AFFECTED
We face significant competition from established and new competitors in
each of our businesses. As existing technology develops and new technologies
emerge, we believe that competition will intensify in each of these business
areas, particularly business telecommunications and the Internet. Some of our
competitors have substantially greater financial and technical resources than we
do. If we are unable to compete successfully our business, financial condition
and results of operations could be adversely affected.
OUR PRINCIPAL BUSINESSES ARE SUBJECT TO GOVERNMENT REGULATION, INCLUDING PRICING
REGULATION, WHICH MAY CHANGE ADVERSELY TO US
Our principal business activities in the UK are regulated and supervised by
various governmental bodies. Changes in laws, regulations or governmental policy
or the interpretations of those laws or regulations affecting our activities and
those of our competitors, such as licensing requirements, changes in price
regulation and deregulation of interconnection arrangements, could have a
material adverse effect on us.
In addition, we are also subject to regulatory initiatives of the European
Commission. Changes in EU Directives may reduce the range of programming and
increase the costs of purchasing television programming or require us to provide
access to our cable network infrastructure to other service providers, which
could have a material adverse effect on us.
OUR BROADCAST SERVICES BUSINESS IS DEPENDENT UPON SITE SHARING ARRANGEMENTS WITH
OUR PRINCIPAL COMPETITOR
As a result of, among other factors, a natural shortage of potential
transmission sites and the difficulties in obtaining planning permission for
erection of further masts, the Castle Tower Corporation Consortium and NTL have
made arrangements to share a large number of tower sites. We cannot assure you
that the site sharing arrangements will not be terminated. Termination of the
site sharing arrangements would have a material adverse effect on us.
Under the present arrangements, one of the parties is the owner, lessor or
licensor of each site and the other party is entitled to request a license to
use specified facilities at that site. Each site license granted pursuant to the
site sharing agreement is for an initial period expiring on December 31, 2005,
subject to title to the site and to the continuation in force of the site
sharing agreement. Each site sharing agreement provides that, if requested by
the sharing party, it will be extended for further periods. Either party may
terminate the agreement by 5 years' notice in writing to the other expiring on
December 31, 2005 or at any date which is a date 10 years or a multiple of 10
years after December 31, 2005.
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OUR BROADCAST SERVICES BUSINESS IS DEPENDENT UPON ITV AND OTHER CONTRACTS
Our broadcast services business is substantially dependent upon contracts
with the ITV contractors, Channel 4/Welsh Fourth Channel and Vodafone for the
provision of transmission services. The prices that we may charge these
companies for television transmission services are subject to regulation by
OFTEL. See "-- Our principal businesses are subject to government regulation,
including pricing regulation, which may change adversely to us." The contracts
with the ITV contractors and Channel 4/Welsh Fourth Channel terminate on
December 31, 2002. Although, historically, the ITV contractors and Channel
4/Welsh Fourth Channel have renewed their contracts with us, we cannot assure
you that they will do so upon expiration of the current contracts, that they
will not negotiate terms for provision of transmission services by us on a basis
less favorable to us or that they would not seek to obtain from third parties a
portion of the transmission services currently provided by us. The loss of any
one of these contracts could have a material adverse effect on us.
FAILURE TO MANAGE OUR GROWTH AND EXPANSION COULD HAVE A MATERIAL ADVERSE EFFECT
ON US
We have experienced rapid growth and development in a relatively short
period, and to meet our strategic objectives will require a continuation of that
growth. Management of that growth will require, among other things:
- stringent control of construction and other costs,
- continued development of our financial and management controls,
- increased marketing activities, and
- the training of new personnel.
Failure to manage our rapid growth and development successfully could have
a material adverse effect on us.
WE ARE DEPENDENT UPON A SMALL NUMBER OF KEY PERSONNEL
A small number of key executive officers manage our businesses, and the
loss of one or more of them could have a material adverse effect on us. We
believe that our future success will depend in large part on our continued
ability to attract and retain highly skilled and qualified personnel. We have
not entered into written employment contracts or non-compete agreements with,
nor have we obtained life insurance policies covering, those key executive
officers. Some of our senior managers also serve as members of senior management
of other companies in the telecommunications business which may reduce the
amount of time they are able to dedicate to our businesses.
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THE TELECOMMUNICATIONS INDUSTRY IS SUBJECT TO RAPID TECHNOLOGICAL CHANGES AND WE
CANNOT PREDICT THE EFFECT OF ANY CHANGES ON OUR BUSINESSES
The telecommunications industry is subject to rapid and significant changes
in technology and we cannot predict the effect of technological changes on our
businesses. However, the cost of implementation for emerging and future
technologies could be significant, and our ability to fund such implementation
may depend on our ability to obtain additional financing.
WE ARE SUBJECT TO CURRENCY RISK BECAUSE WE OBTAIN A SUBSTANTIAL AMOUNT OF
FINANCING IN US DOLLARS BUT GENERALLY GENERATE REVENUES AND INCUR EXPENSES IN
OTHER CURRENCIES
We will encounter currency exchange rate risks because we generate revenues
and incur construction and operating expenses primarily in other currencies,
primarily in British pounds sterling, while we pay interest and principal
obligations with respect to most of our existing indebtedness in United States
dollars. We cannot assure you that any hedging transaction we might enter into
will be successful and that shifts in the currency exchange rates will not have
a material adverse effect on us.
WE DO NOT INSURE THE UNDERGROUND PORTION OF OUR CABLE NETWORK
We obtain insurance of the type and in the amounts that we believe are
customary in the UK for similar companies. Consistent with this practice, we do
not insure the underground portion of our cable network. Substantially all of
our cable network is constructed underground. Any catastrophe that affects a
significant portion of one of our system's underground cable network would
result in substantial uninsured losses and may have a material adverse effect on
us.
LACK OF PUBLIC MARKET FOR THE NOTES
There has been no public market for the notes. The purchasers are not
obligated to make a market and if such market making should occur, it may be
discontinued at any time without notice. Accordingly, there can be no assurance
as to the development or liquidity of any market that may develop for the notes.
YOU SHOULD BE AWARE THAT ACTUAL RESULTS OR OUTCOMES MAY TURN OUT TO BE
MATERIALLY DIFFERENT FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENTS
INCLUDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
This prospectus includes or incorporates by reference projections of
broadcast transmission revenues, build-out results and other forward-looking
statements, including those using words such as "believe," "anticipate,"
"should," "intend," "plan," "will," "expects," "estimates," "projects,"
"positioned," "strategy," and similar expressions. In reviewing that
forward-looking information you should keep in mind that actual results may
differ materially from those expressed or implied in those forward-looking
statements. Important assumptions and factors that could cause actual results to
differ
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<PAGE> 17
materially from those contemplated or projected, forecast, estimated or budgeted
in or expressed or implied by such projections and forward-looking statements
include those specified in this risk factors section, as well as
- industry trends,
- our ability to
-- continue to design network routes and install facilities,
-- obtain and maintain any required government licenses or approvals,
-- finance construction and development,
all in a timely manner, at reasonable costs and on satisfactory terms and
conditions,
- assumptions about
-- customer acceptance,
-- churn rates,
-- overall market penetration and competition from providers of
alternative services, and
-- availability, terms and deployment of capital.
We assume no obligation to update projections or other forward-looking
statements to reflect actual funding requirements, capital expenditures and
results, changes in assumptions or in the factors affecting such projections or
other forward-looking statements. We cannot assure you that:
- any financings will be obtained when required, on acceptable terms or at
all;
- actual amounts required to complete our planned build out will not exceed
the amount we estimate or that additional financing substantially in
excess of that amount will not be required; (see -- "The anticipated
construction costs of our network will increase as a result of our recent
acquisitions and will require substantial amounts of additional
funding");
- we will not acquire franchises, licenses or other new businesses that
would require additional capital;
- operating cash flow will meet expectations or that we will be able to
access such cash from our subsidiaries' operations to meet any unfunded
portion of our capital requirements when required or to satisfy the terms
of the notes, or our other debt instruments and agreements for the
incurrence of additional debt financing (see "-- We are a holding company
that is dependent upon cash flow from our subsidiaries to meet our
obligations -- our ability to access that cash flow may be limited in
some circumstances and your right to receive payments on the notes
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<PAGE> 18
could be adversely affected in the event of a bankruptcy of any of our
subsidiaries");
- our subsidiaries will not incur losses from their exposure to exchange
rate fluctuations or be adversely affected by interest rate fluctuations
(see "-- We are subject to currency risk because we obtain a substantial
amount of financing in US dollars but generally generate revenues and
incur expenses in other currencies");
- there will not be adverse changes in applicable United States, United
Kingdom or Bermuda tax laws; or
- the effects of monetary union in Europe will not be materially adverse to
us.
All forward-looking statements included or incorporated by reference in this
prospectus are expressly qualified by the foregoing.
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<PAGE> 19
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES
This prospectus and the accompanying letter of transmittal set out the
terms and conditions of the exchange offer. On and subject to those terms and
conditions we will accept for exchange old notes which are properly tendered on
or before the expiration date and not withdrawn as permitted below. The
expiration date is 5:00 p.m., London time, on August 20, 1999. However, if we,
in our sole discretion, extend the period of time for which the exchange offer
is open, the expiration date will be the latest time and date to which we extend
the exchange offer.
This prospectus, together with the letter of transmittal, is first being
sent on or about the date of this prospectus, to all holders of old notes known
to us. Our obligation to accept old notes for exchange under the exchange offer
is subject to the conditions described under "Conditions to the exchange offer"
below.
We expressly reserve the right, at any time or on one or more occasions, to
extend the period of time during which the exchange offer is open, and delay
acceptance for exchange of any old notes, by giving oral or written notice of
the extension to you. During any extension of the exchange offer, all old notes
previously tendered will remain subject to the exchange offer and may be
accepted for exchange by us. If we do not accept any old notes tendered for
exchange for any reason they will be returned to you. We will return those notes
without expense to you as promptly as practicable after the end of the exchange
offer.
Old notes tendered in the exchange offer must be in denominations of
principal amount at maturity of L1,000 and any whole multiple of L1,000.
We expressly reserve the right to amend or terminate the exchange offer,
and not to accept for exchange any old notes which we have not already accepted
for exchange, if any of the conditions of the exchange offer specified below
under "Conditions to the exchange offer" occur. We will give oral or written
notice of any extension, amendment, non-acceptance or termination to you as
promptly as practicable. A notice in the case of any extension will be issued by
means of a press release or other public announcement no later than 9:00 a.m.,
London time, on the next business day after the previously scheduled expiration
date.
The tender to us of old notes by you and the acceptance of your tender by
us will be a binding agreement between us on the terms and subject to the
conditions set forth in this prospectus and in the accompanying letter of
transmittal in respect of the old notes tendered by you.
PROCEDURES FOR TENDERING OLD NOTES
When we refer to a holder of old notes in this section of the prospectus
relating to the exchange offer, that includes account holders and any
participant in the Euroclear or Cedelbank clearing systems whose name appears on
a security position listing as the holder of those old notes. Any holder who
wishes to tender old notes for exchange in the
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<PAGE> 20
exchange offer must transmit the letter of transmittal, properly completed and
duly executed, including all other documents required by the letter of
transmittal or, in the case of a book-entry transfer, an agent's message instead
of a letter of transmittal to The Chase Manhattan Bank as exchange agent at one
of the addresses set forth below under "Exchange agent", on or before the
expiration date.
In addition, either
- certificates for the tendered old notes must be received by the exchange
agent along with the letter of transmittal before the expiration date,
- a timely confirmation of a book-entry transfer of the tendered old notes,
which we refer to as a book-entry confirmation, into the appropriate
exchange agent's account at the appropriate book-entry transfer facility
pursuant to the procedure for book-entry transfer described below, must
be received by the exchange agent before the expiration date along with
the letter of transmittal or an agent's message instead of a letter of
transmittal, or
- the holder must comply with the guaranteed delivery procedures we
describe below.
An agent's message means a message, transmitted by the book-entry transfer
facility to and received by the exchange agent. An agent's message forms a part
of a book-entry confirmation, which states that the book-entry transfer facility
has received an express acknowledgment from the tendering participant stating
that the participant has received and agrees to be bound by, and makes the
representations and warranties contained in, the appropriate letter of
transmittal and that we may enforce such letter of transmittal against the
participant.
The method of delivery of old notes, letters of transmittal and all other
required documents is at your election and risk. If delivery is by mail, we
recommend that you use registered mail, properly insured, with return receipt
requested. In all cases, you should allow sufficient time to assure delivery
before the expiration date. No letters of transmittal or old notes should be
sent to us.
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless
- you have not completed the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" on the letter of transmittal or
- the old notes are tendered for the account of an eligible institution, as
we define that term below.
In the event that a signature on a letter of transmittal or a notice of
withdrawal is required to be guaranteed, the guarantee must be by a firm which
is
- a member of a registered national securities exchange
- a member of the National Association of Securities Dealers, Inc.
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<PAGE> 21
- by a commercial bank or trust company having an office or correspondent
in the United States or
- by such other Eligible Institution within the meaning of Rule 17(A)(d)-15
of the Exchange Act.
We refer to each of the institutions in the bullet points above as eligible
institutions. If old notes are registered in the name of a person other than a
signer of the letter of transmittal, the old notes surrendered for exchange must
be endorsed by, or be accompanied by a written instrument or instruments of
transfer, or exchange, in satisfactory form as determined by us in our sole
discretion, duly executed by the registered holder with the signature on those
documents guaranteed by an eligible institution.
All questions as to the validity, form, eligibility, including time of
receipt, and acceptance of old notes tendered for exchange will be determined by
us in our sole discretion. Our determination shall be final and binding. We
reserve the absolute right to reject any and all tenders of any particular old
note not properly tendered or to not accept any particular old note which
acceptance might, in our judgment or the judgment of our counsel, be unlawful.
We also reserve the absolute right to waive any defects or irregularities or
conditions of the exchange offer as to any particular old note either before or
after the expiration date, including the right to waive the ineligibility of any
holder who seeks to tender old notes in the exchange offer.
The interpretation by us of the terms and conditions of the exchange offer
as to any particular old note either before or after the expiration date,
including the appropriate letter of transmittal and the instructions to the
letter of transmittal shall be final and binding on all parties. Any defects or
irregularities in connection with tenders of old notes for exchange must be
cured within reasonable period of time determined by us unless we waive those
defects or irregularities. Neither we, the exchange agent nor any other person
shall be under any duty to give you notification of any defect or irregularity
with respect to any tender of old notes by you for exchange, nor shall any of
them incur any liability for failure to give such notification.
If a letter of transmittal is signed by a person or persons other than the
registered holder or holders of old notes, the old notes must be endorsed or
accompanied by appropriate powers of attorney. The old notes or the power of
attorney should be signed exactly as the name or names of the registered holder
or holders that appear on the security position listing.
If a letter of transmittal, any old notes or powers of attorney are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, the
person signing should so indicate when signing and, in addition, proper evidence
satisfactory to us of their authority to so act must be submitted with the
letter of transmittal, unless we waive it.
By tendering, you will represent to us that, among other things,
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<PAGE> 22
- the new notes acquired in the exchange offer are being obtained in the
ordinary course of business of the person receiving the new notes,
whether or not that person is the holder,
- that neither the holder nor any other person receiving the new notes has
an arrangement or understanding with any person to participate in the
distribution of the notes and
- that neither the holder nor any other person receiving the new notes is
an affiliate, as defined under Rule 405 of the Securities Act, of NTL.
If you are an affiliate of ours, are engaged in or intend to engage in or
have any arrangement with any person to participate in the distribution of the
new notes to be acquired pursuant to the exchange offer, you
- cannot rely on the applicable interpretations of the staff of the SEC and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction.
If you are a broker-dealer who holds old notes acquired for your own
account as a result of market-making activities or other trading activities, and
you receive new notes in exchange for those old notes in the exchange offer, you
may be an "underwriter" within the meaning of the Securities Act and must
acknowledge that you will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of the new notes. The letter of
transmittal states that by so acknowledging and by delivering a prospectus, you
will not be deemed to admit that you are an "underwriter" within the meaning of
the Securities Act.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all of the conditions to the exchange offer,
we will
- accept, promptly after the expiration date, all old notes properly
tendered,
- issue the new notes promptly after acceptance of the old notes and
- cause the new notes to be authenticated by the trustee.
For purposes of the exchange offer, we shall be deemed to have accepted
properly tendered old notes for exchange when, as and if we have given oral,
promptly confirmed in writing, or written notice of that acceptance to the
exchange agent. For each old note accepted for exchange, the holder of such old
note will receive a new note of the same class having a principal amount at
maturity equal to that of the surrendered old note.
If any old notes tendered by you are not accepted for any reason set forth
in the terms and conditions of the exchange offer or if you submitted old notes
for an amount or quantity greater than you desire to exchange, those unaccepted
or non-exchanged old notes will be returned without expense to you. In the case
of old notes tendered by book-entry transfer into the exchange agent's account
at the book-entry transfer facility pursuant to the book-entry procedures
described below, those non-exchanged old notes
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<PAGE> 23
will be credited to an account maintained with the book-entry transfer facility
as promptly as practicable after the end of the exchange offer.
BOOK-ENTRY TRANSFER
The exchange agent will request the establishment of accounts with respect
to the old notes at each book-entry transfer facility for purposes of the
exchange offer within two business days after the date of this prospectus unless
the exchange agent already has established an account with the book-entry
transfer facility suitable for the exchange offer. If you are a financial
institution that is a participant in a book-entry transfer facility's system you
may make book-entry delivery of old notes by causing the book-entry transfer
facility to transfer such old notes into the exchange agent's account at the
book-entry transfer facility in accordance with the book-entry transfer
facility's procedures for transfer.
Although you may deliver old notes to the exchange agent in the exchange
offer through book-entry transfer at the book-entry transfer facility, the
letter of transmittal or a facsimile of it, with any required signature
guarantees or an agent's message instead and any other required documents, must
be transmitted to and received by the exchange agent at one of the addresses set
forth below under "exchange agent," on or before the expiration date. If this is
not possible, the guaranteed delivery procedures described below must be
complied with.
GUARANTEED DELIVERY PROCEDURES
If you want to tender old notes and your old notes are not immediately
available, or time will not permit your old notes or other required documents to
reach the exchange agent before the expiration date, or you cannot complete the
procedure for book-entry transfer on a timely basis, you may tender your old
notes if
- the tender is made through an eligible institution,
- before the expiration date, the exchange agent received from the
eligible institution the appropriate notice of guaranteed delivery,
substantially in the form provided by us, by telegram, telex,
facsimile transmission, mail or hand delivery, setting forth your
name and address and the amount of old notes tendered, stating that
the tender is being made by that notice. The notice of guaranteed
delivery must guarantee that within five London Stock Exchange
trading days after the date of execution of the notice of guaranteed
delivery, the certificates for all physically tendered old notes, in
proper form for transfer, or a book-entry confirmation, as the case
may be, together with a properly completed and duly executed letter
of transmittal, or facsimile of the letter of transmittal or agent's
message instead, with any required signature guarantees, and any
other documents required by the appropriate letter of transmittal
will be deposited by the eligible institution with the exchange agent
and
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- the certificates for all physically tendered old notes, in proper
form for transfer, or a book-entry confirmation, as the case may be,
together with a properly completed and duly executed appropriate
letter of transmittal, or facsimile of the letter of transmittal or
agent's message instead, with any required signature guarantees, and
all other documents required by the letter of transmittal, are
received by the exchange agent within five London Stock Exchange
trading days after the date of execution of the notice of guaranteed
delivery.
WITHDRAWAL RIGHTS
You may withdraw tenders of old notes at any time before the expiration
date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the exchange agent at the addresses set forth below under "exchange
agent". Any notice of withdrawal must:
- specify the name of the person having tendered the old notes to be
withdrawn,
- identify the old notes to be withdrawn, including the principal amount at
maturity,
- and where certificates for old notes have been transmitted, specify the
name in which those old notes are registered, if different from that of
the withdrawing holder.
If certificates for old notes have been delivered or otherwise identified
to the exchange agent then, before the release of such certificates you must
also submit the serial numbers of the particular certificates to be withdrawn
and a signed notice of withdrawal with signatures guaranteed by an eligible
institution unless you are an eligible institution. If you tendered old notes
under the procedure for book-entry transfer described above, the executed notice
of withdrawal, guaranteed by an eligible institution, unless you are an eligible
institution, must specify the name and number of the account at the book-entry
transfer facility to be credited with the withdrawn old notes and otherwise
comply with the procedures of that facility. All questions as to the validity,
form and eligibility, including time of receipt, of notices of withdrawal will
be determined by us. Our determination will be final and binding on all parties.
Any old notes withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the exchange offer. Any old notes which you tender for
exchange but which are not exchanged for any reason will be returned to you
without cost to you or, in the case of old notes tendered by book-entry transfer
into the exchange agent's account at the book-entry transfer facility pursuant
to the book-entry transfer procedures described above, such old notes will be
credited to an account maintained with the book-entry transfer facility for the
old notes as soon as practicable after withdrawal. Properly withdrawn old notes
may be retendered by following one of the procedures described under
"-- Procedures for tendering old notes" above at any time on or before the
expiration date.
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CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the exchange offer, we will not be
required to accept for exchange, or to issue new notes in exchange for, the old
notes and may terminate or amend the exchange offer if at any time before the
acceptance of the old notes for exchange or the exchange of the new notes for
the old notes any of the following events occurs:
(1) there shall be threatened, instituted or pending any action or
proceeding before, or any injunction, order or decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission,
(a) seeking to restrain or prohibit the making or consummation of
the exchange offer or any other transaction contemplated by
the exchange offer, or assessing or seeking any damages as a
result of the exchange offer or any transaction contemplated
by the exchange offer, or
(b) resulting in a material delay in our ability to accept for
exchange or exchange some or all of the old notes in the
exchange offer,
or any statute, rule, regulation, order or injunction shall be sought,
proposed, introduced, enacted, promulgated or deemed applicable to the
exchange offer or any of the transactions contemplated by the exchange
offer by any government or governmental authority, domestic or foreign, or
any action shall have been taken, proposed or threatened, by any
government, governmental authority, agency or court, domestic or foreign,
that in our sole judgment might directly or indirectly result in any of the
consequences referred to in clauses (a) or (b) above or, in our sole
judgement, might result in the holders of new notes having obligations with
respect to resales and transfers of new notes which are greater than those
described in the interpretation of the SEC referred to in this prospectus,
or would otherwise make it inadvisable to proceed with the exchange offer;
or
(2) there shall have occurred
(a) any general suspension of or general limitation on prices for,
or trading in, securities on any national securities exchange
or in the over-the-counter market,
(b) any limitation by any governmental agency or authority which
may adversely affect the ability of NTL to complete the
transactions contemplated by the exchange offer,
(c) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or any
limitation by any governmental agency or authority which
adversely affects the extension of credit or
(3) a commencement of a war, armed hostilities or other similar
international calamity directly or indirectly involving the United States,
or, in the case of any of
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the foregoing existing at the time of the commencement of the exchange
offer, a material acceleration or worsening of those circumstances; or
(4) any change or any development involving a prospective change shall
have occurred or be threatened in the business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects of NTL and our subsidiaries taken as a whole that, in our
reasonable judgment, is or may be adverse to us, or we shall have become
aware of facts that, in our reasonable judgment, have or may have adverse
significance with respect to the value of the old notes or the new notes;
which, in our reasonable judgment in any case, and regardless of the
circumstances, including any action by us, giving rise to that condition, makes
it inadvisable to proceed with the exchange offer and/or with such acceptance or
exchange or with that exchange.
The foregoing conditions are for our sole benefit. Those conditions may be
asserted by us regardless of the circumstances giving rise to that condition or
may be waived by us in whole or in part at any time and from time to time in our
sole discretion. The failure by us at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any of our rights and each of our rights
shall be deemed an ongoing right which may be asserted at any time and from time
to time.
In addition, we will not accept for exchange any old notes tendered, and no
new notes will be issued in exchange for any such old notes, if at such time any
stop order shall be threatened or in effect with respect to the registration
statement of which this prospectus constitutes a part or the qualification of
the indenture under the Trust Indenture Act of 1939, as amended.
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<PAGE> 27
EXCHANGE AGENT
The Chase Manhattan Bank has been appointed as the exchange agent in
respect of the notes for the exchange offer. All executed letters of transmittal
should be sent to the exchange agent at one of the addresses set forth below.
Questions and requests for assistance, requests for additional copies of this
prospectus or of the letter of transmittal in respect of the notes and requests
for notices of guaranteed delivery should be directed to the exchange agent
addressed as follows:
Delivery To: The Chase Manhattan Bank, as exchange agent
<TABLE>
<S> <C>
In London
By Mail, By Hand and Overnight Courier: By Facsimile:
The Chase Manhattan Bank 44 171 777 2373
Attn: Operations Manager
Trinity Tower Confirm by Telephone:
9 Thomas More Street Matthew Pinnock: 44 171 777 2520
London E1 9YT
In Luxembourg
By Mail, By Hand and Overnight Courier: By Facsimile:
Chase Manhattan Bank Luxembourg S.A. (352) 46 26 85 380
Attn: Operations Manager
5 Rue Plaetis Confirm by Telephone:
L-2338, Luxembourg Veronique Cridel: (352) 46 26 85236
</TABLE>
Delivery of the letter of transmittal in respect of the notes to an address
other than as set forth above or transmission via facsimile other than as set
forth above is not a valid delivery of the letter of transmittal.
FEES AND EXPENSES
We will not make any payment to brokers, dealers, or others soliciting
acceptances of the exchange offer except for reimbursement of mailing expenses.
The estimated cash expenses to be incurred in connection with the exchange
offer will be paid by us and are estimated in the aggregate to be $250,000.
TRANSFER TAXES
You will not be obligated to pay any transfer taxes in connection with any
tender of old notes for exchange, except if you instruct us to register new
notes in the name of, or request that old notes not tendered or not accepted in
the exchange offer be returned to, a person other than the registered tendering
holder, you will be responsible for the payment of any applicable transfer tax
thereon.
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<PAGE> 28
USE OF PROCEEDS
We will not receive any cash proceeds from the exchange of old notes for
new notes in the exchange offer. We intend to use the net proceeds from the sale
of the old notes to refinance other notes, finance our construction, capital
expenditure and working capital requirements, including debt service and
repayment obligations and make acquisitions of businesses or assets related to
our business.
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<PAGE> 29
DESCRIPTION OF NOTES
GENERAL
The new notes will be issued under the indenture, dated as of April 14,
1999, between NTL and The Chase Manhattan Bank, as trustee. The following
summary of selected provisions of the indenture is not complete and is qualified
in its entirety by reference to the indenture, including the definitions in the
indenture of various terms used below. The indenture is filed as an exhibit to
the registration statement of which this prospectus forms a part. The
definitions of some terms used in the following summary are set forth below
under "-- Definitions".
In this section of the prospectus entitled "Description of Notes" when we
refer to NTL we are referring only to NTL Communications Corp. and not any of
its subsidiaries.
The notes will be unsecured obligations of NTL, ranking equal in right of
payment with all senior unsecured Indebtedness of NTL and senior in right of
payment to all subordinated Indebtedness of NTL.
The operations of NTL are conducted through its subsidiaries. NTL is
dependent upon the cash flow of its subsidiaries to meet its obligations,
including its obligations under the notes. As a result, the notes will be
effectively subordinated to all existing and future indebtedness and other
liabilities and commitments of NTL's subsidiaries with respect to the cash flow
and assets of those subsidiaries.
Application will be made to list the notes on the Luxembourg Stock
Exchange.
PRINCIPAL, MATURITY AND INTEREST
The new notes to be issued in this exchange offer will be limited in
aggregate principal amount at maturity to L330.0 million. The new notes will be
issued at a substantial discount from their principal amount at maturity. Until
April 15, 2004, no cash interest will accrue on the notes, but the Accreted
Value of the notes will increase, representing amortization of original issue
discount, between the date of original issuance and April 15, 2004, on a
semiannual bond equivalent basis using a 360-day year comprised of twelve 30-day
months, such that the Accreted Value of the notes shall be equal to the full
principal amount at maturity of the notes on April 15, 2004. From April 15,
2004, cash interest on the notes will accrue at the rate of 9 3/4% per annum and
will be payable in cash, semiannually in arrears, on each April 15 and October
15, commencing October 15, 2004, to holders of record on the immediately
preceding April 1 and October 1.
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<PAGE> 30
The Accreted Value of each note on each semi-annual accrual date will be as
set forth below:
<TABLE>
<CAPTION>
SEMI-ANNUAL ACCRUAL DATE ACCRETED VALUE
- ------------------------ --------------
<S> <C>
October 15, 1999....................................... L 651.56
April 15, 2000......................................... L 683.32
October 15, 2000....................................... L 716.63
April 15, 2001......................................... L 751.57
October 15, 2001....................................... L 788.21
April 15, 2002......................................... L 826.63
October 15, 2002....................................... L 866.93
April 15, 2003......................................... L 909.19
October 15, 2003....................................... L 953.52
April 15, 2004......................................... L1,000.00
</TABLE>
Interest on overdue principal and to the extent permitted by law on overdue
installments of interest will accrue at a rate equal to the rate borne by the
notes. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months. A reference to a payment of interest in respect of the
notes includes a payment of special interest, if any, and a reference to a
payment of principal includes a reference to a payment of premium, if any.
The notes will be payable both as to principal and interest on presentation
of such notes if in certificated form at the offices or agencies of NTL
maintained for such purpose within the City and State of New York or, at the
option of NTL, payment of interest may be made by check mailed to the holders of
the notes at their respective addresses set forth in the register of holders of
notes or, if a holder so requests, by wire transfer of immediately available
funds to an account previously specified in writing by such holder to NTL and
the trustee. Until otherwise designated by us, our office or agency in New York
and London, respectively, will be the offices of the trustee maintained for such
purpose. In addition, as described under the caption "Listing", so long as the
notes are listed on the Luxembourg Stock Exchange, an agent for making payments
on, and transfers of, notes will be maintained in Luxembourg. The notes mature
on April 15, 2009, and will be issued in registered form, without coupons, and
in denominations of L1,000 and integral multiples of L1,000.
SUBSTITUTION OF CURRENCY
If the United Kingdom adopts the euro, the regulations of the European
Commission relating to the euro will apply to the notes and the indenture. In
those circumstances neither we nor any holder of the notes is entitled to early
redemption, rescission, notice or repudiation of the terms and conditions of the
notes or the indenture. In addition, neither we nor any holder of the notes will
be entitled to raise other defenses or to request any compensation claim nor
will any other obligation of ours under the notes and the indenture be affected.
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<PAGE> 31
OPTIONAL REDEMPTION
Except as referred to in this offering circular under
"-- Covenants -- Additional amounts; Optional tax redemption", the notes are not
redeemable at NTL's option prior to April 15, 2004. Thereafter, the notes will
be subject to redemption at the option of NTL, in whole or in part, upon not
less than 30 nor more than 60 days' notice, at the redemption prices set forth
below, expressed as percentages of principal amount at maturity, plus accrued
and unpaid interest thereon to the applicable redemption date, if redeemed
during the twelve-month period beginning on April 15 of the years indicated
below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2004........................................................ 104.875%
2005........................................................ 103.250%
2006........................................................ 101.625%
2007 and thereafter......................................... 100.000%
</TABLE>
In the case of a redemption of any class of notes referred to herein under
"-- Covenants -- Additional amounts; Optional tax redemption," redemption of
such notes shall be made at the redemption prices specified in the indenture
plus accrued and unpaid interest, if any, to the applicable redemption date.
MANDATORY REDEMPTION AND REPURCHASE
We are not required to make mandatory redemption or sinking fund payments
with respect to the notes. We are required to make a Change of Control Offer and
an Asset Sale Offer with respect to a repurchase of the notes under the
circumstances described under the captions "Change of control" and "Asset
sales", respectively.
CHANGE OF CONTROL
If a Change of Control Triggering Event occurs, each holder of notes shall
have the right to require us to repurchase all or any part of such holder's
notes equal to L1,000 or an integral multiple of L1,000, pursuant to the Change
of Control Offer at a purchase price equal to 101% of the Accreted Value of
those notes as of the date of purchase. The payment shall be referred to as the
Change of Control Payment. Within 40 days following any Change of Control
Triggering Event, we shall mail a notice to each holder, stating:
(1) that the Change of Control Offer is being made pursuant to the
covenant entitled Change of Control and that all notes tendered will be
accepted for payment;
(2) the purchase price and the purchase date, which shall be no earlier
than 30 days nor later than 40 days from the date such notice is mailed.
This date is referred to as the Change of Control Payment Date;
(3) that the Accreted Value of any notes not tendered will continue to
increase as provided in those notes;
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<PAGE> 32
(4) that, unless we default in the payment of the Change of Control
Payment, the Accreted Value of all notes accepted for payment pursuant to
the Change of Control Offer shall cease to accrete after the Change of
Control Payment Date;
(5) that holders electing to have any notes purchased pursuant to a
Change of Control Offer will be required to surrender the notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
notes completed, to the paying agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;
(6) that holders will be entitled to withdraw their election if the
paying agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
holder, the principal amount of notes delivered for purchase, and a
statement that such holder is withdrawing his election to have such notes
purchased; and
(7) that holders whose notes are being purchased only in part will be
issued new notes equal in Accreted Value to the unpurchased portion of the
notes surrendered, which unpurchased portion must be equal to L1,000 in
principal amount at maturity or an integral multiple of L1,000.
We will comply with the requirements of Rules 13e-4 and 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the notes in connection with a Change of Control Triggering Event.
On the Change of Control Payment Date, we will, to the extent lawful,
(1) accept for payment notes or portions of notes 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 of notes so tendered
and
(3) deliver or cause to be delivered to the trustee the notes so
accepted together with an Officers' Certificate stating the notes or
portions of notes tendered to NTL.
The paying agent shall promptly mail to each holder of notes so accepted,
or, if such a holder requests, wire transfer immediately available funds to an
account previously specified in writing by such holder to NTL and the paying
agent, payment in an amount equal to the purchase price for such notes. The
trustee shall promptly authenticate and mail to each holder a new note equal in
Accreted Value to any unpurchased portion of the notes surrendered, if any;
provided that each such new note shall be in a principal amount at maturity of
L1,000 or an integral multiple of L1,000. We will 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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<PAGE> 33
Except as described above with respect to a Change of Control Triggering
Event, the indenture does not contain any other provisions that permit the
holders of the notes to require that NTL repurchase or redeem the notes in the
event of a takeover, recapitalization or similar restructuring. The indenture
contains covenants which may afford holders of the notes protection in the event
of a highly leveraged transaction, reorganization, restructuring, merger or
similar transaction, including the Change of Control provision described above
and the provisions described under "-- Incurrence of indebtedness and issuance
of preferred stock" and "-- Merger, consolidation or sale of assets" below. Each
of those covenants is, however, subject to exceptions which may permit NTL to be
involved in a highly leveraged transaction that may adversely affect the holders
of the notes.
The Change of Control Offer requirement of the notes may, in certain
circumstances, make more difficult or discourage a takeover of NTL, and, thus,
the removal of incumbent management. Management has not entered into any
agreement or plan involving a Change of Control, although it is possible that
NTL would decide to do so in the future. Subject to the limitations discussed
below, NTL could, in the future, enter into various transactions including
acquisitions, refinancings or other recapitalizations, that would not constitute
a Change of Control Triggering Event under the indenture, but that could
increase the amount of indebtedness outstanding at such time or otherwise affect
NTL's capital structure or credit ratings.
The indentures for our other outstanding senior notes and convertible notes
also contain change of control provisions.
NTL's ability to pay cash to the holders of notes pursuant to a Change of
Control Offer may be limited by NTL's then existing financial resources. See
"Risk Factors -- Our substantial leverage could adversely affect our financial
health and prevent us from fulfilling our obligation under the notes" and "-- We
are a holding company that is dependant upon cash flow from our
subsidiaries -- our ability to access that cash flow may be limited in some
circumstances". Our Credit Facility does, and any future credit agreements or
other agreements relating to indebtedness of NTL may, contain prohibitions or
restrictions on NTL's ability to effect a Change of Control Payment. In the
event a Change of Control Triggering Event occurs at a time when such
prohibitions or restrictions are in effect, NTL could seek the consent of its
lenders to the purchase of notes and other indebtedness containing change of
control provisions or could attempt to refinance the borrowings that contain
such prohibition. If NTL does not obtain such a consent or repay such
borrowings, NTL will be effectively prohibited from purchasing the notes. In
such case, NTL's failure to purchase tendered notes would constitute an Event of
Default under the indenture. Moreover, the events that constitute a Change of
Control or require an Asset Sale Offer under the indenture constitute events of
default under our Credit Facility and may also constitute events of default
under future debt instruments or credit agreements of NTL or NTL's Subsidiaries.
Such events of default may permit the lenders under such debt instruments or
credit agreements to accelerate the debt and, if such debt is not paid or
repurchased, to enforce their security interests in
30
<PAGE> 34
what may be all or substantially all of the assets of NTL's Subsidiaries. Any
such enforcement may limit NTL's ability to raise cash to repay or repurchase
the notes.
NTL will not be required to make a Change of Control Offer in the event NTL
enters into a transaction with management or their affiliates who are Permitted
Holders. The definition of Change of Control includes a phrase relating to the
sale, lease, transfer, conveyance or other disposition of all or substantially
all of NTL's assets. Although there is a developing body of case law
interpreting the phrase substantially all, there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
holder of notes to require NTL to repurchase those notes as a result of a sale,
lease, transfer, conveyance or other disposition of less than all of the assets
of NTL and its Subsidiaries to another Person may be uncertain.
ASSET SALE
The indenture provides that NTL will not and will not permit any of its
Restricted Subsidiaries to cause, make or suffer to exist any Asset Sale, unless
(1) no Default exists or is continuing immediately prior to and after
giving effect to such Asset Sale,
(2) NTL or the Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the
fair market value, evidenced for purposes of this covenant by a
resolution of the Board of Directors set forth in an Officers'
Certificate delivered to the Trustee, of the assets sold or
otherwise disposed of and
(3) at least 80% of the consideration therefor received by NTL or the
Restricted Subsidiary is in the form of
(a) Cash Equivalents,
(b) Replacement Assets,
(c) publicly traded Equity Interests of a Person who is, directly
or indirectly, engaged primarily in one or more Cable
Businesses; provided, however, that NTL or the Restricted
Subsidiary shall Monetize the Equity Interests by sale to one
or more Persons, other than to NTL or a Subsidiary NTL, at a
price not less than the fair market value thereof within 180
days of the consummation of the Asset Sale, or
(d) any combination of the foregoing clauses (a) through (c);
provided, however, that the amount of
(x) any liabilities, as shown on NTL's or the Restricted
Subsidiary's most recent balance sheet or in the notes
thereto, of NTL or any Restricted Subsidiary, other than
liabilities that are by their terms subordinated to the
notes, that are assumed by the transferee of any such assets
and
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<PAGE> 35
(y) any notes or other obligations received by NTL or any
Restricted Subsidiary from such transferee that are within
five Business Days converted by NTL or the Restricted
Subsidiary into cash, shall be deemed to be Cash Equivalents,
to the extent of the Cash Equivalents received in such
conversion, for purposes of this clause (3).
Within 360 days after any Asset Sale, NTL, or the Restricted Subsidiary, as
the case may be, will cause the Net Proceeds from the Asset Sale
(1) to be used to permanently reduce Indebtedness of a Restricted
Subsidiary or
(2) to be invested or reinvested in Replacement Assets.
Pending final application of any Net Proceeds, NTL may temporarily reduce
revolving credit borrowings or otherwise invest those Net Proceeds in any manner
that is not prohibited by the indenture.
Any Net Proceeds from any Asset Sale that are not used or reinvested as
provided in the preceding sentence constitute Excess Proceeds. When the
aggregate amount of Excess Proceeds exceeds $15 million, NTL will make an Asset
Sale Offer to all holders of notes and Other Qualified Notes to purchase the
maximum principal amount of notes and Other Qualified Notes, determined on a pro
rata basis according to the Accreted Value or principal amount, as the case may
be, of the notes and the Other Qualified Notes that may be purchased out of the
Excess Proceeds:
(1) with respect to the Other Qualified Notes, based on the terms set
forth in the indenture related to each issue of the Other Qualified
Notes and
(2) with respect to the notes, at an offer price in cash in an amount
equal to 100% of the Accreted Value of those notes as of the date
of repurchase in accordance with the procedures set forth in the
indenture.
To the extent that the Accreted Value of notes and Other Qualified Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, NTL
may use such deficiency for general corporate purposes. If the Accreted Value of
notes and Other Qualified Notes surrendered by holders thereof exceeds the
amount of Excess Proceeds then the remaining Excess Proceeds will be allocated
pro rata according to Accreted Value to the notes and each issue of the Other
Qualified Notes, and the trustee will select the notes to be purchased from the
amount allocated to the notes on the basis set forth under "Selection and
notice" below. Upon completion of such offers to purchase each of the notes and
the Other Qualified Notes, the amount of Excess Proceeds will be reset at zero.
Notwithstanding the foregoing, NTL and its Subsidiaries may
(1) sell, lease, transfer, convey or otherwise dispose of assets or
property acquired after October 14, 1993, by NTL or any Subsidiary
in a sale-and-leaseback transaction so long as the proceeds of such
sale are applied within five Business Days to permanently reduce
Indebtedness of a
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<PAGE> 36
Restricted Subsidiary or if there is no such Indebtedness or such
proceeds exceed the amount of such Indebtedness then such proceeds
or excess proceeds are reinvested in Replacement Assets within 360
days after such sale, lease, transfer, conveyance or disposition,
(2) (x) swap or exchange assets or property with a Cable Controlled
Subsidiary or
(y) issue, sell, lease, transfer, convey or otherwise dispose of
equity securities of any of NTL's Subsidiaries to a Cable
Controlled Subsidiary, in each of cases (x) and (y) so long
as
(A) the ratio of Indebtedness to Annualized Pro Forma EBITDA
of NTL after such transaction is equal to or less than
the ratio of Indebtedness to Annualized Pro Forma EBITDA
of NTL immediately preceding such transaction; provided,
however, that if the ratio of Indebtedness to Annualized
Pro Forma EBITDA of NTL immediately preceding such
transaction is 6:1 or less, then the ratio of
Indebtedness to Annualized Pro Forma EBITDA of NTL may
be 0.5 greater than such ratio immediately preceding
such transaction and
(B) either
(I) the assets so contributed consist solely of a
license to operate a Cable Business and the Net
Households covered by all of the licenses to
operate cable and telephone systems held by NTL and
its Restricted Subsidiaries immediately after and
giving effect to such transaction equals or exceeds
the number of Net Households covered by all of the
licenses to operate cable and telephone systems
held by NTL and its Restricted Subsidiaries
immediately prior to such transaction or
(II) the assets so contributed consist solely of Cable
Assets and the value of the Capital Stock received,
immediately after and giving effect to such
transaction, as determined by an investment banking
firm of recognized standing with knowledge of the
Cable Business, equals or exceeds the value of the
Cable Assets exchanged for such Capital Stock, or
(3) issue, sell, lease, transfer, convey or otherwise dispose of Equity
Interests of NTL, or any Capital Stock Sales Proceeds therefrom, to
any Person including Non-Restricted Subsidiaries.
SELECTION AND NOTICE
If less than all of the notes are to be redeemed at any time, selection of
notes for redemption will be made by the trustee in compliance with the
requirements of any
33
<PAGE> 37
securities exchange on which the notes are listed. In the absence of any
requirements of any securities exchange or if the notes are not listed,
selection of the note to be redeemed will be made on a pro rata basis, provided
that no notes of L1,000 or less at maturity shall be redeemed in part. Notice of
redemption shall be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each holder of notes to be redeemed at its
registered address. If any note is to be redeemed in part only, the notice of
redemption that relates to such note shall state the portion of the principal
amount at maturity thereof to be redeemed. A new note in principal amount at
maturity equal to the unredeemed portion thereof will be issued in the name of
the holder thereof upon cancellation of the original note. On and after the
redemption date, interest ceases to accrue or, if applicable, the Accreted Value
of any notes tendered will cease to increase as provided in the notes, on notes
or portions of them called for redemption.
COVENANTS
Restricted payments
The indenture provides that NTL will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any distribution on account of
NTL's or any of its Restricted Subsidiaries' Equity Interests,
other than:
(x) dividends or distributions payable in Equity Interests (other
than Disqualified Stock) of NTL or such Restricted Subsidiary
or
(y) dividends or distributions payable to NTL or any Wholly Owned
Subsidiary of NTL, or
(z) pro rata dividends or pro rata distributions payable by a
Restricted Subsidiary;
(2) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of NTL, other than any such Equity Interests owned
by NTL or any Wholly Owned Subsidiary of NTL;
(3) voluntarily purchase, redeem or otherwise acquire or retire for
value any Indebtedness that is subordinated to the notes; or
(4) make any Restricted Investment.
All such payments and other actions set forth in clauses (1) through (4)
above are collectively referred to as Restricted Payments.
NTL or the Restricted Subsidiary may make a Restricted Payment if, at the
time of such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
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<PAGE> 38
(b) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by NTL and its Restricted
Subsidiaries after the Issuance Date, including Restricted
Payments permitted by clauses (2) through (10) of the next
succeeding paragraph, is less than the sum of
(x) the difference between Cumulative EBITDA and 1.5 times
Cumulative Interest Expense plus
(y) Capital Stock Sale Proceeds plus
(z) cash received by NTL or a Restricted Subsidiary from a
Non-Restricted Subsidiary, other than cash which is or is
required to be repaid or returned to such Non-Restricted
Subsidiary; provided, however, that to the extent that any
Restricted Investment that was made after the date of the
indenture is sold for cash or otherwise liquidated or
repaid for cash, the amount credited pursuant to this
clause (z) shall be the lesser of
(A) the cash received with respect to such sale,
liquidation or repayment of such Restricted
Investment, less the cost of such sale, liquidation
or repayment, if any, and
(B) the initial amount of such Restricted Investment, in
each case as determined in good faith by NTL's Board
of Directors.
The foregoing provisions will not prohibit
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment
would have complied with the provisions of the indenture;
(2) (x) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of NTL or any Restricted Subsidiary or
(y) an Investment in any Person,
in each case, in exchange for, or out of the proceeds of, the
substantially concurrent sale, other than to a Restricted
Subsidiary of NTL, of other Equity Interests, other than any
Disqualified Stock, of NTL provided that NTL delivers to the
trustee:
(1) with respect to any transaction involving in excess of $1
million, a resolution of the Board of Directors set forth
in an Officers' Certificate certifying that such
transaction is approved by a majority of the directors on
the Board of Directors; and
(2) with respect to any transaction involving in excess of
$25 million, an opinion as to the fairness to NTL or the
Restricted Subsidiary from a financial point of view
issued by an investment banking firm of national
standing with high yield experience, together with
35
<PAGE> 39
an Officers' Certificate to the effect that such opinion
complies with this clause (2), provided, that the amount
of such proceeds from the sale of such Equity Interests
shall be excluded in each case from Capital Stock Sale
Proceeds for purposes of clause (b)(y), above;
(3) Investments by NTL or any Restricted Subsidiary in a Non-Controlled
Subsidiary which
(A) has no Indebtedness on a consolidated basis other than
Indebtedness incurred to finance the purchase of equipment
used in a Cable Business,
(B) has no restrictions, other than restrictions imposed or
permitted by the indenture or the indentures governing the
Other Qualified Notes or any other instrument governing
unsecured indebtedness of NTL which is equal in right of
payment with the notes, on its ability to pay dividends or
make any other distributions to NTL or any of its Restricted
Subsidiaries,
(C) is or will be a Cable Business and
(D) uses the proceeds of such Investment for constructing a Cable
Business or the working capital needs of a Cable Business;
(4) the redemption, purchase, defeasance, acquisition or retirement of
Indebtedness that is subordinated to the notes, including premium,
if any, and accrued and unpaid interest, made by exchange for, or
out of the proceeds of the substantially concurrent sale, other
than to a Restricted Subsidiary of NTL, of,
(A) Equity Interests of NTL provided, that the amount of such
proceeds from the sale of such Equity Interests shall be excluded
in each case from Capital Stock Sale Proceeds for purposes of
clause (b)(y), above or
(B) Refinancing Indebtedness permitted to be incurred under the
"Incurrence of indebtedness and issuance of preferred stock"
covenant;
(5) Investments by NTL or any Restricted Subsidiary in a
Non-Controlled Subsidiary which is or will be a Cable Business in
an amount not to exceed $80 million in the aggregate plus the sum
of
(x) cash received by NTL or a Restricted Subsidiary from a Non-
Restricted Subsidiary, other than cash which is or is required to
be repaid or returned to such Non-Restricted Subsidiary and
(y) Capital Stock Sale Proceeds, excluding the aggregate net sale
proceeds to be received upon conversion of the Convertible
Subordinated Notes, provided, that the amount of such proceeds
from the sale of such
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<PAGE> 40
Equity Interests shall be excluded in each case from Capital Stock
Sale Proceeds for purposes of clause (2)(y), above;
(6) Investments by NTL or any Restricted Subsidiary in Permitted Non-
Controlled Assets;
(7) Investments by NTL or any Restricted Subsidiary in SDN Limited, a
joint venture organized to operate a digital terrestrial
television multiplex, in an amount not exceeding L11.4 million;
(8) the extension by NTL or any Restricted Subsidiary of trade credit
to a Non-Restricted Subsidiary extended on usual and customary
terms in the ordinary course of business, provided that the
aggregate amount of such trade credit shall not exceed $25 million
at any one time;
(9) the payment of cash dividends on the Preferred Stock accruing on
or after February 15, 2004 or any mandatory redemption or
repurchase of the Preferred Stock, in each case, in accordance
with the Certificate of Designations therefor; and
(10) the exchange of all of the outstanding shares of Preferred Stock
for Subordinated Debentures in accordance with the Certificate of
Designation for the Preferred Stock.
Any Investment in a Subsidiary, other than the issuance, transfer or other
conveyance of Equity Interests of NTL or any Capital Stock Sales Proceeds
therefrom, that is designated by the Board of Directors as a Non-Restricted
Subsidiary shall become a Restricted Payment made on the date of such
designation in the amount of the greater of
(x) the book value of such Subsidiary on the date such Subsidiary
becomes a Non-Restricted Subsidiary and
(y) the fair market value of such Subsidiary on such date as determined
(A) in good faith by the Board of Directors of such Subsidiary if
such fair market value is determined to be less than $25
million and
(B) by an investment banking firm of national standing with high
yield underwriting expertise if such fair market value is
determined to be in excess of $25 million.
Not later than the fifth Business Day after making any Restricted Payment,
other than those referred to in sub-clause (8) of the second paragraph preceding
this paragraph, NTL shall deliver to the trustee an Officers' Certificate
stating that such Restricted Payment is permitted and setting forth the basis
upon which the calculations required by the covenant "Restricted payments" were
computed, which calculations may be based upon NTL's latest available financial
statements.
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Incurrence of indebtedness and issuance of preferred stock
The indenture provides that NTL will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guaranty or otherwise become directly or indirectly liable with respect
to any Indebtedness, including Acquired Debt, and that NTL will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock that is Disqualified Stock; provided,
however, that NTL may incur Indebtedness or issue shares of Disqualified Stock
and any of its Restricted Subsidiaries may issue shares of preferred stock that
is Disqualified Stock if after giving effect to such issuance or incurrence on a
pro forma basis, the sum of
(x) Indebtedness of NTL and its Restricted Subsidiaries, on a
consolidated basis,
(y) the liquidation value of outstanding preferred stock of Restricted
Subsidiaries and
(z) the aggregate amount payable by NTL and its Restricted
Subsidiaries, on a consolidated basis, upon redemption of
Disqualified Stock to the extent such amount is not included in the
preceding clause (y) shall be less than the product of Annualized
Pro Forma EBITDA for the latest fiscal quarter for which internal
financial statements are available immediately preceding the date
on which such additional Indebtedness is incurred or such
Disqualified Stock or preferred stock is issued multiplied by 7.0,
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 Stock or preferred stock had
been issued, as the case may be, at the beginning of such quarter.
The foregoing limitations will not apply to
(a) the incurrence by NTL or any Restricted Subsidiary of Indebtedness
pursuant to the Credit Facility,
(b) the issuance by any Restricted Subsidiary of preferred stock,
other than Disqualified Stock, to NTL, any Restricted Subsidiary
of NTL or the holders of Equity Interests in any Restricted
Subsidiary on a pro rata basis to such holders,
(c) the incurrence of Indebtedness or the issuance of preferred stock
by NTL or any of its Restricted Subsidiaries the proceeds of which
are, or the credit support provided by any such Indebtedness is,
in each case, used to finance the construction, capital
expenditure and working capital needs of a Cable Business,
including, without limitation, payments made pursuant to any
License, the acquisition of Cable Assets or the Capital Stock of a
Qualified Subsidiary,
(d) the incurrence by NTL or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount not to
exceed $50 million,
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(e) the incurrence by NTL or any Restricted Subsidiary of any
Permitted Acquired Debt,
(f) the incurrence by NTL or any Subsidiary of Indebtedness issued in
exchange for, or the proceeds of which are used to extend,
refinance, renew, replace, or refund the notes, Existing
Indebtedness or Indebtedness referred to in clauses (a), (b), (c),
(d) or (e) above or the Refinancing Indebtedness incurred pursuant
to the preceding paragraph; provided, however, that
(1) the principal amount of, and any premium payable in respect
of, such Refinancing Indebtedness shall not exceed the principal
amount of Indebtedness so extended, refinanced, renewed, replaced
or refunded plus the amount of reasonable expenses incurred in
connection therewith;
(2) the Refinancing Indebtedness shall have
(A) a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of, and
(B) a stated maturity no earlier than the stated maturity of,
the Indebtedness being extended, refinanced, renewed, replaced or
refunded; and
(3) the Refinancing Indebtedness shall be subordinated in right
of payment to the notes as and to the extent of the Indebtedness
being extended, refinanced, renewed, replaced or refunded,
(g) the issuance of the Preferred Stock in lieu of payment of cash
interest on the Subordinated Debentures or the incurrence by NTL
of Indebtedness represented by the Subordinated Debentures upon
the exchange of the Preferred Stock in accordance with the
Certificate of Designations therefor,
(h) Indebtedness under Exchange Rate Contracts, provided that such
Exchange Rate Contracts are related to payment obligations under
Existing Indebtedness or Indebtedness incurred under this
paragraph or the preceding paragraph that are being hedged
thereby, and not for speculation and that the aggregate notional
amount under each such Exchange Rate Contract does not exceed the
aggregate payment obligations under such Indebtedness,
(i) Indebtedness under Interest Rate Agreements, provided that the
obligations under such agreements are related to payment
obligations on Existing Indebtedness or Indebtedness otherwise
incurred pursuant to this paragraph or the preceding paragraph,
and not for speculation,
(j) the incurrence of Indebtedness between NTL and any Restricted
Subsidiary, between or among Restricted Subsidiaries and between
any Restricted Subsidiary and other holders of Equity Interests of
such
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Restricted Subsidiary, or other Persons providing funding on their
behalf, on a pro rata basis and on substantially identical
principal financial terms, provided, however, that if any such
Restricted Subsidiary that is the payee of any such Indebtedness
ceases to be a Restricted Subsidiary or transfers such
Indebtedness, other than to NTL or a Restricted Subsidiary of NTL,
such events shall be deemed, in each case, to constitute the
incurrence of such Indebtedness by NTL or by a Restricted
Subsidiary, as the case may be, at the time of such event, and
(k) Indebtedness of NTL and/or any Restricted Subsidiary in respect of
performance bonds of NTL or any Subsidiary or surety bonds
provided by NTL or any Restricted Subsidiary received in the
ordinary course of business in connection with the construction or
operation of a Cable Business.
Any redesignation of a Non-Restricted Subsidiary as a Restricted Subsidiary
shall be deemed for purposes of the foregoing covenant to be an incurrence of
Indebtedness by NTL and its Restricted Subsidiaries of the Indebtedness of such
Non-Restricted Subsidiary as of the time of such redesignation to the extent
such Indebtedness does not already constitute Indebtedness of NTL or one of its
Restricted Subsidiaries.
Liens
The indenture provides that neither NTL nor any of its Restricted
Subsidiaries may directly or indirectly create, incur, assume or suffer to exist
any Lien on any asset now owned or hereafter acquired, or any income or profits
therefrom or assign or convey any right to receive income therefrom, except:
(1) Permitted Liens;
(2) Liens securing Indebtedness and related obligations incurred under
clauses (a), (b), (c), (d), (e), (h), (i) and (k) of the second
paragraph of the "Incurrence of indebtedness and issuance of
preferred stock" covenant;
(3) Liens on the assets acquired or leased with the proceeds of
Indebtedness permitted to be incurred under the "Incurrence of
indebtedness and issuance of preferred stock" covenant; and
(4) Liens securing Refinancing Indebtedness permitted to be incurred
under the "Incurrence of indebtedness and issuance of preferred
stock" covenant; provided that the Refinancing Indebtedness so
issued and secured by such Lien shall not be secured by any
property or assets of NTL or any of its Restricted Subsidiaries
other than the property or assets subject to the Liens securing
such Indebtedness being refinanced.
Dividend and other payment restrictions affecting restricted subsidiaries
The indenture provides that NTL will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or
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<PAGE> 44
become effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to
(1) (a) pay dividends or make any other distributions to NTL or any of
its Subsidiaries
(A) on its Capital Stock or
(B) with respect to any other interest or participation in,
or measured by, its profits, or
(b) pay any indebtedness owed to NTL or any of its Subsidiaries or
(2) make loans or advances to NTL or any of its Subsidiaries or
(3) transfer any of its properties or assets to NTL or any of its
Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of
(a) Existing Indebtedness as in effect on the Issuance Date,
(b) the indenture and the notes,
(c) any agreement covering or relating to Indebtedness permitted
to be incurred under clause (a), (b), (c), (d), (e), (h) or
(i), but only, in the case of clause (h) or (i), to the extent
contemplated by the then-existing Credit Facility, of the
second paragraph of the "Incurrence of indebtedness and
issuance of preferred stock" covenant, provided that the
provisions of such agreement permit any action referred to in
clause (1) above in aggregate amounts sufficient to enable the
payment of interest and principal and mandatory repurchases
pursuant to the terms of the indentures and the notes but
provided further that:
(A) any such agreement may nevertheless encumber, prohibit
or restrict any action referred to in clause (1) above
if an event of default under such agreement has
occurred and is continuing or would occur as a result
of any such action; and
(B) any such agreement may nevertheless contain
(I) restrictions limiting the payment of dividends or
the making of any other distributions to all or a
portion of excess cash-flow or any similar
formulation thereof and
(II) subordination provisions governing Indebtedness
owed to NTL or any Restricted Subsidiary,
(4) applicable law,
(5) any instrument governing Indebtedness or Capital Stock of a
Person acquired by NTL or any of its Subsidiaries as in effect
at the time of such acquisition, except to the extent such
Indebtedness was incurred in connection with such acquisition,
which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any
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Person, other than the Person, or the property or assets of
the Person, so acquired; provided that the EBITDA of such
Person is not taken into account in determining whether such
acquisition was permitted by the terms of the indenture,
(6) customary nonassignment provisions in leases entered into in
the ordinary course of business and consistent with past
practices,
(7) provisions of joint venture or stockholder agreements, so long
as such provisions are determined by a resolution of the Board
of Directors to be, at the time of such determination,
customary for such agreements,
(8) with respect to clause (c) above, purchase money obligations
for property acquired in the ordinary course of business or
the provisions of any agreement with respect to any Asset
Sale, or transaction which, but for its size, would be an
Asset Sale, solely with respect to the assets being sold, or
(9) permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such
Refinancing Indebtedness are determined by a resolution of the
Board of Directors to be no more restrictive than those
contained in the agreements governing the Indebtedness being
refinanced.
Merger, consolidation or sale of assets
The indenture provides that NTL may not consolidate or merge with or into,
whether or not NTL is the surviving corporation, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets in one or more related transactions to, another corporation, Person or
entity unless
(1) NTL is the surviving corporation or the entity or the Person formed
by or surviving any such consolidation or merger, if other than
NTL, or to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made is a corporation
organized or existing under the laws of the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands or of the United States, any state thereof or the District
of Columbia;
(2) the entity or Person formed by or surviving any such consolidation
or merger, if other than NTL, or the entity or Person to which such
sale, assignment, transfer, lease, conveyance or other disposition
will have been made assumes all the Obligations, including the due
and punctual payment of Additional Amounts as defined in the
indenture if the surviving corporation is a corporation organized
or existing under the laws of the United Kingdom, the Netherlands,
the Netherlands Antilles, Bermuda or the Cayman Islands, of NTL,
pursuant to a supplemental indenture in a form reasonably
satisfactory to the trustee, under the notes and the indenture;
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(3) immediately after such transaction no Default or Event of Default
exists;
(4) NTL or any entity or Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been
made will have a ratio of Indebtedness to Annualized Pro Forma
EBITDA equal to or less than the ratio of Indebtedness to
Annualized Pro Forma EBITDA of NTL immediately preceding the
transaction provided, however, that if the ratio of Indebtedness to
Annualized Pro Forma EBITDA of NTL immediately preceding such
transaction is 6:1 or less, then the ratio of Indebtedness to
Annualized Pro Forma EBITDA of NTL may be 0.5 greater than such
ratio immediately preceding such transaction; and
(5) such transaction would not result in the loss of any material
authorization or Material License of NTL or its Subsidiaries.
Additional amounts; optional tax redemption
The indenture provides that the "Payment of Additional Amounts" provision
in the indenture, relating to United Kingdom, Netherlands, Netherlands Antilles,
Bermuda and Cayman Islands withholding and other United Kingdom, Netherlands,
Netherlands Antilles, Bermuda and Cayman Islands taxes, and the "Optional Tax
Redemption" provision in the indenture, relating to NTL's option to redeem the
notes under specified circumstances if Additional Amounts are payable, apply to
the notes in specified circumstances. The provisions of the indenture relating
to the payment of Additional Amounts will only apply in the event that NTL
becomes, or a successor to NTL is, a corporation organized or existing under the
laws of the United Kingdom, the Netherlands, the Netherlands Antilles, Bermuda
or the Cayman Islands. In such circumstances, all payments made by NTL on the
notes will be made without deduction or withholding, for or on account of, any
and all present or future taxes, duties, assessments, or governmental charges of
whatever nature unless the deduction or withholding of such taxes, duties,
assessments or governmental charges is then required by law. If any deduction or
withholding for or on account of any present or future taxes, assessments or
other governmental charges of the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands, or any political
subdivision or taxing authority thereof or therein, shall at any time be
required in respect of any amounts to be paid by NTL under the notes, NTL will
pay or cause to be paid such Additional Amounts as may be necessary in order
that the net amounts received by a holder of the notes after such deduction or
withholding shall be not less than the amounts specified in the notes to which
the holder of such notes is entitled; provided, however, that NTL shall not be
required to make any payment of Additional Amounts for or on account of:
(1) any tax, assessment or other governmental charge to the extent such
tax, assessment or other governmental charge would not have been
imposed but for
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<PAGE> 47
(a) the existence of any present or former connection between
such holder, or between a fiduciary, settlor, beneficiary,
member or shareholder of, or possessor of a power over, such
holder, if such holder is an estate, nominee, trust,
partnership or corporation, other than the holding of the
notes or the receipt of amounts payable in respect of the
notes and the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands or any
political subdivision or taxing authority thereof or therein,
including, without limitation, such holder, or such
fiduciary, settlor, beneficiary, member, shareholder or
possessor, being or having been a citizen or resident thereof
or being or having been present or engaged in trade or
business therein or having had a permanent establishment
therein or
(b) the presentation of the notes, where presentation is required,
for payment on a date more than 30 days after the date on
which such payment became due and payable or the date on which
payment thereof is duly provided for, whichever occurs later,
except to the extent that the holder would have been entitled
to Additional Amounts had the notes been presented on the last
day of such period of 30 days;
(2) any governmental charge that is imposed or withheld by reason of
the failure to comply by the holder of the notes or, if different,
the beneficial owner of the interest payable on the notes, with a
timely request of NTL addressed to such holder or beneficial owner
to provide information, documents or other evidence concerning the
nationality, identity or connection with the taxing jurisdiction of
such holder or beneficial owner which is required or imposed by a
statute, regulation or administrative practice of the taxing
jurisdiction as a precondition to exemption from all or part of
such tax assessment or governmental charge;
(3) any estate, inheritance, gift, sales, transfer, personal property
or similar tax assessment or other governmental charge;
(4) any tax assessment or other governmental charge which is
collectible otherwise than by withholding from payments of
principal amount, redemption amount, Change of Control Payment or
interest with respect to a note or withholding from the proceeds of
a sale or exchange of a note;
(5) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal amount,
redemption amount, Change of Control Payment or interest with
respect to a note, if such payment can be made, and is in fact
made, without such withholding by any other paying agent located
inside the United States;
(6) any tax, assessment or other governmental charge imposed on a
holder that is not the beneficial owner of a note to the extent
that the beneficial
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<PAGE> 48
owner would not have been entitled to the payment of any such
Additional Amounts had the beneficial owner directly held the
note;
(7) any combination of items (1), (2), (3), (4), (5) and (6) above;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any interest on the notes to any holder who is a fiduciary or
partnership or other than the sole beneficial owner of such payment to the
extent that a beneficiary or settlor would not have been entitled to any
Additional Amounts had such beneficiary or settlor been the holder of the notes.
The notes may be redeemed at the option of NTL, in whole but not in part,
upon not less than 30 nor more than 60 days notice, at any time upon the
circumstances set forth below. The redemption price will be equal to the
principal amount of the notes plus accrued and unpaid interest to the date fixed
for redemption or in the case of redemption of notes prior to April 15, 2004, at
a redemption price equal to 100% of the Accreted Value of the notes as of the
date fixed for redemption if after the Issuance Date there has occurred any
change in or amendment to the laws, or any regulations or official rulings
promulgated thereunder, of the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands, or any political subdivision or taxing
authority thereof or therein, or any change in or amendment to the official
application or interpretation of such laws, regulation or rulings which becomes
effective after the Issuance Date, as a result of which NTL is or would be so
required on the next succeeding Interest Payment Date to pay Additional Amounts
with respect to the notes with respect to Withholding Taxes imposed by the
United Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands, or any political subdivision or taxing authority thereof or therein and
such Withholding Tax is imposed at a rate that exceeds the rate, if any, at
which Withholding Tax was imposed on the Issuance Date provided, that,
(1) this paragraph shall not apply to the extent that, at the Relevant
Date it was known or would have been known had professional advice
of a nationally recognized accounting firm in the United Kingdom,
Netherlands, Netherlands Antilles, Bermuda or the Cayman Islands,
as the case may be, been sought, that a Change in Tax Law in the
United Kingdom, the Netherlands, the Netherlands Antilles, Bermuda
or the Cayman Islands, was to occur after the Issuance Date,
(2) no such notice of redemption may be given earlier than 90 days
prior to the earliest date on which NTL would be obliged to pay
such Additional Amounts were a payment in respect of the notes then
due,
(3) at the time such notice of redemption is given, such obligation to
pay such Additional Amount remains in effect and
(4) the payment of such Additional Amounts cannot be avoided by the use
of any reasonable measures available to NTL.
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The notes may also be redeemed, in whole but not in part, at any time upon
the circumstances set forth below. The redemption price will be equal to the
principal amount of the notes plus accrued and unpaid interest to the date fixed
for redemption or in the case of redemption of notes prior to April 15, 2004, at
a redemption price equal to 100% of the Accreted Value of the notes as of the
date fixed for redemption if the Person formed after the Issuance Date by a
consolidation, amalgamation, reorganization, reconstruction or other similar
arrangement of NTL or the Person into which NTL is merged after the Issuance
Date or to which NTL conveys, transfers or leases its properties and assets
after the Issuance substantially as an entirety is required, as a consequence of
such Subsequent Consolidation and as a consequence of a Change in Tax Law in the
United Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands occurring after the date of such Subsequent Consolidation to pay
Additional Amounts with respect to Notes with respect to Withholding Tax and
such Withholding Tax is imposed at a rate that exceeds the rate, if any, at
which Withholding Tax was or would have been imposed on the date of such
Subsequent Consolidation. This paragraph shall not apply to the extent that, at
the date of such Subsequent Consolidation it was known or would have been known
had professional advice of a nationally recognized accounting firm in the United
Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands, as the case may be, been sought, that a Change in Tax Law in the United
Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands, was to occur after such date.
NTL will also pay, or make available for payment, to holders on the
redemption date any Additional Amounts resulting from the payment of such
redemption price.
Transactions with affiliates
The indenture provides that NTL will not, and will not permit any of its
Restricted Subsidiaries to enter into an Affiliate Transaction. This prohibits
NTL and any Restricted Subsidiary to sell, lease, transfer or otherwise dispose
of any of its properties or assets to, or purchase any property or assets from,
or enter into or amend any contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate, unless
(1) such Affiliate Transaction is on terms that are no less favorable
to NTL or the relevant Subsidiary than those that could have been
obtained in a comparable transaction by NTL or such Subsidiary with
an unrelated Person and
(2) NTL delivers to the trustee
(a) with respect to any Affiliate Transaction involving aggregate
payments in excess of $1 million or any series of Affiliate
Transactions with an Affiliate involving aggregate payments
in excess of $1 million, a resolution of the Board of
Directors set forth in an Officers' Certificate certifying
that such Affiliate Transaction complies with clause (1)
above and such Affiliate Transaction is
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approved by a majority of the disinterested directors on the
Board of Directors and
(b) with respect to any Affiliate Transaction or any series of
Affiliate Transactions involving aggregate payments in excess
of $25 million, an opinion as to the fairness to NTL or such
Subsidiary from a financial point of view issued by an
investment banking firm of national standing with high yield
experience together with an Officers' Certificate to the
effect that such opinion complies with this clause (b);
provided, however, that notwithstanding the foregoing provisions, the following
shall not be deemed to be Affiliate Transactions:
(1) any employment agreement entered into by NTL or any of its
Subsidiaries in the ordinary course of business and consistent with
the past practice of NTL or its predecessor or such Subsidiary;
(2) transactions between or among NTL and/or its Restricted
Subsidiaries;
(3) transactions permitted by the provisions of the indenture described
above under the covenant "Restricted payments";
(4) Liens permitted under the Liens covenant which are granted by NTL
or any of its Subsidiaries to an unrelated Person for the benefit
of NTL or any other Subsidiary of NTL;
(5) any transaction pursuant to an agreement in effect on the Issuance
Date;
(6) the incurrence of Indebtedness by a Restricted Subsidiary where
such Indebtedness is owed to the holders of the Equity Interests of
such Restricted Subsidiary on a pro rata basis and on substantially
identical principal financial terms;
(7) management, operating, service or interconnect agreements entered
into in the ordinary course of business with any Cable Business in
which NTL or any Restricted Subsidiary has an Investment and which
is not a Cable Controlled Subsidiary, and of which no Affiliate of
NTL is an Affiliate other than as a result of such Investment; and
(8) any tax sharing agreement.
Reports
Whether or not required by the rules and regulations of the SEC, so long as
any notes are outstanding, NTL will file with the SEC and furnish to the holders
of notes all quarterly and annual financial information required to be contained
in a filing with the SEC on Forms 10-Q and 10-K, or the equivalent of those
reports under the Exchange Act for foreign private issuers in the event NTL
becomes a corporation organized under the laws of the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands, including
a "Management's Discussion and Analysis of Results of
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Operations and Financial Condition" and, with respect to the annual information
only, a report by NTL's certified independent accountants, in each case, as
required by the rules and regulations of the SEC as in effect on the Issuance
Date. NTL does not publish unconsolidated financial reports.
EVENTS OF DEFAULT AND REMEDIES
The indenture provides that each of the following constitutes an Event of
Default:
(1) default for 30 days in the payment when due of interest and
Additional Amounts, if applicable, on the notes;
(2) default in payment when due of principal on the notes;
(3) failure by NTL to comply with the provisions described under the
covenants "Change of control", "Restricted payments" or "Incurrence
of indebtedness and issuance of preferred stock";
(4) failure by NTL for 60 days after notice to comply with certain
other covenants and agreements contained in the indenture or the
notes;
(5) 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 NTL or any of its Restricted
Subsidiaries, or the payment of which is guaranteed by NTL or any
of its Restricted Subsidiaries, whether such Indebtedness or
guarantee now exists, or is created after the Issuance Date, which
default
(a) is caused by a failure to pay when due principal or interest
on such Indebtedness within the grace period provided in such
Indebtedness, which Payment Default continues beyond any
applicable grace period or
(b) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of
any such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so
accelerated, aggregates $10 million or more;
(6) failure by NTL or any Restricted Subsidiary of NTL to pay final
judgments (other than any judgment as to which a reputable
insurance company has accepted full liability) aggregating in
excess of $5 million, which judgments are not stayed within 60 days
after their entry;
(7) certain events of bankruptcy or insolvency with respect to NTL or
any of its Material Subsidiaries; and
(8) the revocation of a Material License.
If any Event of Default occurs and is continuing, the trustee or the
holders of at least 25% in Accreted Value (if prior to April 15, 2004) or
principal amount (if on or
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after April 15, 2004), as applicable, of the then outstanding notes may declare
all the notes to be due and payable immediately. Notwithstanding the foregoing,
in the case of an Event of Default arising from certain events of bankruptcy or
insolvency, with respect to NTL or any Material Subsidiary, all outstanding
notes will become due and payable without further action or notice. Holders of
the notes may not enforce the indenture or the notes except as provided in the
indenture. Subject to certain limitations, holders of a majority in principal
amount at maturity of outstanding notes may direct the trustee in its exercise
of any trust or power. The trustee may withhold from holders of the notes notice
of any continuing Default or Event of Default, except a Default or Event of
Default relating to the payment of principal or interest, if it determines that
withholding notice is in their interest.
The holders of a majority in aggregate principal amount at maturity of each
class of notes then outstanding by notice to the trustee may on behalf of the
holders of all of the applicable class of notes waive any existing Default or
Event of Default and its consequences under the indenture except a continuing
Default or Event of Default in the payment of interest on, or the principal of,
the notes.
NTL is required to deliver to the trustee annually a statement regarding
compliance with the indenture, and NTL is required, upon becoming aware of any
Default or Event of Default, to deliver to the trustee a statement specifying
such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS
No director, officer, employee, incorporator or shareholder of NTL, as
such, shall have any liability for any Obligations of NTL under the notes or the
indenture or for any claim based on, in respect of, or by reason of, such
Obligations or their creation. Each holder of the notes by accepting a note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the notes. Such waiver may not be effective to
waive liabilities under the federal securities laws, and it is the view of the
commission that a waiver of such liabilities is against public policy.
DEFEASANCE AND DISCHARGE OF THE INDENTURE AND THE NOTES
NTL may cause the defeasance of the notes if NTL irrevocably deposits, or
causes to be deposited, in trust with the trustee or the Paying Agent, at any
time prior to the stated maturity of the notes or the date of redemption of all
the outstanding notes, as trust funds in trust, money or direct noncallable
obligations of or guaranteed by the United States of America in an amount
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, without reinvestment thereof, to pay timely and discharge all
amounts payable in respect of Accreted Value (if prior to April 15, 2004) or
principal amount (if on or after April 15, 2004), of the then outstanding notes
and all interest due thereon to maturity or redemption. The indenture will then
cease to be of further effect as to all outstanding notes except, among other
things, as to
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(1) remaining rights of registration of transfer and substitution and
exchange of the notes,
(2) rights of holders to receive payment of principal of and interest
on the notes, and
(3) the rights, obligations and immunities of the trustee.
In order to exercise Defeasance:
(1) NTL shall have delivered to the trustee an Opinion of Counsel
reasonably acceptable to the trustee confirming that
(a) NTL has received from, or there has been published by, the
Internal Revenue Service, a ruling or
(b) since the date of the indenture, there has been a change in
the applicable federal income tax law, in either case to the
effect that, and based thereon, such Opinion of Counsel shall
confirm that the holders of the outstanding notes will not
recognize income, gain or loss for federal income tax
purposes as a result of such 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
Defeasance had not occurred;
(2) no Event of Default shall have occurred and be continuing on the
date of such deposit, other than an Event of Default resulting from
the borrowing of funds to be applied to such deposit, or insofar as
Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after
the date of deposit;
(3) such Defeasance shall not result in a breach or violation of, or
constitute a default under, any material agreement or instrument,
other than the indenture, to which NTL or any of its Subsidiaries
is a party or by which NTL or any of its Subsidiaries is bound;
(4) NTL shall have delivered to the trustee an Opinion of Counsel to
the effect that 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;
(5) NTL shall have delivered to the trustee an Officers' Certificate
stating that the deposit was not made by NTL with the intent of
preferring the holders of the notes over the other creditors of NTL
with the intent of defeating, hindering, delaying or defrauding
creditors of NTL or others;
(6) the deposit shall not result in NTL, the trustee or the trust being
subject to the Investment Company Act;
(7) holders of the notes will have a valid, perfected and unavoidable,
under applicable bankruptcy or insolvency laws, subject to the
passage of time
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referred to in clause (4) above, first priority security interest in the trust
funds; and
(8) We shall have delivered to the trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent
relating to the Defeasance have been complied with.
UNCLAIMED MONEY, PRESCRIPTION
If money deposited with the trustee or Paying Agent for the payment of
principal or interest remains unclaimed for two years, the trustee and the
Paying Agent shall pay the money back to us at our written request. After that,
holders of notes entitled to the money must look to us for payment unless an
abandoned property law designates another person and all liability of the
trustee and the Paying Agent shall cease. Other than as set forth in this
paragraph, the indenture does not provide for any prescription period for the
payment of interest and principal on the notes.
BOOK-ENTRY, DELIVERY AND FORM
The new notes will be issued initially in the form of global notes (the
"Global Notes") deposited with the Paying Agent in London as common depositary
(such capacity, the "Common Depositary") for Euroclear and Cedelbank. Except as
described in this prospectus, beneficial interests in the Global Notes will be
shown on, and transfers thereof will be effected only through, records
maintained in book-entry form by Euroclear and Cedelbank.
DEPOSITARY PROCEDURES
Euroclear and Cedelbank. We understand as follows with respect to
Euroclear and Cedelbank: Euroclear and Cedelbank each hold securities for their
holders and facilitate the clearance and settlement of securities transactions
by electronic book-entry transfer between their respective holders, thereby
eliminating the need for physical movements of certificates and any risk from
lack of simultaneous transfers of securities. Euroclear and Cedelbank each
provide various services including safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. Each of Euroclear and Cedelbank can settle securities transactions in
any of more than 30 currencies, including pounds sterling. Euroclear and
Cedelbank each also deal with domestic securities markets in several countries
through established depository and custodial relationships. The respective
systems of Euroclear and Cedelbank have established an electronic bridge between
their two systems across which their respective holders may settle trades with
each other. Account holders in both Euroclear and Cedelbank are world-wide
financial institutions including underwriters, securities brokers and dealers,
banks, trust companies and clearing corporations. Indirect access to both
Euroclear and Cedelbank is available to other institutions that clear through or
maintain a custodial relationship with a holder of either system. a holder's
overall contractual relations with either Euroclear or Cedelbank are governed by
the respective rules and operating procedures of Euroclear or Cedelbank and any
applicable laws. Both Euroclear
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and Cedelbank act under such rules and operating procedures only on behalf of
their respective holders and have no record of or relationship with any persons
who are not direct holders.
Investors who hold accounts with Euroclear or Cedelbank may acquire, hold
and transfer security entitlements with respect to Global Notes against
Euroclear or Cedelbank and its respective property by book-entry to accounts
with Euroclear or Cedelbank, each of which has an account with the Common
Depositary and subject at all times to the procedures and requirements of
Euroclear or Cedelbank, as the case may be. "Security entitlement" means the
rights and property interests of a holder against its securities intermediary
under applicable law in or with respect to a security, including any ownership,
co-ownership, contractual or other rights. Investors who do not have accounts
with Euroclear or Cedelbank may acquire, hold and transfer security entitlements
with respect to a Global Note against the securities intermediary and its
property with which such investors hold accounts by book-entry to accounts with
such securities intermediary, which in turn may hold a security entitlement with
respect to the Global Note through Euroclear or Cedelbank. Investors electing to
acquire security entitlements with respect to a Global Note through an account
with Euroclear or Cedelbank or some other securities intermediary must follow
the settlement procedures of their securities intermediary with respect to the
settlement of new issues of securities. Security entitlements with respect to
the Global Notes to be acquired through an account with Euroclear or Cedelbank
will be credited to such account as of the settlement date against payment in
pounds sterling for value as of the settlement date. Investors electing to
acquire, hold or transfer security entitlements with respect to a Global Note
through an account with Euroclear, Cedelbank or some other securities
intermediary other than in connection with the initial distribution of the notes
must follow the settlement procedures of their securities intermediary with
respect to the settlement of secondary market transactions in securities.
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 of notes for any purpose. So long as the Common Depositary is the
registered owner or holder of a Global Note, such party will be considered the
sole owner or holder of the notes represented by such Global Note for all
purposes under the indenture and the notes. Accordingly, each person owning a
beneficial interest in a Global Note must rely on the procedures of Euroclear
and Cedelbank, as the case may be, and their participants or holders to exercise
any rights and remedies of a holder under the indenture. Payments of principal
and interest on the Global Notes will be made to the Common Depositary on behalf
of Euroclear and Cedelbank, as the case may be, as the registered owners
thereof.
The laws of some countries and some states in the United States require
that certain persons take physical delivery in definitive form of securities
that they own. Consequently, the ability to transfer beneficial interests in a
Global Note to such persons may be limited to that extent. Because Euroclear and
Cedelbank can act only on behalf
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of their respective participants or holders, as the case may be, the ability of
a person having beneficial interests in a Global Note to pledge such interests
to persons or entities that do not participate in the relevant clearing system,
or otherwise take actions in respect of such interests, may be affected by the
lack of a physical certificate evidencing such interests.
PAYMENTS ON THE GLOBAL NOTES
Payments in respect of the principal of, premium, if any, and interest on a
Global Note will be made through a payment agent appointed pursuant to the
indenture and will be payable to the Common Depositary on behalf of Euroclear
and Cedelbank each in its capacity as the registered holder of the notes under
the indenture. Under the terms of the indenture, NTL and the trustee will treat
the persons in whose names the notes, including the Global Notes, are registered
as the owners thereof for the purpose of receiving such payments and for any and
all other purposes whatsoever. Consequently, none of NTL, the trustee, or any
agent of NTL, or the trustee has or will have any responsibility or liability
for
(1) any aspect or accuracy of the records of the relevant clearing
system, the participants therein or the holders thereof, as the case may
be, relating to payments made on account of beneficial ownership interests
in the Global Notes, or for maintaining, supervising or reviewing any
records of such clearing system, participant or holder relating to
beneficial ownership interests in the Global Notes, or
(2) any other matter relating to the actions and practices of the
relevant clearing system or the participants therein or the holders
thereof.
Euroclear or Cedelbank upon receipt of any such payment, will immediately
credit the accounts of their relevant participants or holders, as the case may
be, with payments in amounts proportionate to their respective holdings in
principal amount of beneficial interests in the Global Notes, as shown on the
records of Euroclear or Cedelbank. NTL expects that payments by such
participants or holders, as the case may be, to the beneficial owners of Global
Notes will be governed by standing instructions and customary practices and will
be the responsibility of such participants or holders. Neither NTL nor the
trustee will have responsibility or liability for the payment of amounts owing
in respect of beneficial interests in the Global Notes held by the Common
Depositary for Euroclear and Cedelbank.
TRANSFERS OF GLOBAL SECURITIES AND INTERESTS THEREIN
Unless definitive securities are issued, the Global Notes may be
transferred, in whole and not in part, only by Euroclear and Cedelbank to the
Common Depositary, as the case may be, or by the Common Depositary to Euroclear
and Cedelbank, respectively, or to another nominee or successor thereof or a
nominee of such successor.
Transfers of beneficial interests in the Global Notes will be subject to
the applicable rules and procedures of Euroclear and Cedelbank, as the case may
be, and their
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respective holders and intermediaries. Any secondary market trading activity in
beneficial interests in the Global Notes is expected to occur through the
participants or holders and intermediaries, as the case may be, of Euroclear and
Cedelbank, and the securities custody accounts of investors will be credited
with their holdings against payment in same-day funds on the settlement date.
No service charge will be made for any registration of transfer or exchange
of the notes, but the trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Although Euroclear and Cedelbank have agreed to various procedures to
facilitate transfers of interests in the Global Notes among participants and
holders in Euroclear and Cedelbank, they are under no obligation to perform or
to continue to perform such procedures, and such procedures may be discontinued
at any time. Neither we, the trustee, nor any agent of ours or the trustee will
have any responsibility for the nonperformance or misperformance (as a result of
insolvency, mistake, misconduct or otherwise) by Euroclear or Cedelbank or their
respective participants, indirect participants, holders or intermediaries of
their respective obligations under the rules and procedures governing their
operations.
We understand that under existing industry practices, if we or the trustee
requests any action of holders of notes, or if an owner of a beneficial interest
in a Global Note desires to give instructions or take an action that a holder is
entitled to give or take under the indenture, Euroclear or Cedelbank, as the
case may be, would authorize their respective participants or holders, as the
case may be, owning the relevant beneficial interest to give instructions to
take such action, and such participants or holders would authorize indirect
participants or intermediaries to give instructions or take such action, or
would otherwise act upon the instructions of such indirect participants or
intermediaries. Euroclear or Cedelbank is not required to authorize holders to
take any action.
We understand that under existing practices of Euroclear or Cedelbank if
less than all of the notes are to be redeemed at any time, Euroclear or
Cedelbank, as the case may be, will credit their participants' or holders'
accounts on a proportionate basis, with adjustments to prevent fractions, or by
lot or on such other basis as Euroclear or Cedelbank, as the case may be, deems
fair and appropriate, provided that no beneficial interests of less than L1,000,
may be redeemed in part.
CERTIFICATED NOTES
Beneficial interests in a Global Note are exchangeable for definitive notes
in registered certificated form only if Euroclear and Cedelbank are unwilling or
unable to continue as depositary for such Global Note and we fail to appoint a
successor depositary within 90 days or there shall have occurred and be
continuing a Default or an Event of Default with respect to the applicable
notes. In all cases, certificated notes delivered in exchange for any Global
Note or beneficial interest in the Global Notes will be registered in the names,
and issued in any approved denominations, requested by or on behalf of Euroclear
or Cedelbank, as the case may be, in accordance with their customary procedures.
The notes may not be issued in bearer form.
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In the case of the issuance of certificated notes in the limited
circumstances set forth above, the Holder of any such certificated note may
transfer such note by surrendering it at the offices or agencies of NTL
maintained for such purpose within the City and State of New York. Until
otherwise designated by NTL, NTL's office or agency in the City and State of New
York and London, England, respectively, will be the offices of the trustee
maintained for such purpose. In the event of a partial transfer of a holding of
notes represented by one certificate, or partial redemption of such a holding
represented by one certificate, a new certificate shall be issued to the
transferee in respect of the part transferred or redeemed and a further new
certificate in respect of the balance of the holding not transferred or redeemed
shall be issued to the transferor, provided that no certificate in denominations
less than L1,000 shall be issued. Each new certificate to be issued shall be
available for delivery within ten business days at the office of the trustee.
The cost of preparing, printing, packaging and delivering the certificated notes
shall be borne by NTL.
NTL shall not be required to register the transfer or exchange of
certificated notes for a period of 15 days preceding
(a) the due date for any payment of principal of or interest on the
notes or
(b) a selection of notes to be redeemed.
Also, NTL is not required to register the transfer or exchange of any notes
selected for redemption. In the event of the transfer of any certificated note,
the trustee may require a holder, among other things, to furnish appropriate
endorsements and transfer documents, and NTL may require a holder to pay any
taxes and fees required by law and permitted by the indenture and the notes.
If certificated notes are issued and a holder of a certificated note claims
that the note has been lost, destroyed or wrongfully taken or if such note is
mutilated and is surrendered to the trustee, NTL shall issue and the trustee
shall authenticate a replacement note if the trustee's and NTL's requirements
are met. If required by the trustee or NTL, an indemnity bond sufficient in the
judgment of both to protect NTL, the trustee or any paying agent or
authenticating agent appointed pursuant to the indenture from any loss which any
of them may suffer if a note is replaced must be posted. NTL may charge for its
expenses in replacing a note.
In case any such mutilated, destroyed, lost or stolen note has become or is
about to become due and payable, or is about to be redeemed or purchased by NTL
pursuant to the provisions of the Indenture, NTL in its discretion may, instead
of issuing a new note, pay, redeem or purchase such note, as the case may be.
TRANSFER AND EXCHANGE
A holder may transfer or exchange interests in the notes in accordance with
procedures described in "Book-Entry; Delivery and Form". The registrar and the
trustee may require a holder, among other things, to furnish appropriate
endorsements and transfer documents and NTL may require a holder to pay any
taxes and fees required by law or permitted by the indenture. NTL is not
required to transfer or exchange any note
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selected for redemption. Also, NTL is not required to transfer or exchange any
note for a period of 15 days before a selection of notes to be redeemed.
The registered holder of a note will be treated as the owner of it for all
purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next succeeding paragraph, the indenture or the
notes may be amended or supplemented with the consent of the holders of at least
a majority in principal amount at maturity of the then outstanding notes,
including consents obtained in connection with a tender offer or exchange offer
for the notes, and any existing default or compliance with any provision of the
indenture or the notes may be waived with the consent of the holders of a
majority in principal amount at maturity of the then outstanding notes,
including consents obtained in connection with a tender offer or exchange offer
for the notes.
The holders of a majority in Accreted Value (if prior to April 15, 2004) or
principal amount (if on or after April 15, 2004), as applicable, of the then
outstanding notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the trustee
under the indenture, subject to certain exceptions. The indenture provides that
in case an Event of Default shall occur, which shall not be cured, the trustee
will be required, in the exercise of its power, to use the degree of care of a
prudent man in the conduct of his own affairs. Subject to such provisions, the
trustee will be under no obligation to exercise any of its rights or powers
under the indenture at the request of any holder of notes, unless such holder
shall have offered to the trustee security and indemnity satisfactory to it
against any loss, liability or expense.
The Chase Manhattan Bank is also the trustee for all of the Existing Notes
and the convertible notes.
LISTING
Application will be made to list the new notes on the Luxembourg Stock
Exchange. The legal notice relating to the issue of the new notes and the
articles of association of NTL will be registered prior to the listing with the
Registrar of the District Court in Luxembourg, where such documents are
available for inspection and where copies thereof can be obtained upon request.
In addition, as long as the notes are listed on the Luxembourg Stock Exchange,
an agent for making payments on, and transfers of, notes will be maintained in
Luxembourg. NTL has initially designated Banque Internationale a Luxembourg S.A.
as its agent for such purposes.
DEFINITIONS
Set forth below are selected defined terms used in the indenture. Reference
is made to the indenture for a full definition of all terms, as well as any
other capitalized terms used in this description of the notes for which no
definition is provided.
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"Accreted Value" means, as of any date of determination prior to April 15,
2004, with respect to any note, the sum of
(a) the initial offering price (which shall be calculated by discounting
the aggregate principal amount at maturity of such note, at a rate of
9 3/4% per annum, compounded semiannually on each April 15 and October
15, from April 15, 2004 to the date of issuance) of such note, and
(b) 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 a
rate of 9 3/4% per annum of the initial offering price of a note
compounded semiannually on each April 15 and October 15 from the date
of issuance of the note through the date of determination, computed on
the basis of a 360-day year of twelve 30-day months.
"Acquired Debt" means, with respect to any specified Person, Indebtedness
of any other Person (the "Acquired Person") existing at the time such Acquired
Person merged with or into or became a Subsidiary of such specified Person,
including Indebtedness incurred in connection with, or in contemplation of, such
Acquired Person merging with or into or becoming a Subsidiary of such specified
Person.
"Acquired Person" has the meaning specified in the definition of Acquired
Debt.
"Adjusted Total Assets" means the total amount of assets of NTL and its
Restricted Subsidiaries, including the amount of any Investment in any
Non-Restricted Subsidiary, except to the extent resulting from write-ups of
assets, other than write-ups in connection with accounting for acquisitions in
conformity with GAAP, after deducting therefrom
(1) all current liabilities of NTL and its Restricted Subsidiaries, and
(2) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all as calculated
in conformity with GAAP.
For purposes of this Adjusted Total Assets definition,
(a) assets shall be calculated less applicable accumulated
depreciation, accumulated amortization and other valuation
reserves, and
(b) all calculations shall exclude all intercompany items.
"Adjusted Total Controlled Assets" means the total amount of assets of NTL
and its Cable Controlled Subsidiaries, except to the extent resulting from
write-ups of assets, other than write-ups in connection with accounting for
acquisitions in conformity with GAAP, after deducting therefrom
(1) all current liabilities of NTL and such Cable Controlled
Subsidiaries; and
(2) all goodwill, trade names, trademarks, patients, unamortized debt
discount and expense and other like intangibles of NTL and such
Restricted Subsidiaries, all as calculated in conformity with GAAP;
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provided that Adjusted Total Controlled Assets shall be reduced (to the extent
not otherwise reduced in accordance with GAAP) by an amount equal to the
aggregate amount of all Investments of NTL or any such Cable Controlled
Subsidiaries in any Person other than a Cable Controlled Subsidiary, except Cash
Equivalents. For purposes of this Adjusted Total Controlled Assets definition,
(a) assets shall be calculated less applicable accumulated
depreciation, accumulated amortization and other valuation
reserves, and
(b) all calculations shall exclude all intercompany items.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control",
including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with", as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Annualized Pro Forma EBITDA" means, with respect to any Person, such
Person's Pro Forma EBITDA for the latest fiscal quarter multiplied by four.
"Asset Sale" means
(1) any sale, lease, transfer, conveyance or other disposition of any
assets, including by way of a sale-and-leaseback, other than the
sale or transfer of inventory or goods held for sale in the
ordinary course of business, provided that the sale, lease,
transfer, conveyance or other disposition of all or substantially
all of the assets of NTL shall be governed by the provisions of the
indenture described under the captions "Change of control" or
"Merger, consolidation or sale of assets" or
(2) any issuance, sale, lease, transfer, conveyance or other
disposition of any Equity Interests of any of the NTL's Restricted
Subsidiaries to any Person;
in either case other than
(a) to
(A) NTL,
(B) any Wholly Owned Subsidiary, or
(C) any Subsidiary which is a Subsidiary of NTL on the
Issuance Date provided that at the time of and after
giving effect to such issuance, sale, lease, transfer,
conveyance or other disposition to such Subsidiary, NTL's
ownership percentage in such Subsidiary is equal to or
greater than such percentage on the Issuance Date or
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(b) the issuance, sale, transfer, conveyance or other disposition
of Equity Interests of a Subsidiary in exchange for capital
contributions made on a pro rata basis by the holders of the
Equity Interests of such Subsidiary.
"Cable Assets" means tangible or intangible assets, licenses, including,
without limitation, Licenses, and computer software used in connection with a
Cable Business.
"Cable Business" means
(i) any Person directly or indirectly operating, or owning a license
to operate, a cable and/or television and/or telephone and/or
telecommunications system or service principally within the United
Kingdom and/or the Republic of Ireland and
(ii) any Cable Related Business.
"Cable Controlled Property" means a Cable Controlled Subsidiary or a Cable
Asset held by a Cable Controlled Subsidiary.
"Cable Controlled Subsidiary" means any Restricted Subsidiary which is
primarily engaged, directly or indirectly, in one or more Cable Businesses.
"Cable Related Business" means a Person which directly or indirectly owns
or provides a service or product used in a Cable Business, including, without
limitation, any television programming, production and/or licensing business or
any programming guide or telephone directory business or content or software
related thereto.
"Capital Stock" means any and all shares, interests, participations, rights
or other equivalents, however designated, of corporate stock, including, without
limitation, partnership interests.
"Capital Stock Sale Proceeds" means the aggregate net sale proceeds,
including from the sale of any property received for the Capital Stock or the
fair market value of such property, as determined by an independent appraisal
firm, received by NTL or any Subsidiary of NTL from the issue or sale, other
than to a Subsidiary, by NTL of any class of its Capital Stock after October 14,
1993, including Capital Stock of NTL issued after October 14, 1993 upon
conversion of or in exchange for other securities of NTL.
"Cash Equivalents" means
(1) Permitted Currency,
(2) securities issued or directly and fully guaranteed or insured by
the United States government, a European Union member government or
any agency or instrumentality thereof having maturities of not more
than six months and two days from the date of acquisition,
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any commercial bank(s)
domiciled in the United States, the
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United Kingdom, the Republic of Ireland or any other European Union
member 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 clauses (2) and (3)
entered into with any financial institution meeting the
qualifications specified in clause (3) above,
(5) commercial paper rated P-1 or the equivalent thereof by Moody's or
A-1 or the equivalent thereof by S&P and in each case maturing
within six months and two days after the date of acquisition and
(6) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1)-(5) of this
definition.
"Change of Control" means
(1) the sale, lease or transfer of all or substantially all of the
assets of NTL to any "Person" or "group", within the meaning of
Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing, including any group acting
for the purpose of acquiring, holding or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act,
other than any Permitted Holder,
(2) the approval by the requisite stockholders of NTL of a plan of
liquidation or dissolution of NTL,
(3) any "Person" or "group", within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act or any successor provision to either
of the foregoing, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act, other than any Permitted
Holder, becomes the "beneficial owner", as defined in Rule 13d-3
under the Exchange Act, of more than 50% of the total voting power
of all classes of the voting stock of NTL and/or warrants or
options to acquire such voting stock, calculated on a fully diluted
basis, unless, as a result of such transaction, the ultimate direct
or indirect ownership of NTL is substantially the same immediately
after such transaction as it was immediately prior to such
transaction, or
(4) during any period of two consecutive years, individuals who at the
beginning of such period constituted NTL's Board of Directors,
together with any new directors whose election or appointment by
such board or whose nomination for election by the shareholders of
NTL was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority of NTL's
Board of Directors then in office.
"Change of Control Triggering Event" means the occurrence of both a Change
of Control and a Ratings Decline.
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"Consolidated Interest Expense" means, for any Person, for any period, the
amount of interest in respect of Indebtedness, including amortization of
original issue discount, amortization of debt issuance costs, and non-cash
interest payments on any Indebtedness and the interest portion of any deferred
payment obligation and after taking into account the effect of elections made
under any Interest Rate Agreement, however denominated, with respect to such
Indebtedness, the amount of Redeemable Dividends, Restricted Subsidiary
Preferred Stock Dividends and the interest component of rentals in respect of
any capital lease obligation paid, in each case whether accrued or scheduled to
be paid or accrued by such Person and its Subsidiaries, other than
Non-Restricted Subsidiaries, during such period to the extent such amounts were
deducted in computing Consolidated Net Income, determined on a consolidated
basis in accordance with GAAP. For purposes of this definition, interest on a
capital lease obligation shall be deemed to accrue at an interest rate
reasonably determined by such Person to be the rate of interest implicit in such
capital lease obligation in accordance with GAAP consistently applied.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Subsidiaries, other than
Non-Restricted Subsidiaries, for such period, on a consolidated basis,
determined in accordance with GAAP; provided, that
(1) the Net Income of any Person that is not a Subsidiary or that is
accounted for by the equity method of accounting shall be included
only to the extent of the amount of dividends or distributions paid
to the referent Person or a Wholly Owned Subsidiary,
(2) the Net Income of any Person that is a Subsidiary, other than a
Subsidiary of which at least 80% of the Capital Stock having
ordinary voting power for the election of directors or other
governing body of such Subsidiary is owned by the referent Person
directly or indirectly through one or more Subsidiaries, shall be
included only to the extent of the amount of dividends or
distributions paid to the referent Person or a Wholly Owned
Subsidiary,
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition
shall be excluded and
(4) the cumulative effect of a change in accounting principles shall be
excluded.
"Convertible Subordinated Notes" means (a) NTL's 7% Convertible
Subordinated Notes issued pursuant to an indenture dated as of June 12, 1996
also between NTL and The Chase Manhattan Bank, as trustee and (b) NTL's 7%
Convertible Subordinated Notes due 2008 issued pursuant to an indenture dated as
of December 16, 1998 also between NTL and The Chase Manhattan Bank, as trustee.
"Credit Facility" means the Facilities Agreement dated October 17, 1997
between NTL (UK) Group Inc., as principal guarantor, Chase Manhattan plc, as
arranger, Chase Manhattan International Limited, as agent and security trustee
and The Chase
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Manhattan Bank as issuer, as such Facilities Agreement may be supplemented,
amended, restated, modified, renewed, refunded, replaced or refinanced, in whole
or in part, from time to time in an aggregate outstanding principal amount not
to exceed the greater of
(1) L555 million and
(2) the amount of the aggregate commitments thereunder as the same may
be increased after March 13, 1998 as contemplated by the Facilities
Agreement as amended or supplemented to March 13, 1998, but in no
event greater than L875 million, less, in each case, the aggregate
amount of all Net Proceeds of Asset Sales that have been applied to
permanently reduce Indebtedness under the Credit Facility pursuant
to the covenant described above under "-- Asset sale".
Indebtedness that may otherwise be incurred under the indenture may, but need
not, be incurred under the Credit Facility without regard to the limit set forth
in the preceding sentence. Indebtedness outstanding under the Credit Facility on
the date of the indenture shall be deemed to have been incurred on such date in
reliance on the exception provided by clause (a) of the second paragraph of the
covenant described above under "-- Incurrence of indebtedness and issuance of
preferred stock".
"Cumulative EBITDA" means the cumulative EBITDA of NTL from and after the
Issuance Date to the end of the fiscal quarter immediately preceding the date of
a proposed Restricted Payment, or, if such cumulative EBITDA for such period is
negative, minus the amount by which such cumulative EBITDA is less than zero;
provided, however, that EBITDA of Non-Restricted Subsidiaries shall not be
included.
"Cumulative Interest Expense" means the aggregate amount of Consolidated
Interest Expense paid, accrued or scheduled to be paid or accrued by NTL from
the Issuance Date to the end of the fiscal quarter immediately preceding a
proposed Restricted Payment, determined on a consolidated basis in accordance
with GAAP.
"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.
"Diamond Notes" means the 10% Diamond Senior Notes due 2008, the 9 1/8%
Diamond Senior Notes due 2008, the 10 3/4% Diamond Senior Discount Notes due
2007, the 11 3/4% Diamond Senior Discount Notes due 2005 and the 13 1/4% Diamond
Senior Discount Notes due 2004.
"Disqualified Stock" means any Capital Stock which, by its terms, or by the
terms of any security into which it is convertible or for which it is
exchangeable, or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking
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fund obligation or otherwise, or redeemable at the option of the holder thereof,
in whole or in part, on or prior to the date on which the Notes mature.
"EBITDA" means, for any Person, for any period, an amount equal to
(1) the sum of
(a) Consolidated Net Income for such period, exclusive of any
gain or loss realized in such period upon an Asset Sale,
plus
(b) the provision for taxes for such period based on income or
profits to the extent such income or profits were included
in computing Consolidated Net Income and any provision for
taxes utilized in computing net loss under clause (a)
hereof, plus
(c) Consolidated Interest Expense for such period, plus
(d) depreciation for such period on a consolidated basis, plus
(e) amortization of intangibles for such period on a
consolidated basis, plus
(f) any other non-cash item reducing Consolidated Net Income
for such period, excluding any such non-cash item to the
extent that it represents an accrual of or reserve for
cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period,
minus
(2) all non-cash items increasing Consolidated Net Income for such
period, all for such Person and its Subsidiaries determined in
accordance with GAAP consistently applied.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock, but excluding any Indebtedness that is
convertible into, or exchangeable for, Capital Stock.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office as operator of the Euroclear system.
"European Union member" means any country that is or becomes a member of
the European Union or any successor organization thereto.
"Exchange Rate Contract" means, with respect to any Person, any currency
swap agreements, forward exchange rate agreements, foreign currency futures or
options, exchange rate collar agreements, exchange rate insurance and other
agreements or arrangements, or combination thereof, the principal purpose of
which is to provide protection against fluctuations in currency exchange rates.
An Exchange Rate Contract may also include an Interest Rate Agreement.
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"Existing Indebtedness" means Indebtedness of NTL and its Subsidiaries in
existence on the Issuance Date, until such amounts are repaid, including,
without limitation, the Existing Notes.
"Existing Notes" means the Old Notes and the Convertible Subordinated
Notes.
"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 approved by a significant segment of the accounting profession,
which are in effect on the Issuance Date and are applied on a consistent basis.
"Guarantee" means a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner, including, without limitation, letters of credit and
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit, or
reimbursement agreements in respect thereof, or representing the balance
deferred and unpaid of the purchase price of any property, including pursuant to
capital leases and sale-and-leaseback transactions, or representing any hedging
obligations under an Exchange Rate Contract or an Interest Rate Agreement,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness, other than obligations
under an Exchange Rate Contract or an Interest Rate Agreement, would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
and also includes, to the extent not otherwise included, the Guarantee of items
which would be included within this definition. The amount of any Indebtedness
outstanding as of any date shall be the accreted value thereof, in the case of
any Indebtedness issued with original issue discount.
"Interest Rate Agreement" means, with respect to any Person, any interest
rate swap agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement the principal purpose of which is to protect the
party indicated therein against fluctuations in interest rates.
"Investment Grade" means BBB- or higher by S&P or Baa3 or higher by Moody's
or the equivalent of such ratings by S&P or Moody's. In the event that NTL shall
be permitted to select any other Rating Agency, the equivalent of such ratings
by such Rating Agency shall be used.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons, including Affiliates, in the forms of loans, including
Guarantees, advances or capital contributions, excluding commission, travel and
similar advances and loans, joint property ownership and other arrangements, in
each case, made to officers and employees made in the ordinary course of
business, purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities and all other items
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that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
"Issuance Date" means the date on which the notes are first authenticated
and issued.
"License" means any license issued or awarded pursuant to the Broadcasting
Act 1990, the Cable and Broadcasting Act 1984, the Telecommunications Act 1984
or the Wireless Telegraphy Act 1948, in each case, as such Acts may, from time
to time be, amended, modified or re-enacted, or equivalent statutes of any
jurisdiction, to operate or own a Cable Business.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code, or equivalent or successor statutes, of any
jurisdiction.
"Material License" means a License held by NTL or any of its Subsidiaries
which License at the time of determination covers a number of Net Households
which equals or exceeds 5% of the aggregate number of Net Households covered by
all of the Licenses held by NTL and its Subsidiaries at such time.
"Material Subsidiary" means
(1) NTL UK Group, Inc., formerly known as OCOM Sub II, Inc., NTLIH, NTL
Group Limited, CableTel Surrey Limited, CableTel Cardiff Limited,
CableTel Glasgow, CableTel Newport and CableTel Kirklees and
(2) any other Subsidiary of NTL which is a "significant subsidiary" as
defined in Rule 1-02(v) of Regulation S-X under the Securities Act
and the Exchange Act, as such Regulation is in effect on the date
of the indenture.
"Monetize" means a strategy with respect to Equity Interests that generates
an amount of cash equal to the fair value of such Equity Interests.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Households" means the product of
(1) the number of households covered by a License in the United Kingdom
and
(2) the percentage of the entity holding such License which is owned
directly or indirectly by NTL.
"Net Income" means, with respect to any Person for a specific period, the
net income (loss) of such Person during such period, determined in accordance
with GAAP, excluding, however, any gain, but not loss, during such period,
together with any related provision for taxes on such gain, but not loss,
realized during such period in connection
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with any Asset Sale, including, without limitation, dispositions pursuant to
sale-and-leaseback transactions, and excluding any extraordinary gain, but not
loss, during such period, together with any related provision for taxes on such
extraordinary gain, but not loss.
"Net Proceeds" means the aggregate cash proceeds received by NTL or any of
its Subsidiaries in respect of any Asset Sale, net of the direct costs relating
to such Asset Sale, including, without limitation, legal, accounting and
investment banking fees, and sales commissions, and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, after
taking into account any available tax credits or deductions and any tax sharing
arrangements, amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets.
"Non-Controlled Subsidiary" means an entity which is not a Cable Controlled
Subsidiary.
"Non-Recourse Debt" means Indebtedness or that portion of Indebtedness as
to which none of NTL, nor any Restricted Subsidiary:
(1) provides credit support, including any undertaking, agreement or
instrument which would constitute Indebtedness;
(2) is directly or indirectly liable; or
(3) constitutes the lender.
"Non-Restricted Subsidiary" means
(1) a Subsidiary that
(a) at the time of its designation by the Board of Directors as a
Non-Restricted Subsidiary has not acquired any assets, other
than as specifically permitted by clause (5) of "Permitted
investments" or by the "Restricted payments" covenant, at any
previous time, directly or indirectly from the Company or any
of its Restricted Subsidiaries,
(b) has no Indebtedness other than Non-Recourse Debt and
(c) that at the time of such designation, after giving pro forma
effect to such designation, the ratio of Indebtedness to
Annualized Pro Forma EBITDA of NTL is equal to or less than
the ratio of Indebtedness to Annualized Pro Forma EBITDA of
NTL immediately preceding such designation, provided, however,
that if the ratio of Indebtedness to Annualized Pro Forma
EBITDA of NTL immediately preceding such designation is 6:1 or
less, then the ratio of Indebtedness to Annualized Pro Forma
EBITDA of NTL may be 0.5 greater than such ratio immediately
preceding such designation;
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(2) any Subsidiary which
(a) has been acquired or capitalized out of or by Equity Interests
of NTL or Capital Stock Sales Proceeds therefrom,
(b) has no Indebtedness other than Non-Recourse Debt and
(c) is designated as a Non-Restricted Subsidiary by the Board of
Directors or is merged, amalgamated or consolidated with or
into, or its assets or capital stock is to be transferred to,
a Non-Restricted Subsidiary; or
(3) any Subsidiary of a Non-Restricted Subsidiary.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Old Notes" means the 9 3/4% notes.
"Other Qualified Notes" means any outstanding senior indebtedness of NTL
issued pursuant to an indenture having a provision substantially similar to the
Asset Sale Offer provision contained in the indenture, including, without
limitation, the 9 3/4% notes and the Diamond Notes.
"Permitted Acquired Debt" means, with respect to any Acquired Person,
including, for this purpose, any Non-Restricted Subsidiary at the time such
Non-Restricted Subsidiary becomes a Restricted Subsidiary, Acquired Debt of such
Acquired Person and its Subsidiaries in an amount, determined on a consolidated
basis, not exceeding the sum of
(1) amount of the gross book value of property, plant and equipment of
the Acquired Person and its Subsidiaries as set forth on the most
recent consolidated balance sheet of the Acquired Person, which may
be unaudited, prior to the date it becomes an Acquired Person and
(2) the aggregate amount of any Cash Equivalents held by such Acquired
Person at the time it becomes an Acquired Person.
"Permitted Currency" means the lawful currency of the United States or a
European Union member.
"Permitted Designee" means
(1) a spouse or a child of a Permitted Holder,
(2) trusts for the benefit of a Permitted Holder or a spouse or child
of a Permitted Holder,
(3) in the event of the death or incompetence of a Permitted Holder,
his estate, heirs, executor, administrator, committee or other
personal representative or
(4) any Person so long as a Permitted Holder owns at least 50% of the
voting power of all classes of the voting stock of such Person.
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"Permitted Holders" means George S. Blumenthal, J. Barclay Knapp and their
Permitted Designees.
"Permitted Investments" means
(1) any Investments in NTL or in a Cable Controlled Property or in a
Qualified Subsidiary, including, without limitation,
(a) Guarantees of Indebtedness of NTL, a Cable Controlled
Subsidiary or a Qualified Subsidiary,
(b) Liens securing such Indebtedness or Guarantees or
(c) the payment of any balance deferred and unpaid of the purchase
price of any Qualified Subsidiary;
(2) any Investments in Cash Equivalents;
(3) Investments by NTL in Indebtedness of a counter-party to an
Exchange Rate Contract for hedging a Permitted Currency exchange
risk that are made, for purposes other than speculation, in
connection with such contract to hedge not more than the aggregate
principal amount of the Indebtedness being hedged, or, in the case
of Indebtedness issued with original issue discount, based on the
amounts payable after the amortization of such discount;
(4) Investments by NTL or any Subsidiary of NTL in a Person, if as a
result of such Investment
(a) such Person becomes a Cable Controlled Subsidiary or
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets
to, or is liquidated into, NTL or a Wholly Owned Subsidiary of
NTL; and
(5) any issuance, transfer or other conveyance of Equity Interests in
NTL, or any Capital Stock Sales Proceeds therefrom, to a Subsidiary
of NTL.
"Permitted Liens" means
(1) Liens in favor of NTL;
(2) Liens on property of a Person existing at the time such Person is
merged into or consolidated with NTL or any Subsidiary of NTL;
provided, that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not secure any
property or assets of NTL or any of its Subsidiaries other than the
property or assets subject to the Liens prior to such merger or
consolidation;
(3) liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more
than 60 days past due or are being contested in good faith and by
appropriate proceedings;
(4) Liens existing on the Issuance Date;
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(5) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently
concluded; provided, that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have
been made therefor and
(6) easements, rights of way, restrictions and other similar easements,
licenses, restrictions on the use of properties or minor
imperfections of title that, in the aggregate, are not material in
amount, and do not in any case materially detract from the
properties subject thereto or interfere with the ordinary conduct
of the business of NTL or its Restricted Subsidiaries.
"Permitted Non-Controlled Assets" means Equity Interests in any Person
primarily engaged, directly or indirectly, in one or more Cable Businesses if
such Equity Interests
(1) were acquired by NTL or any of its Restricted Subsidiaries in
connection with any Asset Sale or any Investment otherwise
permitted under the terms of the Indenture and
(2) to the extent that, after giving pro forma effect to the
acquisition thereof by NTL or any of its Restricted Subsidiaries,
Adjusted Total Controlled Assets is greater than 80% of Adjusted
Total Assets based on the most recent consolidated balance sheet of
NTL.
"Pro Forma EBITDA" means for any Person, for any period, the EBITDA of such
Person as determined on a consolidated basis for such Person and its
Subsidiaries in accordance with GAAP after giving effect to the following:
(1) if, during or after such period, such Person or any of its
Subsidiaries shall have made any Asset Sale, Pro Forma EBITDA of
such Person and its Subsidiaries for such period shall be reduced
by an amount equal to the Pro Forma EBITDA, if positive, directly
attributable to the assets which are the subject of such Asset Sale
for the period or increased by an amount equal to the Pro Forma
EBITDA, if negative, directly attributable thereto for such period
and
(2) if, during or after such period, such Person or any of its
Subsidiaries completes an acquisition of any Person or business
which immediately after such acquisition is a Subsidiary of such
Person or whose assets are held directly by such Person or a
Subsidiary of such Person, Pro Forma EBITDA shall be computed so as
to give pro forma effect to the acquisition of such Person or
business, without giving effect to clause (3)of the definition of
Consolidated Net Income;
and provided further that, with respect to NTL, all of the foregoing
references to "Subsidiary" or "Subsidiaries" shall be deemed to refer
only to a "Restricted Subsidiary" or "Restricted Subsidiaries" of
NTL.
"Qualified Subsidiary" means a Wholly Owned Subsidiary, or an entity that
will become a Wholly Owned Subsidiary after giving effect to the transaction
being
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considered, that at the time of and after giving effect to the consummation of
the transaction under consideration,
(1) is a Cable Business or holds only Cable Assets,
(2) has no Indebtedness (other than Indebtedness being incurred to
consummate such transaction) and
(3) has no encumbrances or restrictions, other than such encumbrances
or restrictions imposed or permitted by the Indenture, the
indentures governing the Old Notes or any other instrument
governing unsecured indebtedness of NTL which is pari passu with
the notes, on its ability to pay dividends or make any other
distributions to NTL or any of its Subsidiaries.
"Rating Agencies" means
(1) S&P,
(2) Moody's and
(3) if S&P or Moody's or both shall not make a rating of the notes
publicly available, a nationally recognized securities rating
agency or agencies, as the case may be, selected by NTL, which
shall be substituted for S&P or Moody's or both, as the case may
be.
"Rating Category" means
(1) with respect to S&P, any of the following categories: BB, B, CCC,
CC, C and D, or equivalent successor categories,
(2) with respect to Moody's, any of the following categories: Ba, B,
Caa, Ca, C and D, or equivalent successor categories, and
(3) the equivalent of any such category of S&P or Moody's used by
another Rating Agency.
In determining whether the rating of the notes has decreased by one or more
gradations, gradations within Rating Categories + and -- for S&P; 1, 2 and 3 for
Moody's; or the equivalent gradations for another Rating Agency shall be taken
into account e.g., with respect to S&P, a decline in a rating from BB to BB-, as
well as from BB- to B+, will constitute a decrease of one gradation.
"Rating Date" means that date which is 90 days prior to the earlier of
(1) a Change of Control and
(2) public notice of the occurrence of a Change of Control or of the
intention by NTL or any Permitted Holder to effect a Change of
Control.
"Ratings Decline" means the occurrence of any of the following events on,
or within six months after, the date of public notice of the occurrence of a
Change of Control or of the intention of NTL or any Person to effect a Change of
Control, which period shall
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be extended so long as the rating of any of NTL's debt securities is under
publicly announced consideration for possible downgrade by any of the Rating
Agencies:
(1) in the event that any of NTL's debt securities are rated by both of
the Rating Agencies on the Rating Date as Investment Grade, the
rating of such securities by either of the Rating Agencies shall be
below Investment Grade,
(2) in the event that any of NTL's debt securities are rated by either,
but not both, of the Rating Agencies on the Rating Date as
Investment Grade, the rating of such securities by both of the
Rating Agencies shall be below Investment Grade, or
(3) in the event any of NTL's debt securities are rated below
Investment Grade by both of the Rating Agencies on the Rating Date,
the rating of such securities by either Rating Agency shall be
decreased by one or more gradations, including gradations within
Rating Categories as well as between Rating Categories.
"Redeemable Dividend" means, for any dividend with regard to Disqualified
Stock, the quotient of the dividend divided by the difference between one and
the maximum statutory federal income tax rate, expressed as a decimal number
between 1 and 0, then applicable to the issuer of such Disqualified Stock.
"Replacement Assets" means
(1) Cable Assets,
(2) Equity Interests of any Person engaged, directly or indirectly,
primarily in a Cable Business, which Person is or will become on
the date of acquisition thereof a Restricted Subsidiary as a result
of NTL's acquiring such Equity Interests,
(3) Permitted Non-Controlled Assets or
(4) any combination of the foregoing.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" means any Subsidiary of NTL which is not a Non-
Restricted Subsidiary.
"Restricted Subsidiary Preferred Stock Dividend" means, for any dividend
with regard to preferred stock of a Restricted Subsidiary, the quotient of the
dividend divided by the difference between one and the maximum statutory federal
income tax rate, expressed as a decimal number between 1 and 0, then applicable
to the issuer of such preferred stock.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Subordinated Debentures" means the debentures exchangeable by NTL for the
Preferred Stock in accordance with the Certificate of Designation therefor.
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"Subsidiary" 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 or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Weighted Average Life to 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
(a) the amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment
at final maturity, in respect thereof, by
(b) the number of years, calculated to the nearest one-twelfth, that
will elapse between such date and the making of such payment, by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Subsidiary" means, at any time, a Restricted Subsidiary all
of the Capital Stock of which, except directors' qualifying shares, is at the
time owned directly or indirectly by NTL.
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REGISTRATION RIGHTS
The following summary of the registration rights provided in the
registration rights agreement and the old notes is not complete. You should
refer to the registration rights agreement and the notes for a full description
of the registration rights that apply to the old notes. The registration rights
agreement is filed as an exhibit to the registration statement of which this
prospectus forms a part.
Under the registration rights agreement, we agreed to file with the SEC a
registration statement, including a prospectus, on the appropriate form under
the Securities Act with respect to an offer to exchange the old notes for new
notes registered under the Securities Act with terms substantially identical to
those of the old notes. If:
(1) on or prior to the time the exchange offer is completed existing SEC
interpretations are changed such that the debt securities received by
holders other than restricted holders in the exchange offer for
registrable securities are not or would not be, upon receipt,
transferable by each such holder without restriction under the
Securities Act,
(2) the exchange offer has not been completed by November 26, 1999 or
(3) the exchange offer is not available to any holder of the old notes,
we will file with the SEC a shelf registration statement to cover resales of the
old notes by the holders who satisfy certain conditions relating to the
provision of information in connection with the shelf registration statement. We
will use our best efforts to cause the applicable registration statement to be
declared effective as promptly as practicable by the SEC.
The registration rights agreement provides that:
(a) we will file an exchange registration statement with the SEC by July
14, 1999,
(b) we will use our best efforts to have the exchange registration
statement declared effective by the SEC October 12, 1999,
(c) unless the exchange offer would not be permitted by applicable law or
SEC policy, we will commence the exchange offer and use our best
efforts to issue by the forty-fifth day following the date on which the
exchange registration statement is declared effective, new notes in
exchange for all notes tendered before that date in the exchange offer
and
(d) if obligated to file the shelf registration statement, we will use our
best efforts to file the shelf registration statement with the SEC as
promptly as practicable after such filing obligation arises and to
cause the shelf registration to be declared effective by the SEC within
120 days after the filing of such shelf registration statement.
If, with respect to the old notes:
(1) we fail to file the exchange registration statement or the shelf
registration statement on or before the date specified for such filing,
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(2) the exchange registration statement is not declared effective October
12, 1999 or the shelf registration statement is not declared effective
within 120 days from the date such shelf registration statement is
filed,
(3) we fail to complete the exchange offer within the specified time frame,
or
(4) the exchange registration statement or the shelf registration statement
is filed and declared effective but is thereafter either withdrawn or
becomes subject to an effective stop order suspending the
effectiveness, except as specifically permitted in the registration
rights agreement, without being succeeded immediately by an additional
registration statement which becomes effective,
then we will pay special interest pursuant to provisions of the registration
rights agreement and the old notes to each holder of the old notes.
Special interest will accrue from:
(1) the date specified for such filing, in the case of clause (1)
above,
(2) the date specified for effectiveness in the case of clause (2)
above,
(3) the date specified for completion of the exchange offer, in the
case of clause (3) above or
(4) the date such exchange registration statement or shelf registration
statement ceases to be effective, in the case of clause (4) above
(each such period referred to in clauses (1)-(4) above an "Accrual
Period"),
at a rate per annum equal to 0.25% for the first 90 days of the Accrual Period;
0.50% for the second 90 days of the Accrual Period; 0.75% for the third 90 days
of the Accrual Period and 1.0% for the remaining portion of the Accrual Period
of the Accreted Value of the notes, determined daily.
All accrued special interest will be paid by us on each interest payment
date to the applicable global note holder by wire transfer of immediately
available funds or by federal funds check and to holders of certificated
securities by wire transfer to the accounts specified by them in writing or by
mailing checks to their registered addresses if no such accounts have been
specified in writing. Following the cure of all registration defaults, the
accrual of special interest will cease.
Special interest on the old notes, if any, will be computed on the basis of
a 360-day year comprised of twelve 30-day months.
Holders of old notes will be required to make certain representations to us
as described in the registration rights agreement in order to participate in the
exchange offer and will be required to deliver information to be used in
connection with the shelf registration statement and to provide comments on the
shelf registration statement within the time periods set forth in the
registration rights agreement in order to have their old notes included in the
shelf registration statement and benefit from the provisions regarding special
interest pursuant to provisions of the old notes, as set forth above.
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FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of the material U.S. federal income tax
consequences of an exchange of old notes for the new notes and the ownership of
the new notes. It deals only with notes held as capital assets by initial
holders of old notes, and does not deal with special situations, such as those
of dealers in securities, financial institutions, insurance companies and
holders whose "functional currency" is not the U.S. dollar, or special rules
with respect to straddle or "hedging" transactions. The discussion below is
based upon the Internal Revenue Code of 1986, as amended and regulations,
rulings and judicial decisions thereunder as of the date hereof, and such
authorities may be repealed, revoked or modified (including retroactively) so as
to result in federal income tax consequences different from those discussed
below.
You are urged to consult your tax advisor regarding the tax consequences
that may be specific to you of the exchange of old notes for new notes and the
ownership of the new notes, as well as any tax consequences arising under any
state, local or foreign laws.
As used herein, the term "U.S. holder" means a beneficial owner of a note
that is for United States federal income tax purposes
(1) a citizen or resident of the United States,
(2) a corporation, partnership or other entity created or organized under
the laws of the United States or any political subdivision thereof or
therein,
(3) an estate or trust described in Section 7701(a)(30) of the Internal
Revenue Code, or
(4) a person whose worldwide income or gain is otherwise subject to U.S.
federal income taxation on a net income basis.
As used herein, the term "Non-U.S. holder" means a holder of a note that is not
a U.S. holder.
EXCHANGE OF NOTES
There will be no federal income tax consequences to holders exchanging old
notes for new notes pursuant to the exchange offer since the exchange offer will
be by operation of the original terms of the old notes, pursuant to a unilateral
act by us, and will not result in any material alteration in the terms of the
old notes. Each exchanging holder will have the same adjusted tax basis and
holding period in the new notes as it had in the old notes immediately before
the exchange.
TAXATION OF NOTES -- U.S. HOLDERS
Original Issue Discount. Because the old notes were issued with original
issue discount ("OID") for federal income tax purposes, the new notes issued in
exchange for the old notes will also bear OID that each U.S. holder of a new
note will be required to include OID in income as it accrues on a
yield-to-maturity basis over the term of the new note in advance of cash
payments attributable to such income (regardless of whether the holder is a cash
or accrual basis taxpayer). The amount of OID with respect
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to a new note equals the excess of the stated redemption price at maturity of
such new note over its issue price. The stated redemption price at maturity of a
new note will include all payments required to be made on the new note whether
denominated as principal or interest (other than payments subject to remote or
incidental contingencies). The issue price of the new notes equals the issue
price of the old notes, which was L621.10 per $1,000 principal amount at
maturity.
A U.S. holder of a debt instrument that bears OID is required to include in
gross income an amount equal to the sum of the daily portions of OID for each
day during the taxable year in which the U.S. holder holds the debt instrument.
The daily portions of OID are determined by allocating to each day in an accrual
period the pro rata portion of the OID that is allocable to the accrual period.
The amount of OID that is allocable to an accrual period with respect to the new
notes generally will be equal to the product of the adjusted issue price of the
new notes at the beginning of the accrual period (the issue price of the new
notes determined as described above, generally increased by all prior accruals
of OID and decreased by the amount of payments made on the new notes) and the
notes' yield-to-maturity (the discount rate, which, when applied to all payments
under the notes, results in a present value equal to the issue price of the new
notes). In the case of the final accrual period, the allocable OID generally is
the difference between the amount payable at maturity and the adjusted issue
price at the beginning of the accrual period. All payments on a note generally
will be viewed first as a payment of previously accrued OID (to the extent
thereof), with payments considered made from the earliest accrual period, and
then as a payment of principal.
We will furnish annually to the IRS and to U.S. holders (other than with
respect to certain exempt holders, including, in particular, corporations)
information with respect to the OID accruing while the notes were held by the
U.S. holders.
Under certain circumstances described above, we will be required to pay
special interest on the notes if we fail to comply with certain of our
obligations under the registration rights agreement. Although not free from
doubt, such additional amount should be taxable to a U.S. holder as ordinary
income at the time it accrues or is received in accordance with such holder's
regular method of accounting. It is possible, however, that the IRS may take a
different position, in which case the timing and the amount of income on the
notes may be different.
If we meet the Foreign Active Business Requirement described below,
interest income (including OID) with respect to a note may be treated as foreign
source income. Due to the factual nature of this issue, it is not certain that
we will meet this requirement.
Disposition of new notes. A U.S. holder will generally recognize gain or
loss upon the sale, exchange, retirement or other disposition of new notes equal
to the difference between the amount realized on the disposition (other than
amounts attributable to accrued but unpaid OID) and the U.S. holder's adjusted
tax basis in the new notes. A U.S. holder's adjusted tax basis in a new note
will generally be the cost of the new note, increased by any OID previously
included in income by such holder and decreased by any amount received on the
new note. Such gain or loss generally would be capital gain
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or loss (except to the extent of any exchange gain or loss with respect to
foreign currency, as discussed below).
Foreign currency. The new notes will be denominated in a currency other
than the U.S. dollar. The following summarizes certain of the United States
federal income tax consequences to U.S. holders as a result of the new notes'
foreign currency denomination.
OID. For purposes of computing OID, (i) OID will be determined in units
of pounds sterling, (ii) such accrued discount will be translated into U.S.
dollars as if the U.S. holder were receiving interest using the accrual method
of accounting (as discussed below), and (iii) the amount of foreign currency
gain or loss on the accrued discount will be determined by comparing the amount
determined under (ii) with the amount of income received attributable to the
discount (either upon payment, maturity or an earlier disposition), as
translated into U.S. dollars at the rate of exchange on the date of such
receipt, with the amount of discount accrued. In general, a U.S. holder who uses
the accrual method of accounting for federal income tax purposes would include
in income the U.S. dollar value of the amount of accrued discount with respect
to a new note during an accrual period, which is generally determined by
translating such income at the average rate of exchange for the accrual period,
or with respect to an accrual period that spans two taxable years, at the
average rate for the partial period within the taxable year.
Disposition of new notes. As discussed above, upon the sale, exchange or
retirement of a new note, a U.S. holder will recognize taxable gain or loss
equal to the difference between the amount realized on the sale, exchange or
retirement and such holder's adjusted tax basis in the new note. Such gain or
loss generally will be capital gain or loss and will be long term capital gain
or loss if the new note was held for more than one year. If a U.S. holder
receives foreign currency on such a sale, exchange or retirement, the amount
realized will be based on the U.S. dollar value of the foreign currency on the
date of disposition (assuming the new notes are not publicly traded). A U.S.
holder's adjusted tax basis in a new note will equal the U.S. dollar cost of the
note (determined on the date of the purchase) to such holder, increased by the
U.S. dollar value of the amounts of any OID previously included in income by the
holder with respect to such new note and reduced by the U.S. dollar value of any
payments received by the holder. In the case of an adjustment resulting from the
accrual of OID, such adjustment will be made at the rate at which such OID is
translated into U.S. dollars under the rules described above. If a U.S. holder
purchases a new note with previously owned foreign currency, the holder will
recognize ordinary income or loss in an amount equal to the difference, if any,
between such holder's tax basis in the foreign currency and the U.S. dollar fair
market value of the foreign currency used to purchase the new note, determined
on the date of purchase.
For purposes of the foregoing, there is a special rule for purchases and
sales of publicly traded notes by a cash basis taxpayer under which units of
foreign currency paid or received are translated into U.S. dollars at the spot
rate on the settlement date of the purchase or sale. In that case, no exchange
gain or loss will result from currency
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fluctuations between the trade date and the settlement of such a purchase or
sale. An accrual basis taxpayer may elect the same treatment required of cash
basis taxpayers with respect to purchases and sales of publicly traded notes,
provided the election is applied consistently. Such election cannot be changed
without the consent of the IRS.
Gain or loss realized upon the sale, exchange or retirement of a note that
is attributable to fluctuations in currency exchange rates will be ordinary
income or loss, which will not be treated as interest income or expense. Gain or
loss attributable to fluctuations in exchange rates will equal the difference
between the U.S. dollar value of the foreign currency principal amount (which
means, for this purpose, purchase price) of the note, determined on the date
such payment is received or the new note is disposed of, and the U.S. dollar
value of the foreign currency principal amount of the new note, determined on
the date the U.S. holder acquired the new note. Such foreign currency gain or
loss will be recognized only to the extent of the total gain or loss realized by
the U.S. holder on the sale, exchange or retirement of the new note.
Exchange of Foreign Currencies. A U.S. holder will have a tax basis in
any foreign currency received as interest or on the sale, exchange or retirement
of a note equal to the U.S. dollar value of such foreign currency, determined at
the time the interest is received or at the time of the sale, exchange or
retirement. Any gain or loss realized by a U.S. holder on a sale or other
disposition of foreign currency (including its exchange for U.S. dollars or its
use to purchase new notes) will be ordinary income or loss.
TAXATION OF NOTES -- NON-U.S. HOLDERS
The following discussion is limited to the U.S. federal income tax
consequences relevant to a holder of a note that is a non-U.S. holder.
Subject to the discussion of backup withholding below, payments of interest
on a new note to any non-U.S. holder will generally not be subject to U.S.
federal income or withholding tax, provided that
(1) the holder is not
(a) a direct or indirect owner of 10% or more of the total voting
power of all our voting stock,
(b) a controlled foreign corporation related to us through stock
ownership or
(c) a foreign tax-exempt organization or a foreign private
foundation for U.S. federal income tax purposes,
(2) such interest payments are not effectively connected with the
conduct by the non-U.S. holder of a trade or business within the United
States and
(3) we (or our paying agent) receive
(a) from the non-U.S. holder, a properly completed Form W-8 (or
substitute Form W-8) under penalties of perjury which provides the
non-U.S.
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holder's name and address and certifies that the non-U.S. holder of the
note is a non-U.S. holder or
(b) from a security clearing organization, bank or other
financial institution that holds the notes in the ordinary course of
its trade or business (a "financial institution") on behalf of the
non-U.S. holder, certification under penalties of perjury that such a
Form W-8 (or substitute Form W-8) has been received by it, or by
another such financial institution, from the non-U.S. holder, and a
copy of the Form W-8 (or substitute Form W-8) is furnished to us or our
paying agent.
A non-U.S. holder that does not qualify for exemption from withholding
under the preceding paragraph generally will be subject to withholding of U.S.
federal income tax at the rate of 30% (or lower applicable treaty rate) on
payments of interest (including OID) on the new notes unless the Foreign Active
Business Requirement is met, as described below.
If the payments of interest on a new note are effectively connected with
the conduct by a non-U.S. holder of a trade or business in the United States,
such payments will be subject to U.S. federal income tax on a net basis at the
rates applicable to United States persons generally (and, with respect to
corporate holders, may also be subject to a 30% branch profits tax). If payments
are subject to U.S. federal income tax on a net basis in accordance with the
rules described in the preceding sentence, such payments will not be subject to
United States withholding tax so long as the holder provides us or our paying
agent with a properly executed Form 4224.
In addition, if we can show to the satisfaction of the IRS that at least
80% of the gross income from all sources for the 3-year period ending with the
close of our taxable year preceding the interest payment (or such period as may
be applicable) is "active foreign business income" (the "Foreign Active Business
Requirement") then interest (including OID) on the new notes would be treated as
foreign source income that is not subject to U.S. withholding. Active foreign
business income is generally gross income of a corporation derived from sources
outside the U.S., or is attributable to income so derived by a subsidiary of the
corporation, which is attributable to the active conduct of a trade or business
in the foreign jurisdiction by the corporation (or subsidiary). It is uncertain
whether we would meet the Foreign Active Business Requirement for treating
interest income as non-U.S. source.
Non-U.S. holders should consult any applicable income tax treaties, which
may provide for a lower rate of withholding tax exemption from or reduction of
branch profits tax, or other rules different from those described above.
Sale, exchange or redemption of new notes. Subject to the discussion
concerning backup withholding, any gain realized by a non-U.S. holder on the
sale, exchange, retirement or other disposition of a new note generally will not
be subject to a U.S. federal income tax, unless
(1) such gain is effectively connected with the conduct by such
non-U.S. holder of a trade or business within the United States,
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(2) the non-U.S. holder is an individual who is present in the United
States for 183 days or more in the taxable year of the disposition and
certain other conditions are satisfied, or
(3) the non-U.S. holder is subject to tax pursuant to the provisions of
U.S. tax law applicable to certain U.S. expatriates.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Payments with respect to the new notes and the proceeds upon the sale or
other disposition of the new notes may be subject to the information reporting
and possible U.S. backup withholding at a 31% rate. Backup withholding will not
apply to U.S. holders who furnish a correct taxpayer identification number and
provide other certification or who are otherwise exempt from backup withholding.
Copies of those information returns may also be made available, under the
provisions of a specific treaty or agreement, to the tax authorities of the
country in which the non-U.S. holder resides.
The regulations provide that backup withholding (which generally is a
withholding tax imposed at the rate of 31% on payments to persons that fail to
furnish certain required information) and information reporting will not apply
to payments made in respect to the exchange notes by us to a non-U.S. holder, if
the holder certifies as to its non-U.S. status under penalties of perjury or
otherwise establishes an exemption (provided that neither the Company nor its
paying agent has actual knowledge that the holder is a U.S. person or that the
condition of any other exemption are not, if fact, satisfied).
The payment of the proceeds from the disposition of notes to or through the
United States office of any broker, U.S. or foreign, will be subject to
information reporting and possible backup withholding unless the owner certifies
as to its non-U.S. status under penalty of perjury or otherwise establishes an
exemption, provided that the broker does not have actual knowledge that the
holder is a U.S. person or that the conditions of any other exemption are not,
in fact, satisfied. The payment of the proceeds from the disposition of a note
to or through a non-U.S. office of a non-U.S. broker that is not a U.S. related
person will not be subject to information reporting or backup withholding. For
this purpose, a "U.S. related person" is (i) a "controlled foreign corporation"
for U.S. federal income tax purposes or (ii) a foreign person 50% or more of
whose gross income from all sources for the three-year period ending with the
close of its taxable year preceding the payment (or for such part of the period
that the broker has been in existence) is derived from activities that are
effectively connected with the conduct of a U.S. trade or business.
In the case of the payment of proceeds from the disposition of new notes to
or through a non-U.S. office of a broker that is a U.S. related person, the
regulations require information reporting on the payment unless the broker has
documentary evidence in its files that the owner is a non-U.S. holder and the
broker has no knowledge to the contrary. Backup withholding will not apply to
payments made through foreign offices of a broker that is a U.S. person or a
U.S. related person (absent actual knowledge that the payee is a U.S. person.)
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Any amounts withheld under the backup withholding rules from a payment to a
non-U.S. holder will be allowed as a refund or a credit against such non-U.S.
holders' federal income tax liability, provided that the requisite procedures
are followed.
The Treasury Department promulgated new final regulations regarding the
withholding and information reporting rules discussed above applicable to
non-U.S. holders. In general, the final regulations do not significantly alter
the substantive withholding and information reporting requirements but rather
unify current certification procedures and forms and clarify reliance standards.
The final regulations are generally effective for payments made after December
31, 1999, subject to certain transition rules. Non-U.S. holders should consult
their own tax advisors with respect to the impact, if any, of the final
regulations.
POTENTIAL FEDERAL INCOME TAX CONSEQUENCES TO US AND TO CORPORATE HOLDERS
The notes will constitute applicable high yield discount obligations
("AHYDOs") if their yield-to-maturity is greater than the sum of the relevant
applicable federal rate (the "AFR") plus five percentage points and the notes
were issued with significant OID. In such event, we will not be entitled to
deduct OID that accrues with respect to such notes until amounts attributable to
such OID are paid. In addition, if any notes are AHYDOs and the
yield-to-maturity of such notes exceeds the sum of the relevant AFR plus six
percentage points (the "Excess Yield"), our deduction for the "disqualified
portion" of the OID for any accrual period will be equal to the product of
(1) the Excess Yield divided by the yield-to-maturity on such notes,
and
(2) the OID for the accrual period.
Subject to otherwise applicable limitations, holders that are U.S.
corporations will be entitled to a dividends received deduction (generally at a
current rate of 70%) with respect to any disqualified portion of the accrued OID
to the extent that we have sufficient current or accumulated earnings and
profits. If the disqualified portion exceeds our current and accumulated
earnings and profits, the excess will continue to be taxed as ordinary OID
income in accordance with the rules described above in "Original Issue
Discount."
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PLAN OF DISTRIBUTION
If you are a broker-dealer and hold old notes for your own account as a
result of market-making activities or other trading activities and you receive
new notes in exchange for old notes in the exchange offer, you may be a
statutory underwriter and must acknowledge that you will deliver a prospectus in
connection with any resale of such new notes. 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 new notes received in exchange for old notes where
such old notes were acquired as a result of market-making activities or other
trading activities. We acknowledge and, unless you are a broker-dealer, you must
acknowledge that you are not engaged in, do not intend to engage in, and have no
arrangement or understanding with any person to participate in a distribution of
new notes. We have agreed that starting on the expiration date of the exchange
offer and ending on the close of business on the 180th day following the
expiration date of the exchange offer, we will make this prospectus, as amended
or supplemented, available to any broker-dealer for use in connection with any
such resale.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their 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 new notes or a combination of those methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any resale of that kind 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 new notes. Any broker-dealer
that resells new 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 such new notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of new 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.
For a period of 180 days after the expiration date, we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests such documents in the letter of
transmittal.
We have agreed to pay all expenses incident to the exchange offer
(including the expenses of one counsel for the holders of the notes) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the notes, including any broker-dealers, against various liabilities,
including liabilities under the Securities Act.
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LEGAL MATTERS
The validity of the issuance of the new notes will be passed upon for us by
Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York, special counsel
for us.
EXPERTS
The consolidated financial statements and schedules of NTL Incorporated
appearing in NTL Incorporated's Annual Report (Form 10-K) for the year ended
December 31, 1998 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
The consolidated financial statements as of December 31, 1997 and 1996 and
for each of the three years in the period ended December 31, 1997 of Comcast UK
Cable Partners Limited and subsidiaries incorporated by reference in this
prospectus have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is also incorporated by reference in this
prospectus and have been so incorporated by reference in reliance upon the
report of that firm given upon their authority as experts in accounting and
auditing.
The consolidated financial statements as of December 31, 1997 and 1996 and
for each of the three years in the period ended December 31, 1997 of Birmingham
Cable Corporation Limited and Cable London PLC incorporated by reference in this
prospectus have been audited by Deloitte & Touche, independent auditors, as
stated in their reports, which are also incorporated by reference in this
prospectus and have been so incorporated by reference in reliance upon the
reports of that firm given upon their authority as experts in accounting and
auditing.
The combined financial statements of ComTel UK Finance, B.V. and its
subsidiaries as of and for the year ended December 31, 1997, and the combined
financial statements of Telecential as of and for the 16 months ended December
31, 1996, incorporated by reference in this prospectus have been audited by
Deloitte & Touche, independent auditors, as stated in their reports, which are
also incorporated by reference in this prospectus.
The combined financial statements as of and for the year ended December 31,
1996 of ComTel UK Finance B.V. incorporated by reference in this prospectus have
been so incorporated by reference in reliance on the report of Coopers &
Lybrand, independent Chartered Accountants given on the authority of said firm
of experts in auditing and accounting.
The consolidated financial statements of Diamond Cable Communications Plc
as of December 31, 1997 and 1998 and for each of the years in the three year
period ended December 31, 1998 incorporated by reference herein have been
audited by KPMG, independent auditors, to the extent and for the periods
indicated in their reports on those financial statements. Those financial
statements have been incorporated by reference in reliance upon the reports of
KPMG given on their authority as experts in accounting and auditing.
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ENFORCEABILITY OF CIVIL LIABILITIES
A substantial majority of our assets are located outside the United States.
As a result, it may not be possible for you to realize in the United States upon
judgments of courts of the United States predicated upon the civil liability
under the federal securities laws of the United States. The United States and
England do not currently have a treaty providing for the reciprocal recognition
and enforcement of judgments, other than arbitration awards, in civil and
commercial matters. Therefore, a final judgment for the payment of a fixed debt
or sum of money rendered by any United States court based on civil liability,
whether or not predicated solely upon the United States federal securities laws,
would not automatically be enforceable in England. In order to enforce in
England a United States judgment, proceedings must be initiated by way of common
law action before a court of competent jurisdiction in England. An English court
will, subject to what is said below, normally order summary judgment on the
basis that there is no defense to the claim for payment and will not
reinvestigate the merits of the original dispute. In such an action, an English
court will treat the United States judgment as creating a valid debt upon which
the judgment creditor could bring an action for payment, as long as
(1) the United States court had jurisdiction over the original proceeding,
(2) the judgment is final and conclusive on the merits,
(3) the judgment does not contravene English public policy,
(4) the judgment must not be for a tax, penalty or a judgment arrived at by
doubling, trebling or otherwise multiplying a sum assessed as
compensation for the loss or damage sustained and
(5) the judgment has not been obtained by fraud or in breach of the
principles of natural justice.
Based on the foregoing, there can be no assurance that you will be able to
enforce in England judgments in civil and commercial matters obtained in any
United States court. There is doubt as to whether an English court would impose
civil liability in an original action predicated solely upon the United States
federal securities laws brought in a court of competent jurisdiction in England.
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WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We are currently subject to the informational requirements of the
Securities Exchange Act. We file reports, proxy statements, information
statements and other information with the commission under the Exchange Act. You
can inspect and copy any reports, proxy statements, information statements and
other information we file with the commission at the public reference facilities
the SEC maintains at:
Room 1024, Judiciary Plaza,
450 Fifth Street, N.W.,
Washington, D.C. 20549,
and at the SEC's regional offices located at:
Suite 1400, Northwestern Atrium Center,
500 West Madison Street,
Chicago, Illinois 60661
and
13th Floor, Seven World Trade Center,
New York, New York 10048,
and you may also obtain copies of that material by mail from the public
reference section of the SEC at:
450 Fifth Street, N.W.,
Washington, D.C. 20549,
at prescribed rates.
The SEC also maintains a site on the world wide web, the address of which
is http://www.sec.gov. That site also contains our reports, proxy and
information statements and other information. You can also inspect reports,
proxy statements and other information concerning NTL at the offices of the
Nasdaq Stock Market, Reports Section, at:
1735 K Street, N.W.,
Washington, D.C. 20006.
If the new notes are listed on the Luxembourg Stock Exchange, copies of our
reports, proxy statements and other information will also be made available free
of charge at the office of our agent in Luxembourg, Banque Internationale a
Luxembourg S.A.
This prospectus is part of a registration statement filed by us with the
SEC. It does not contain all the information included or incorporated in the
registration statement. The full registration statement can be obtained from the
SEC as indicated above or from us.
The SEC allows us to incorporate by reference some information about NTL
that we file with the SEC. This allows us to disclose important information to
you by
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referencing those filed documents. Any information that we reference this way is
considered part of this prospectus.
The following documents filed by us with the SEC are incorporated by
reference into this prospectus:
(a) our Annual Report on Form 10-K for the year ended December 31,
1998, dated March 31, 1999;
(b) our Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, dated May 17, 1999;
(c) our Current Reports on Form 8-K dated January 25, 1999 (filed on
January 25, 1999), March 18, 1999 (filed on March 23, 1999), March 8, 1999
(filed on March 11, 1999), April 1, 1999 (filed on April 1, 1999), April 8,
1999 (filed on April 12, 1999) and April 8 (filed on April 1);
(d) our Proxy Statement on Schedule 14A dated January 29, 1999; and
(e) NTL Incorporated's Proxy Statement on Schedule 14A dated April 28,
1999.
We are incorporating by reference the documents listed above and any
current reports and proxy statements we file with the commission until the end
of the exchange offer. Any information incorporated by reference this way will
automatically be deemed to update and supersede this information.
We will provide you without charge on your request, a copy of any or all
documents which are incorporated by reference to this prospectus, except for
exhibits which are specifically incorporated by reference into those documents.
You should make your request in writing or by telephone to:
NTL Communications Corp.
110 East 59th Street
26th Floor
New York NY 10022
Attention: Richard J. Lubasch
Tel: (212) 906 8440
To ensure timely delivery of any documents you request, you should make
such a request at least five days before the exchange offer expires. In
addition, copies of those documents will also be made available free of charge
at the office of our agent in Luxembourg.
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GENERAL INFORMATION
CLEARING SYSTEMS
The International Security Identification Number ("ISIN") for the new notes
is XS0100213080 and the common code is 10021308.
AUTHORIZATION
The issue of the new notes was authorized by a resolution of the board of
directors of NTL on April 7, 1999.
AVAILABLE DOCUMENTS, FINANCIAL REPORTS AND INFORMATION
Copies of the indentures and the registration rights agreements referred to
in this prospectus will, so long as the notes are listed on the Luxemburg Stock
Exchange, be available for inspection during normal business hours at the office
of our Luxembourg agent specified on the inside back cover of this prospectus.
A copy of the certificate of incorporation and by-laws of NTL will be
available for inspection during normal business hours at the office of the
Luxembourg Agent.
Whether or not required by the rules and regulations of the SEC, so long as
the notes are outstanding, we will file with the SEC and furnish to holders of
notes all quarterly and annual financial information required to be contained in
a filing with the SEC on Forms 10-Q and 10-K (or the equivalent thereof under
the Exchange Act for foreign private issuers in the event we become a
corporation organized under the laws of the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands), including a "Management's
Discussion and Analysis or Results of Operations and Financial Condition" and,
with respect to the annual information only, a report thereon by our certified
independent public accountants, in each case, as required by the rules and
regulations of the Commission as in effect on November 6, 1998.
In compliance with Forms 10-Q and 10-K, we currently publish audited annual
consolidated financial reports and unaudited quarterly consolidated financial
reports. As long as the notes are listed on the Luxembourg Stock Exchange,
copies of such reports or any other reports we are required to furnish to
holders of the notes in accordance with the preceding paragraph, will be
available at the specified office of the listing, paying and transfer agent in
Luxembourg. We do not publish unconsolidated financial reports.
Copies of reports, proxy statements and other information concerning NTL
filed by NTL with the Commission will, as long as the notes are listed on the
Luxembourg Stock Exchange, be available at the specified office of the listing,
paying and transfer agent in Luxembourg.
MATERIAL ADVERSE CHANGE
Except as disclosed in this prospectus, there has been no material adverse
change in the financial position of NTL since March 31, 1999.
87
<PAGE> 91
- ------------------------------------------------------
- ------------------------------------------------------
You should rely only on the information contained in this document or that
we have referred you to. We have not authorized any other person to provide you
with different information. This prospectus may be delivered to you after the
date of this prospectus. However, you should realize that the affairs of NTL may
have changed since the date of this prospectus. This prospectus will not reflect
such changes. You should not consider this prospectus to be an offer or
solicitation relating to the notes in any jurisdiction in which such an offer or
solicitation is not authorized.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Incorporation of Certain Documents by
Reference...........................
Prospectus Summary.................... 1
Risk Factors.......................... 7
The Exchange Offer.................... 16
Use of Proceeds....................... 25
Description of Notes.................. 26
Registration Rights................... 73
Federal Income Tax Considerations..... 75
Plan of Distribution.................. 82
Legal Matters......................... 83
Experts............................... 83
Enforceability of Civil Liabilities... 84
Where You Can Find More Information... 85
General Information................... 87
</TABLE>
Until , 1999, which is 90 days after the date of this prospectus,
if you are a dealer effecting transactions in the new notes, whether or not you
are participating in the exchange offer, you may be required to deliver a
prospectus. This obligation is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
[NTL LOGO]
NTL COMMUNICATIONS CORP.
L330,000,000
9 3/4% SERIES B
SENIOR DEFERRED
COUPON NOTES DUE 2009
------------------------
PROSPECTUS
------------------------
July 22, 1999
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 92
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 102 of the Delaware General Corporation Law (the
"DGCL"), the Company's Amended and Restated Certificate of Incorporation
eliminates a director's personal liability for monetary damages to the Company
and its stockholders arising from a breach or alleged breach of a director's
fiduciary duty except for liability under Section 174 of the DGCL or liability
for a breach of the director's duty of loyalty to the Company or its
stockholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law or for any transaction in
which the director derived an improper personal benefit. The effect of this
provision in the certificate of incorporation is to eliminate the rights of the
Company and its stockholders (through stockholders, derivative suits on behalf
of the Company) to recover monetary damages against a director for breach of
fiduciary duty as a director (including breaches resulting from negligent or
grossly negligent behavior) except in the situations described above.
The Company's Restated By-laws provide that directors and officers of the
Company shall be indemnified against liabilities arising from their service as
directors and officers to the full extent permitted by law. Section 145 of the
DGCL empowers a corporation to 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 he 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
other enterprise, against expenses (including attorney's fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he 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 reasonable cause to believe his conduct was unlawful.
Section 145 also empowers a corporation to 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 fight of the corporation to procure a
judgment in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses (including attorney's fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted under similar standards, 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 of Chancery or the court in which
such action was brought shall determine that despite the adjudication of
liability such person
II-1
<PAGE> 93
is fairly and reasonably entitled to indemnify for such expenses which the court
shall deem proper.
Section 145 further provides that to the extent that a 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, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
corporation is empowered to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liabilities under Section 145.
The Company has entered into a director and officer indemnity agreement
("Indemnity Agreement") with each officer and director of the Company (an
"Indemnitee"). Under the bylaws and these Indemnity Agreements, the Company must
indemnify an Indemnitee to the fullest extent permitted by the DGCL for losses
and expenses incurred in connection with actions in which the indemnitee is
involved by reason of having been a director or officer of the Company. The
Company is also obligated to advance expenses an indemnitee may incur in
connection with such actions before any resolution of the action.
ITEM 21. EXHIBITS
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
3.1 Restated Certificate of Incorporation of the Company(3)
3.1(a) Certificate of Ownership and Merger, dated as of March 26,
1997(4)
3.2 Restated By-laws of the Company(1)
4.1 Indenture, dated as of April 14, 1998, by and between the
Company and The Chase Manhattan Bank, as Trustee, with
respect to the new notes
4.2 Registration Rights Agreement, dated as of April 14, 1998,
by and among the Company and Goldman Sachs International,
Morgan Stanley & Co. International Limited, Bankers Trust
International PLC, Chase Manhattan International, Donaldson,
Lufkin & Jenrette International, Salomon Brothers
International Limited and of UBS AG, acting through its
division Warburg Dillon Read, with respect to the notes
4.3 Certificate of Designation, dated February 12, 1997, with
respect to the Redeemable Preferred Stock(5)
4.4 Registration Rights Agreement, dated February 12, 1997, by
and among the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Chase Securities Inc. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated with respect to
the Redeemable Preferred Stock(5)
</TABLE>
II-2
<PAGE> 94
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
4.5 Form of new notes (included in Exhibit 4.1)
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
the legality of the notes being registered hereby*
10.1 Compensation Plan Agreements, as amended and restated
effective June 3, 1997(5)
10.2 Form of Director and Officer Indemnity Agreement (together
with a schedule of executed Indemnity Agreements)(2)
11.1 Statement of computation of per share earnings(5)
12.1 Computation of Ratio of Earnings to Fixed Charges and
Combined Fixed Charges and Preferred Stock Dividends**
21.1 Subsidiaries of the Company(5)
23.1 Consent of Ernst & Young, LLP*
23.2 Consent of Deloitte & Touche LLP*
23.3 Consent of Deloitte & Touche -- Birmingham*
23.4 Consent of Deloitte & Touche -- London*
23.5 Consent of Deloitte & Touche -- Comtel*
23.6 Consent of Coopers & Lybrand -- ComTel*
23.7 Consent of KPMG -- Diamond*
23.8 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1)*
24.1 Powers of Attorney
99.1 Form of Letter of Transmittal in respect of the Notes*
99.2 Form of Notice of Guaranteed Delivery*
99.3 Form of Letter to Client*
99.4 Form of Letter to Brokers, Dealers, Trust Companies and
others Nominees*
99.5 Exchange Agent Agreement by and between the Company and The
Chase Manhattan Bank as Exchange Agent
</TABLE>
- ---------------
* Filed herewith.
** To be filed by amendment.
(1) Incorporated by reference from the Company's Registration Statement on Form
S-1, File No. 33-63570.
(2) Incorporated by reference from the Company's Registration Statement on Form
S-4, File No. 33-92794.
(3) Incorporated by reference from the Company's and NTL Incorporated's
Registration Statement on Form S-3, File No. 33-72335.
(4) Incorporated by reference from the Company's Form 8-K, filed with the
Commission on March 26, 1997.
(5) Incorporated by reference to the Company's Annual Report on Form 10-K, filed
with the Commission on March 30, 1998.
II-3
<PAGE> 95
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the Securities
Exchange Act) 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act 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 its 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 and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 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 includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
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 the registration statement when it became effective.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.
II-4
<PAGE> 96
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to the 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 22nd day of July, 1999.
NTL Communications Corp.
By /s/ RICHARD J. LUBASCH
------------------------------------
Richard J. Lubasch
Executive Vice President --
General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board, Treasurer July 22, 1999
- ----------------------------------- and Director
George S. Blumenthal
* President, Chief Executive Officer July 22, 1999
- ----------------------------------- and Director
J. Barclay Knapp
/s/ JOHN F. GREGG Senior Vice President, Chief July 22, 1999
- ----------------------------------- Financial Officer
John F. Gregg
* Vice President -- Controller July 22, 1999
- -----------------------------------
Gregg Gorelick
Director July 22, 1999
- -----------------------------------
Sidney R. Knafel
* Director July 22, 1999
- -----------------------------------
Ted H. McCourtney
* Director July 22, 1999
- -----------------------------------
Del Mintz
Director July 22, 1999
- -----------------------------------
Alan J. Patricof
</TABLE>
II-5
<PAGE> 97
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Director July 22, 1999
- -----------------------------------
Warren Potash
Director July 22, 1999
- -----------------------------------
Michael S. Willner
* Director July 22, 1999
- -----------------------------------
Robert T. Goad
</TABLE>
* The undersigned by signing his name hereunto has hereby signed this Amendment
No. 1 to the above-named persons, on July 22, 1999, pursuant to a power of
attorney executed on behalf of each such person.
By: /s/ RICHARD J. LUBASCH
--------------------------------------------------------
Richard J. Lubasch
Attorney-in-fact
II-6
<PAGE> 98
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
3.1 Restated Certificate of Incorporation of the Company(3)
3.1(a) Certificate of Ownership and Merger, dated as of March 26,
1997(4)
3.2 Restated By-laws of the Company(1)
4.1 Indenture, dated as of April 14, 1998, by and between the
Company and The Chase Manhattan Bank, as Trustee, with
respect to the new notes
4.2 Registration Rights Agreement, dated as of April 14, 1998,
by and among the Company and Goldman Sachs International,
Morgan Stanley & Co. International Limited, Bankers Trust
International PLC, Chase Manhattan International, Donaldson,
Lufkin & Jenrette International, Salomon Brothers
International Limited and of UBS AG, acting through its
division Warburg Dillon Read, with respect to the notes*
4.3 Certificate of Designation, dated February 12, 1997, with
respect to the Redeemable Preferred Stock(5)
4.4 Registration Rights Agreement, dated February 12, 1997, by
and among the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Chase Securities Inc. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated with respect to
the Redeemable Preferred Stock(5)
4.5 Form of new notes (included in Exhibit 4.1)
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
the legality of the notes being registered hereby*
10.1 Compensation Plan Agreements, as amended and restated
effective June 3, 1997(5)
10.2 Form of Director and Officer Indemnity Agreement (together
with a schedule of executed Indemnity Agreements)(2)
11.1 Statement of computation of per share earnings(5)
12.1 Computation of Ratio of Earnings to Fixed Charges and
Combined Fixed Charges and Preferred Stock Dividends**
21.1 Subsidiaries of the Company(5)
23.1 Consent of Ernst & Young, LLP*
23.2 Consent of Deloitte & Touche LLP*
23.3 Consent of Deloitte & Touche -- Birmingham*
23.4 Consent of Deloitte & Touche -- London*
23.5 Consent of Deloitte & Touche -- Comtel*
23.6 Consent of Coopers & Lybrand -- ComTel*
23.7 Consent of KPMG -- Diamond*
23.8 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1)*
24.1 Powers of Attorney (included in the signature page to this
Registration Statement)
</TABLE>
<PAGE> 99
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
99.1 Form of Letter of Transmittal in respect of the Notes*
99.2 Form of Notice of Guaranteed Delivery*
99.3 Form of Letter to Client*
99.4 Form of Letter to Brokers, Dealers, Trust Companies and
others Nominees*
99.5 Exchange Agent Agreement by and between the Company and The
Chase Manhattan Bank, as Exchange Agent
</TABLE>
- ---------------
* Filed herewith.
** To be filed by amendment.
(1) Incorporated by reference from the Company's Registration Statement on Form
S-1, File No. 33-63570.
(2) Incorporated by reference from the Company's Registration Statement on Form
S-4, File No. 33-92794.
(3) Incorporated by reference from the Company's and NTL Incorporated's
Registration Statement on Form S-3, File No. 33-72335.
(4) Incorporated by reference from the Company's Form 8-K, filed with the
Commission on March 26, 1997.
(5) Incorporated by reference to the Company's Annual Report on Form 10-K, filed
with the Commission on March 30, 1998.
<PAGE> 1
Exhibit 4.1
Execution Copy
NTL INCORPORATED
$625,000,000
11 1/2% SENIOR NOTES DUE 2008
INDENTURE
Dated as of November 2, 1998
The Chase Manhattan Bank
Trustee
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I........................................................................................................ 1
Section 1.01. Definitions..................................................................................... 1
Section 1.02. Other Definitions............................................................................... 13
Section 1.03. Incorporation by Reference of Trust Indenture Act............................................... 13
Section 1.04. Rules of Construction........................................................................... 14
ARTICLE II. THE NOTES............................................................................................ 14
Section 2.01. Form and Dating................................................................................. 14
Section 2.02. Execution and Authentication.................................................................... 16
Section 2.03. Registrar and Paying Agent...................................................................... 17
Section 2.04. Paying Agent to Hold Money in Trust............................................................. 17
Section 2.05. Holder Lists.................................................................................... 17
Section 2.06. Transfer and Exchange........................................................................... 18
Section 2.07. Replacement Notes............................................................................... 22
Section 2.08. Outstanding Notes............................................................................... 22
Section 2.09. Treasury Notes.................................................................................. 22
Section 2.10. Temporary Notes; Global Notes................................................................... 22
Section 2.11. Cancellation.................................................................................... 23
Section 2.12. Defaulted Interest.............................................................................. 23
ARTICLE III. REDEMPTION.......................................................................................... 24
Section 3.01. Notices to Trustee.............................................................................. 24
Section 3.02. Selection of Notes to Be Redeemed............................................................... 24
Section 3.03. Notice of Redemption............................................................................ 24
Section 3.04. Effect of Notice of Redemption.................................................................. 25
Section 3.05. Deposit of Redemption Price..................................................................... 25
Section 3.06. Notes Redeemed in Part.......................................................................... 25
Section 3.07. Optional Redemption and Optional Tax Redemption................................................. 25
Section 3.08. Mandatory Redemption............................................................................ 25
Section 3.09. Asset Sale Offer and Purchase Offer............................................................. 25
ARTICLE IV. COVENANTS............................................................................................ 28
Section 4.01. Payment of Notes................................................................................ 28
Section 4.02. Reports......................................................................................... 28
Section 4.03. Compliance Certificate.......................................................................... 29
Section 4.04. Stay, Extension and Usury Laws.................................................................. 29
Section 4.05. Corporate Existence............................................................................. 29
Section 4.06. Taxes........................................................................................... 30
Section 4.07. Limitations on Liens............................................................................ 30
Section 4.08. Incurrence Of Indebtedness And Issuance Of Preferred Stock...................................... 30
Section 4.09. Restricted Payments............................................................................. 32
Section 4.10. Asset Sales..................................................................................... 35
Section 4.11. Transactions with Affiliates.................................................................... 37
Section 4.12. Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries...................... 38
Section 4.13. Change of Control............................................................................... 39
Section 4.14. Payment of Additional Amounts................................................................... 40
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE V. SUCCESSORS............................................................................................ 40
Section 5.01. Merger, Consolidation or Sale of Assets......................................................... 40
Section 5.02. Successor Corporation Substituted............................................................... 41
ARTICLE VI. DEFAULTS AND REMEDIES................................................................................ 41
Section 6.01. Events of Default............................................................................... 41
Section 6.02. Acceleration.................................................................................... 43
Section 6.03. Other Remedies.................................................................................. 44
Section 6.04. Waiver of Past Defaults......................................................................... 44
Section 6.05. Control by majority............................................................................. 44
Section 6.06. Limitation on Suits............................................................................. 44
Section 6.07. Rights of Holders to Receive Payment............................................................ 45
Section 6.08. Collection Suit by Trustee...................................................................... 45
Section 6.09. Trustee May File Proofs of Claim................................................................ 45
Section 6.10. Priorities...................................................................................... 45
Section 6.11. Undertaking for Costs........................................................................... 46
ARTICLE VII. TRUSTEE............................................................................................. 46
Section 7.01. Duties of Trustee............................................................................... 46
Section 7.02. Rights of Trustee............................................................................... 47
Section 7.03. Individual Rights of Trustee.................................................................... 47
Section 7.04. Trustee's Disclaimer............................................................................ 47
Section 7.05. Notice of Defaults.............................................................................. 47
Section 7.06. Reports by Trustee to Holders.................................................................. 48
Section 7.07. Compensation and Indemnity...................................................................... 48
Section 7.08. Replacement of Trustee.......................................................................... 48
Section 7.09. Successor Trustee by Merger, Etc................................................................ 49
Section 7.10. Eligibility; Disqualification................................................................... 49
Section 7.11. Preferential Collection of Claims Against Company............................................... 50
ARTICLE VIII. DISCHARGE OF INDENTURE............................................................................. 50
Section 8.01. Termination of Company's Obligations............................................................ 50
Section 8.02. Option to Effect Defeasance..................................................................... 50
Section 8.03. Application of Trust Money...................................................................... 52
Section 8.04. Repayment to Company............................................................................ 52
Section 8.05. Reinstatement................................................................................... 52
ARTICLE IX. AMENDMENTS, SUPPLEMENTS AND WAIVERS.................................................................. 53
Section 9.01. Without Consent of Holders...................................................................... 53
Section 9.02. With Consent of Holders......................................................................... 53
Section 9.03. Compliance with Trust Indenture Act............................................................. 54
Section 9.04. Revocation and Effect of Consents............................................................... 54
Section 9.05. Notation on or Exchange of Notes................................................................ 54
Section 9.06. Trustee Protected............................................................................... 55
ARTICLE X. MISCELLANEOUS......................................................................................... 55
Section 10.01. Trust Indenture Act Controls.................................................................. 55
Section 10.02. Notices....................................................................................... 55
Section 10.03. Communication by Holders with Other Holders................................................... 55
Section 10.04. Certificate and Opinion as to Conditions Precedent............................................ 56
Section 10.05. Statements Required in Certificate or Opinion................................................. 56
Section 10.06. Rules by Trustee and Agents................................................................... 56
Section 10.07. Legal Holidays................................................................................ 56
Section 10.08. No Recourse Against Others.................................................................... 56
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
Section 10.09. Counterparts and Facsimile Signatures......................................................... 57
Section 10.10. Variable Provisions........................................................................... 57
Section 10.11. Governing Law................................................................................. 57
Section 10.12. No Adverse Interpretation of Other Agreements................................................. 58
Section 10.13. Successors.................................................................................... 58
Section 10.14. Severability.................................................................................. 58
Section 10.15. Table of Contents, Headings, Etc.............................................................. 58
</TABLE>
iii
<PAGE> 5
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C>
310 (a)(1)................................................................................................ 7.10
(a)(2) ................................................................................................... 7.10
(a)(3).................................................................................................... N.A.
(a)(4).................................................................................................... N.A.
(a)(5).................................................................................................... 7.10
(b) ..................................................................................................... 7.08, 7.10
(c) ..................................................................................................... N.A.
311(a).................................................................................................... 7.11
(b) ..................................................................................................... 7.11
(c) ..................................................................................................... N.A.
312 (a)................................................................................................... 2.05
(b) ..................................................................................................... 10.03
(c) ..................................................................................................... 10.03
313(a).................................................................................................... 7.06
(b)(1).................................................................................................... N.A.
(b)(2).................................................................................................... 7.06
(c) ..................................................................................................... 7.06
(d) ..................................................................................................... 7.06
314(a).................................................................................................... 4.02, 4.03
(b) ..................................................................................................... N.A.
(c)(1).................................................................................................... 10.04
(c)(2).................................................................................................... 10.04
(c)(3).................................................................................................... N.A.
(d) ..................................................................................................... N.A.
(e) ..................................................................................................... N.A.
(f) ..................................................................................................... N.A.
315 (a)................................................................................................... 7.01(b)
(b) ..................................................................................................... 7.05
(c) ..................................................................................................... 7.01(a)
(d) ..................................................................................................... 7.01(c)
(e) ..................................................................................................... 6.11
316 (a)(last sentence).................................................................................... 2.09
(a)(1)(A)................................................................................................. 6.05
(a)(1)(B)................................................................................................. 6.04
(a)(2).................................................................................................... N.A.
(b) ..................................................................................................... 6.07
(c) ..................................................................................................... 9.04
317 (a)(1)................................................................................................ 6.08
(a)(2).................................................................................................... 6.09
(b) ..................................................................................................... 2.04
318 (a)................................................................................................... N.A.
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
iv
<PAGE> 6
INDENTURE, dated as of November 2, 1998, between NTL Incorporated, a
Delaware corporation (the "COMPANY"), and The Chase Manhattan Bank, a New York
corporation, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders (as defined in Section 1.01) of the
Company's 11 1/2% Senior Notes due 2008 (the "INITIAL NOTES") and, if and when
issued in exchange for Initial Notes, the Company's 11 1/2% Series B Senior
Notes due 2008 (the "EXCHANGE NOTES" and, together with the Initial Notes, the
"NOTES"):
ARTICLE I.
SECTION 1.01 DEFINITIONS.
"9 1/2% NOTES" means the Company's 9 1/2% Senior Notes due 2008 and the
Company's 9 1/2% Series B Senior Notes due 2008.
"9 3/4% NOTES" means the Company's 9 3/4% Senior Deferred Coupon Notes
due 2008 and the Company's 9 3/4% Series B Senior Deferred Coupon Notes due
2008.
"10% NOTES" means the Company's 10% Series B Senior Notes due 2007.
"10 3/4% NOTES" means the Company's 10 3/4% Senior Deferred Coupon
Notes due 2008 and the Company's 10 3/4% Series B Senior Deferred Coupon Notes
due 2008.
"11 1/2% DEFERRED COUPON NOTES" means the Company's 11 1/2% Series B
Senior Deferred Coupon Notes due 2006.
"12 3/4% NOTES" means the Company's 12 3/4% Series A Senior Deferred
Coupon Notes due 2005.
"ACQUIRED DEBT" means, with respect to any specified Person,
Indebtedness of any other Person (the "Acquired Person") existing at the time
such Acquired Person merged with or into or became a Subsidiary of such
specified Person, including Indebtedness incurred in connection with, or in
contemplation of, such Acquired Person merging with or into or becoming a
Subsidiary of such specified Person.
"ACQUIRED PERSON" has the meaning specified in the definition of
Acquired Debt.
"ADJUSTED TOTAL ASSETS" means the total amount of assets of the Company
and its Restricted Subsidiaries (including the amount of any Investment in any
Non-Restricted Subsidiary), except to the extent resulting from write-ups of
assets (other than write-ups in connection with accounting for acquisitions in
conformity with GAAP), after deducting therefrom (i) all current liabilities of
the Company and its Restricted Subsidiaries, and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as calculated in conformity with GAAP. For purposes of this
Adjusted Total Assets definition, (a) assets shall be calculated less applicable
accumulated depreciation, accumulated amortization and other valuation reserves,
and (b) all calculations shall exclude all intercompany items.
"ADJUSTED TOTAL CONTROLLED ASSETS" means the total amount of assets of
the Company and its Cable Controlled Subsidiaries, except to the extent
resulting from write-ups of assets (other than write-
<PAGE> 7
ups in connection with accounting for acquisitions in conformity with GAAP),
after deducting therefrom (i) all current liabilities of the Company and such
Cable Controlled Subsidiaries; and (ii) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangibles of the
Company and such Restricted Subsidiaries, all as calculated in conformity with
GAAP; provided that Adjusted Total Controlled Assets shall be reduced (to the
extent not otherwise reduced in accordance with GAAP) by an amount equal to the
aggregate amount of all Investments of the Company or any such Cable Controlled
Subsidiaries in any Person other than a Cable Controlled Subsidiary, except Cash
Equivalents. For purposes of this Adjusted Total Controlled Assets definition,
(a) assets shall be calculated less applicable accumulated depreciation,
accumulated amortization and other valuation reserves, and (b) all calculations
shall exclude all intercompany items.
"AFFILIATE" of any specified Person means any other Person directly
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"AGENT" means any Registrar or Paying Agent.
"ANNUALIZED PRO FORMA EBITDA" means, with respect to any Person, such
Person's Pro Forma EBITDA for the latest fiscal quarter multiplied by four.
"ASSET SALE" means (i) any sale, lease, transfer, conveyance or other
disposition of any assets (including by way of a sale-and-leaseback) other than
the sale or transfer of inventory or goods held for sale in the ordinary course
of business (provided that the sale, lease, transfer, conveyance or other
disposition of all or substantially all of the assets of the Company shall be
governed by Section 4.13 or 5.01 hereof) or (ii) any issuance, sale, lease,
transfer, conveyance or other disposition of any Equity Interests of any of the
Company's Restricted Subsidiaries to any Person; in either case other than (A)
to (w) the Company, (x) any Wholly Owned Subsidiary, or (y) any Subsidiary which
is a Subsidiary of the Company on the Issuance Date provided that at the time of
and after giving effect to such issuance, sale, lease, transfer, conveyance or
other disposition to such Subsidiary, the Company's ownership percentage in such
Subsidiary is equal to or greater than such percentage on the Issuance Date or
(B) the issuance, sale, transfer, conveyance or other disposition of Equity
Interests of a Subsidiary in exchange for capital contributions made on a pro
rata basis by the holders of the Equity Interests of such Subsidiary.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
authorized committee of the Board.
"BUSINESS DAY" means any day that is not a Legal Holiday.
"CABLE ASSETS" means tangible or intangible assets, licenses
(including, without limitation, Licenses) and computer software used in
connection with a Cable Business.
"CABLE BUSINESS" means (i) any Person directly or indirectly operating,
or owning a license to operate, a cable and/or television and/or telephone
and/or telecommunications system or service
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<PAGE> 8
principally within the United Kingdom and/or the Republic of Ireland and (ii)
any Cable Related Business.
"CABLE CONTROLLED PROPERTY" means a Cable Controlled Subsidiary or a
Cable Asset held by a Cable Controlled Subsidiary.
"CABLE CONTROLLED SUBSIDIARY" means any Restricted Subsidiary that is
primarily engaged, directly or indirectly, in one or more Cable Businesses.
"CABLE RELATED BUSINESS" means a Person which directly or indirectly
owns or provides a service or product used in a Cable Business, including,
without limitation, any television programming, production and/or licensing
business or any programming guide or telephone directory business or content or
software related thereto.
"CAPITAL STOCK" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, including,
without limitation, partnership interests.
"CAPITAL STOCK SALE PROCEEDS" means the aggregate net sale proceeds
(including from the sale of any property received for the Capital Stock or the
fair market value of such property, as determined by an independent appraisal
firm) received by the Company or any Subsidiary of the Company from the issue or
sale (other than to a Subsidiary) by the Company of any class of its Capital
Stock after October 14, 1993 (including Capital Stock of the Company issued
after October 14, 1993 upon conversion of or in exchange for other securities of
the Company).
"CASH EQUIVALENTS" means (i) Permitted Currency, (ii) securities issued
or directly and fully guaranteed or insured by the United States government, a
European Union member government or any agency or instrumentality thereof having
maturities of not more than six months and two days from the date of
acquisition, (iii) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any commercial bank(s) domiciled in the United
States, the United Kingdom, the Republic of Ireland or any other European Union
member 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 described in clauses (ii) and (iii) entered into with any financial
institution meeting the qualifications specified in clause (iii) above, (v)
commercial paper rated P-1 or the equivalent thereof by Moody's or A-1 or the
equivalent thereof by S & P and in each case maturing within six months and two
days after the date of acquisition and (vi) money market funds at least 95% of
the assets of which constitute Cash Equivalents of the kinds described in
clauses (i)-(v) of this definition.
"CHANGE OF CONTROL" means (i) the sale, lease or transfer of all or
substantially all of the assets of the Company to any "Person" or "group"
(within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(1) under the Exchange Act) (other than any Permitted Holder),
(ii) the approval by the requisite stockholders of the Company of a plan of
liquidation or dissolution of the Company, (iii) any "Person" or "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing, including any group acting for the purpose
of acquiring, holding or disposing of securities within the meaning of Rule 13d-
5(b)(1) under the Exchange Act), other than any Permitted Holder, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than 50% of the total voting power of all classes of the voting stock of the
Company and/or warrants or options to
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<PAGE> 9
acquire such voting stock, calculated on a fully diluted basis, unless, as a
result of such transaction, the ultimate direct or indirect ownership of the
Company is substantially the same immediately after such transaction as it was
immediately prior to such transaction, or (iv) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Company's Board of Directors (together with any new directors whose election
or appointment by such board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Company's Board
of Directors then in office.
"CHANGE OF CONTROL TRIGGERING EVENT" means the occurrence of both a
Change of Control and a Ratings Decline.
"COMPANY" means the party named as such above until a successor
replaces it in accordance with Article V and thereafter means the successor.
"CONSOLIDATED INTEREST EXPENSE" means, for any Person, for any period,
the amount of interest in respect of Indebtedness (including amortization of
original issue discount, amortization of debt issuance costs, and non-cash
interest payments on any Indebtedness and the interest portion of any deferred
payment obligation and after taking into account the effect of elections made
under any Interest Rate Agreement, however denominated, with respect to such
Indebtedness), the amount of Redeemable Dividends, Restricted Subsidiary
Preferred Stock Dividends and the interest component of rentals in respect of
any capital lease obligation paid, in each case whether accrued or scheduled to
be paid or accrued by such Person and its Subsidiaries (other than
Non-Restricted Subsidiaries) during such period to the extent such amounts were
deducted in computing Consolidated Net Income, determined on a consolidated
basis in accordance with GAAP. For purposes of this definition, interest on a
capital lease obligation shall be deemed to accrue at an interest rate
reasonably determined by such Person to be the rate of interest implicit in such
capital lease obligation in accordance with GAAP consistently applied.
"CONSOLIDATED NET INCOME" means, with respect to any Person, for any
period, the aggregate of the Net Income of such Person and its Subsidiaries
(other than Non-Restricted Subsidiaries) for such period, on a consolidated
basis, determined in accordance with GAAP; provided that (i) the Net Income of
any Person that is not a Subsidiary or that is accounted for by the equity
method of accounting shall be included only to the extent of the amount of
dividends or distributions paid to the referent Person or a Wholly Owned
Subsidiary, (ii) the Net Income of any Person that is a Subsidiary (other than a
Subsidiary of which at least 80% of the Capital Stock having ordinary voting
power for the election of directors or other governing body of such Subsidiary
is owned by the referent Person directly or indirectly through one or more
Subsidiaries) shall be included only to the extent of the amount of dividends or
distributions paid to the referent Person or a Wholly Owned Subsidiary, (iii)
the Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded and (iv) the
cumulative effect of a change in accounting principles shall be excluded.
"CONVERTIBLE SUBORDINATED NOTES" means the Company's 7% Convertible
Subordinated Notes issued pursuant to an indenture dated as of June 12, 1996,
between the Company and The Chase Manhattan Bank (formerly known as Chemical
Bank), as trustee.
"CREDIT FACILITY" means the Facilities Agreement, dated October 17,
1997, between NTL (UK) Group Inc., as principal guarantor, Chase Manhattan plc,
as arranger, Chase Manhattan International
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<PAGE> 10
Limited, as agent and security trustee and the Chase Manhattan Bank as issuer,
as such Facilities Agreement may be supplemented, amended, restated, modified,
renewed, refunded, replaced or refinanced, in whole or in part, from time to
time in an aggregate outstanding principal amount not to exceed the greater of
(i) (pound sterling) 555 million and (ii) the amount of the aggregate
commitments thereunder as the same may be increased after March 13, 1998 as
contemplated by the Facilities Agreement as amended or supplemented to March 13,
1998, but in no event greater than (pound sterling) 875 million, less in each
case, the aggregate amount of all Net Proceeds of Asset Sales that have been
applied to permanently reduce Indebtedness under the Credit Facility pursuant
Section 4.10 hereof. Indebtedness that may otherwise be incurred under this
Indenture may, but need not, be incurred under the Credit Facility without
regard to the limit set forth in the preceding sentence. Indebtedness
outstanding under the Credit Facility on the date hereof shall be deemed to have
been incurred on such date in reliance on the exception provided by Section
4.08(b)(i).
"CUMULATIVE EBITDA" means the cumulative EBITDA of the Company from and
after the Issuance Date to the end of the fiscal quarter immediately preceding
the date of a proposed Restricted Payment, or, if such cumulative EBITDA for
such period is negative, minus the amount by which such cumulative EBITDA is
less than zero; provided, however, that EBITDA of Non-Restricted Subsidiaries
shall not be included.
"CUMULATIVE INTEREST EXPENSE" means the aggregate amount of
Consolidated Interest Expense paid, accrued or scheduled to be paid or accrued
by the Company from the Issuance Date to the end of the fiscal quarter
immediately preceding a proposed Restricted Payment, determined on a
consolidated basis in accordance with GAAP.
"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.
"DEPOSITARY" shall mean The Depository Trust Company, its nominees and
their respective successors.
"DISQUALIFIED STOCK" means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
on which the Notes mature.
"EBITDA" means, for any Person, for any period, an amount equal to (A)
the sum of (i) Consolidated Net Income for such period (exclusive of any gain or
loss realized in such period upon an Asset Sale), plus (ii) the provision for
taxes for such period based on income or profits to the extent such income or
profits were included in computing Consolidated Net Income and any provision for
taxes utilized in computing net loss under clause (i) hereof, plus (iii)
Consolidated Interest Expense for such period, plus (iv) depreciation for such
period on a consolidated basis, plus (v) amortization of intangibles for such
period on a consolidated basis, plus (vi) any other non-cash item reducing
Consolidated Net Income for such period (excluding any such non-cash item to the
extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a prior
period), minus (B) all non-cash items increasing Consolidated Net Income for
such period, all for such Person and its Subsidiaries determined in accordance
with GAAP consistently applied.
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<PAGE> 11
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any Indebtedness that is
convertible into, or exchangeable for Capital Stock).
"EUROPEAN UNION MEMBER" means any country that is or becomes a member
of the European Union or any successor organization thereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE RATE CONTRACT" means, with respect to any Person, any
currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance and
other agreements or arrangements, or combination thereof, the principal purpose
of which is to provide protection against fluctuations in currency exchange
rates. An Exchange Rate Contract may also include an Interest Rate Agreement.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries in existence on the Issuance Date, until such amounts are repaid,
including, without limitation, the Existing Notes.
"EXISTING NOTES" means the Old Notes and the Convertible Subordinated
Notes.
"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 approved by a significant segment of the accounting profession,
which are in effect on the Issuance Date and are applied on a consistent basis.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"HOLDER" means a Person in whose name a Note is registered in the
register referred to in Section 2.03.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or representing the
balance deferred and unpaid of the purchase price of any property (including
pursuant to capital leases and sale-and-leaseback transactions) or representing
any hedging obligations under an Exchange Rate Contract or an Interest Rate
Agreement, except any such balance that constitutes an accrued expense or trade
payable, if and to the extent any of the foregoing indebtedness (other than
obligations under an Exchange Rate Contract or an Interest Rate Agreement) would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, and also includes, to the extent not otherwise included, the
Guarantee of items which would be included within this definition. The amount of
any Indebtedness outstanding as of any date shall be the accreted value thereof,
in the case of any Indebtedness issued with original issue discount
"INDENTURE" means this Indenture, as amended from time to time.
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<PAGE> 12
"INITIAL PURCHASERS" means Morgan Stanley & Co. Incorporated, Chase
Securities Inc., Donaldson, Lufkin & Jenrette Securities Corporation and
Goldman, Sachs & Co.
"INTEREST RATE AGREEMENT" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
similar agreement, the principal purpose of which is to protect the party
indicated therein against fluctuations in interest rates.
"INVESTMENT GRADE" means BBB- or higher by S&P or Baa3 or higher by
Moody's or the equivalent of such ratings by S&P or Moody's. In the event that
the Company shall be permitted to select any other Rating Agency, the equivalent
of such ratings by such Rating Agency shall be used.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of loans
(including Guarantees), advances or capital contributions (excluding commission,
travel and similar advances and loans, joint property ownership and other
arrangements, in each case, made to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities and all other items that are
or would be classified as investments on a balance sheet prepared in accordance
with GAAP.
"ISSUANCE DATE" means the date on which the Notes are first
authenticated and issued.
"LICENSE" means any license issued or awarded pursuant to the
Broadcasting Act 1990, the Cable and Broadcasting Act 1984, the
Telecommunications Act 1984 or the Wireless Telegraphy Act 1948 (in each case,
as such Acts may, from time to time, be amended, modified or re-enacted) (or
equivalent statutes of any jurisdiction) to operate or own a Cable Business.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent or successor statutes) of any
jurisdiction).
"MATERIAL LICENSE" means a License held by the Company or any of its
Subsidiaries which License at the time of determination covers a number of Net
Households which equals or exceeds 5% of the aggregate number of Net Households
covered by all of the Licenses held by the Company and its Subsidiaries at such
time.
"MATERIAL SUBSIDIARY" means (i) NTL UK Group, Inc. (formerly known as
OCOM Sub II, Inc.), NTL Investment Holdings Limited, NTL Group Limited, CableTel
Surrey Limited, CableTel Cardiff Limited, CableTel Glasgow, CableTel Newport and
CableTel Kirklees and (ii) any other Subsidiary of the Company which is a
"significant subsidiary" as defined in Rule 1-02(v) of Regulation S-X under the
Securities Act and the Exchange Act (as such Regulation is in effect on the date
hereof).
"MONETIZE" means a strategy with respect to Equity Interests that
generates an amount of cash equal to the fair value of such Equity Interests.
"MOODY'S" means Moody's Investors Service, Inc. and its successors.
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<PAGE> 13
"NET HOUSEHOLDS" means the product of (i) the number of households
covered by a License in the United Kingdom and (ii) the percentage of the entity
holding such License which is owned directly or indirectly by the Company.
"NET INCOME" means, with respect to any Person for a specific period,
the net income (loss) of such Person during such period, determined in
accordance with GAAP, excluding, however, any gain (but not loss) during such
period, together with any related provision for taxes on such gain (but not
loss), realized during such period in connection with any Asset Sale (including,
without limitation, dispositions pursuant to sale-and-leaseback transactions),
and excluding any extraordinary gain (but not loss) during such period, together
with any related provision for taxes on such extraordinary gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale, net of the
direct costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets the
subject of such Asset Sale and any reserve for adjustment in respect of the sale
price of such asset or assets.
"NON-CONTROLLED SUBSIDIARY" means an entity which is not a Cable
Controlled Subsidiary.
"NON-RECOURSE DEBT" means Indebtedness or that portion of Indebtedness
as to which none of the Company, nor any Restricted Subsidiary: (i) provides
credit support (including any undertaking, agreement or instrument which would
constitute Indebtedness); (ii) is directly or indirectly liable; or (iii)
constitutes the lender.
"NON-RESTRICTED SUBSIDIARY" means (A) a Subsidiary that (a) at the time
of its designation by the Board of Directors as a Non-Restricted Subsidiary has
not acquired any assets (other than as specifically permitted by clause (e) of
"Permitted Investments" or Section 4.09 hereof), at any previous time, directly
or indirectly from the Company or any of its Restricted Subsidiaries, (b) has no
Indebtedness other than Non-Recourse Debt and (c) that at the time of such
designation, after giving pro forma effect to such designation, the ratio of
Indebtedness to Annualized Pro Forma EBITDA of the Company is equal to or less
than the ratio of Indebtedness to Annualized Pro Forma EBITDA of the Company
immediately preceding such designation, provided, however, that if the ratio of
Indebtedness to Annualized Pro Forma EBITDA of the Company immediately preceding
such designation is 6:1 or less, then the ratio of Indebtedness to Annualized
Pro Forma EBITDA of the Company may be 0.5 greater than such ratio immediately
preceding such designation; (B) any Subsidiary which (a) has been acquired or
capitalized out of or by Equity Interests (other than Disqualified Stock) of the
Company or Capital Stock Sale Proceeds therefrom, (b) has no Indebtedness other
than Non-Recourse Debt and (c) is designated as a Non-Restricted Subsidiary by
the Board of Directors or is merged, amalgamated or consolidated with or into,
or its assets or capital stock is to be transferred to, a Non-Restricted
Subsidiary; or (C) any Subsidiary of a Non-Restricted Subsidiary.
"NOTES" has the meaning set forth in the preamble hereto.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
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<PAGE> 14
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers, one
of whom must be the Chairman of the Board, the President, the Treasurer or a
Vice President of the Company. See Sections 10.04 and 10.05 hereof.
"OLD NOTES" means the 12 3/4% Notes, the 11 1/2% Deferred Coupon Notes,
the 10 3/4% Notes, the 10% Notes, the 9 3/4% Notes and the 9 1/2% Notes.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee. See Sections 10.04 and 10.05 hereof.
"OTHER QUALIFIED NOTES" means any outstanding senior indebtedness of
the Company issued pursuant to an indenture having a provision substantially
similar to Section 4.10 hereof (including, without limitation, the 12 3/4%
Notes, the 11 1/2% Deferred Coupon Notes, the 10 3/4% Notes, the 10% Notes, the
9 3/4% Notes and the 9 1/2% Notes).
"PERMITTED ACQUIRED DEBT" means, with respect to any Acquired Person
(including, for this purpose, any Non-Restricted Subsidiary at the time such
Non-Restricted Subsidiary becomes a Restricted Subsidiary), Acquired Debt of
such Acquired Person and its Subsidiaries in an amount (determined on a
consolidated basis) not exceeding the sum of (x) amount of the gross book value
of property, plant and equipment of the Acquired Person and its Subsidiaries as
set forth on the most recent consolidated balance sheet of the Acquired Person
(which may be unaudited) prior to the date it becomes an Acquired Person and (y)
the aggregate amount of any Cash Equivalents held by such Acquired Person at the
time it becomes an Acquired Person.
"PERMITTED CURRENCY" means the lawful currency of the United States or
a European Union member.
"PERMITTED DESIGNEE" means (i) a spouse or a child of a Permitted
Holder, (ii) trusts for the benefit of a Permitted Holder or a spouse or child
of a Permitted Holder, (iii) in the event of the death or incompetence of a
Permitted Holder, his estate, heirs, executor, administrator, committee or other
personal representative or (iv) any Person so long as a Permitted Holder owns at
least 50% of the voting power of all classes of the voting stock of such Person.
"PERMITTED HOLDERS" means George S. Blumenthal, J. Barclay Knapp and
their Permitted Designees.
"PERMITTED INVESTMENTS" means (a) any Investments in the Company or in
a Cable Controlled Property or in a Qualified Subsidiary (including, without
limitation, (i) Guarantees of Indebtedness of the Company, a Cable Controlled
Subsidiary or a Qualified Subsidiary, (ii) Liens securing such Indebtedness or
Guarantees or (iii) the payment of any balance deferred and unpaid of the
purchase price of any Qualified Subsidiary); (b) any Investments in Cash
Equivalents; (c) Investments by the Company in Indebtedness of a counter-party
to an Exchange Rate Contract for hedging a Permitted Currency exchange risk that
are made, for purposes other than speculation, in connection with such contract
to hedge not more than the aggregate principal amount of the Indebtedness being
hedged (or, in the case of Indebtedness issued with original issue discount,
based on the amounts payable after the amortization of such discount); (d)
Investments by the Company or any Subsidiary of the Company in a Person, if as a
result of such Investment (i) such Person becomes a Cable Controlled Subsidiary
or (ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets
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<PAGE> 15
to, or is liquidated into, the Company or a Wholly Owned Subsidiary of the
Company; and (e) any issuance, transfer or other conveyance of Equity Interests
(other than Disqualified Stock) in the Company (or any Capital Stock Sale
Proceeds therefrom) to a Subsidiary of the Company.
"PERMITTED LIENS" means (a) Liens in favor of the Company; (b) Liens on
property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company; provided, that
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not secure any property or assets of the Company or any of
its Subsidiaries other than the property or assets subject to the Liens prior to
such merger or consolidation; (c) liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of obligations not more than 60
days past due or are being contested in good faith and by appropriate
proceedings; (d) Liens existing on the Issuance Date; (e) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided, that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor and (f) easements, rights of way, restrictions and other
similar easements, licenses, restrictions on the use of properties or minor
imperfections of title that, in the aggregate, are not material in amount, and
do not in any case materially detract from the properties subject thereto or
interfere with the ordinary conduct of the business of the Company or its
Restricted Subsidiaries.
"PERMITTED NON-CONTROLLED ASSETS" means Equity Interests in any Person
primarily engaged, directly or indirectly, in one or more Cable Businesses if
such Equity Interests (x) were acquired by the Company or any of its Restricted
Subsidiaries in connection with any Asset Sale or any Investment otherwise
permitted under the terms of the Indenture and (y) to the extent that, after
giving pro forma effect to the acquisition thereof by the Company or any of its
Restricted Subsidiaries, Adjusted Total Controlled Assets is greater than 80% of
Adjusted Total Assets based on the most recent consolidated balance sheet of the
Company.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PREFERRED STOCK" means the 13% Senior Redeemable Exchangeable
Preferred Stock of the Company with an original aggregate liquidation preference
of $100,000,000.
"PRO FORMA EBITDA" means for any Person, for any period, the EBITDA of
such Person as determined on a consolidated basis for such Person and its
Subsidiaries in accordance with GAAP after giving effect to the following: (i)
if, during or after such period, such Person or any of its Subsidiaries shall
have made any Asset Sale, Pro Forma EBITDA of such Person and its Subsidiaries
for such period shall be reduced by an amount equal to the Pro Forma EBITDA (if
positive) directly attributable to the assets which are the subject of such
Asset Sale for the period or increased by an amount equal to the Pro Forma
EBITDA (if negative) directly attributable thereto for such period and (ii) if,
during or after such period, such Person or any of its Subsidiaries completes an
acquisition of any Person or business which immediately after such acquisition
is a Subsidiary of such Person or whose assets are held directly by such Person
or a Subsidiary of such Person, Pro Forma EBITDA shall be computed so as to give
pro forma effect to the acquisition of such Person or business (without giving
effect to clause (iii) of the definition of Consolidated Net Income); and
provided further that, with respect to the Company, all of the foregoing
references to "Subsidiary" or "Subsidiaries" shall be deemed to refer only to a
"Restricted Subsidiary" or "Restricted Subsidiaries" of the Company.
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<PAGE> 16
"PURCHASE AGREEMENT" means the Purchase Agreement, dated as of October
26, 1998, between the Company and the Initial Purchasers.
"QUALIFIED SUBSIDIARY" means a Wholly Owned Subsidiary, or an entity
that will become a Wholly Owned Subsidiary after giving effect to the
transaction being considered, that at the time of and after giving effect to the
consummation of the transaction under consideration, (i) is a Cable Business or
holds only Cable Assets, (ii) has no Indebtedness (other than Indebtedness being
incurred to consummate such transaction) and (iii) has no encumbrances or
restrictions (other than such encumbrances or restrictions imposed or permitted
by this Indenture, the indentures governing the Old Notes or any other
instrument governing unsecured indebtedness of the Company which is pari passu
with the Notes) on its ability to pay dividends or make any other distributions
to the Company or any of its Subsidiaries.
"RATING AGENCIES" means (i) S&P, (ii) Moody's and (iii) if S&P or
Moody's or both shall not make a rating of the Notes publicly available, a
nationally recognized securities rating agency or agencies, as the case may be,
selected by the Company, which shall be substituted for S&P or Moody's or both,
as the case may be.
"RATING CATEGORY" means (i) with respect to S&P, any of the following
categories: BB, B, CCC, CC, C and D (or equivalent successor categories), (ii)
with respect to Moody's, any of the following categories: Ba, B, Caa, Ca, C and
D (or equivalent successor categories) and (iii) the equivalent of any such
category of S&P or Moody's used by another Rating Agency. In determining whether
the rating of the Notes has decreased by one or more gradations, gradations
within Rating Categories (+ and - for S&P; 1, 2 and 3 for Moody's; or the
equivalent gradations for another Rating Agency) shall be taken into account
(e.g., with respect to S&P, a decline in a rating from BB to BB-, as well as
from BB- to B+, will constitute a decrease of one gradation).
"RATING DATE" means that date which is 90 days prior to the earlier of
(x) a Change of Control and (y) public notice of the occurrence of a Change of
Control or of the intention by the Company or any Permitted Holder to effect a
Change of Control.
"RATINGS DECLINE" means the occurrence of any of the following events
on, or within six months after, the date of public notice of the occurrence of a
Change of Control or of the intention of the Company or any Person to effect a
Change of Control (which period shall be extended so long as the rating of any
of the Company's debt securities is under publicly announced consideration for
possible downgrade by any of the Rating Agencies): (a) in the event that any of
the Company's debt securities are rated by both of the Rating Agencies on the
Rating Date as Investment Grade, the rating of such securities by either of the
Rating Agencies shall be below Investment Grade, (b) in the event that any of
the Company's debt securities are rated by either, but not both, of the Rating
Agencies on the Rating Date as Investment Grade, the rating of such securities
by both of the Rating Agencies shall be below Investment Grade, or (c) in the
event any of the Company's debt securities are rated below Investment Grade by
both of the Rating Agencies on the Rating Date, the rating of such securities by
either Rating Agency shall be decreased by one or more gradations (including
gradations within Rating Categories as well as between Rating Categories).
"REDEEMABLE DIVIDEND" means, for any dividend with regard to
Disqualified Stock, the quotient of the dividend divided by the difference
between one and the maximum statutory federal income tax rate (expressed as a
decimal number between 1 and 0) then applicable to the issuer of such
Disqualified Stock.
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<PAGE> 17
"REGISTERED EXCHANGE OFFER" has the meaning set forth in the
Registration Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
relating to the Notes, dated November 2, 1998, between the Company and the
Initial Purchasers party thereto.
"REPLACEMENT ASSETS" means (w) Cable Assets, (x) Equity Interests of
any Person engaged, directly or indirectly, primarily in a Cable Business, which
Person is or will become on the date of acquisition thereof a Restricted
Subsidiary as a result of the Company's acquiring such Equity Interests, (y)
Permitted Non-Controlled Assets or (z) any combination of the foregoing.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company which is
not a Non-Restricted Subsidiary.
"RESTRICTED SUBSIDIARY PREFERRED STOCK DIVIDEND" means, for any
dividend with regard to preferred stock of a Restricted Subsidiary, the quotient
of the dividend divided by the difference between one and the maximum statutory
federal income tax rate (expressed as a decimal number between 1 and 0) then
applicable to the issuer of such preferred stock.
"S&P" means Standard & Poor's Ratings Group and its successors.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBORDINATED DEBENTURES" means the debentures exchangeable by the
Company for the Preferred Stock in accordance with the Certificate of
Designations therefor.
"SUBSIDIARY" 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 or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (Sections)
77aaa-77bbbb) as in effect on the date of execution of this Indenture.
"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.
"TRUST OFFICER" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the
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<PAGE> 18
nearest one-twelfth) that will elapse between such date and the making of such
payment, by (b) the then outstanding principal amount of such Indebtedness.
"WHOLLY OWNED SUBSIDIARY" means, at any time, a Restricted Subsidiary
all of the Capital Stock of which (except directors' qualifying shares) is at
the time owned directly or indirectly by the Company.
SECTION 1.02 OTHER DEFINITIONS.
<TABLE>
<CAPTION>
DEFINED
TERM IN SECTION
- ---- ----------
<S> <C>
"ADDITIONAL AMOUNTS".......................................... 4.14
"AFFILIATE TRANSACTION"....................................... 4.11
"AGENT MEMBER"................................................ 2.01
"ASSET SALE OFFER"............................................ 4.10
"BANKRUPTCY LAW".............................................. 6.01
"CEDEL"....................................................... 2.01
"CHANGE OF CONTROL PAYMENT"................................... 4.13
"COMMENCEMENT DATE"........................................... 3.09
"CUSTODIAN"................................................... 6.01
"DEFEASANCE".................................................. 8.02
"EUROCLEAR"................................................... 2.01
"EVENT OF DEFAULT"............................................ 6.01
"EXCESS PROCEEDS"............................................. 4.10
"GLOBAL NOTE"................................................. 2.01
"INCUR"....................................................... 4.08
"LEGAL HOLIDAY"............................................... 10.08
"OFFER AMOUNT"................................................ 3.09
"OFFICER"..................................................... 10.11
"PAYING AGENT"................................................ 2.03
"PAYMENT DEFAULT"............................................. 6.01
"PURCHASE DATE"............................................... 3.09
"PURCHASE OFFER".............................................. 4.13
"QIBS"........................................................ 2.01
"REFINANCING INDEBTEDNESS".................................... 4.08
"REGULATION S"................................................ 2.01
"REGULATION S GLOBAL NOTE" ................................... 2.01
"REGISTRAR"................................................... 2.03
"RESTRICTED NOTES"............................................ 2.01
"RESTRICTED PAYMENTS"......................................... 4.09
"RULE 144A"................................................... 2.01
"RULE 144A GLOBAL NOTE"....................................... 2.01
"TENDER PERIOD"............................................... 3.09
"U.S. GOVERNMENT OBLIGATIONS"................................. 8.02
</TABLE>
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
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<PAGE> 19
The following TIA terms used in this Indenture have the following
meanings:
"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 or any other obligor on the
Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP consistently applied;
(c) references to "GAAP" shall mean GAAP in effect as of the
time when and for the period as to which such accounting principles are
to be applied;
(d) "OR" is not exclusive;
(e) words in the singular include the plural, and in the
plural include the singular;
(f) provisions apply to successive events and transactions;
(g) 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; and
(h) a reference to "$" or U.S. Dollars is to United States
dollars and a reference to "L" is to British pounds sterling.
ARTICLE II.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) General.
The Initial Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto, which is
hereby incorporated by reference and expressly made a part of this
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<PAGE> 20
Indenture. The Exchange Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit B hereto, which is hereby
incorporated by reference and expressly made a part of this Indenture. The Notes
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or usage (provided
that any such notation, legend or endorsement is in a form acceptable to the
Company). The Company shall furnish any such legend not contained in Exhibit A
or Exhibit B to the Trustee in writing. 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 of the Notes set forth in Exhibit A
and Exhibit B are 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 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.
The Initial Notes are being offered and sold by the Company
pursuant to the Purchase Agreement.
Initial Notes offered and sold in reliance on Regulation S
under the Securities Act ("REGULATION S"), as provided in the Purchase
Agreement, shall be issued initially in the form of one or more permanent Global
Notes in definitive, fully registered form without interest coupons with the
Global Notes Legend and Restricted Notes Legend set forth in Exhibit A hereto
(the "REGULATION S GLOBAL NOTE"), which shall be deposited on behalf of the
purchasers of the Initial Notes represented thereby with the Trustee, at its New
York office, as custodian, for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of the Euroclear System ("EUROCLEAR") or Cedel Bank,
societe anonyme ("CEDEL"), duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the
Regulation S Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its nominee
as hereinafter provided.
Initial Notes offered and sold to Qualified Institutional
Buyers ("QIBS") in reliance on Rule 144A under the Securities Act ("RULE 144A"),
as provided in the Purchase Agreement, shall be issued initially in the form of
one or more permanent Global Notes in definitive, fully registered form without
interest coupons with the Global Notes Legend and Restricted Notes Legend set
forth in Exhibit A hereto ("RULE 144A GLOBAL NOTE"), which shall be deposited on
behalf of the purchasers of the Initial Notes represented thereby with the
Trustee, at its New York office, as custodian for the Depositary, and registered
in the name of the Depositary or a nominee of the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Rule 144A Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee as hereinafter provided.
Upon consummation of the Registered Exchange Offer, the
Exchange Notes may be issued in the form of one or more permanent Global Notes
in definitive, fully registered form without interest coupons with the Global
Notes Legend but not the Restricted Notes Legend set forth in Exhibit A hereto,
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of such Global Notes may from time to
time be increased or decreased by adjustments made on the records of the Trustee
and the Depositary or its nominee as hereinafter provided.
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<PAGE> 21
(c) Book-Entry Provisions.
This Section 2.01(c) shall apply only to the Regulation S
Global Note, the Rule 144A Global Note and the Exchange Notes issued in the form
of one or more permanent Global Notes (collectively, the "GLOBAL NOTES")
deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(c), authenticate and deliver initially one or more Global
Notes that (a) shall be registered in the name of the Depositary for such Global
Note or Global Notes or the nominee of such Depositary and (b) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions or held by the Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("AGENT
MEMBERS") shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depositary or by the Trustee as the custodian
of the Depositary or under such Global Note, and the Depositary may be treated
by the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of
an owner of a beneficial interest in any Global Note.
(d) Certificated Notes.
In addition to the provisions of Section 2.10, owners of
beneficial interests in Global Notes may, upon request to the Trustee, receive a
certificated Initial Note, which certificated Initial Note shall bear the
Restricted Notes Legend set forth in Exhibit A hereto ("RESTRICTED NOTES").
After a transfer of any Initial Notes during the period of the
effectiveness of a Shelf Registration Statement with respect to the Initial
Notes and pursuant thereto, all requirements for Restricted Notes Legends on
such Initial Note will cease to apply, and a certificated Initial Note without a
Restricted Notes Legend will be available to the Holder of such Initial Notes.
Upon the consummation of a Registered Exchange Offer with respect to the Initial
Notes pursuant to which Holders of Initial Notes are offered Exchange Notes in
exchange for their Initial Notes, certificated Initial Notes with the Restricted
Notes Legend set forth in Exhibit A hereto will be available to Holders of such
Initial Notes that do not exchange their Initial Notes, and Exchange Notes in
certificated form without the Restricted Notes Legend set forth in Exhibit A
hereto will be available to Holders that exchange such Initial Notes in such
Registered Exchange Offer.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time the Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of an authorized officer of the Trustee. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
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<PAGE> 22
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate (1) Initial Notes for original issue up to an aggregate
principal amount stated in paragraph 6 of the Initial Notes and (2) Exchange
Notes for issue only in a Registered Exchange Offer, pursuant to the
Registration Rights Agreement, in exchange for Initial Notes for a like
principal amount. The aggregate principal amount of Notes outstanding at any
time shall not exceed the amount set forth herein, except as provided in Section
2.07.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders, the
Company or an Affiliate.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain in the Borough of Manhattan, City of New
York, State of New York and, if and as long as the Notes are listed on the
Luxembourg Stock Exchange, in Luxembourg, (i) offices or agencies where the
Notes may be presented for registration of transfer or for exchange
("REGISTRAR") and (ii) offices or agencies where the Notes may be presented for
payment ("PAYING AGENT"). The Company initially designates the Trustee at its
corporate trust offices in the Borough of Manhattan, City of New York, State of
New York to act as principal Registrar and Paying Agent and Chase Manhattan Bank
Luxembourg S.A. to act as a Registrar and Paying Agent. The principal 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 in such other locations as it shall determine. 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 prior
notice to any Holder. The Company shall notify the Trustee of the name and
address of any Agent not a party to this Indenture. 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 Affiliates may act as Paying Agent
or Registrar.
SECTION 2.04. 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 payment of
principal or interest on the Notes, and will notify the Trustee of any default
by the Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee
and to account for any money disbursed by it. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or an Affiliate
of the Company) shall have no further liability for the money. If the Company or
an Affiliate of the Company 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.
SECTION 2.05. 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
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before each interest payment date and at such other times as the
Trustee
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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 Holders.
SECTION 2.06. TRANSFER AND EXCHANGE.
Where Notes are presented to the Registrar or a co-registrar with a
request to register a transfer or to exchange them for an equal principal amount
of Notes of other denominations, the Registrar shall register the transfer or
make the exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Company shall issue and the
Trustee shall authenticate Notes at the Registrar's request. No service charge
shall be made for any registration of transfer or exchange (except as otherwise
expressly permitted herein), but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer tax or similar governmental
charge payable upon exchanges pursuant to Sections 2.10, 3.06 or 9.05 hereof).
The Company shall not be required (i) to issue, register the transfer
of or exchange any Note for a period beginning at the opening of business 15
days before the day of any selection of Notes to be redeemed under Section 3.02
hereof and ending at the close of business on the day of selection, or (ii) to
register the transfer, or exchange, of any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part.
(a) Notwithstanding any provision to the contrary herein, so
long as a Global Note remains outstanding and is held by or on behalf
of the Depositary, transfers of a Global Note, in whole or in part, or
of any beneficial interest therein, shall only be made in accordance
with Section 2.01(b) and this Section 2.06(a); provided, however, that
beneficial interests in a Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in the same
Global Note in accordance with the transfer restrictions set forth in
the Restricted Notes Legend and under the heading "Transfer
Restrictions" in the Company's Offering Memorandum dated October 26,
1998.
(i) Except for transfers or exchanges made in accordance with
clauses (ii) through (iv) of this Section 2.06(a), transfers of a
Global Note shall be limited to transfers of such Global Note in whole,
but not in part, to nominees of the Depositary or to a successor of the
Depositary or such successor's nominee.
(ii) Rule 144A Global Note to Regulation S Global Note. If an
owner of a beneficial interest in the Rule 144A Global Note deposited
with the Depositary or the Trustee as custodian for the Depositary
wishes at any time to transfer its interest in such Rule 144A Global
Note to a Person who is required to take delivery thereof in the form
of an interest in the Regulation S Global Note, such owner may, subject
to the rules and procedures of the Depositary, exchange or cause the
exchange of such interest for an equivalent beneficial interest in the
Regulation S Global Notes. Upon receipt by the principal Registrar of
(1) instructions given in accordance with the Depositary's procedures
from an Agent Member directing the principal Registrar to credit or
cause to be credited a beneficial interest in the Regulation S Global
Note in an amount equal to the beneficial interest in the Rule 144A
Global Note to be exchanged, (2) a written order given in accordance
with the Depositary's procedures containing information regarding the
participant account of the Depositary and the Euroclear or Cedel
account to be credited with such increase and (3) a certificate in the
form of Exhibit C attached hereto
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<PAGE> 24
given by the Holder of such beneficial interest, then the principal
Registrar shall instruct the Depositary to reduce or cause to be
reduced the principal amount of the Rule 144A Global Note and to
increase or cause to be increased the principal amount of the
Regulation S Global Note by the aggregate principal amount of the
beneficial interest in the Rule 144A Global Note equal to the
beneficial interest in the Regulation S Global Note to be exchanged or
transferred, to credit or cause to be credited to the account of the
Person specified in such instructions a beneficial Interest in the
Regulation S Global Note equal to the reduction in the principal amount
of the Rule 144A Global Note and to debit or cause to be debited from
the account of the Person making such exchange or transfer the
beneficial interest in the Rule 144A Global Note that is being
exchanged or transferred.
(iii) Regulation S Global Note to Rule 144A Global Note. If an
owner of a beneficial interest in the Regulation S Global Note
deposited with the Depositary or with the Trustee as custodian for the
Depositary wishes at any time to transfer its interest in such
Regulation S Global Note to a Person who is required to take delivery
thereof in the form of an interest in the Rule 144A Global Note, such
Holder may, subject to the rules and procedures of Euroclear or Cedel,
as the case may be, and the Depositary, exchange or cause the exchange
of such interest for an equivalent beneficial interest in the Rule 144A
Global Note. Upon receipt by the principal Registrar of (1)
instructions from Euroclear or Cedel, if applicable, and the
Depositary, directing the principal Registrar to credit or cause to be
credited a beneficial interest in the Rule 144A Global Note equal to
the beneficial interest in the Regulation S Global Note to be exchanged
or transferred, such instructions to contain information regarding the
participant account with the Depositary to be credited with such
increase, (2) a written order given in accordance with the Depositary's
procedures containing information regarding the participant account of
the Depositary and (3) a certificate in the form of Exhibit D attached
hereto given by the owner of such beneficial interest, then Euroclear
or Cedel or the principal Registrar, as the case may be, will instruct
the Depositary to reduce or cause to be reduced the Regulation S Global
Note and to increase or cause to be increased the principal amount of
the Rule 144A Global Note by the aggregate principal amount of the
beneficial interest in the Regulation S Global Note to be exchanged or
transferred, and the principal Registrar shall instruct the Depositary,
concurrently with such reduction, to credit or cause to be credited to
the account of the Person specified in such instructions a beneficial
interest in the Rule 144A Global Note equal to the reduction in the
principal amount of the Regulation S Global Note and to debit or cause
to be debited from the account of the Person making such exchange or
transfer the beneficial interest in the Regulation S Global Note that
is being exchanged or transferred.
(iv) Global Note to Restricted Note. If an owner of a
beneficial interest in a Global Note deposited with the Depositary or
with the Trustee as custodian for the Depositary wishes at any time to
transfer its interest in such Global Note to a Person who is required
to take delivery thereof in the form of a Restricted Note, such owner
may, subject to the rules and procedures of Euroclear or Cedel, if
applicable, and the Depositary, cause the exchange of such interest for
one or more Restricted Notes of any authorized denomination or
denominations and of the same aggregate principal amount. Upon receipt
by the principal Registrar of (1) instructions from Euroclear or Cedel,
if applicable, and the Depositary directing the principal Registrar to
authenticate and
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deliver one or more Restricted Notes of the same aggregate principal
amount as the beneficial interest in the Global Note to be exchanged,
such instructions to contain the name or names of the designated
transferee or transferees, the authorized denomination or denominations
of the Restricted Notes to be so issued and appropriate delivery
instructions, (2) a certificate in the form of Exhibit E attached
hereto given by the owner of such beneficial interest to the effect set
forth therein, (3) a certificate in the form of Exhibit F attached
hereto given by the Person acquiring the Restricted Notes for which
such interest is being exchanged, to the effect set forth therein, and
(4) such other certifications, legal opinions or other information as
the Company may reasonably require to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act, then
Euroclear or Cedel, if applicable, or the principal Registrar, as the
case may be, will instruct the Depositary to reduce or cause to be
reduced such Global Note by the aggregate principal amount of the
beneficial interest therein to be exchanged and to debit or cause to be
debited from the account of the Person making such transfer the
beneficial interest in the Global Note that is being transferred, and
concurrently with such reduction and debit the Company shall execute,
and the Trustee shall authenticate and deliver, one or more Restricted
Notes of the same aggregate principal amount in accordance with the
instructions referred to above.
(v) Restricted Note to Restricted Note. If a Holder of a
Restricted Note wishes at any time to transfer such Restricted Note to
a Person who is required to take delivery thereof in the form of a
Restricted Note, such Holder may, subject to the restrictions on
transfer set forth herein and in such Restricted Note, cause the
exchange of such Restricted Note for one or more Restricted Notes of
any authorized denomination or denominations and of the same aggregate
principal amount. Upon receipt by the principal Registrar of (1) such
Restricted Note, duly endorsed as provided herein, (2) instructions
from such Holder directing the principal Registrar to authenticate and
deliver one or more Restricted Notes of the same aggregate principal
amount as the Restricted Note to be exchanged, such instructions to
contain the name or authorized denomination or denominations of the
Restricted Notes to be so issued and appropriate delivery instructions,
(3) a certificate from the Holder of the Restricted Note to be
exchanged in the form of Exhibit E attached hereto, (4) a certificate
in the form of Exhibit F attached hereto given by the Person acquiring
the Restricted Notes for which such interest is being exchanged, to the
effect set forth therein, and (5) such other certifications, legal
opinions or other information as the Company may reasonably require to
confirm that such transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of
the Securities Act, then the Registrar shall cancel or cause to be
canceled such Restricted Note and concurrently therewith, the Company
shall execute, and the Trustee shall authenticate and deliver, one or
more Restricted Notes of the same aggregate principal amount, in
accordance with the instructions referred to above.
(vi) Other Exchanges. In the event that a beneficial interest
in a Global Note is exchanged for Notes in definitive registered form
pursuant to Section 2.10, prior to the effectiveness of a Shelf
Registration Statement with respect to such Notes, such Notes may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of clauses (ii) through (v) above
(including the
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certification requirements intended to ensure that such transfers
comply with Rule 144A, Rule 144, Regulation S or any other available
exemption from registration, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(vii) Distribution Compliance Period. Prior to the termination
of the "DISTRIBUTION COMPLIANCE PERIOD" (as defined in Regulation S)
with respect to the issuance of the Notes, transfers of interests in
the Regulation S Global Note to "U.S. PERSONS" (as defined in
Regulation S) shall be limited to transfers to QIBs made pursuant to
the provisions of Sections 2.06(a)(iii). The Company shall advise the
Trustee as to the termination of the distribution compliance period and
the Trustee may rely conclusively thereon.
(viii) Regulation S Global Note to Certificated Note. Upon
proper presentment to the Trustee of a certificate substantially in the
form of Exhibit G hereto and subject to the rules and procedures of the
Depositary or its direct or indirect participants, including Euroclear
and Cedel, an interest in a Regulation S Global Note may be exchanged
for a certificated Restricted Note. At any time following consummation
of the Exchange Offer pursuant to the Registration Rights Agreement
(provided that such consummation is after the expiration of the 40-day
distribution compliance period provided for in Rule 903 of Regulation
S), such exchange may be made without presentment of the certificate in
substantially the form of Exhibit G by any Holder who certifies to the
Trustee that such Holder would have been able to participate in such
Exchange Offer and resell Exchange Notes without delivery of a
prospectus under applicable rules and interpretations of the
Commission, and such certificated Note shall be free from any
restriction on transfer (other than such as are solely attributable to
any holder's status).
(b) Except in connection with a Registered Exchange Offer or a
Shelf Registration Statement contemplated by and in accordance with the
terms of the Registration Rights Agreement, if Initial Notes are issued
upon the transfer, exchange or replacement of Initial Notes bearing the
Restricted Securities Legend set forth in Exhibit A hereto, or if a
request is made to remove such Restricted Notes Legend on Initial
Notes, the Initial Notes so issued shall bear the Restricted Notes
Legend, or the Restricted Notes Legend shall not be removed, as the
case may be, unless there is delivered to the Company such satisfactory
evidence, which may include an opinion of counsel licensed to practice
law in the State of New York, as may be reasonably required by the
Company, that neither the legend nor the restrictions on transfer set
forth therein are required to ensure that transfers thereof comply with
the provisions of Rule 144A, Rule 144, Regulation S or any other
available exemption from registration under the Securities Act or, with
respect to Restricted Notes, that such Notes are not "restricted"
within the meaning of Rule 144 under the Securities Act. Upon provision
of such satisfactory evidence, the Trustee, at the direction of the
Company, shall authenticate and deliver Initial Notes that do not bear
the legend.
(c) Neither the Company nor the Trustee shall have any
responsibility for any actions taken or not taken by the Depositary and
the Company shall have no responsibility for any actions taken or not
taken by the Trustee as agent or custodian of the Depositary.
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SECTION 2.07. REPLACEMENT NOTES.
If the Holder of a Note claims that the Note has been lost, destroyed
or wrongfully taken or if such Note is mutilated and is surrendered to the
Trustee, the Company shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's and the Company's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be sufficient in
the judgment of both to protect the Company, the Trustee, any Agent or any
authenticating agent from any loss which any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article III hereof, the Company in its discretion may,
instead of issuing a new Note, pay or purchase such Note, as the case may be.
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.
SECTION 2.08. 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, and those described in this Section as not outstanding.
If a Note is replaced, paid or purchased pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced, paid or purchased Note is held by a bona
fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
Except as set forth in Section 2.09 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or an Affiliate of the Company shall be considered as though they are
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.
SECTION 2.10. TEMPORARY NOTES; GLOBAL NOTES.
(a) Until definitive Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Company considers appropriate for
temporary Notes. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes. Holders of temporary Notes shall be entitled to all of
the benefits of this Indenture.
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(b) A Global Note deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.01 shall
be transferred to the beneficial owners thereof in the form of
certificated Notes only in accordance with Section 2.01(d) or if such
transfer complies with Section 2.06 and (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for
such Global Note or if at any time such Depositary ceases to be a
"clearing agency" registered under the Exchange Act and a successor
depositary is not appointed by the Company within 90 days of such
notice, or (ii) an Event of Default has occurred and is continuing.
(c) Any Global Note that is transferable to the beneficial
owners thereof in the form of certificated Notes pursuant to Section
2.01(d) or to this Section 2.10 shall be surrendered by the Depositary
to the Trustee to be so transferred, in whole or from time to time in
part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Note, an equal
aggregate principal amount of Initial Notes of authorized denominations
in the form of certificated Notes. Any portion of a Global Note
transferred pursuant to this Section shall be executed, authenticated
and delivered only in denominations of $1,000 and any integral multiple
thereof and registered in such names as the Depositary shall direct.
Any Initial Note in the form of certificated Notes delivered in
exchange for an interest in the Global Notes shall, except as otherwise
provided by Section 2.06(b) bear the Restricted Notes Legend set forth
in Exhibit A hereto.
(d) The registered Holder of a Global Note may grant proxies
and otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which
a Holder is entitled to take under this Indenture or the Notes.
(e) In the event of the occurrence of either of the events
specified in Section 2.10(b), the Company will promptly make available
to the Trustee a reasonable supply of certificated Notes in definitive,
fully registered form without interest coupons.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee shall promptly cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
canceled Notes as the Company directs. 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 fails to make a payment of interest on the Notes, it
shall pay such defaulted interest plus any interest payable on the defaulted
interest, in any lawful manner. It may pay such defaulted interest, plus any
such interest payable on it, to the Persons who are Holders on a subsequent
special record date. The Company shall fix any such record date and payment
date, provided that no such record date shall be less than 10 days prior to the
related payment date for such defaulted interest. At least 15 days before any
such record date, the Company shall mail to Holders a notice that states the
special record date, the related payment date and amount of such interest to be
paid.
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ARTICLE III.
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of the Notes and Section 3.07 hereof or pursuant to the
Optional Tax Redemption provision of the Notes (Section 8 of the Initial Notes
and Section 7 of the Exchange Notes), it shall notify the Trustee of the
redemption date and the principal amount of Notes to be redeemed, and in
connection with an Optional Tax Redemption as provided in the Notes, such notice
shall be accompanied by an Officers' Certificate to the effect that the
conditions to such redemption contained herein have been complied with. The
Company shall give each notice provided for in this Section 3.01 at least 50
days before the redemption date (unless a shorter notice period shall be
satisfactory to the Trustee).
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, selection
of Notes shall be made by the Trustee on a pro rata basis or by lot or by method
that complies with the requirements of any exchange on which the Notes are
listed and that the Trustee considers fair and appropriate, provided that no
Notes of $1,000 or less shall be redeemed in part. The Trustee shall make the
selection not more than 60 days and not less than 30 days before the redemption
date from Notes outstanding not previously called for redemption. Notes and
portions of Notes selected shall be in amounts of $1,000 or integral multiples
of $1,000. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. The Trustee
shall notify the Company promptly of the Notes or portions of Notes to be called
for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail, 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;
(c) if any Note is to be redeemed in part only, the portion of
the principal amount thereof redeemed, and that, after the redemption
date, upon surrender of such Note, 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;
(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 plus accrued interest;
(f) that interest on Notes called for redemption ceases to
accrue on and after the redemption date; and
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(g) the paragraph of the Notes pursuant to which the Notes
called for redemption are being redeemed.
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at its expense; provided 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 information to be stated in such notice, as provided in the preceding
paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become due and payable on the redemption
date at the price set forth in the Note. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price of
and accrued interest on all Notes to be redeemed on that date. The Trustee or
the Paying Agent shall return to the Company any money not required for that
purpose.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and 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.
SECTION 3.07. OPTIONAL REDEMPTION AND OPTIONAL TAX REDEMPTION.
The Company may redeem all or any portion of the Notes, upon the terms
and at the redemption prices set forth in each of the Notes. The Company may
also redeem all of the Notes in accordance with the Optional Tax Redemption
provision of the Notes (Section 8 of the Initial Notes and Section 7 of the
Exchange Notes). Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION
The Company shall not be required to make mandatory redemption payments
with respect to the Notes.
SECTION 3.09. ASSET SALE OFFER AND PURCHASE OFFER.
(a) In the event that, pursuant to Sections 4.10 or 4.13
hereof, the Company shall commence an offer to all Holders of the Notes
to purchase Notes (the "ASSET SALE OFFER" or "PURCHASE OFFER"), the
Company shall follow the procedures in this Section 3.09.
(b) The Asset Sale Offer or the Purchase Offer, as the case
may be, shall remain open for a period specified by the Company which
shall be no less than 30 calendar days and no more than 40 calendar
days following its commencement (the "COMMENCEMENT DATE") (as
determined
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in accordance with Section 4.10 or 4.13 hereof, as the case may be),
except to the extent that a longer period is required by applicable law
(the "TENDER PERIOD"). Upon the expiration of the Tender Period (the
"PURCHASE Date"), the Company shall purchase the principal amount of
Notes required to be purchased pursuant to Section 4.10 or 4.13 hereof
(the "OFFER AMOUNT") or, if less than the Offer Amount has been
tendered, all Notes tendered in response to the Asset Sale Offer or the
Purchase Offer, as the case may be.
(c) If the Purchase Date is on or after an interest payment
record date and on or before the related interest payment date, any
accrued 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 will be payable to Holders who tender Notes
pursuant to the Asset Sale Offer or the Purchase Offer, as the case may
be.
(d) The Company shall provide the Trustee with notice of the
Asset Sale Offer or the Purchase Offer, as the case may be, at least 10
days before the Commencement Date.
(e) On or before the Commencement Date, the Company or the
Trustee (at the expense of the Company) shall send, by first class
mail, a notice to each of the Holders, which shall govern the terms of
the Asset Sale Offer or the Purchase Offer and shall state:
(i) that the Asset Sale Offer or the Purchase Offer is being
made pursuant to this Section 3.09 and, as applicable, Section 4.10 or
4.13 hereof and the length of time the Asset Sale Offer or the Purchase
Offer will remain open;
(ii) the Offer Amount, the purchase price (as determined in
accordance with Section 4.10 or 4.13 hereof) and the Purchase Date, and
in the case of a Purchase Offer made pursuant to Section 4.13 hereof,
that all Notes tendered will be accepted for payment;
(iii) that any Note or portion thereof not tendered or
accepted for payment will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the
purchase price, any Note or portion thereof accepted for payment
pursuant to the Asset Sale Offer or the Purchase Offer will cease to
accrue interest after the Purchase Date;
(v) that Holders electing to have a Note or portion thereof
purchased pursuant to any Asset Sale Offer or Purchase Offer will be
required to surrender the Note, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Note completed, to the
Company, a depositary, if appointed by the Company, or a Paying Agent
at the address specified in the notice prior to the close of business
on the third Business Day preceding the Purchase Date;
(vi) that Holders will be entitled to withdraw their election
if the Company, depositary or Paying Agent, as the case may be,
receives, not later than the close of business on the second Business
Day preceding the Purchase Date, or such longer period as may be
required by law, a letter or a telegram, telex or facsimile
transmission (receipt of which is confirmed and promptly followed by a
letter) setting forth the name of the Holder, the principal amount of
the Note or portion thereof the Holder delivered for
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purchase and a statement that such Holder is withdrawing his election
to have the Note or portion thereof purchased;
(vii) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount (as defined in Section
4.10 hereof), the Trustee will select the Notes to be purchased pro
rata or by a method that complies with the requirements of any exchange
on which the Notes are listed and that the Trustee considers fair and
appropriate 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
(viii) that Holders whose Notes were purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
In addition, the notice shall, to the extent permitted by applicable
law, be accompanied by a copy of the information regarding the Company and its
Subsidiaries which is required to be contained in the most recent Quarterly
Report on Form 10-Q or Annual Report on Form 10-K (including any financial
statements or other information required to be included or incorporated by
reference therein) and any Reports on Form 8-K filed since the date of such
Quarterly Report or Annual Report (or would have been required to file if the
Company remained a company incorporated in the United States), as the case may
be, which the Company has filed (or would have been required to file if it
remained a company incorporated in the United States) with the SEC on or prior
to the date of the notice. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to the Asset
Sale Offer or the Purchase Offer, as the case may be.
(f) At least one Business Day prior to the Purchase Date, the
Company shall irrevocably deposit with the Trustee or a Paying Agent in
immediately available funds an amount equal to the Offer Amount to be
held for payment in accordance with the terms of this Section. On the
Purchase Date, the Company shall, to the extent lawful, (i) accept for
payment the Notes or portions thereof tendered pursuant to the Asset
Sale Offer or the Purchase Offer, (ii) deliver or cause the depositary
or Paying Agent to deliver to the Trustee Notes so accepted and (iii)
deliver to the Trustee an Officers' Certificate stating such Notes or
portions thereof have been accepted for payment by the Company in
accordance with the terms of this Section 3.09. The depositary, the
Paying Agent or the Company, as the case may be, shall promptly (but in
any case not later than ten (10) calendar 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 Trustee shall promptly authenticate and
mail or deliver to such Holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered. Any Notes not so
accepted shall be promptly mailed or delivered by or on behalf of the
Company to the Holder thereof. The Company will publicly announce in a
newspaper of general circulation the results of the Asset Sale Offer or
the Purchase Offer on the Purchase Date.
(g) For the purposes of calculating the allocation of
available Excess Proceeds to the Notes and each issue of Other
Qualified Notes on a pro rata basis according to accreted value or
principal amount, as the case may be, the relevant principal amount of
the Notes and the relevant principal amount or the accreted value, as
the case may be, of any Other Qualified Notes denominated in a currency
other than United States dollars will be notionally converted into
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United States dollars from the currency such Other Qualified Notes are
denominated in (the "BASE CURRENCY");
(i) in the case of determining the maximum principal
amount of Notes and Other Qualified Notes that may be
purchased out of the Excess Proceeds at the noon
buying rate in the City of New York as certified for
customs purposes by the Federal Reserve Bank of New
York for cable transfers in the Base Currency (the
"NOON BUYING RATE") on the Business Day which is 10
Business Days prior to the Commencement Date; and
(ii) in the case of determining the allocation of the
remaining Excess Proceeds if the aggregate principal
amount or accreted value, as the case may be, of
Notes and Other Qualified Notes surrendered by
holders in the Asset Sale Offer exceeds the remaining
amount of Excess Proceeds, at the Noon Buying Rate on
the second Business Day preceding the Purchase Date.
(h) The Asset Sale Offer or the Purchase Offer shall be made
by the Company in compliance with all applicable provisions of the
Exchange Act, and all applicable tender offer rules promulgated
thereunder, and shall include all instructions and materials necessary
to enable such Holders to tender their Notes.
ARTICLE IV.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay the principal of, premium, if any, and interest
on, the Notes on the dates and in the manner provided in the Notes. Principal,
premium, if any, and interest shall be considered paid on the date due if the
Paying Agent (other than the Company or an Affiliate of the Company) holds on
that date money designated for and sufficient to pay all principal and interest
then due. To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue principal and premium, if any, at the rate borne by the Notes,
compounded semiannually; and (ii) overdue installments of interest (without
regard to any applicable grace period) at the same rate, compounded
semiannually.
SECTION 4.02. REPORTS.
Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall file with the SEC and
furnish to the Trustee and to the Holders of Notes, all quarterly and annual
financial information required to be contained in a filing with the SEC on Forms
10-Q and 10-K (or the equivalent thereof under the Exchange Act for foreign
private issuers in the event the Company becomes a corporation organized under
the laws of the United Kingdom, the Netherlands, the Netherlands Antilles,
Bermuda or the Cayman Islands), including a "Management's Discussion and
Analysis of Results of Operations and Financial Condition" and, with respect to
the annual information only, a report thereon by the Company's certified
independent accountants, in each case, in the form required by the rules and
regulations of the SEC as in effect on the Issuance Date. This Section 4.02 will
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apply notwithstanding that the Company becomes a corporation organized under the
laws of the United Kingdom, the Netherlands, the Netherlands Antilles, Bermuda
or the Cayman Islands.
SECTION 4.03. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, 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, and complied with the covenants
and conditions contained in, this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of his knowledge the
Company has kept, observed, performed and fulfilled each and every covenant, and
complied with the covenants and conditions contained in this Indenture and is
not in default in the performance or observance of any of the terms, provisions
and conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he may have
knowledge) and that to the best of his knowledge no event has occurred and
remains in existence by reason of which payments on account of the principal or
of interest, if any, on the Notes are prohibited.
One of the Officers signing such Officers' Certificate shall be either
the Company's principal executive officer, principal financial officer or
principal accounting officer.
The Company will so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon becoming aware of any Default or Event of Default
an Officers' Certificate specifying such Default or Event of Default.
Immediately upon the occurrence of any event giving rise to the accrual
of Special Interest (as such term is defined in Exhibit A hereto) or the
cessation of such accrual, the Company shall give the Trustee notice thereof and
of the event giving rise to such accrual or cessation (such notice to be
contained in an Officers' Certificate) and prior to receipt of such Officers'
Certificate the Trustee shall be entitled to assume that no such accrual has
commenced or ceased, as the case may be.
SECTION 4.04. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 4.05. CORPORATE EXISTENCE.
Subject to Article V hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each subsidiary
of the Company in accordance with the respective organizational documents of
each subsidiary and 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 subsidiary, if the Board of
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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. The Company shall notify the Trustee in writing of any subsidiary which
qualifies as a Material Subsidiary and is not specified in clause (i) of the
definition thereof.
SECTION 4.06. TAXES.
The Company shall, and shall cause each of its subsidiaries to, pay
prior to delinquency all taxes, assessments and governmental levies, except as
contested in good faith and by appropriate proceedings.
SECTION 4.07. LIMITATIONS ON LIENS.
Neither the Company nor any of its Restricted Subsidiaries may,
directly or indirectly create, incur, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired, or any income or profits therefrom or
assign or convey any right to receive income therefrom, except:
(a) Permitted Liens;
(b) Liens securing Indebtedness and related obligations to the
extent such Indebtedness and related obligations are permitted under
Sections 4.08(b)(i), (iii), (iv), (v), (viii), (ix) and (xi) hereof;
(c) Liens on the assets acquired or leased with the proceeds
of Indebtedness permitted to be incurred under Section 4.08 hereof; and
(d) Liens securing Refinancing Indebtedness permitted to be
incurred under Section 4.08 hereof; provided that the Refinancing
Indebtedness so issued and secured by such Lien shall not be secured by
any property or assets of the Company or any of its Restricted
Subsidiaries other than the property or assets subject to the Liens
securing such Indebtedness being refinanced.
SECTION 4.08. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guaranty or otherwise become directly or indirectly
liable with respect to (collectively, "INCUR") any Indebtedness
(including Acquired Debt) and the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock that is
Disqualified Stock; provided, however, that the Company may incur
Indebtedness or issue shares of Disqualified Stock and any of its
Restricted Subsidiaries may issue shares of preferred stock that is
Disqualified Stock if after giving effect to such issuance or
incurrence on a pro forma basis, the sum of (x) Indebtedness of the
Company and its Restricted Subsidiaries, on a consolidated basis, (y)
the liquidation value of outstanding preferred stock of Restricted
Subsidiaries and (z) the aggregate amount payable by the Company and
its Restricted Subsidiaries, on a consolidated basis, upon redemption
of Disqualified Stock to the extent such amount is not included in the
preceding clause (y) shall be less than the product of Annualized Pro
Forma EBITDA for the latest fiscal quarter for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock or
preferred stock is issued multiplied by 7.0, determined on a pro forma
basis (including a pro
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forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock or preferred
stock had been issued, as the case may be, at the beginning of such
quarter.
(b) The foregoing limitations in Section 4.08(a) shall not
apply to:
(i) the incurrence by the Company or any Restricted Subsidiary
of Indebtedness pursuant to the Credit Facility;
(ii) the issuance by any Restricted Subsidiary of preferred
stock (other than Disqualified Stock) to the Company, any Restricted
Subsidiary of the Company or the holders of Equity Interests in any
Restricted Subsidiary on a pro rata basis to such holders;
(iii) the incurrence of Indebtedness or the issuance of
preferred stock by the Company or any of its Restricted Subsidiaries
the proceeds of which are (or the credit support provided by any such
Indebtedness is), in each case, used to finance the construction,
capital expenditure and working capital needs of a Cable Business
(including, without limitation, payments made pursuant to any License),
the acquisition of Cable Assets or the Capital Stock of a Qualified
Subsidiary;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount not to exceed $50 million;
(v) the incurrence by the Company or any Restricted Subsidiary
of any Permitted Acquired Debt;
(vi) the incurrence by the Company or any Subsidiary of
Indebtedness issued in exchange for, or the proceeds of which are used
to extend, refinance, renew, replace, or refund the Notes, Existing
Indebtedness or Indebtedness referred to in clauses (i), (ii), (iii),
(iv) or (v) above or Indebtedness incurred pursuant to Section 4.08(a)
hereof (the "REFINANCING INDEBTEDNESS"); provided, however, that (1)
the principal amount of, and any premium payable in respect of, such
Refinancing Indebtedness shall not exceed the principal amount of
Indebtedness so extended, refinanced, renewed, replaced or refunded
(plus the amount of reasonable expenses incurred in connection
therewith); (2) the Refinancing Indebtedness shall have (A) a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, and (B) a stated maturity no earlier than the
stated maturity of, the Indebtedness being extended, refinanced,
renewed, replaced or refunded; and (3) the Refinancing Indebtedness
shall be subordinated in right of payment to the Notes as and to the
extent of the Indebtedness being extended, refinanced, renewed,
replaced or refunded;
(vii) the issuance of the Preferred Stock in lieu of payment
of cash interest on the Subordinated Debentures or the incurrence by
the Company of Indebtedness represented by the Subordinated Debentures
upon the exchange of the Preferred Stock in accordance with the
Certificate of Designations therefor;
(viii) Indebtedness under Exchange Rate Contracts, provided
that such Exchange Rate Contracts are related to payment obligations
under Existing Indebtedness
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or Indebtedness incurred under Section 4.08(a) or (b) hereof that are
being hedged thereby, and not for speculation and that the aggregate
notional amount under each such Exchange Rate Contract does not exceed
the aggregate payment obligations under such Indebtedness;
(ix) Indebtedness under Interest Rate Agreements, provided
that the obligations under such agreements are related to payment
obligations on Existing Indebtedness or Indebtedness otherwise incurred
pursuant to Section 4.08(a) or (b) hereof, and not for speculation;
(x) the incurrence of Indebtedness between the Company and any
Restricted Subsidiary, between or among Restricted Subsidiaries and
between any Restricted Subsidiary and other holders of Equity Interests
of such Restricted Subsidiary (or other Persons providing funding on
their behalf) on a pro rata basis and on substantially identical
principal financial terms; provided, however, that if any such
Restricted Subsidiary that is the payee of any such Indebtedness ceases
to be a Restricted Subsidiary or transfers such Indebtedness (other
than to the Company or a Restricted Subsidiary of the Company), such
events shall be deemed, in each case, to constitute the incurrence of
such Indebtedness by the Company or by a Restricted Subsidiary, as the
case may be, at the time of such event; and
(xi) Indebtedness of the Company and/or any Restricted
Subsidiary in respect of performance bonds of the Company or any
Subsidiary or surety bonds provided by the Company or any Restricted
Subsidiary received in the ordinary course of business in connection
with the construction or operation of a Cable Business.
(c) Any redesignation of a Non-Restricted Subsidiary as a
Restricted Subsidiary shall be deemed for purposes of this Section 4.08
to be an incurrence of Indebtedness by the Company and its Restricted
Subsidiaries of the Indebtedness of such Non-Restricted Subsidiary as
of the time of such redesignation to the extent such Indebtedness does
not already constitute Indebtedness of the Company or one of its
Restricted Subsidiaries.
SECTION 4.09. 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 dividend or make any distribution on
account of the Company's or any of its Restricted Subsidiaries' Equity
Interests (other than (x) dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or such
Restricted Subsidiary or (y) dividends or distributions payable to the
Company or any Wholly Owned Subsidiary of the Company, or (z) pro rata
dividends or pro rata distributions payable by a Restricted
Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company (other than any such Equity
Interests owned by the Company or any Wholly Owned Subsidiary of the
Company);
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(iii) voluntarily purchase, redeem or otherwise acquire or
retire for value any Indebtedness that is subordinated to the Notes; or
(iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being
collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time
of such Restricted Payment:
(1) no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof; and
(2) such Restricted Payment, together with the
aggregate of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the Issuance Date (including Restricted
Payments permitted by clauses (ii) through (ix) of Section 4.09(b)), is
less than the sum of (x) the difference between Cumulative EBITDA and
1.5 times Cumulative Interest Expense plus (y) Capital Stock Sale
Proceeds plus (z) cash received by the Company or a Restricted
Subsidiary from a Non-Restricted Subsidiary (other than cash which is
or is required to be repaid or returned to such Non-Restricted
Subsidiary); provided, however, that to the extent that any Restricted
Investment that was made after the date of this Indenture is sold for
cash or otherwise liquidated or repaid for cash, the amount credited
pursuant to this clause (z) shall be the lesser of (A) the cash
received with respect to such sale, liquidation or repayment of such
Restricted Investment (less the cost of such sale, liquidation or
repayment, if any) and (B) the initial amount of such Restricted
Investment, in each case as determined in good faith by the Company's
Board of Directors.
(b) The foregoing provisions in Section 4.09(a) shall not
prohibit:
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment
would have complied with the provisions of this Indenture;
(ii) (x) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Company or any Restricted
Subsidiary or (y) an Investment in any Person, in each case, in
exchange for, or out of the proceeds of, the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of other
Equity Interests (other than any Disqualified Stock) of the Company,
provided that the Company delivers to the Trustee:
(1) with respect to any transaction involving in
excess of $1 million, a resolution of the Board of Directors set forth
in an Officers' Certificate certifying that such transaction is
approved by a majority of the directors on the Board of Directors; and
(2) with respect to any transaction involving in
excess of $25 million, an opinion as to the fairness to the Company or
such Subsidiary from a financial point of view issued by an investment
banking firm of national standing with high yield experience, together
with an Officers' Certificate to the effect that such opinion complies
with this clause (2), provided that the amount of such proceeds from
the sale of such Equity Interests shall be excluded in each case from
Capital Stock Sale Proceeds for purposes of clause (a)(iv)(2)(y),
above;
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(iii) Investments by the Company or any Restricted Subsidiary
in a Non-Controlled Subsidiary which (A) has no Indebtedness on a
consolidated basis other than Indebtedness incurred to finance the
purchase of equipment used in a Cable Business, (B) has no restrictions
(other than restrictions imposed or permitted by this Indenture or the
indentures governing the Other Qualified Notes or any other instrument
governing unsecured indebtedness of the Company which is pari passu
with the Notes) on its ability to pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries, (C)
is or will be a Cable Business and (D) uses the proceeds of such
Investment for constructing a Cable Business or the working capital
needs of a Cable Business;
(iv) the redemption, purchase, defeasance, acquisition or
retirement of Indebtedness that is subordinated to the Notes (including
premium, if any, and accrued and unpaid interest) made by exchange for,
or out of the proceeds of the substantially concurrent sale (other than
to a Restricted Subsidiary of the Company) of (A) Equity Interests of
the Company, provided that the amount of such proceeds from the sale of
such Equity Interests shall be excluded in each case from Capital Stock
Sale Proceeds for purposes of clause (a)(iv)(2)(y) above or (B)
Refinancing Indebtedness permitted to be incurred under Section 4.08
hereof;
(v) Investments by the Company or any Restricted Subsidiary in
a Non-Controlled Subsidiary which is or will be a Cable Business in an
amount not to exceed $80 million in the aggregate plus the sum of (x)
cash received by the Company or a Restricted Subsidiary from a
Non-Restricted Subsidiary (other than cash which is or is required to
be repaid or returned to such Non-Restricted Subsidiary) and (y)
Capital Stock Sale Proceeds (excluding the aggregate net sale proceeds
to be received upon conversion of the Convertible Subordinated Notes),
provided that the amount of such proceeds from the sale of such Equity
Interests shall be excluded in each case from Capital Stock Sale
Proceeds for purposes of clause (a)(iv)(2)(y) above;
(vi) Investments by the Company or any Restricted Subsidiary
in Permitted Non-Controlled Assets;
(vii) the extension by the Company or any Restricted
Subsidiary of trade credit to a Non-Restricted Subsidiary extended on
usual and customary terms in the ordinary course of business, provided
that the aggregate amount of such trade credit shall not exceed $25
million at any one time;
(viii) the payment of cash dividends on the Preferred Stock
accruing on or after February 15, 2004 or any mandatory redemption or
repurchase of the Preferred Stock, in each case, in accordance with the
Certificate of Designations therefor; and
(ix) the exchange of all of the outstanding shares of
Preferred Stock for Subordinated Debentures in accordance with the
Certificate of Designations for the Preferred Stock.
(c) Any Investment in a Subsidiary (other than the issuance,
transfer or other conveyance of Equity Interests of the Company (or any
Capital Stock Sale Proceeds therefrom)) that is designated by the Board
of Directors as a Non-Restricted Subsidiary shall become a
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Restricted Payment made on the date of such designation in the amount
of the greater of (x) the book value of such Subsidiary on the date
such Subsidiary becomes a Non-Restricted Subsidiary and (y) the fair
market value of such Subsidiary on such date as determined (A) in good
faith by the Board of Directors of such Subsidiary if such fair market
value is determined to be less than $25 million and (B) by an
investment banking firm of national standing with high yield
underwriting expertise if such fair market value is determined to be in
excess of $25 million.
(d) Not later than the fifth Business Day after making any
Restricted Payment (other than those referred to in sub-clause (vii) of
Section 4.09(b)), the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this
Section 4.09 were computed, which calculations may be based upon the
Company's latest available financial statements.
SECTION 4.10. ASSET SALES.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to cause, make or suffer to exist any Asset
Sale, unless:
(i) no Default exists or is continuing immediately prior to
and after giving effect to such Asset Sale;
(ii) the Company (or the Restricted Subsidiary, as the case
may be) receives consideration at the time of such Asset Sale at least
equal to the fair market value (evidenced for purposes of this Section
4.10 by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) of the assets sold or
otherwise disposed of; and
(iii) at least 80% of the consideration therefor received by
the Company or such Restricted Subsidiary is in the form of (w) Cash
Equivalents, (x) Replacement Assets, (y) publicly traded Equity
Interests of a Person who is, directly or indirectly, engaged primarily
in one or more Cable Businesses; provided, however, that the Company or
such Restricted Subsidiary shall Monetize such Equity Interests by sale
to one or more Persons (other than to the Company or a Subsidiary
thereof) at a price not less than the fair market value thereof within
180 days of the consummation of such Asset Sale, or (z) any combination
of the foregoing clauses (w) through (y); provided, however, that the
amount of (x) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet or in the notes
thereto) of the Company or any Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Notes) that are
assumed by the transferee of any such assets and (y) any notes or other
obligations received by the Company or any such Restricted Subsidiary
from such transferee that are within five Business Days converted by
the Company or such Restricted Subsidiary into cash, shall be deemed to
be Cash Equivalents (to the extent of the Cash Equivalents received in
such conversion) for purposes of this clause (iii).
(b) Within 360 days after any Asset Sale, the Company (or the
Restricted Subsidiary, as the case may be) shall cause the Net Proceeds
from such Asset Sale:
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(i) to be used to permanently reduce Indebtedness of a
Restricted Subsidiary; or
(ii) to be invested or reinvested in Replacement Assets.
Pending final application of any such Net Proceeds, the
Company may temporarily reduce revolving credit borrowings or otherwise invest
such Net Proceeds in any manner that is not prohibited by this Indenture or the
indentures for the Other Qualified Notes.
Any Net Proceeds from any Asset Sale that are not used or
reinvested as provided in the preceding sentence constitute "EXCESS PROCEEDS."
When the aggregate amount of Excess Proceeds exceeds $15 million, the Company
shall make an offer (an "ASSET SALE OFFER") to all holders of Notes and Other
Qualified Notes to purchase the maximum principal amount of Notes and Other
Qualified Notes (determined on a pro rata basis according to the accreted value
or principal amount, as the case may be, of the Notes and the Other Qualified
Notes and in accordance with Section 3.09(g)(i)) that may be purchased out of
the Excess Proceeds (x) with respect to the Other Qualified Notes, based on the
terms set forth in the indenture related to each issue of the Other Qualified
Notes and (y) with respect to the Notes, at an offer price in cash in an amount
equal to 100% of the outstanding principal amount thereof plus accrued and
unpaid interest, if any, to the date fixed for the closing of such offer, in
accordance with the procedures set forth in Section 3.09 hereof. To the extent
that the aggregate principal amount or accreted value, as the case may be, of
Notes and Other Qualified Notes tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Company may use such deficiency for general
corporate purposes. If the aggregate principal amount or accreted value, as the
case may be, of Notes and Other Qualified Notes surrendered by holders thereof
exceeds the amount of Excess Proceeds, then such remaining Excess Proceeds shall
be allocated pro rata according to accreted value or principal amount, as the
case may be, to the Notes and each issue of the Other Qualified Notes and in
accordance with Section 3.09(g)(ii), and the Trustee shall select the Notes to
be purchased from the amount allocated to the Notes on the basis set forth in
Section 3.09(e) hereof. Upon completion of such offers to purchase each of the
Notes and the Other Qualified Notes, the amount of Excess Proceeds will be reset
at zero.
(c) Notwithstanding the provisions of Sections 4.10(a) and
(b): the Company and its Subsidiaries may:
(i) sell, lease, transfer, convey or otherwise dispose of
assets or property acquired after October 14, 1993, by the Company or
any Subsidiary in a sale-and-leaseback transaction so long as the
proceeds of such sale are applied within five Business Days to
permanently reduce Indebtedness of a Restricted Subsidiary or if there
is no such Indebtedness or such proceeds exceed the amount of such
Indebtedness then such proceeds or excess proceeds are reinvested in a
Replacement Assets within 360 days after such sale, lease, transfer,
conveyance or disposition;
(ii) (x) swap or exchange assets or property with a Cable
Controlled Subsidiary or (y) issue, sell, lease, transfer, convey or
otherwise dispose of equity securities of any of the Company's
Subsidiaries to a Cable Controlled Subsidiary, in each of cases (x) and
(y) so long as (A) the ratio of Indebtedness to Annualized Pro Forma
EBITDA of the Company after such transaction is equal to or less than
the ratio of Indebtedness to Annualized Pro Forma EBITDA of the Company
immediately preceding such transaction; provided, however, that if the
ratio of Indebtedness to
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Annualized Pro Forma EBITDA of the Company immediately preceding such
transaction is 6:1 or less, then the ratio of Indebtedness to
Annualized Pro Forma EBITDA of the Company may be 0.5 greater than such
ratio immediately preceding such transaction and (B) either (I) the
assets so contributed consist solely of a license to operate a Cable
Business and the Net Households covered by all of the licenses to
operate cable and telephone systems held by the Company and its
Restricted Subsidiaries immediately after and giving effect to such
transaction equals or exceeds the number of Net Households covered by
all of the licenses to operate cable and telephone systems held by the
Company and its Restricted Subsidiaries immediately prior to such
transaction or (II) the assets so contributed consist solely of Cable
Assets and the value of the Capital Stock received, immediately after
and giving effect to such transaction, as determined by an investment
banking firm of recognized standing with knowledge of the Cable
Business, equals or exceeds the value of Cable Assets exchanged for
such Capital Stock; or
(iii) issue, sell, lease, transfer, convey or otherwise
dispose of Equity Interests (other than Disqualified Stock) of the
Company (or any Capital Stock Sale Proceeds therefrom) to any Person
(including Non-Restricted Subsidiaries).
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or amend any contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an "AFFILIATE
TRANSACTION"), unless:
(a) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Subsidiary than those that
could have been obtained in a comparable transaction by the Company or
such Subsidiary with an unrelated Person and
(b) the Company delivers to the Trustee:
(i) with respect to any Affiliate Transaction involving
aggregate payments in excess of $1 million or any series of Affiliate
Transactions with an Affiliate involving aggregate payments in excess
of $1 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction
complies with Section 4.11 (a) and such Affiliate Transaction is
approved by a majority of the disinterested directors on the Board of
Directors; and
(ii) with respect to any Affiliate Transaction involving
aggregate payments in excess of $25 million or any series of Affiliate
Transactions with an Affiliate involving aggregate payments in excess
of $25 million, an opinion as to the fairness to the Company or such
Subsidiary from a financial point of view issued by an investment
banking firm of national standing with high yield experience together
with an Officers' Certificate to the effect that such opinion complies
with this clause (ii); provided, however, that notwithstanding the
foregoing provisions, the following shall not be deemed to be Affiliate
Transactions:
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(1) any employment agreement entered into by the
Company or any of its Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or its predecessor
or such Subsidiary;
(2) transactions between or among the Company and/or
its Restricted Subsidiaries;
(3) transactions permitted by the provisions of
Section 4.09 hereof;
(4) Liens permitted under Section 4.07 hereof which
are granted by the Company or any of its Subsidiaries to an unrelated
Person for the benefit of the Company or any other Subsidiary of the
Company;
(5) any transaction pursuant to an agreement in
effect on the Issuance Date;
(6) the incurrence of Indebtedness by a Restricted
Subsidiary where such Indebtedness is owed to the holders of the Equity
Interests of such Restricted Subsidiary on a pro rata basis and on
substantially identical principal financial terms;
(7) management, operating, service or interconnect
agreements entered into in the ordinary course of business with any
Cable Business in which the Company or any Restricted Subsidiary has an
Investment and which is not a Cable Controlled Subsidiary (and of which
no Affiliate of the Company is an Affiliate other than as a result of
such Investment); and
(8) any tax sharing agreement.
SECTION 4.12. DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(a) (i) pay dividends or make any other distributions to the
Company or any of its Subsidiaries (A) on its Capital Stock or (B) with
respect to any other interest or participation in, or measured by, its
profits, or (ii) pay any indebtedness owed to the Company or any of its
Subsidiaries, or
(b) make loans or advances to the Company or any of its
Subsidiaries, or
(c) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of:
(i) Existing Indebtedness as in effect on the Issuance Date;
(ii) this Indenture and the Notes;
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(iii) any agreement covering or relating to Indebtedness
permitted to be incurred under Section 4.08(b)(i), (ii), (iii), (iv),
(v), (viii) or (ix) hereof (but only, in the case of Section
4.08(b)(viii) or (ix), to the extent contemplated by the then-existing
Credit Facility), provided that the provisions of such agreement permit
any action referred to in clause (a) above in aggregate amounts
sufficient to enable the payment of interest and principal and
mandatory repurchases pursuant to the terms of this Indenture and the
Notes, but provided further that: (x) any such agreement may
nevertheless encumber, prohibit or restrict any action referred to in
clause (a) above if an event of default under such agreement has
occurred and is continuing or would occur as a result of any such
action; and (y) any such agreement may nevertheless contain (I)
restrictions limiting the payment of dividends or the making of any
other distributions to all or a portion of excess cash-flow (or any
similar formulation thereof) and (II) subordination provisions
governing Indebtedness owed to the Company or any Restricted
Subsidiary;
(iv) applicable law;
(v) any instrument governing Indebtedness or Capital Stock of
a Person acquired by the Company or any of its Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that the EBITDA
of such Person is not taken into account in determining whether such
acquisition was permitted by the terms of this Indenture;
(vi) customary nonassignment provisions in leases entered into
in the ordinary course of business and consistent with past practices;
(vii) provisions of joint venture or stockholder agreements,
so long as such provisions are determined by a resolution of the Board
of Directors to be, at the time of such determination, customary for
such agreements;
(viii) with respect to clause (c) above, purchase money
obligations for property acquired in the ordinary course of business or
the provisions of any agreement with respect to any Asset Sale (or
transaction which, but for its size, would be an Asset Sale), solely
with respect to the assets being sold; or
(ix) permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Refinancing
Indebtedness are determined by a resolution of the Board of Directors
to be no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced.
SECTION 4.13. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control Triggering
Event, 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 described in
Section 3.09 hereof (the "PURCHASE OFFER") at a purchase price equal to
101% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of purchase (the "CHANGE OF CONTROL
PAYMENT").
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(b) Within 40 days following any Change of Control Triggering
Event, the Company shall mail to each Holder the notice provided by
Section 3.09(e).
SECTION 4.14. PAYMENT OF ADDITIONAL AMOUNTS.
At least 10 days prior to the first date on which payment of principal
and any premium or interest on the Notes is to be made, and at least 10 days
prior to any subsequent such date if there has been any change with respect to
the matters set forth in the Officers' Certificate described in this Section
4.14, the Company shall furnish the Trustee and the Paying Agent, if other than
the Trustee, with an Officers' Certificate instructing the Trustee and the
Paying Agent whether the Company is obligated to pay Additional Amounts (as
defined in Section 3 of the Initial Notes or Section 2 of the Exchange Notes)
with respect to such payment of principal, or of any premium or interest on the
Notes. If the Company will be obligated to pay Additional Amounts with respect
to such payment, then such Officers' Certificate shall specify by country the
amount, if any, required to be withheld on such payments to such Holders and the
Company will pay to the Trustee or the Paying Agent such Additional Amounts. The
Company shall indemnify the Trustee and the Paying Agent for, and hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished to them pursuant to this Section 4.14.
Whenever in this Indenture there is mentioned, in any context, the
payment of principal (and premium, if any), Offer Amount, interest or any other
amount payable under or with respect to any Note such mention shall be deemed to
include mention of the payment of Additional Amounts provided for in this
Section 4.14 and Section 3 of the Initial Notes (or Section 2 of the Exchange
Notes) to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to the provisions of this Section
4.14 and Section 3 of the Initial Notes (or Section 2 of the Exchange Notes) and
express mention of the payment of Additional Amounts (if applicable) in any
provisions hereof shall not be construed as excluding Additional Amounts in
those provisions hereof where such express mention is not made (if applicable).
ARTICLE V.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company may not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, another corporation, Person or
entity unless:
(a) the Company is the surviving corporation or the entity or
the Person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United Kingdom,
the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands or of the United States, any state thereof or the District of
Columbia;
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(b) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or
Person to which such sale, assignment, transfer, lease, conveyance or
other disposition will have been made assumes all the Obligations
(including the due and punctual payment of Additional Amounts if the
surviving corporation is a corporation organized or existing under the
laws of the United Kingdom, the Netherlands, the Netherlands Antilles,
Bermuda or the Cayman Islands) of the Company, pursuant to a
supplemental indenture in a form reasonably satisfactory to the
Trustee, under the Notes and this Indenture;
(c) immediately after such transaction no Default or Event of
Default exists;
(d) the Company or any entity or Person formed by or surviving
any such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been made
will have a ratio of Indebtedness to Annualized Pro Forma EBITDA equal
to or less than the ratio of Indebtedness to Annualized Pro Forma
EBITDA of the Company immediately preceding the transaction; provided,
however, that if the ratio of Indebtedness to Annualized Pro Forma
EBITDA of the Company immediately preceding such transaction is 6:1 or
less, then the ratio of Indebtedness to Annualized Pro Forma EBITDA of
the Company may be 0.5 greater than such ratio immediately preceding
such transaction; and
(e) such transaction would not result in the loss of any
material authorization or Material License of the Company or its
Subsidiaries.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person has been named as the Company herein; provided, however, that
the predecessor Company in the case of a sale, assignment, transfer, lease,
conveyance or other disposition shall not be released from the obligation to pay
the principal of and interest on the Notes.
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if:
(a) the Company defaults in the payment of interest (and
Additional Amounts, if applicable) on any Note when the same becomes
due and payable and the Default continues for a period of 30 days after
the date due and payable;
(b) the Company defaults in the payment of the principal of
any Note when the same becomes due and payable at maturity, upon
redemption or otherwise;
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(c) the Company fails to observe or perform any covenant or
agreement contained in Section 4.08, 4.09, or 4.13 hereof;
(d) the Company fails to observe or perform any other covenant
or agreement contained in this Indenture or the Notes, required by any
of them to be performed and the Default continues for a period of 60
days after notice from the Trustee to the Company or from the Holders
of 25% in aggregate principal amount of the then outstanding Notes to
the Company and the Trustee stating that such notice is a "Notice of
Default";
(e) 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 Restricted
Subsidiary (or the payment of which is guaranteed by the Company or any
Restricted Subsidiary), whether such Indebtedness or guarantee now
exists or is created after the Issuance Date, which default:
(i) is caused by a failure to pay when due principal of or
interest on such Indebtedness within the grace period provided for in
such Indebtedness (which failure continues beyond any applicable grace
period) (a "PAYMENT DEFAULT"); or
(ii) results in the acceleration of such Indebtedness prior to
its express maturity
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there is a
Payment Default or the maturity of which has been so accelerated, aggregates $10
million or more;
(f) a final judgment or final judgments (other than any
judgment as to which a reputable insurance company has accepted full
liability) for the payment of money are entered by a court or courts of
competent jurisdiction against the Company or any Restricted Subsidiary
of the Company which remains undischarged for a period (during which
execution shall not be effectively stayed) of 60 days, provided that
the aggregate of all such judgments exceeds $5 million;
(g) the Company or any Material Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it
in an involuntary case in which it is the debtor;
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property;
(iv) makes a general assignment for the benefit of its
creditors; or
(v) generally is unable to pay its debts as the same become
due;
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(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Material
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any Material
Subsidiary or for all or substantially all of its property; or
(iii) orders the liquidation of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for
60 days; and
(i) the revocation of a Material License.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors or the protection of creditors.
The term "CUSTODIAN" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clauses (g) and (h) of Section 6.01 hereof) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the then outstanding Notes by notice to the Company and the Trustee,
may declare all the Notes to be due and payable. Upon such declaration, the
principal of, premium, if any, and interest on, the Notes shall be due and
payable immediately. If an Event of Default specified in clause (g) or (h) of
Section 6.01 hereof occurs, such an amount shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder. The Holders of a majority in principal amount of the
then outstanding Notes by notice to the Trustee may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration. In the case of any Event of Default pursuant to the provisions of
Section 6.01 occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company with the intention of avoiding payment
of the premium that the Company would have had to pay if the Company then had
elected to redeem the Notes pursuant to Section 7 of the Initial Notes (Section
6 in the case of the Exchange Notes), an equivalent premium shall, upon demand
of the Holders of at least 25% in principal amount of the then outstanding Notes
delivered to the Company and the Trustee, also become and be immediately due and
payable to the extent permitted by law, anything in this Indenture or in the
Notes contained to the contrary notwithstanding. If an Event of Default occurs
prior to October 1, 2003, by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to October 1, 2003, pursuant to
Section 7 of the Initial Notes (Section 6 in the case of the Exchange Notes),
then the premium payable for purposes of this paragraph for each of the years
beginning on October 1 of the years (November 2 in the case of 1998) set forth
below shall, subject to the foregoing demand, be as set forth in the following
table expressed as a percentage of the amount that would otherwise be due
pursuant to this Section 6.02 hereof but for the provisions of this sentence.
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<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1998.......................................... 115.333%
1999.......................................... 113.416%
2000.......................................... 111.500%
2001.......................................... 109.583%
2002.......................................... 107.667%
</TABLE>
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal or interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder 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 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount of the then outstanding
Notes by notice to the Trustee may waive an existing Default or Event of Default
and its consequences except a continuing Default or Event of Default in the
payment of the principal of or interest on any Note. When a Default or Event of
Default is waived, it is cured and ceases; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture, is unduly prejudicial to the rights of other Holders, or
would involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Holder gives to the Trustee notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a request to the Trustee to pursue the
remedy;
(c) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
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(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal and interest on the Note, on or
after the respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder made pursuant to this
Section.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid on the Notes and interest on overdue principal and
interest and such further amount as shall be sufficient to cover the costs and,
to the extent lawful, expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
the Holders allowed in any judicial proceedings relative to the Company, its
creditors or its property. Nothing contained herein 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 thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07 hereof;
Second: to Holders for amounts due and unpaid on the Notes for
principal and interest (and Additional Amounts, if applicable), ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal and interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders made pursuant to this Section.
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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 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE VII.
TRUSTEE
SECTION 7.01. 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 their
exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default: (i)
the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others and (ii) in the absence of bad
faith on its part, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee
shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture and to confirm the
correctness of all mathematical computations.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that: (i) this paragraph does not limit the effect
of paragraph (b) of this Section 7.01; (ii) the Trustee shall not be
liable for any error of judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts and (iii) the Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.05 hereof.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against
any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
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SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers.
(e) The Trustee shall not be charged with knowledge of any
Event of Default under subsection (c), (d), (e), (f) or (i) (and
subsection (a) or (b) if the Trustee does not act as Paying Agent) of
Section 6.01 or of the identity of any Material Subsidiary referred to
in clause (ii) of the definition thereof unless either (1) a Trust
Officer of the Trustee assigned to its Corporate Trustee Administration
Department shall have actual knowledge thereof, or (2) the Trustee
shall have received notice thereof in accordance with Section 10.02
hereof from the Company or any Holder.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee 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, and it shall not be responsible for any
statement of the Company in the Indenture or any statement in the Notes other
than its authentication or for compliance by the Company with the Registration
Rights Agreement.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders 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 on any Note, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Holders.
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SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after the reporting date stated in Section 10.11, the
Trustee shall mail to Holders a brief report dated as of such reporting date
that complies with TIA (Section) 313(a) if and to the extent required by such
(Section) 313(a). 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 Holders shall be
filed with the SEC and each stock exchange on which the Notes are listed. The
Company shall notify the Trustee when the Notes are listed on any stock
exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable disbursements,
expenses and advances incurred or made by it. Such disbursements and expenses
may include the reasonable disbursements, compensation and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity. 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, disbursements and expenses of such counsel. The Company need not pay for
any settlement made without its consent, which consent shall not be unreasonably
withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
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 money or property held in trust to pay
principal and interest on particular Notes.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
All amounts owing to the Trustee under this Section shall be payable by
the Company in United States dollars.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove the
Trustee if:
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(a) the Trustee fails to comply with Section 7.10 hereof,
unless the Trustee's duty to resign is stayed as provided in TIA
(Section) 310(b);
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA (Section) 310(b), any
Holder who has been a bona fide Holder of a Note for at least six months 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. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to
this Section 7.08 hereof, the Company's obligations under Section 7.07 hereof
shall continue for the benefit of the retiring trustee with respect to expenses
and liabilities incurred by it prior to such replacement.
SECTION 7.09. 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.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (Section) 310(a)(1) and (5). The Trustee shall always have a
combined capital and surplus as stated in Section 10.11 hereof. The Trustee is
subject to TIA (Section) 310(b). The following indentures shall be deemed to be
specifically described herein for the purposes of clause (i) of the first
proviso contained in TIA (Section) 310(b): (a) indenture, dated as of April 20,
1995, between the Company and The Chase Manhattan Bank, as trustee, relating to
the 12 3/4% Notes, as amended, (b) indenture, dated as of January 30, 1996,
between the Company and The Chase Manhattan Bank, as trustee, relating to the 11
1/2% Deferred Coupon Notes,
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as amended, (c) indenture, dated as February 12, 1997, between the Company and
The Chase Manhattan Bank, as trustee, relating to the 10% Notes, as amended, (d)
indenture dated as of March 13, 1998, between the Company and The Chase
Manhattan Bank, as trustee, relating to the Company's 9 1/2% Senior Notes due
2008, (e) indenture, dated as of March 13, 1998, between the Company and The
Chase Manhattan Bank, as trustee, relating to the Company's 10 3/4% Senior
Deferred Coupon Notes due 2008 and (f) indenture, dated as of March 13, 1998,
between the Company and The Chase Manhattan Bank, as trustee, relating to
Company's the 9 3/4% Senior Deferred Coupon Notes due 2008.
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 VIII.
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS.
This Indenture shall cease to be of further effect (except that the
Company's obligations under Sections 7.07 and 8.03 hereof shall survive) when
all outstanding Notes theretofore authenticated and issued have been delivered
to the Trustee for cancellation and the Company has paid all sums payable
hereunder.
SECTION 8.02. OPTION TO EFFECT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
this Section 8.02 be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Section. Upon the Company's election to have
this Section 8.02 apply to all the outstanding Notes, the Company shall, subject
to the satisfaction of the conditions set forth in the next paragraph, be deemed
to have been discharged from its obligations with respect to all outstanding
Notes on the date such conditions are satisfied (hereinafter, "DEFEASANCE"). For
this purpose, Defeasance means that the Company shall be deemed to have paid and
discharged the entire Obligations represented by the outstanding Notes, which
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.03 hereof and the other Sections of this Indenture referred to in clauses (a)
and (b) below, and to have satisfied all its other obligations under such Notes
and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in the following paragraph, payments in
respect of the principal of, premium, if any, and interest on such Notes when
such payments are due; (ii) the Company's obligations with respect to such Notes
under Article II hereof; (iii) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith;
and (iv) this Article VIII.
In order to exercise Defeasance:
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(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, pursuant to an irrevocable trust
and security agreement in form satisfactory to the Trustee, money in
U.S. dollars sufficient or U.S. Government Obligations the principal of
and interest on which will be sufficient or a combination thereof
sufficient in the opinion of a nationally recognized firm of
independent public accountants, expressed in a written certification
thereof (in form satisfactory to the Trustee) to pay the principal of,
premium, if any, and interest on the outstanding Notes on the stated
date for payment thereof or on the applicable redemption date, as the
case may be, of such principal or installment of principal of, premium,
if any, and interest on the outstanding Notes;
(b) the Company shall have delivered to the Trustee, an
Opinion of Counsel (which counsel may be an employee of the Company)
reasonably acceptable to the Trustee confirming that: (A) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the Issuance Date, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such
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 Defeasance had not occurred;
(c) no Event of Default shall have occurred and be continuing
on the date of such Defeasance (other than an Event of Default
resulting from or related to the incurrence of Indebtedness, the
proceeds of which are to be applied to such deposit) or, insofar as
Sections 6.01(g) and (h) hereof are concerned, at any time in the
period ending on the 91st day after the date of deposit (or greater
period of time in which any such deposit of trust funds may remain
subject to the effect of any Bankruptcy Law insofar as those apply to
the deposit by the Company);
(d) such Defeasance shall not result in a breach or violation
of, or constitute a default under, any material agreement or instrument
(other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(e) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that after the 91st day following the deposit
(or such greater period referred to in (c) above), the trust funds will
not be subject to the effect of any applicable Bankruptcy Law;
(f) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Notes over any
other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others;
(g) the deposit shall not result in the Company, the Trustee
or the trust fund established pursuant to (a) above being subject to
regulation under the Investment Company Act of 1940, as amended;
(h) Holders of the Notes will have a valid, perfected and
unavoidable (under applicable Bankruptcy Law), subject to the passage
of time referred to clause (e) above, first priority security interest
in the trust funds; and
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(i) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel (subject to customary
exceptions), each stating that all conditions precedent provided for or
relating to the Defeasance have been complied with.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged. In order to have money available on a
payment date to pay principal or interest (including Additional Amounts, if
applicable) on the Notes, the U.S. Government Obligations shall be payable as to
principal or interest on or before such payment date in such amounts as will
provide the necessary money. U.S. Government Obligations shall not be callable
at the issuer's option.
SECTION 8.03. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.02 hereof. It shall apply the deposited
money and the money from U.S. Government Obligations through the Paying Agent
and in accordance with this Indenture to the payment of principal and interest
on the Notes.
SECTION 8.04. REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal or interest that remains
unclaimed for two years after the date upon which such payment shall have become
due; provided, however, that the Company shall have first caused notice of such
payment to the Company to be mailed to each Holder entitled thereto no less than
30 days prior to such payment. After payment to the Company, the Trustee and the
Paying Agent shall have no further liability with respect to such money and
Holders entitled to the money must look to the Company for payment as general
creditors unless any applicable abandoned property law designates another
Person.
SECTION 8.05. REINSTATEMENT.
If (i) the Trustee or Paying Agent is unable to apply any money in
accordance with Section 8.03 hereof by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application and (ii) the Holders of at least a majority in principal amount
of the then outstanding Notes so request by written notice to the Trustee, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 hereof
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 8.03 hereof or such request is revoked by such
Holders; provided, however, that if the Company makes any payment of interest on
or principal of any Note following 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 held by the Trustee or Paying Agent.
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ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Notes without the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Section 5.01 hereof;
(c) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(d) to make any change that does not adversely affect the
interests hereunder of any Holder; or
(e) to qualify the Indenture under the TIA or to comply with
the requirements of the SEC in order to maintain the qualification of
the Indenture under the TIA.
SECTION 9.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.07 hereof, the Company and the Trustee may amend
or supplement this Indenture or the Notes with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in
principal amount of the Notes then outstanding may also waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment,
supplement or waiver under this Section may not:
(a) reduce the amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter the provisions of Sections 7 and 8 of the Initial
Note and Sections 6 and 7 of the Exchange Note (other than provisions
relating to the covenants described under Sections 4.10 and 4.13);
(c) reduce the rate of or change the time for payment of
interest on any Note;
(d) waive a default in the payment of the principal of, or
interest on, any Note (except a rescission of acceleration of the Notes
by the Holders of at least a majority in aggregate principal amount of
the Notes and a waiver of the payment default that resulted from such
acceleration);
(e) except as contemplated by Section 10.07(e), make any Note
payable in money other than that stated in the Note;
(f) make any change in Section 6.04 or 6.07 hereof;
(g) waive a redemption payment with respect to any Note; or
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(h) make any change in the foregoing amendment and waiver
provisions of this Article 9.
To secure a consent of the Holders under this Section 9.02, it shall
not be necessary for the Holders to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to Holders a notice briefly describing the
amendment or waiver.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
SECTION 9.04. 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 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 or subsequent Holder may revoke the consent as to
his Note or portion of a Note if the Trustee receives the notice of revocation
before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Notes have
consented to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders after such record date. No consent shall be valid or effective for
more than 90 days after such record date unless consents from Holders of the
principal amount of Notes required hereunder for such amendment or waiver to be
effective shall have also been given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective it shall
bind every Holder, unless it is of the type described in any of clauses (a)
through (h) of Section 9.02 hereof. In such case, the amendment or waiver shall
bind each Holder who has consented to it and every subsequent Holder that
evidences the same debt as the consenting Holder's Note.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment or
waiver on any Note thereafter authenticated. The Company in exchange for all
Notes may issue and the Trustee shall authenticate new Notes that reflect the
amendment or waiver.
Failure to make such notation on a Note or to issue a new Note as
aforesaid shall not affect the validity and effect of such amendment or waiver.
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SECTION 9.06. TRUSTEE PROTECTED.
The Trustee shall sign all supplemental indentures, except that the
Trustee may, but need not, sign any supplemental indenture that adversely
affects its rights.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS.
This Indenture is subject to the provisions of the TIA that are
required to be incorporated into this Indenture (or, prior to the registration
of the Notes pursuant to the Registration Rights Agreement, would be required to
be incorporated into this Indenture if it were qualified under the TIA), and
shall, to the extent applicable, be governed by such provisions. If any
provision of this Indenture limits, qualifies, or conflicts with another
provision which is required (or would be so required) to be incorporated in this
Indenture by the TIA, the incorporated provision shall control.
SECTION 10.02. 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 to the other's address stated in Section 10.10 hereof. The Company or the
Trustee by notice to the other may designate additional or different addresses
for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by first class
mail to his address shown on the register kept by the Registrar. 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.
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.
All other notices or communications shall be in writing.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by the Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
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).
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SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.05. 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 pursuant to Section 4.03)
shall include:
(a) a statement that the Person signing such certificate or
rendering such 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, such
Person has made such examination or investigation as is necessary to
enable such Person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 10.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by, or a meeting of,
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 10.07. LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions in the State of New York are not required to be open. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If any other operative date for purposes of
this Indenture shall occur on a Legal Holiday then for all purposes the next
succeeding day that is not a Legal Holiday shall be such operative date.
SECTION 10.08. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, 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. Each Holder by accepting a Note waives
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and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
SECTION 10.09. COUNTERPARTS AND FACSIMILE SIGNATURES.
This Indenture may be executed by manual or facsimile signature in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 10.10. VARIABLE PROVISIONS.
"OFFICER" means the Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
The first certificate pursuant to Section 4.03 hereof shall be for the
fiscal year ended on December 31, 1998.
The reporting date for Section 7.06 hereof is March 15, of each year.
The first reporting date is March 15, 1999.
The Trustee shall always have a combined capital and surplus of at
least $100,000,000 as set forth in its most recent published annual report of
condition.
The Company's address is:
NTL Incorporated
110 East 59th Street, 26th Floor
New York, New York 10022
Attention: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
The Trustee's address is:
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trustee
Administration Department
SECTION 10.11. GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE
AND THE NOTES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
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SECTION 10.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or an Affiliate. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 10.13. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 10.14. 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 10.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
NTL INCORPORATED, as Company
By: /s/ Richard J. Lubasch
Name: Richard J. Lubasch
Title: Senior Vice President and
General Counsel
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ Andrew M. Deck
Name: Andrew M. Deck
Title: Vice President
<PAGE> 65
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE
144(k) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE), AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFF-SHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED
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<PAGE> 66
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE
IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFF-SHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
A-2
<PAGE> 67
No. ________
$______
CUSIP No. [ ]/CINS No. [ ]
11 1/2% SENIOR NOTE DUE 2008
NTL Incorporated, a Delaware corporation (the "COMPANY"), promises to
pay to __________________________ or registered assigns, the principal sum of
____________________ $[____________] [,or such other amount as is indicated on
Schedule A hereof* ,] on October 1, 2008, subject to the further provisions of
this Note set forth on the reverse hereof which further provisions shall for all
purposes have the same effect as if set forth at this place.
Interest Payment Dates: April 1 and October 1, commencing April 1, 1999
Record Dates: March 15 and September 15
IN WITNESS WHEREOF, NTL Incorporated has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated:_____________________
NTL INCORPORATED
by:________________________
by:________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 11 1/2% Senior
Notes due 2008 described in the
within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By:______________________________________
Authorized Officer
- --------
* Applicable to Global Notes Only
A-3
<PAGE> 68
[FORM OF REVERSE OF INITIAL NOTE]
NTL INCORPORATED
11 1/2% Senior Note due 2008
1. Interest. NTL INCORPORATED, a Delaware corporation (the "COMPANY"),
is the issuer of 11 1/2% Senior Notes due 2008 (the "NOTES"). The Notes will
accrue interest at a rate of 11 1/2% per annum. The Company promises to pay
interest on the Notes in cash semiannually on each April 1 and October 1,
commencing on April 1, 1999, to Holders of record on the immediately preceding
March 15 and September 15, respectively. Interest on the Notes will accrue from
the most recent date to which interest has been paid, or if no interest has been
paid, from November 2, 1998. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. The Company will pay interest on overdue principal
at the interest rate borne by the Notes, compounded semiannually, and it shall
pay interest on overdue installments of interest (without regard to any
applicable grace period) at the same interest rate compounded semiannually. Any
interest paid on this Note shall be increased to the extent necessary to pay
Additional Amounts as set forth in this Note.
2. Special Interest. The Holder of this Note is entitled to the
benefits of the Registration Rights Agreement relating to the Notes, dated as of
November 2, 1998, between the Company and the Initial Purchasers party thereto
(the "REGISTRATION RIGHTS AGREEMENT").
In the event that either (a) the Exchange Offer Registration Statement
(as such term is defined in the Registration Rights Agreement) is not filed with
the SEC on or prior to the 90th day following the date of original issuance of
the Notes, (b) the Exchange Offer Registration Statement is not declared
effective prior to the 180th day following the date of original issuance of the
Notes (as such period may be extended in accordance with the SEC review delay
provisions of the Registration Rights Agreement) or (c) the Registered Exchange
Offer (as such term is defined in the Registration Rights Agreement) is not
consummated or a Shelf Registration Statement (as such term is defined in the
Registration Rights Agreement) is not declared effective on or prior to the
220th day following the date of original issuance of the Notes (as such period
may be extended in accordance with the SEC review delay provisions of the
Registration Rights Agreement) (each such event referred to in clauses (a)
through (c) above, a "REGISTRATION DEFAULT"), interest will accrue (in addition
to the stated interest on the Notes) from and including the next day following
each of (i) such 90-day period in the case of clause (a) above and (ii) such
180-day period in the case of clause (b) above and (iii) such 220-day period in
the case of clause (c) above (in each of cases (b) and (c) as such period is
extended, if applicable, in the manner aforesaid) (each such period referred to
in clauses (i)-(iii) above an "ACCRUAL PERIOD"), at a rate per annum equal to
0.50% of the principal amount of the Notes (determined daily). The amount of
such additional interest (the "SPECIAL INTEREST") will increase by an additional
0.50% of the principal amount with respect to each subsequent applicable Accrual
Period until all Registration Defaults have been cured, up to a maximum amount
of Special Interest of 1.50% per annum of the principal amount (determined
daily). In each case such additional interest will be payable in cash
semiannually in arrears on each April 1 and October 1, commencing April 1, 1999,
to Holders of record on the immediately preceding March 15 and September 15,
respectively. In the event that a Shelf Registration Statement is declared
effective pursuant to the terms of the Registration Rights Agreement, if the
Company fails to keep such Registration Statement continuously effective for the
period required by the Registration Rights Agreement, then from such time as the
Shelf Registration Statement is no longer effective until the earlier of (i) the
date that the Shelf Registration Statement is again deemed effective, (ii) the
date that is the second anniversary of the original issuance of the Notes or
(iii) the date as of which all of the Notes are sold pursuant to the Shelf
Registration Statement, Special Interest shall accrue at a rate per annum equal
to 0.50% of the principal
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<PAGE> 69
amount of the Notes (1.00% thereof if the Shelf Registration Statement is no
longer effective for 30 days or more) and shall be payable in cash semiannually
in arrears on each April 1 and October 1, commencing April 1, 1999, to the
Holders of record on the immediately preceding March 15 and September 15,
respectively.
3. Additional Amounts. This Section 3 shall apply only in the event
that the Company becomes, or a successor to the Company is, a corporation
organized or existing under the laws of the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands. All payments made by the
Company on this Note shall be made without deduction for or on account of, any
and all present or future taxes, duties, assessments, or governmental charges of
whatever nature unless the deduction or withholding of such taxes, duties,
assessments or governmental charges is then required by law. If any deduction or
withholding for or on account of any present or future taxes, assessments or
other governmental charges of the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands (or any political
subdivision or taxing authority thereof or therein) shall at any time be
required in respect of any amounts to be paid by the Company under this Note,
the Company shall pay or cause to be paid such additional amounts ("ADDITIONAL
AMOUNTS") as may be necessary in order that the net amounts received by a Holder
of this Note after such deduction or withholding shall be not less than the
amounts specified in this Note to which the Holder of this Note is entitled;
provided, however, that the Company shall not be required to make any payment of
Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge to
the extent such tax, assessment or other governmental charge would not
have been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or possessor of a power over,
such Holder, if such Holder is an estate, nominee, trust, partnership
or corporation), other than the holding of this Note or the receipt of
amounts payable in respect of this Note, and the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands
(or any political subdivision or taxing authority thereof or therein)
including, without limitation, such Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a
citizen or resident thereof or being or having been present or engaged
in trade or business therein or having or having had a permanent
establishment therein or (ii) the presentation of this Note (where
presentation is required) for payment on a date more than 30 days after
the date on which such payment became due and payable or the date on
which payment thereof is duly provided for, whichever occurs later,
except to the extent that the Holder would have been entitled to
Additional Amounts had this Note been presented on the last day of such
period of 30 days;
(b) any tax, assessment or other governmental charge
that is imposed or withheld by reason of the failure to comply by the
Holder of this Note or, if different, the beneficial owner of the
interest payable on this Note, with a timely request of the Company
addressed to such Holder or beneficial owner to provide information,
documents or other evidence concerning the nationality, residence,
identity or connection with the taxing jurisdiction of such Holder or
beneficial owner which is required or imposed by a statute, regulation
or administrative practice of the taxing jurisdiction as a precondition
to exemption from all or part of such tax, assessment or governmental
charge;
(c) any estate, inheritance, gift, sales, transfer,
personal property or similar tax, assessment or other governmental
charge;
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<PAGE> 70
(d) any tax, assessment or other governmental charge
which is collectible otherwise than by withholding from payments of
principal amount, redemption amount, Change of Control Payment or
interest with respect to a Note or withholding from the proceeds of a
sale or exchange of a Note;
(e) any tax, assessment or other governmental charge
required to be withheld by any Paying Agent from any payment of
principal amount, redemption amount, Change of Control Payment or
interest with respect to a Note, if such payment can be made, and is in
fact made, without such withholding by any other Paying Agent located
inside the United States;
(f) any tax, assessment or other governmental charge
imposed on a Holder that is not the beneficial owner of a Note to the
extent that the beneficial owner would not have been entitled to the
payment of any such Additional Amounts had the beneficial owner
directly held the Note;
(g) any combination of items (a), (b), (c), (d), (e)
and (f) above;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any interest on, this Note to any Holder who is a fiduciary or
partnership or other than the sole beneficial owner of such payment to the
extent that a beneficiary or settlor would not have been entitled to any
Additional Amounts had such beneficiary or settlor been the Holder of this Note.
All references to principal amount or interest on the Notes in the Indenture or
the Notes shall include any Additional Amounts payable to the Company pursuant
to this Section 3.
4. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date for the next interest payment date
even though Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Notes to a Paying Agent to collect
principal and premium payments. The Company will pay principal, premium, if any,
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal, premium, if any, and interest by check payable in such money. It may
mail an interest check to a holder's registered address. If a Holder so
requests, principal, premium, if any, and interest may be paid by wire transfer
of immediately available funds to an account previously specified in writing by
such Holder to the Company and the Trustee.
5. Paying Agent and Registrar. The Trustee will act as Paying Agent and
Registrar in the City of New York, New York. Chase Manhattan Bank Luxembourg
S.A. will act as Paying Agent and Registrar in Luxembourg if and as long as the
Notes are listed on the Luxembourg Stock Exchange. The Company may change any
Paying Agent or Registrar without prior notice. The Company or any of its
Affiliates may act in any such capacity.
6. Indenture. The Company issued the Notes under an Indenture, dated as
of November 2, 1998 (the "INDENTURE"), between the Company and The Chase
Manhattan Bank, as Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by the Trust Indenture Act of
1939 (15 U.S. Code (Sections) 77aaa-77bbbb) as in effect on the date of
the Indenture. The Notes are subject to, and qualified by, all such terms,
certain of which are summarized hereon, and Holders are referred to the
Indenture and such Act for a statement of such terms. The Notes are unsecured
general obligations of the Company limited to $625,000,000 in aggregate
principal amount.
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<PAGE> 71
7. Optional Redemption. Except as provided in Section 8 hereof, the
Notes are not redeemable at the Company's option prior to October 1, 2003.
Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on October
1 of the years indicated below:
Year Percentage
---- ----------
2003..................................... 105.570%
2004..................................... 103.833%
2005..................................... 101.917%
2006 and thereafter...................... 100.000%
8. Optional Tax Redemption. (a) The Notes may be redeemed at the option
of the Company, in whole but not in part, upon not less than 30 nor more than 60
days notice, at any time at a redemption price equal to the principal amount
thereof plus accrued and unpaid interest to the date fixed for redemption if
after the date on which Section 3 of this Note becomes applicable (the "RELEVANT
DATE") there has occurred any change in or amendment to the laws (or any
regulations or official rulings promulgated thereunder) of the United Kingdom,
the Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands (or any
political subdivision or taxing authority thereof or therein), or any change in
or amendment to the official application or interpretation of such laws,
regulation or rulings (a "CHANGE IN TAX LAW") which becomes effective after the
Relevant Date, as a result of which the Company is or would be so required on
the next succeeding Interest Payment Date to pay Additional Amounts with respect
to the Notes as described under Section 3 hereof with respect to withholding
taxes imposed by the United Kingdom, the Netherlands, the Netherlands Antilles,
Bermuda or the Cayman Islands (or any political subdivision or taxing authority
thereof or therein) (a "WITHHOLDING TAX") and such Withholding Tax is imposed at
a rate that exceeds the rate (if any) at which Withholding Tax was imposed on
the Relevant Date, provided, however, that (i) this paragraph shall not apply to
the extent that, at the Relevant Date it was known or would have been known had
professional advice of a nationally recognized accounting firm in the United
Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands, as the case may be, been sought, that a Change in Tax Law in the United
Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands was to occur after the Relevant Date, (ii) no such notice of redemption
may be given earlier than 90 days prior to the earliest date on which the
Company would be obliged to pay such Additional Amounts were a payment in
respect of the Notes then due, (iii) at the time such notice of redemption is
given, such obligation to pay such Additional Amount remains in effect and (iv)
the payment of such Additional Amounts cannot be avoided by the use of any
reasonable measures available to the Company.
The Notes may also be redeemed, in whole but not in part, at any time
at a redemption price equal to the principal amount thereof plus accrued and
unpaid interest to the date fixed for redemption if the Person formed after the
Relevant Date by a consolidation, amalgamation, reorganization or reconstruction
(or other similar arrangement) of the Company or the Person into which the
Company is merged after the Relevant Date or to which the Company conveys,
transfers or leases its properties and assets after the Relevant Date
substantially as an entirety (collectively, a "SUBSEQUENT CONSOLIDATION") is
required, as a consequence of such Subsequent Consolidation and as a consequence
of a Change in Tax Law in the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands occurring after the date of such
Subsequent Consolidation to pay Additional Amounts with respect to
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<PAGE> 72
Notes with respect to Withholding Tax as described under Section 3 hereof and
such Withholding Tax is imposed at a rate that exceeds the rate (if any) at
which Withholding Tax was or would have been imposed on the date of such
Subsequent Consolidation, provided, however, that this paragraph shall not apply
to the extent that, at the date of such Subsequent Consolidation it was known or
would have been known had professional advice of a nationally recognized
accounting firm in the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands, as the case may be, been sought, that a
Change in Tax Law in the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands was to occur after such date.
The Company will also pay, or make available for payment, to Holders on
the Redemption Date any Additional Amounts (as described, but subject to the
exceptions referred to, in Section 3 hereof) resulting from the payment of such
Redemption Price.
9. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder of
the Notes to be redeemed at his address of record. The Notes in denominations
larger than $1,000 may be redeemed in part but only in integral multiples of
$1,000. In the event of a redemption of less than all of the Notes, the Notes
will be chosen for redemption by the Trustee in accordance with the Indenture.
On and after the redemption date, interest ceases to accrue on the Notes or
portions of them called for redemption.
If this Note is redeemed subsequent to a record date with respect to
any interest payment date specified above and on or prior to such interest
payment date, then any accrued interest will be paid to the Person in whose name
this Note is registered at the close of business on such record date.
10. Mandatory Redemption. The Company will not be required to make
mandatory redemption or repurchase payments with respect to the Notes. There are
no sinking fund payments with respect to the Notes.
11. Repurchase at Option of Holder. (a) If there is a Change of Control
Triggering Event, the Company shall be required to offer to purchase on the
Purchase Date all outstanding Notes at a purchase price equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest to the
Purchase Date. Holders of Notes that are subject to an offer to purchase will
receive a Change of Control offer from the Company prior to any related Purchase
Date and may elect to have such Notes or portions thereof in authorized
denominations purchased by completing the form entitled "Option of Holder to
Elect Purchase" appearing below.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, and when the aggregate amount of Excess Proceeds from such Asset Sales
exceeds $15 million, the Company shall be required to make an offer (an "ASSET
SALE OFFER") to all holders of the Notes and Other Qualified Notes to purchase
the maximum principal amount of Notes and Other Qualified Notes (determined on a
pro rata basis according to the principal amount or accreted value, as the case
may be, of the Notes and the Other Qualified Notes) that may be purchased out of
the Excess Proceeds, with respect to the Notes, at an offer price in cash in an
amount equal to 100% of the outstanding principal amount thereof plus accrued
and unpaid interest, if any, to the date fixed for the closing of such offer. To
the extent that the aggregate principal amount or accreted value, as the case
may be, of Notes and Other Qualified Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use such deficiency for
general corporate purposes. If the aggregate principal amount or accreted value,
as the case may be, of Notes and Other Qualified Notes surrendered by holders
thereof exceeds the amount of Excess Proceeds, then such remaining Excess
Proceeds will be allocated pro rata according to principal
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<PAGE> 73
amount or accreted value, as the case may be, to the Notes and each issue of the
Other Qualified Notes and, the Trustee will select the Notes to be purchased in
accordance with Section 3.09(e) of the Indenture. Upon completion of such offer
to purchase, the amount of Excess Proceeds will be reset at zero.
12. 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, as
provided in the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption (except the unredeemed portion of any Note being
redeemed in part). Also, it need not exchange or register the transfer of any
Note for a period of 15 days before a selection of Notes to be redeemed.
13. Persons Deemed Owners. Except as provided in paragraph 4 of this
Note, the registered Holder of a Note may be treated as its owner for all
purposes.
14. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, Holders of Notes
entitled to the money must look to the Company for payment unless an abandoned
property law designates another Person and all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
15. Defaults and Remedies. The Notes shall have the Events of Default
set forth in Section 6.01 of the Indenture. Subject to certain limitations in
the Indenture, if an Event of Default occurs and is continuing, the Trustee by
notice to the Company or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes by notice to the Company and the Trustee
may declare all the Notes to be due and payable immediately, except that in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all unpaid principal and interest accrued on the Notes shall become
due and payable immediately without further action or notice. The Holders of a
majority in principal amount of the Notes then outstanding by written notice to
the Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration. Holders may not enforce
the Indenture or the Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Notes issued under the Indenture may direct the Trustee in its
exercise of any trust or power. The Company must furnish annually compliance
certificates to the Trustee. The above description of Events of Default and
remedies is qualified by reference, and subject in its entirety, to the more
complete description thereof contained in the Indenture.
16. Amendments, Supplements and Waivers. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes (including consents obtained in connection with a tender offer or exchange
offer for Notes), and any existing default may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes. Without
the consent of any Holder, the Indenture or the Notes may be amended among other
things, to cure any ambiguity, defect or inconsistency, to provide for
assumption of the Company's obligations to Holders, to make any change that does
not adversely affect the rights of any Holder or to qualify the Indenture under
the TIA or to
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<PAGE> 74
comply with the requirements of the SEC in order to maintain the qualification
of the Indenture under the TIA.
17. Restrictive Covenants. The Indenture imposes certain limitations on
the ability of the Company and its Subsidiaries to, among other things, engage
in certain transactions with Affiliates, incur additional indebtedness and make
payments in respect of Capital Stock. The limitations are subject to a number of
important qualifications and exceptions.
18. Trustee Dealings with the Company. The Trustee, in its individual
or any other capacity may become the owner or pledgee of the Notes and may
otherwise deal with the Company or an Affiliate with the same rights it would
have, as if it were not Trustee, subject to certain limitations provided for in
the Indenture and in the TIA. Any Agent may do the same with like rights.
19. No Recourse Against Others. A director, officer, employee or
stockholder, 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. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the Notes.
20. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THE NOTES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
21. Authentication. The Notes shall not be valid until authenticated by
the manual signature of an authorized officer of the Trustee or an
authenticating agent.
22. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and UGMA (= Uniform Gifts to
Minors Act).
The Company will furnish to any Holder of the Notes upon written
request and without charge a copy of the Indenture. Request may be made to:
NTL Incorporated
110 East 59th Street, 26th Floor
New York, New York 10022
Attention of: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
A-10
<PAGE> 75
ASSIGNMENT FORM
To assign this Note, fill in the
form below:
(I) or (we) assign and transfer this Note to
__________________________________________
(Insert assignee's social security or tax I.D. no.)
__________________________________________
__________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Your Signature:_____________________________________________________
(Sign exactly as your name appears on the
other side of this Note)
Date: __________________
Signature Guarantee:* ____________________________________________
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Notes and the last date,
if any, on which such Notes were owned by the Company or any Affiliate
of the Company, the undersigned confirms that such Notes are being
transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company or any subsidiary thereof,
(2) [ ] to a qualified institutional buyer in compliance with Rule
144A,
(3) [ ] inside the United States to an Institutional Accredited
Investor that, prior to such transfer, furnishes to the
Trustee a signed letter containing certain representations and
agreements relating to the restrictions on transfer of the
Notes (the form of which letter can be obtained from the
Trustee) and, if such transfer is in respect of an aggregate
principal amount of Notes of less than $100,000, an opinion of
counsel acceptable to the Company that such transfer is in
compliance with the Securities Act,
(4) [ ] outside the United States in compliance with Rule 904 under
the Securities Act,
(5) [ ] pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if available) or
(6) [ ] pursuant to an effective registration statement under the
Securities Act.
- -------------------------------
* Signature must be guaranteed by a commercial bank, trust
company or member firm of the New York Stock Exchange
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<PAGE> 76
--------------------------
Signature
Signature Guarantee*
- --------------------------
Signature must be guaranteed
------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Date: --------------------
- --------------------------
* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
NOTICE: To be executed by an executive officer
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<PAGE> 77
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note or a portion thereof
repurchased by the Company pursuant to Section 3.09, 4.10 or 4.13 of the
Indenture, check the box: [ ]
If the purchase is in part, indicate the portion (in
denominations of $1,000 or any integral multiple thereof) to be purchased:
______________________
Your Signature:_______________________________________________________
(Sign exactly as your name appears
on the other side of this Note)
Date: ________________________
Signature Guarantee:**/
- -------------------------------
**/ Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
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<PAGE> 78
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount of this Global Note shall be
$__________________. The following increases or decreases in the principal
amount of this Global Note have been made:
<TABLE>
<CAPTION>
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Amount of decrease in Amount of increase Principal amount of Signature of Date of exchange
principal amount of in principal amount this Global Note authorized officer following such
this Global Note of this Global Note of Trustee or Notes decrease or increase
Custodian
<S> <C> <C> <C> <C>
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
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</TABLE>
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<PAGE> 79
EXHIBIT B
[FORM OF FACE OF EXCHANGE NOTE]
[Global Notes Legend, if applicable]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
B-1
<PAGE> 80
No. ___________ $__________
CUSIP No. [ ]CINS No. [ ]
11 1/2% SERIES B SENIOR NOTE DUE 2008
NTL Incorporated, a Delaware corporation (the "COMPANY") promises to
pay to _________________________ or registered assigns, the principal sum of [ ]
$[ ] [or such other amount as is indicated on Schedule A hereof]**** on October
1, 2008, subject to the further provisions of this Note set forth on the reverse
hereof which further provisions shall for all purposes have the same effect as
if set forth at this place.
Interest Payment Dates: April 1 and October 1, commencing April 1, 1999
Record Dates: March 15 and September 15
IN WITNESS WHEREOF, NTL Incorporated has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated: ________________
NTL INCORPORATED,
by:____________________________________
by:____________________________________
- ----------------------------------------------
**** Applicable to Global Notes only.
B-2
<PAGE> 81
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 11 1/2% Series B Senior Notes due 2008 described in the
within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By: _____________________________________
Authorized Officer
B-3
<PAGE> 82
(FORM OF REVERSE OF EXCHANGE NOTE)
NTL INCORPORATED
11 1/2% Series B Senior Note due 2008
1. Interest. NTL INCORPORATED, a Delaware corporation (the "COMPANY"),
is the issuer of 11 1/2% Series B Senior Notes due 2008 (the "NOTES"). The Notes
will accrue interest at a rate of 11 1/2% per annum. The Company promises to pay
interest on the Notes in cash semiannually on each April 1 and October 1,
commencing April 1, 1999, to Holders of record on the immediately preceding
March 15 and September 15, respectively, at the rate of 11 1/2% per annum.
Interest on the Notes will accrue from the most recent date to which interest
has been paid on the Company's 11 1/2% Senior Notes due 2008, or the Notes, as
the case may be, or if no interest has been paid, from November 2, 1998.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue principal and premium, if any,
at the interest rate borne by the Notes, compounded semiannually, and it shall
pay interest on overdue installments of interest (without regard to any
applicable grace period) at the same interest rate compounded semiannually. Any
interest paid on this Note shall be increased to the extent necessary to pay
Additional Amounts as set forth in this Note.
2. Additional Amounts. This Section 2 shall apply only in the event
that the Company becomes, or a successor to the Company is, a corporation
organized or existing under the laws of the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands. All payments made by the
Company on this Note shall be made without deduction for or on account of, any
and all present or future taxes, duties, assessments, or governmental charges of
whatever nature unless the deduction of such taxes, duties, assessments or
governmental charges is then required by law. If any deduction or withholding
for or on account of any present or future taxes, assessments or other
governmental charges of the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands (or any political subdivision or taxing
authority thereof or taxing authority thereof or therein) shall at any time be
required in respect of any amounts to be paid by the Company under this Note,
the Company shall pay or cause to be paid such additional amounts ("ADDITIONAL
AMOUNTS") as may be necessary in order that the net amounts received by a Holder
of this Note after such deduction or withholding shall be not less than the
amounts specified in this Note to which the Holder of this Note is entitled;
provided, however, that the Company shall not be required to make any payment of
Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge to the
extent such tax, assessment or other governmental charge would not have
been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or possessor of a power over,
such Holder, if such Holder is an estate, nominee, trust, partnership
or corporation), other than the holding of this Note or the receipt of
amounts payable in respect of this Note, the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands or
any political subdivision or taxing authority thereof or therein,
including, without limitation, such Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a
citizen or resident thereof or being or having been present or engaged
in trade or business therein or having or having had a permanent
establishment therein or (ii) the presentation of this Note (where
presentation is required) for payment on a date more than 30 days after
the date on which such payment became due and payable or the date on
which payment thereof is duly provided for, whichever occurs
B-4
<PAGE> 83
later, except to the extent that the Holder would have been entitled to
Additional Amounts had this Note been presented on the last day of such
period of 30 days;
(b) any tax, assessment or other governmental charge that is
imposed or withheld by reason of the failure to comply by the Holder of
this Note or, if different, the beneficial owner of the interest
payable on this Note, with a timely request of the Company addressed to
such Holder or beneficial owner to provide information, documents or
other evidence concerning the nationality, residence, identity or
connection with the taxing jurisdiction of such Holder or beneficial
owner which is required or imposed by a statute, regulation or
administrative practice of the taxing jurisdiction as a precondition to
exemption from all or part of such tax, assessment or governmental
charge;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or other governmental charge;
(d) any tax, assessment or other governmental charge which is
collectible otherwise than by withholding from payments of principal
amount, redemption amount, Change of Control Payment or interest with
respect to a Note or withholding from the proceeds of a sale or
exchange of a Note;
(e) any tax, assessment or other governmental charge required
to be withheld by any Paying Agent from any payment of principal
amount, redemption amount, Change of Control Payment or interest with
respect to a Note, if such payment can be made, and is in fact made,
without such withholding by any other Paying Agent located inside the
United States;
(f) any tax, assessment or other governmental charge imposed
on a Holder that is not the beneficial owner of a Note to the extent
that the beneficial owner would not have been entitled to the payment
of any such Additional Amounts had the beneficial owner directly held
the Note;
(g) any combination of items (a), (b), (c), (d), (e) and (f)
above;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any interest on, this Note to any Holder who is a fiduciary or
partnership or other than the sole beneficial owner of such payment to the
extent that a beneficiary or settlor would not have been entitled to any
Additional Amounts had such beneficiary or settlor been the Holder of this Note.
All references to principal amount or interest on the Notes in the Indenture or
the Notes shall include any Additional Amounts payable to the Company pursuant
to this Section 2.
3. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date for the next interest payment date
even though Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Notes to a Paying Agent to collect
principal and premium payments. The Company will pay principal, premium, if any,
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal, premium, if any, and interest by check payable in such money. It may
mail an interest check to a holder's registered address. If a Holder so
requests, principal, premium, if any, and interest may be paid by wire transfer
of immediately available funds to an account previously specified in writing by
such Holder to the Company and the Trustee.
B-5
<PAGE> 84
4. Paying Agent and Registrar. The Trustee will act as Paying Agent and
Registrar in the City of New York. Chase Manhattan Bank Luxembourg S.A. will act
as Paying Agent and Registrar in Luxembourg if and as long as the Notes are
listed on the Luxembourg Stock Exchange. The Company may change any Paying Agent
or Registrar without prior notice. The Company or any of its Affiliates may act
in any such capacity.
5. Indenture. The Company issued the Notes under an indenture, dated as
of November 2, 1998 (the "INDENTURE"), between the Company and The Chase
Manhattan Bank, as Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by the Trust Indenture Act of
1939 (15 U.S. Code (Section)(Section) 77aaa-77bbbb) as in effect on the date of
the Indenture. The Notes are subject to, and qualified by, all such terms,
certain of which are summarized hereon, and Holders are referred to the
Indenture and such Act for a statement of such terms. The Notes are unsecured
general obligations of the Company limited to $625,000,000 in aggregate
principal amount.
6. Optional Redemption. Except as provided in Section 7 herein, the
Notes are not redeemable at the Company's option prior to October 1, 2003.
Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on October
1 of the years indicated below:
<TABLE>
<CAPTION>
<S> <C> <C>
Year Percentage
---- ----------
2003 ......................................... 105.570%
2004.......................................... 103.833%
2005.......................................... 101.917%
2006 and thereafter........................... 100.000%
</TABLE>
7. Optional Tax Redemption. (a) The Notes may be redeemed at the option
of the Company, in whole but not in part, upon not less than 30 nor more than 60
days notice, at any time at a redemption price equal to the principal amount
thereof plus accrued and unpaid interest to the date fixed for redemption if
after the date on which Section 2 of this Note becomes applicable (the "RELEVANT
DATE") there has occurred any change in or amendment to the laws (or any
regulations or official rulings promulgated thereunder) of the United Kingdom,
the Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands (or any
political subdivision or taxing authority thereof or therein), or any change in
or amendment to the official application or interpretation of such laws,
regulations or rulings (a "CHANGE IN TAX LAW") which becomes effective after the
Relevant Date, as a result of which the Company is or would be so required on
the next succeeding Interest Payment Date to pay Additional Amounts with respect
to the Notes as described under Section 2 hereof with respect to withholding
taxes imposed by the United Kingdom, the Netherlands, the Netherlands Antilles,
Bermuda or the Cayman Islands (or any political subdivision or taxing authority
thereof or therein) (a "WITHHOLDING TAX') and such Withholding Tax is imposed at
a rate that exceeds the rate (if any) at which Withholding Tax was imposed on
the Relevant Date, provided, however, that (i) this paragraph shall not apply to
the extent that, at the Relevant Date it was known or would have been known had
professional advice of a nationally recognized accounting firm in the United
Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands, as the case may be, been sought, that a change in Tax Law in the United
Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands was to occur after the Relevant Date, (ii) no such notice of redemption
may be given earlier than 90 days prior to the earliest date on which the
Company would be obliged to pay such Additional Amounts were a payment
B-6
<PAGE> 85
in respect of the Notes then due, (iii) at the time such notice of redemption is
given, such obligation to pay such Additional Amount remains in effect and (iv)
the payment of such Additional Amounts cannot be avoided by the use of any
reasonable measures available to the Company.
(b) The Notes may also be redeemed, in whole but not in part, at any
time at a redemption price equal to the principal amount thereof plus accrued
and unpaid interest to the date fixed for redemption if the Person formed after
the Relevant Date by a consolidation, amalgamation, reorganization or
reconstruction (or other similar arrangement) of the Company or the Person into
which the Company is merged after the Relevant Date or to which the Company
conveys, transfers or leases its properties and assets after the Relevant Date
substantially as an entirety (collectively, a "SUBSEQUENT CONSOLIDATION") is
required, as a consequence of such Subsequent Consolidation and as a consequence
of a Change in Tax Law in the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands occurring after the date of such
Subsequent Consolidation to pay Additional Amounts with respect to Notes with
respect to Withholding Tax as described under Section 2 hereof and such
Withholding Tax is imposed at a rate that exceeds the rate (if any) at which
Withholding Tax was or would have been imposed on the date of such Subsequent
Consolidation, provided, however, that this paragraph shall not apply to the
extent that, at the date of such Subsequent Consolidation it was known or would
have been known had professional advice of a nationally recognized accounting
firm in the United Kingdom, the Netherlands, the Netherlands Antilles, Bermuda
or the Cayman Islands, as the case may be, been sought, that a Change in Tax Law
in the United Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the
Cayman Islands was to occur after such date.
The Company will also pay, or make available for payment, to Holders on
the Redemption Date any Additional Amounts (as described, but subject to the
exceptions referred to, in Section 2 hereof) resulting from the payment of such
Redemption Price.
8. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder of
the Notes to be redeemed at his address of record. The Notes in denominations
larger than $1,000 may be redeemed in part but only in integral multiples of
$1,000. In the event of a redemption of less than all of the Notes, the Notes
will be chosen for redemption by the Trustee in accordance with the Indenture.
On and after the redemption date, interest ceases to accrue on the Notes or
portions of them called for redemption. If this Note is redeemed subsequent to a
record date with respect to any interest payment date specified above and on or
prior to such interest payment date, then any accrued interest will be paid to
the Person in whose name this Note is registered at the close of business on
such record date.
9. Mandatory Redemption. The Company will not be required to make
mandatory redemption or repurchase payments with respect to the Notes. There are
no sinking fund payments with respect to the Notes.
10. Repurchase at Option of Holder. (a) If there is a Change of Control
Triggering Event, the Company shall be required to offer to purchase on the
Purchase Date all outstanding Notes at a purchase price equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest to the
Purchase Date. Holders of Notes that are subject to an offer to purchase will
receive a Change of Control offer from the Company prior to any related Purchase
Date and may elect to have such Notes or portions thereof in authorized
denominations purchased by completing the form entitled "Option of Holder to
Elect Purchase" appearing below.
B-7
<PAGE> 86
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, and when the aggregate amount of Excess Proceeds from such Asset Sales
exceeds $15 million, the Company shall be required to make an offer (an "ASSET
SALE OFFER") to all holders of the Notes and Other Qualified Notes to purchase
the maximum principal amount of Notes and other Qualified Notes (determined on a
pro rata basis according to the principal amount or accreted value, as the case
may be, of the Notes and the Other Qualified Notes) that may be purchased out of
the Excess Proceeds with respect to the Notes, at an offer price in cash in an
amount equal to 100% of the outstanding principal amount thereof plus accrued
and unpaid interest, if any, to the date fixed for the closing of such offer. To
the extent that the aggregate principal amount or accreted value, as the case
may be, of Notes and Other Qualified Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use such deficiency for
general corporate purposes. If the aggregate principal amount or accreted value,
as the case may be, of Notes and Other Qualified Notes surrendered by holders
thereof exceeds the amount of Excess Proceeds then any remaining Excess Proceeds
will be allocated pro rata according to principal amount or accreted value, as
the case may be, to the Notes and each issue of the Other Qualified Notes and,
the Trustee will select the Notes to be purchased in accordance with Section
3.09(e) of the Indenture. Upon completion of such offer to purchase, the amount
of Excess Proceeds will be reset at zero.
11. 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, as
provided in the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption (except the unredeemed portion of any Note being
redeemed in part). Also, it need not exchange or register the transfer of any
Note for a period of 15 days before a selection of Notes to be redeemed.
12. Persons Deemed Owners. Except as provided in paragraph 3 of this
Note, the registered Holder of a Note may be treated as its owner for all
purposes.
13. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, Holders of Notes
entitled to the money must look to the Company for payment unless an abandoned
property law designates another Person and all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
14. Defaults and Remedies. The Notes shall have the Events of Default
as set forth in Section 6.01 of the Indenture. Subject to certain limitations in
the Indenture, if an Event of Default occurs and is continuing, the Trustee by
notice to the Company or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes by notice to the Company and the Trustee
may declare all the Notes to be due and payable immediately, except that in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all unpaid principal and interest accrued on the Notes shall become
due and payable immediately without further action or notice. The Holders of a
majority in principal amount of the Notes then outstanding by written notice to
the Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration. Holders may not enforce
the Indenture or the Notes as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes issued under the Indenture may direct the Trustee in its exercise of any
trust
B-8
<PAGE> 87
or power. The Company must furnish annually compliance certificates to the
Trustee. The above description of Events of Default and remedies is qualified by
reference, and subject in its entirety, to the more complete description thereof
contained in the Indenture.
15. Amendments, Supplements and Waivers. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes (including consents obtained in connection with a tender offer or exchange
offer for Notes), and any existing default may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes. Without
the consent of any Holder, the Indenture or the Notes may be amended among other
things, to cure any ambiguity, defect or inconsistency, to provide for
assumption of the Company's obligations to Holders, to make any change that does
not adversely affect the rights of any Holder or to qualify the Indenture under
the TIA or to comply with the requirements of the SEC in order to maintain the
qualification of the Indenture under the TIA.
16. Restrictive Covenants. The Indenture imposes certain limitations on
the ability of the Company and its Subsidiaries to, among other things, engage
in certain transactions with Affiliates, incur additional Indebtedness and make
payments in respect of Capital Stock. The limitations are subject to a number of
important qualifications and exceptions.
17. Trustee Dealings with the Company. The Trustee, in its individual
or any other capacity may become the owner or pledgee of the Notes and may
otherwise deal with the Company or an Affiliate with the same rights it would
have, as if it were not Trustee, subject to certain limitations provided for in
the Indenture and in the TIA. Any Agent may do the same with like rights.
18. No Recourse Against Others. A director, officer, employee or
stockholder, 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. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the Notes.
19. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THE NOTES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
20. Authentication. The Notes shall not be valid until authenticated by
the manual signature of an authorized officer of the Trustee or an
authenticating agent.
21. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and UGMA (= Uniform Gifts to
Minors Act).
B-9
<PAGE> 88
The Company will furnish to any Holder of the Notes upon written
request and without charge a copy of the Indenture. Request may be made to:
NTL Incorporated
110 East 59th Street, 26th Floor
New York, New York 10022
Attention of: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
B-10
<PAGE> 89
ASSIGNMENT FORM
To assign this Note, fill in the
form below:
(I) or (we) assign and transfer this Note to
------------------------------------------
(Insert assignee's social security or tax I.D. no.)
------------------------------------------
------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Your Signature:_______________________________________________________
(Sign exactly as your name appears on the other
side of this Note)
Date: __________________
Signature Guarantee: **/ ______________________________
- ------------------
**/ Signature must be guaranteed by a commercial Bank, trust company or member
of the New York Stock Exchange.
B-11
<PAGE> 90
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note or a portion thereof repurchased
by the Company pursuant to Section 3.09, 4.10 or 4.13 of the Indenture, check
the box: / /
If the purchase is in part, indicate the portion (in denominations of
$1,000 or any integral multiple thereof) to be purchased: _____________________
Your Signature:_______________________________________________________
(Sign exactly as your name appears on the other
side of this Note)
Date: ________________________
Signature Guarantee:***
- ---------------------
*** Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
B-12
<PAGE> 91
SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount of this Global Note shall be
$__________________. The following increases or decreases in the principal
amount of this Global Note have been made:
<TABLE>
<CAPTION>
- ------------------------- --------------------- ---------------------- --------------------- ---------------------
Amount of decrease in Amount of increase Principal amount of Signature of Date of exchange
principal amount of in principal amount this Global Note authorized officer following such
this Global Note of this Global Note of Trustee or Notes decrease or increase
Custodian
- ------------------------- --------------------- ---------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
- ------------------------- --------------------- ---------------------- --------------------- ---------------------
- ------------------------- --------------------- ---------------------- --------------------- ---------------------
- ------------------------- --------------------- ---------------------- --------------------- ---------------------
- ------------------------- --------------------- ---------------------- --------------------- ---------------------
- ------------------------- --------------------- ---------------------- --------------------- ---------------------
- ------------------------- --------------------- ---------------------- --------------------- ---------------------
- ------------------------- --------------------- ---------------------- --------------------- ---------------------
- ------------------------- --------------------- ---------------------- --------------------- ---------------------
- ------------------------- --------------------- ---------------------- --------------------- ---------------------
</TABLE>
B-13
<PAGE> 92
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM RULE 144A GLOBAL NOTE
TO REGULATION S GLOBAL NOTE
(Transfers pursuant to (Section) 2.06(a)(ii)
of the Indenture)
The Chase Manhattan Bank, as Trustee
450 West 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
Re: NTL Incorporated 11 1/2% Senior Notes due 2008 (the
"NOTES")
Reference is hereby made to the Indenture, dated as of
November 2, 1998 (the "INDENTURE"), between NTL Incorporated, as Issuer, and The
Chase Manhattan Bank, as Trustee.
This letter relates to $[ ] aggregate principal amount of
Notes which are held in the form of the [Rule 144A Global Note (CUSIP No. )]
with the Depositary in the name of [name of transferor] (the "TRANSFEROR") to
effect the transfer of the Notes in exchange for an equivalent beneficial
interest in the Regulation S Global Notes.
In connection with such request, the Transferor does hereby
certify that such transfer has been effected in accordance with the transfer
restrictions set forth in the Notes and (i) with respect to transfers made in
reliance on Regulation S, does hereby certify that:
(1) the offer of the Notes was not made to a Person in the
United States;
(2) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither the
Transferor nor any Person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the United States Securities Act of
1933, as amended (the "SECURITIES ACT");
and (ii) with respect to transfers made in reliance on Rule 144 does hereby
certify that the Notes are being transferred in a transaction permitted by Rule
144 under the Securities Act; and (iii) with respect to transfers made in
reliance on Rule 144A, does hereby certify that such Notes are being transferred
in accordance with Rule 144A under the Securities Act to a transferee that the
Transferor reasonably believes is purchasing the Notes for its own account or an
account with respect to which the transferee exercises sole investment
discretion and the transferee and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in a transaction meeting the
requirements of Rule 144A and in accordance with applicable securities laws of
any state of the United States or any other jurisdiction.
In addition, if the sale is made during a distribution
compliance period and the provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1)
of Regulation S are applicable thereto, we confirm
C-1
<PAGE> 93
that such sale has been made in accordance with the applicable provisions of
Rule 903(c)(2) or (3) or Rule 904(c)(1), as the case may be.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Capitalized terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S.
[Name of Transferor]
By:___________________________
Name:
Title:
Dated:
cc: NTL Incorporated
110 East 59th Street
New York, New York 10022
Attn: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
C-2
<PAGE> 94
EXHIBIT D
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM REGULATION S GLOBAL NOTE
TO RULE 144A GLOBAL NOTE
(Transfers pursuant to (Section) 2.06(a)(iii)
of the Indenture)
The Chase Manhattan Bank, as Trustee
450 West 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
Re: NTL Incorporated 11 1/2% Senior Notes due 2008
(the "NOTES")
Reference is hereby made to the Indenture, dated as of
November 2, 1998 (the "INDENTURE"), between NTL Incorporated, as Issuer, and The
Chase Manhattan Bank, as Trustee. Capitalized terms used but not defined herein
shall have the respective meanings given them in the Indenture.
This letter relates to $[ ] aggregate principal amount of
Notes which are held in the form of the Regulation S Global Note (CINS No. [ ])
with the Depositary in the name of [name of transferor] (the "TRANSFEROR") to
effect the transfer of the Notes in exchange for an equivalent beneficial
interest in the Rule 144A Global Note.
In connection with such request, and in respect of such Notes
the Transferor does hereby certify that such Notes are being transferred in
accordance with (i) the transfer restrictions set forth in the Notes and (ii)
Rule 144A under the United States Securities Act of 1933, as amended, to a
transferee that the Transferor reasonably believes is purchasing the Notes for
its own account or an account with respect to which the transferee exercises
sole investment discretion and the transferee and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
[Name of Transferor],
By:___________________________
Name:
Title:
Dated:
cc: NTL Incorporated
110 East 59th Street
New York, New York 10022
Attn: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
D-1
<PAGE> 95
EXHIBIT E
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM GLOBAL NOTE OR RESTRICTED
NOTE TO RESTRICTED NOTE
(Transfers pursuant to (Section) 2.06(a)(iv)
or (Section) 2.06(a)(v) of the Indenture)
The Chase Manhattan Bank, as Trustee
450 West 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
Re: NTL Incorporated 11 1/2% Senior Notes due 2008 (the "NOTES")
Reference is hereby made to the Indenture, dated as of November 2, 1998
(the "INDENTURE"), between NTL Incorporated, as Issuer, and The Chase Manhattan
Bank, as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given them in the Indenture.
This letter relates to $[ ] aggregate principal amount of Notes which
are held [in the form of the [Rule 144A/Regulation S] [Global] [Restricted] Note
(CUSIP No. [ ] CINS No. [ ]) with the Depositary in the name of [name of
transferor] (the "TRANSFEROR") to effect the transfer of the Notes.
In connection with such request, and in respect of such Notes, the
Transferor does hereby certify that such Notes are being transferred (i) in
accordance with the transfer restrictions set forth in the Notes and (ii) in
accordance with applicable securities laws of any state of the United States or
any other jurisdiction.
*Insert, if appropriate.
[Name of Transferor],
By:___________________________
Name:
Title:
Dated:
cc: NTL Incorporated
110 East 59th Street
New York, New York 10022
Attn: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
E-1
<PAGE> 96
EXHIBIT F
FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE
The Chase Manhattan Bank, as Trustee
450 West 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
Re: NTL Incorporated 11 1/2% Senior Notes due 2008 (the "NOTES")
Reference is hereby made to the Indenture, dated as of November 2, 1998
(the "INDENTURE), between NTL Incorporated, as Issuer, and The Chase Manhattan
Bank, as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given them in the Indenture.
This letter relates to $[ ] aggregate principal amount of Notes which
are held [in the form of the [Rule 144/Regulation S] [Restricted] [Global] Note
(CUSIP No. [ ] CINS No. [ ]) with the Depositary * * in the name of [name of
transferor] (the "TRANSFEROR") to effect the transfer of the Notes to the
undersigned.
In connection with such request, and in respect of such Notes we
confirm that:
1. We understand that the Notes were originally offered in a
transaction not involving any public offering in the United States within the
meaning of the United States Securities Act of 1933, as amended (the "SECURITIES
ACT"), that the Notes have not been registered under the Securities Act and that
(A) the Notes may be offered, resold, pledged or otherwise transferred only (i)
to a Person who the seller reasonably believes is a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in a transaction
meeting the requirements of Rule 144A, in a transaction meeting the requirements
of Rule 144 under the Securities Act, to a Person who the seller reasonably
believes is an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act), outside
the United States in a transaction meeting the requirements of Rule 903 or 904
of Regulation S under the Securities Act or in accordance with another exemption
from the registration requirements of the Securities Act (and based upon an
opinion of counsel if the Company so requests), (ii) to the Company, (iii)
pursuant to any other available exemption from registration or (iv) pursuant to
an effective registration statement, and, in each case, in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction and (B) the purchaser will, and each subsequent Holder
is required to, notify any subsequent purchaser from it of the resale
restrictions set forth in (A) above.
2. We are a corporation, partnership or other entity having such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Notes, and we are (or
any account for which we are purchasing under paragraph 4 below is) an
institutional "accredited investor" as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act, able to bear the economic risk of our proposed
investment in the Notes.
- --------------------------
* Insert and modify if appropriate
F-1
<PAGE> 97
3. We are acquiring the Notes for our own account (or for accounts as
to which we exercise sole investment discretion and have authority to make, and
do make, the statements contained in this letter) and not with a view to any
distribution of the Notes, subject, nevertheless, to the understanding that the
disposition of our property shall at all times be and remain within our control.
4. We are, and each account (if any) for which we are purchasing Notes
is, purchasing Notes having an aggregate principal amount of not less than
$100,000 and, if such transfer is in respect of an aggregate principal amount of
Notes of less than $100,000, we are providing an opinion of counsel acceptable
to the Company that such transfer is in compliance with the Securities Act.
5. We understand that (a) the Notes will be delivered to us in
registered form only and that the certificate delivered to us in respect of the
Notes will bear a legend substantially to the following effect:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE
144(k) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE), AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFF-SHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE)
OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
F-2
<PAGE> 98
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFF-SHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.
and (b) such certificates will be reissued without the foregoing legend
only in accordance with the terms of the Indenture.
6. We agree that in the event that at some future time we wish to
dispose of any of the Notes, we will not do so unless:
(a) the Notes are sold to the Company;
(b) the Notes are sold to a qualified institutional buyer
in compliance with Rule 144A under the Securities Act;
(c) the Notes are sold outside the United States in
compliance with Rule 903 or Rule 904 under the Securities Act;
(d) the Notes are sold pursuant to an effective
registration statement under the Securities Act; or
(e) the Notes are sold pursuant to any other available
exemption from registration, subject to the requirements of
the legend set forth above.
Very truly yours,
[PURCHASER]
By:______________________________
Name:
Title:
Dated:
cc: NTL Incorporated
110 East 59th Street
New York, New York 10022
Attn: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
F-3
<PAGE> 99
EXHIBIT G
FORM OF CERTIFICATE FOR TRANSFERS OF
REGULATION S GLOBAL NOTE FOR
RESTRICTED NOTES
(Transfers pursuant to (Section) 2.06(a)(viii))
(Transferor)
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
Re: NTL Incorporated 11 1/2% Senior Notes due 2008 (the "NOTES")
Reference is hereby made to the Indenture, dated as of November 2, 1998
(the "INDENTURE"), between NTL Incorporated, as Issuer, and The Chase Manhattan
Bank, as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given them in the Indenture.
This certificate relates to $[ ] aggregate principal amount of Notes
which are held in the form of the Regulation S Global Note (CINS No. [ ]) with
the Depositary in the name of [name of transferor] (the "TRANSFEROR") to effect
the transfer of the beneficial interest in such Regulation S Global Note for a
beneficial interest in an equivalent aggregate principal amount of Restricted
Securities.
In connection with such request, and in respect of such Notes, we
confirm that:
We are either not a U.S. Person (as defined below) or we have purchased
our beneficial interest in the above referenced Regulation S Global
Note in a transaction that is exempt from the registration requirements
under the Securities Act.
We are delivering this certificate in connection with obtaining a
beneficial interest in Restricted Securities in exchange for our
beneficial interest in the Regulation S Global Note.
For purposes of this certificate, "U.S. PERSON" means (i) any individual
resident in the United States, (ii) any partnership or corporation organized or
incorporated under the laws of the United States, (iii) any estate of which an
executor or administrator is a U.S. Person (other than an estate governed by
foreign law and of which at least one executor or administrator is a non-U.S.
Person who has sole or shared investment discretion with respect to its assets),
(iv) any trust of which any trustee is a U.S. Person (other than a trust of
which at least one trustee is a non-U.S. Person who has sole or shared
investment discretion with respect to its assets and no beneficiary of the trust
(and no settlor if the trust is revocable) is a U.S. Person), (v) any agency or
branch of a foreign entity located in the United States, (vi) any non-
discretionary or similar account (other than an estate or trust) held by a
dealer or other fiduciary for the benefit or account of a U.S. Person, (vii) any
discretionary or similar account (other than an estate or trust) held by a
dealer or other fiduciary organized, incorporated or (if an individual) resident
in the United States (other than such an account held for the benefit or account
of a non-U.S. Person), (viii) any partnership or corporation organized or
incorporated under the laws of a foreign jurisdiction and formed by a U.S.
Person principally for the purpose of investing in securities not registered
under the Securities Act (unless it is organized or incorporated, and owned, by
accredited investors within the meaning of Rule 501(a) under the Securities Act
who are not natural Persons, estates or trusts); provided,
G-1
<PAGE> 100
however, that the term "U.S. PERSON" shall not include (A) a branch or agency of
a U.S. Person that is located and operating outside the United States for valid
business purposes as a locally regulated branch or agency engaged in the banking
or insurance business, (B) any employee benefit plan established and
administered in accordance with the law, customary practices and documentation
of a foreign country and (C) the international organizations set forth in
Section 902(o)(7) of Regulation S under the Securities Act and any other similar
international organizations, and their agencies, affiliates and pension plans.
We irrevocably authorize you to produce this certificate or a copy
hereof to any interested party in any administrative or other proceedings with
respect to the matters covered by this certificate.
Very truly yours,
[TRANSFEROR]
By:___________________________
Name:
Title:
Dated: To be completed by the account Holder as, or as agent for,
the beneficial owner(s) of the Notes to which this
certificate relates.
cc: NTL Incorporated
110 East 59th Street
New York, New York 10022
Attn: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
G-2
<PAGE> 1
Exhibit 4.2
EXECUTION COPY
NTL INCORPORATED
$450,000,000
12-3/8% SENIOR DEFERRED COUPON NOTES DUE 2008
INDENTURE
Dated as of November 6, 1998
------------------------
The Chase Manhattan Bank
Trustee
------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I.........................................................................................................1
Section 1.01. Definitions......................................................................................1
Section 1.02. Other Definitions...............................................................................13
Section 1.03. Incorporation by Reference of Trust Indenture Act...............................................14
Section 1.04. Rules of Construction...........................................................................14
ARTICLE II. THE NOTES............................................................................................15
Section 2.01. Form and Dating.................................................................................15
Section 2.02. Execution and Authentication....................................................................17
Section 2.03. Registrar and Paying Agent......................................................................17
Section 2.04. Paying Agent to Hold Money in Trust.............................................................18
Section 2.05. Holder Lists....................................................................................18
Section 2.06. Transfer and Exchange...........................................................................18
Section 2.07. Replacement Notes...............................................................................22
Section 2.08. Outstanding Notes...............................................................................22
Section 2.09. Treasury Notes..................................................................................23
Section 2.10. Temporary Notes; Global Notes...................................................................23
Section 2.11. Cancellation....................................................................................24
Section 2.12. Defaulted Interest..............................................................................24
ARTICLE III. REDEMPTION..........................................................................................24
Section 3.01. Notices to Trustee..............................................................................24
Section 3.02. Selection of Notes to Be Redeemed...............................................................24
Section 3.03. Notice of Redemption............................................................................25
Section 3.04. Effect of Notice of Redemption..................................................................25
Section 3.05. Deposit of Redemption Price.....................................................................25
Section 3.06. Notes Redeemed in Part..........................................................................26
Section 3.07. Optional Redemption and Optional Tax Redemption.................................................26
Section 3.08. Mandatory Redemption............................................................................26
Section 3.09. Asset Sale Offer and Purchase Offer.............................................................26
ARTICLE IV. COVENANTS............................................................................................29
Section 4.01. Payment of Notes................................................................................29
Section 4.02. Reports.........................................................................................29
Section 4.03. Compliance Certificate..........................................................................29
Section 4.04. Stay, Extension and Usury Laws..................................................................30
Section 4.05. Corporate Existence.............................................................................30
Section 4.06. Taxes...........................................................................................30
Section 4.07. Limitations on Liens............................................................................31
Section 4.08. Incurrence Of Indebtedness And Issuance Of Preferred Stock......................................31
Section 4.09. Restricted Payments.............................................................................33
Section 4.10. Asset Sales.....................................................................................36
Section 4.11. Transactions with Affiliates....................................................................38
Section 4.12. Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries......................39
Section 4.13. Change of Control...............................................................................40
Section 4.14. Payment of Additional Amounts...................................................................40
ARTICLE V. SUCCESSORS............................................................................................41
Section 5.01. Merger, Consolidation or Sale of Assets.........................................................41
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
Section 5.02. Successor Corporation Substituted...............................................................42
ARTICLE VI. DEFAULTS AND REMEDIES................................................................................42
Section 6.01. Events of Default...............................................................................42
Section 6.02. Acceleration....................................................................................44
Section 6.03. Other Remedies..................................................................................44
Section 6.04. Waiver of Past Defaults.........................................................................45
Section 6.05. Control by majority.............................................................................45
Section 6.06. Limitation on Suits.............................................................................45
Section 6.07. Rights of Holders to Receive Payment............................................................45
Section 6.08. Collection Suit by Trustee......................................................................46
Section 6.09. Trustee May File Proofs of Claim................................................................46
Section 6.10. Priorities......................................................................................46
Section 6.11. Undertaking for Costs...........................................................................46
ARTICLE VII. TRUSTEE.............................................................................................46
Section 7.01. Duties of Trustee...............................................................................47
Section 7.02. Rights of Trustee...............................................................................47
Section 7.03. Individual Rights of Trustee....................................................................48
Section 7.04. Trustee's Disclaimer............................................................................48
Section 7.05. Notice of Defaults..............................................................................48
Section 7.06. Reports by Trustee to Holders..................................................................48
Section 7.07. Compensation and Indemnity......................................................................48
Section 7.08. Replacement of Trustee..........................................................................49
Section 7.09. Successor Trustee by Merger, Etc................................................................50
Section 7.10. Eligibility; Disqualification...................................................................50
Section 7.11. Preferential Collection of Claims Against Company...............................................50
ARTICLE VIII. DISCHARGE OF INDENTURE.............................................................................51
Section 8.01. Termination of Company's Obligations............................................................51
Section 8.02. Option to Effect Defeasance.....................................................................51
Section 8.03. Application of Trust Money......................................................................52
Section 8.04. Repayment to Company............................................................................53
Section 8.05. Reinstatement...................................................................................53
ARTICLE IX. AMENDMENTS, SUPPLEMENTS AND WAIVERS..................................................................53
Section 9.01. Without Consent of Holders......................................................................53
Section 9.02. With Consent of Holders.........................................................................54
Section 9.03. Compliance with Trust Indenture Act.............................................................54
Section 9.04. Revocation and Effect of Consents...............................................................55
Section 9.05. Notation on or Exchange of Notes................................................................55
Section 9.06. Trustee Protected...............................................................................55
ARTICLE X. MISCELLANEOUS.........................................................................................55
Section 10.01. Trust Indenture Act Controls..................................................................55
Section 10.02. Notices.......................................................................................56
Section 10.03. Communication by Holders with Other Holders...................................................56
Section 10.04. Certificate and Opinion as to Conditions Precedent............................................56
Section 10.05. Statements Required in Certificate or Opinion.................................................56
Section 10.06. Rules by Trustee and Agents...................................................................57
Section 10.07. Legal Holidays................................................................................57
Section 10.08. No Recourse Against Others....................................................................57
Section 10.09. Counterparts and Facsimile Signatures.........................................................57
Section 10.10. Variable Provisions...........................................................................57
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
Section 10.11. Governing Law.................................................................................58
Section 10.12. No Adverse Interpretation of Other Agreements.................................................58
Section 10.13. Successors....................................................................................58
Section 10.14. Severability..................................................................................58
Section 10.15. Table of Contents, Headings, Etc..............................................................59
</TABLE>
iii
<PAGE> 5
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C>
310 (a)(1)................................................................................................7.10
(a)(2) ...................................................................................................7.10
(a)(3)....................................................................................................N.A.
(a)(4)....................................................................................................N.A.
(a)(5)....................................................................................................7.10
(b) .....................................................................................................7.08,
7.10
(c) .....................................................................................................N.A.
311(a)....................................................................................................7.11
(b) .....................................................................................................7.11
(c) .....................................................................................................N.A.
312 (a)...................................................................................................2.05
(b) .....................................................................................................10.03
(c) .....................................................................................................10.03
313(a)....................................................................................................7.06
(b)(1)....................................................................................................N.A.
(b)(2)....................................................................................................7.06
(c) .....................................................................................................7.06
(d) .....................................................................................................7.06
314(a)....................................................................................................4.02
4.03,
(b) .....................................................................................................N.A.
(c)(1)....................................................................................................10.04
(c)(2)....................................................................................................10.04
(c)(3)....................................................................................................N.A.
(d) .....................................................................................................N.A.
(e) .....................................................................................................N.A.
(f) .....................................................................................................N.A.
315 (a)...................................................................................................7.01(b)
(b) .....................................................................................................7.05
(c) .....................................................................................................7.01(a)
(d) .....................................................................................................7.01(c)
(e) .....................................................................................................6.11
316 (a)(last sentence)....................................................................................2.09
(a)(1)(A).................................................................................................6.05
(a)(1)(B).................................................................................................6.04
(a)(2)....................................................................................................N.A.
(b) .....................................................................................................6.07
(c) .....................................................................................................9.04
317 (a)(1)................................................................................................6.08
(a)(2)....................................................................................................6.09
(b) .....................................................................................................2.04
318 (a)...................................................................................................N.A.
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
iv
<PAGE> 6
INDENTURE, dated as of November 6, 1998, between NTL Incorporated, a
Delaware corporation (the "COMPANY"), and The Chase Manhattan Bank, a New York
corporation, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders (as defined in Section 1.01) of the
Company's 12-3/8% Senior Deferred Coupon Notes due 2008 (the "INITIAL NOTES")
and, if and when issued in exchange for Initial Notes, the Company's 12-3/8%
Series B Senior Deferred Coupon Notes due 2008 (the "EXCHANGE NOTES" and,
together with the Initial Notes, the "NOTES"):
ARTICLE I.
SECTION 1.01. DEFINITIONS.
"9-1/2% NOTES" means the Company's 9-1/2% Senior Notes due 2008 and the
Company's 9-1/2% Series B Senior Notes due 2008.
"9-3/4% NOTES" means the Company's 9-3/4% Senior Deferred Coupon Notes
due 2008 and the Company's 9-3/4% Series B Senior Deferred Coupon Notes due
2008.
"10% NOTES" means the Company's 10% Series B Senior Notes due 2007.
"10-3/4% NOTES" means the Company's 10-3/4% Senior Deferred Coupon
Notes due 2008 and the Company's 10-3/4% Series B Senior Deferred Coupon Notes
due 2008.
"11-1/2% DEFERRED COUPON NOTES" means the Company's 11-1/2% Series B
Senior Deferred Coupon Notes due 2006.
"11-1/2% NOTES" means the Company's 11-1/2% Senior Notes due 2008 and
the Company's 11-1/2% Series B Senior Notes due 2008.
"12-3/4% NOTES" means the Company's 12-3/4% Series A Senior Deferred
Coupon Notes due 2005.
"ACCRETED VALUE" means, as of any date of determination prior to
October 1, 2003, with respect to any Note, the sum of (a) the initial offering
price (which is $555.05 per $1000.00 principal amount at maturity of the Notes)
of such Note, and (b) 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 a rate of
12-3/8% per annum of the initial offering price of such Note compounded
semiannually on each April 1 and October 1 from the date of issuance of the Note
through the date of determination, computed on the basis of a 360-day year of
twelve 30-day months.
"ACQUIRED DEBT" means, with respect to any specified Person,
Indebtedness of any other Person (the "Acquired Person") existing at the time
such Acquired Person merged with or into or became a Subsidiary of such
specified Person, including Indebtedness incurred in connection with, or in
contemplation of, such Acquired Person merging with or into or becoming a
Subsidiary of such specified Person.
"ACQUIRED PERSON" has the meaning specified in the definition of
Acquired Debt.
<PAGE> 7
"ADJUSTED TOTAL ASSETS" means the total amount of assets of the Company
and its Restricted Subsidiaries (including the amount of any Investment in any
Non-Restricted Subsidiary), except to the extent resulting from write-ups of
assets (other than write-ups in connection with accounting for acquisitions in
conformity with GAAP), after deducting therefrom (i) all current liabilities of
the Company and its Restricted Subsidiaries, and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as calculated in conformity with GAAP. For purposes of this
Adjusted Total Assets definition, (a) assets shall be calculated less applicable
accumulated depreciation, accumulated amortization and other valuation reserves,
and (b) all calculations shall exclude all intercompany items.
"ADJUSTED TOTAL CONTROLLED ASSETS" means the total amount of assets of
the Company and its Cable Controlled Subsidiaries, except to the extent
resulting from write-ups of assets (other than write-ups in connection with
accounting for acquisitions in conformity with GAAP), after deducting therefrom
(i) all current liabilities of the Company and such Cable Controlled
Subsidiaries; and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles of the Company
and such Restricted Subsidiaries, all as calculated in conformity with GAAP;
provided that Adjusted Total Controlled Assets shall be reduced (to the extent
not otherwise reduced in accordance with GAAP) by an amount equal to the
aggregate amount of all Investments of the Company or any such Cable Controlled
Subsidiaries in any Person other than a Cable Controlled Subsidiary, except Cash
Equivalents. For purposes of this Adjusted Total Controlled Assets definition,
(a) assets shall be calculated less applicable accumulated depreciation,
accumulated amortization and other valuation reserves, and (b) all calculations
shall exclude all intercompany items.
"AFFILIATE" of any specified Person means any other Person directly
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"AGENT" means any Registrar or Paying Agent.
"ANNUALIZED PRO FORMA EBITDA" means, with respect to any Person, such
Person's Pro Forma EBITDA for the latest fiscal quarter multiplied by four.
"ASSET SALE" means (i) any sale, lease, transfer, conveyance or other
disposition of any assets (including by way of a sale-and-leaseback) other than
the sale or transfer of inventory or goods held for sale in the ordinary course
of business (provided that the sale, lease, transfer, conveyance or other
disposition of all or substantially all of the assets of the Company shall be
governed by Section 4.13 or 5.01 hereof) or (ii) any issuance, sale, lease,
transfer, conveyance or other disposition of any Equity Interests of any of the
Company's Restricted Subsidiaries to any Person; in either case other than (A)
to (w) the Company, (x) any Wholly Owned Subsidiary, or (y) any Subsidiary which
is a Subsidiary of the Company on the Issuance Date provided that at the time of
and after giving effect to such issuance, sale, lease, transfer, conveyance or
other disposition to such Subsidiary, the Company's ownership percentage in such
Subsidiary is equal to or greater than such percentage on the Issuance Date or
(B) the issuance, sale, transfer, conveyance or other disposition of Equity
Interests of a Subsidiary in exchange for capital contributions made on a pro
rata basis by the holders of the Equity Interests of such Subsidiary.
-2-
<PAGE> 8
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
authorized committee of the Board.
"BUSINESS DAY" means any day that is not a Legal Holiday.
"CABLE ASSETS" means tangible or intangible assets, licenses
(including, without limitation, Licenses) and computer software used in
connection with a Cable Business.
"CABLE BUSINESS" means (i) any Person directly or indirectly operating,
or owning a license to operate, a cable and/or television and/or telephone
and/or telecommunications system or service principally within the United
Kingdom and/or the Republic of Ireland and (ii) any Cable Related Business.
"CABLE CONTROLLED PROPERTY" means a Cable Controlled Subsidiary or a
Cable Asset held by a Cable Controlled Subsidiary.
"CABLE CONTROLLED SUBSIDIARY" means any Restricted Subsidiary that is
primarily engaged, directly or indirectly, in one or more Cable Businesses.
"CABLE RELATED BUSINESS" means a Person which directly or indirectly
owns or provides a service or product used in a Cable Business, including,
without limitation, any television programming, production and/or licensing
business or any programming guide or telephone directory business or content or
software related thereto.
"CAPITAL STOCK" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, including,
without limitation, partnership interests.
"CAPITAL STOCK SALE PROCEEDS" means the aggregate net sale proceeds
(including from the sale of any property received for the Capital Stock or the
fair market value of such property, as determined by an independent appraisal
firm) received by the Company or any Subsidiary of the Company from the issue or
sale (other than to a Subsidiary) by the Company of any class of its Capital
Stock after October 14, 1993 (including Capital Stock of the Company issued
after October 14, 1993 upon conversion of or in exchange for other securities of
the Company).
"CASH EQUIVALENTS" means (i) Permitted Currency, (ii) securities issued
or directly and fully guaranteed or insured by the United States government, a
European Union member government or any agency or instrumentality thereof having
maturities of not more than six months and two days from the date of
acquisition, (iii) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any commercial bank(s) domiciled in the United
States, the United Kingdom, the Republic of Ireland or any other European Union
member 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 described in clauses (ii) and (iii) entered into with any financial
institution meeting the qualifications specified in clause (iii) above, (v)
commercial paper rated P-1 or the equivalent thereof by Moody's or A-1 or the
equivalent thereof by S & P and in each case maturing within six months and two
days after the date of acquisition and (vi) money market funds at least 95% of
the assets of which constitute Cash Equivalents of the kinds described in
clauses (i)-(v) of this definition.
-3-
<PAGE> 9
"CHANGE OF CONTROL" means (i) the sale, lease or transfer of all or
substantially all of the assets of the Company to any "Person" or "group"
(within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(1) under the Exchange Act) (other than any Permitted Holder),
(ii) the approval by the requisite stockholders of the Company of a plan of
liquidation or dissolution of the Company, (iii) any "Person" or "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing, including any group acting for the purpose
of acquiring, holding or disposing of securities within the meaning of Rule 13d-
5(b)(1) under the Exchange Act), other than any Permitted Holder, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than 50% of the total voting power of all classes of the voting stock of the
Company and/or warrants or options to acquire such voting stock, calculated on a
fully diluted basis, unless, as a result of such transaction, the ultimate
direct or indirect ownership of the Company is substantially the same
immediately after such transaction as it was immediately prior to such
transaction, or (iv) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Company's Board of Directors
(together with any new directors whose election or appointment by such board or
whose nomination for election by the shareholders of the Company was approved by
a vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Company's Board of Directors then in office.
"CHANGE OF CONTROL TRIGGERING EVENT" means the occurrence of both a
Change of Control and a Ratings Decline.
"COMPANY" means the party named as such above until a successor
replaces it in accordance with Article V and thereafter means the successor.
"CONSOLIDATED INTEREST EXPENSE" means, for any Person, for any period,
the amount of interest in respect of Indebtedness (including amortization of
original issue discount, amortization of debt issuance costs, and non-cash
interest payments on any Indebtedness and the interest portion of any deferred
payment obligation and after taking into account the effect of elections made
under any Interest Rate Agreement, however denominated, with respect to such
Indebtedness), the amount of Redeemable Dividends, Restricted Subsidiary
Preferred Stock Dividends and the interest component of rentals in respect of
any capital lease obligation paid, in each case whether accrued or scheduled to
be paid or accrued by such Person and its Subsidiaries (other than
Non-Restricted Subsidiaries) during such period to the extent such amounts were
deducted in computing Consolidated Net Income, determined on a consolidated
basis in accordance with GAAP. For purposes of this definition, interest on a
capital lease obligation shall be deemed to accrue at an interest rate
reasonably determined by such Person to be the rate of interest implicit in such
capital lease obligation in accordance with GAAP consistently applied.
"CONSOLIDATED NET INCOME" means, with respect to any Person, for any
period, the aggregate of the Net Income of such Person and its Subsidiaries
(other than Non-Restricted Subsidiaries) for such period, on a consolidated
basis, determined in accordance with GAAP; provided that (i) the Net Income of
any Person that is not a Subsidiary or that is accounted for by the equity
method of accounting shall be included only to the extent of the amount of
dividends or distributions paid to the referent Person or a Wholly Owned
Subsidiary, (ii) the Net Income of any Person that is a Subsidiary (other than a
Subsidiary of which at least 80% of the Capital Stock having ordinary voting
power for the election of directors or other governing body of such Subsidiary
is owned by the referent Person directly or
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<PAGE> 10
indirectly through one or more Subsidiaries) shall be included only to the
extent of the amount of dividends or distributions paid to the referent Person
or a Wholly Owned Subsidiary, (iii) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded and (iv) the cumulative effect of a change in
accounting principles shall be excluded.
"CONVERTIBLE SUBORDINATED NOTES" means the Company's 7% Convertible
Subordinated Notes issued pursuant to an indenture dated as of June 12, 1996,
between the Company and The Chase Manhattan Bank (formerly known as Chemical
Bank), as trustee.
"CREDIT FACILITY" means the Facilities Agreement, dated October 17,
1997, between NTL (UK) Group Inc., as principal guarantor, Chase Manhattan plc,
as arranger, Chase Manhattan International Limited, as agent and security
trustee and the Chase Manhattan Bank as issuer, as such Facilities Agreement may
be supplemented, amended, restated, modified, renewed, refunded, replaced or
refinanced, in whole or in part, from time to time in an aggregate outstanding
principal amount not to exceed the greater of (i) pound sterling555 million and
(ii) the amount of the aggregate commitments thereunder as the same may be
increased after March 13, 1998 as contemplated by the Facilities Agreement as
amended or supplemented to March 13, 1998, but in no event greater than pound
sterling875 million, less in each case, the aggregate amount of all Net Proceeds
of Asset Sales that have been applied to permanently reduce Indebtedness under
the Credit Facility pursuant Section 4.10 hereof. Indebtedness that may
otherwise be incurred under this Indenture may, but need not, be incurred under
the Credit Facility without regard to the limit set forth in the preceding
sentence. Indebtedness outstanding under the Credit Facility on the date hereof
shall be deemed to have been incurred on such date in reliance on the exception
provided by Section 4.08(b)(i).
"CUMULATIVE EBITDA" means the cumulative EBITDA of the Company from and
after the Issuance Date to the end of the fiscal quarter immediately preceding
the date of a proposed Restricted Payment, or, if such cumulative EBITDA for
such period is negative, minus the amount by which such cumulative EBITDA is
less than zero; provided, however, that EBITDA of Non-Restricted Subsidiaries
shall not be included.
"CUMULATIVE INTEREST EXPENSE" means the aggregate amount of
Consolidated Interest Expense paid, accrued or scheduled to be paid or accrued
by the Company from the Issuance Date to the end of the fiscal quarter
immediately preceding a proposed Restricted Payment, determined on a
consolidated basis in accordance with GAAP.
"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.
"DEPOSITARY" shall mean The Depository Trust Company, its nominees and
their respective successors.
"DISQUALIFIED STOCK" means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
on which the Notes mature.
"EBITDA" means, for any Person, for any period, an amount equal to (A)
the sum of (i) Consolidated Net Income for such period (exclusive of any gain or
loss realized in such period upon an
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<PAGE> 11
Asset Sale), plus (ii) the provision for taxes for such period based on income
or profits to the extent such income or profits were included in computing
Consolidated Net Income and any provision for taxes utilized in computing net
loss under clause (i) hereof, plus (iii) Consolidated Interest Expense for such
period, plus (iv) depreciation for such period on a consolidated basis, plus (v)
amortization of intangibles for such period on a consolidated basis, plus (vi)
any other non-cash item reducing Consolidated Net Income for such period
(excluding any such non-cash item to the extent that it represents an accrual of
or reserve for cash expenses in any future period or amortization of a prepaid
cash expense that was paid in a prior period), minus (B) all non-cash items
increasing Consolidated Net Income for such period, all for such Person and its
Subsidiaries determined in accordance with GAAP consistently applied.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any Indebtedness that is
convertible into, or exchangeable for Capital Stock).
"EUROPEAN UNION MEMBER" means any country that is or becomes a member
of the European Union or any successor organization thereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE RATE CONTRACT" means, with respect to any Person, any
currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance and
other agreements or arrangements, or combination thereof, the principal purpose
of which is to provide protection against fluctuations in currency exchange
rates. An Exchange Rate Contract may also include an Interest Rate Agreement.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries in existence on the Issuance Date, until such amounts are repaid,
including, without limitation, the Existing Notes.
"EXISTING NOTES" means the Old Notes and the Convertible Subordinated
Notes.
"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 approved by a significant segment of the accounting profession,
which are in effect on the Issuance Date and are applied on a consistent basis.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"HOLDER" means a Person in whose name a Note is registered in the
register referred to in Section 2.03.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or representing the
balance deferred and unpaid of the purchase price of any property (including
pursuant to capital leases and sale-and-leaseback transactions) or representing
any hedging obligations under an Exchange Rate
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<PAGE> 12
Contract or an Interest Rate Agreement, except any such balance that constitutes
an accrued expense or trade payable, if and to the extent any of the foregoing
indebtedness (other than obligations under an Exchange Rate Contract or an
Interest Rate Agreement) would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP, and also includes, to the extent
not otherwise included, the Guarantee of items which would be included within
this definition. The amount of any Indebtedness outstanding as of any date shall
be the accreted value thereof, in the case of any Indebtedness issued with
original issue discount
"INDENTURE" means this Indenture, as amended from time to time.
"INITIAL PURCHASERS" means Morgan Stanley & Co. Incorporated, Chase
Securities Inc., Donaldson, Lufkin & Jenrette Securities Corporation and
Goldman, Sachs & Co.
"INTEREST RATE AGREEMENT" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
similar agreement, the principal purpose of which is to protect the party
indicated therein against fluctuations in interest rates.
"INVESTMENT GRADE" means BBB- or higher by S&P or Baa3 or higher by
Moody's or the equivalent of such ratings by S&P or Moody's. In the event that
the Company shall be permitted to select any other Rating Agency, the equivalent
of such ratings by such Rating Agency shall be used.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of loans
(including Guarantees), advances or capital contributions (excluding commission,
travel and similar advances and loans, joint property ownership and other
arrangements, in each case, made to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities and all other items that are
or would be classified as investments on a balance sheet prepared in accordance
with GAAP.
"ISSUANCE DATE" means the date on which the Notes are first
authenticated and issued.
"LICENSE" means any license issued or awarded pursuant to the
Broadcasting Act 1990, the Cable and Broadcasting Act 1984, the
Telecommunications Act 1984 or the Wireless Telegraphy Act 1948 (in each case,
as such Acts may, from time to time, be amended, modified or re-enacted) (or
equivalent statutes of any jurisdiction) to operate or own a Cable Business.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent or successor statutes) of any
jurisdiction).
"MATERIAL LICENSE" means a License held by the Company or any of its
Subsidiaries which License at the time of determination covers a number of Net
Households which equals or exceeds 5% of the aggregate number of Net Households
covered by all of the Licenses held by the Company and its Subsidiaries at such
time.
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<PAGE> 13
"MATERIAL SUBSIDIARY" means (i) NTL UK Group, Inc. (formerly known as
OCOM Sub II, Inc.), NTL Investment Holdings Limited, NTL Group Limited, CableTel
Surrey Limited, CableTel Cardiff Limited, CableTel Glasgow, CableTel Newport and
CableTel Kirklees and (ii) any other Subsidiary of the Company which is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act and the Exchange Act (as such Regulation is in effect on the date
hereof).
"MONETIZE" means a strategy with respect to Equity Interests that
generates an amount of cash equal to the fair value of such Equity Interests.
"MOODY'S" means Moody's Investors Service, Inc. and its successors.
"NET HOUSEHOLDS" means the product of (i) the number of households
covered by a License in the United Kingdom and (ii) the percentage of the entity
holding such License which is owned directly or indirectly by the Company.
"NET INCOME" means, with respect to any Person for a specific period,
the net income (loss) of such Person during such period, determined in
accordance with GAAP, excluding, however, any gain (but not loss) during such
period, together with any related provision for taxes on such gain (but not
loss), realized during such period in connection with any Asset Sale (including,
without limitation, dispositions pursuant to sale-and-leaseback transactions),
and excluding any extraordinary gain (but not loss) during such period, together
with any related provision for taxes on such extraordinary gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale, net of the
direct costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets the
subject of such Asset Sale and any reserve for adjustment in respect of the sale
price of such asset or assets.
"NON-CONTROLLED SUBSIDIARY" means an entity which is not a Cable
Controlled Subsidiary.
"NON-RECOURSE DEBT" means Indebtedness or that portion of Indebtedness
as to which none of the Company, nor any Restricted Subsidiary: (i) provides
credit support (including any undertaking, agreement or instrument which would
constitute Indebtedness); (ii) is directly or indirectly liable; or (iii)
constitutes the lender.
"NON-RESTRICTED SUBSIDIARY" means (A) a Subsidiary that (a) at the time
of its designation by the Board of Directors as a Non-Restricted Subsidiary has
not acquired any assets (other than as specifically permitted by clause (e) of
"Permitted Investments" or Section 4.09 hereof), at any previous time, directly
or indirectly from the Company or any of its Restricted Subsidiaries, (b) has no
Indebtedness other than Non-Recourse Debt and (c) that at the time of such
designation, after giving pro forma effect to such designation, the ratio of
Indebtedness to Annualized Pro Forma EBITDA of the Company is equal to or less
than the ratio of Indebtedness to Annualized Pro Forma EBITDA of the Company
immediately preceding such designation, provided, however, that if the ratio of
Indebtedness to Annualized Pro Forma EBITDA of the Company immediately preceding
such designation is 6:1 or less, then the ratio of Indebtedness to Annualized
Pro Forma EBITDA of the Company may be 0.5 greater than such ratio immediately
preceding such designation; (B) any Subsidiary which (a) has been acquired or
capitalized
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<PAGE> 14
out of or by Equity Interests (other than Disqualified Stock) of the Company or
Capital Stock Sale Proceeds therefrom, (b) has no Indebtedness other than
Non-Recourse Debt and (c) is designated as a Non-Restricted Subsidiary by the
Board of Directors or is merged, amalgamated or consolidated with or into, or
its assets or capital stock is to be transferred to, a Non-Restricted
Subsidiary; or (C) any Subsidiary of a Non-Restricted Subsidiary.
"NOTES" has the meaning set forth in the preamble hereto.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers, one
of whom must be the Chairman of the Board, the President, the Treasurer or a
Vice President of the Company. See Sections 10.04 and 10.05 hereof.
"OLD NOTES" means the 12-3/4% Notes, the 11-1/2% Deferred Coupon Notes,
the 10-3/4% Notes, the 10% Notes, the 9-3/4% Notes, the 9-1/2% Notes and the
11-1/2% Notes.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee. See Sections 10.04 and 10.05 hereof.
"OTHER QUALIFIED NOTES" means any outstanding senior indebtedness of
the Company issued pursuant to an indenture having a provision substantially
similar to Section 4.10 hereof (including, without limitation, the 12-3/4%
Notes, the 11-1/2% Deferred Coupon Notes, the 10-3/4% Notes, the 10% Notes, the
9-3/4% Notes, the 9-1/2% Notes and the 11-1/2% Notes).
"PERMITTED ACQUIRED DEBT" means, with respect to any Acquired Person
(including, for this purpose, any Non-Restricted Subsidiary at the time such
Non-Restricted Subsidiary becomes a Restricted Subsidiary), Acquired Debt of
such Acquired Person and its Subsidiaries in an amount (determined on a
consolidated basis) not exceeding the sum of (x) amount of the gross book value
of property, plant and equipment of the Acquired Person and its Subsidiaries as
set forth on the most recent consolidated balance sheet of the Acquired Person
(which may be unaudited) prior to the date it becomes an Acquired Person and (y)
the aggregate amount of any Cash Equivalents held by such Acquired Person at the
time it becomes an Acquired Person.
"PERMITTED CURRENCY" means the lawful currency of the United States or
a European Union member.
"PERMITTED DESIGNEE" means (i) a spouse or a child of a Permitted
Holder, (ii) trusts for the benefit of a Permitted Holder or a spouse or child
of a Permitted Holder, (iii) in the event of the death or incompetence of a
Permitted Holder, his estate, heirs, executor, administrator, committee or other
personal representative or (iv) any Person so long as a Permitted Holder owns at
least 50% of the voting power of all classes of the voting stock of such Person.
"PERMITTED HOLDERS" means George S. Blumenthal, J. Barclay Knapp and
their Permitted Designees.
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<PAGE> 15
"PERMITTED INVESTMENTS" means (a) any Investments in the Company or in
a Cable Controlled Property or in a Qualified Subsidiary (including, without
limitation, (i) Guarantees of Indebtedness of the Company, a Cable Controlled
Subsidiary or a Qualified Subsidiary, (ii) Liens securing such Indebtedness or
Guarantees or (iii) the payment of any balance deferred and unpaid of the
purchase price of any Qualified Subsidiary); (b) any Investments in Cash
Equivalents; (c) Investments by the Company in Indebtedness of a counter-party
to an Exchange Rate Contract for hedging a Permitted Currency exchange risk that
are made, for purposes other than speculation, in connection with such contract
to hedge not more than the aggregate principal amount of the Indebtedness being
hedged (or, in the case of Indebtedness issued with original issue discount,
based on the amounts payable after the amortization of such discount); (d)
Investments by the Company or any Subsidiary of the Company in a Person, if as a
result of such Investment (i) such Person becomes a Cable Controlled Subsidiary
or (ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Wholly Owned Subsidiary of the Company; and (e) any issuance,
transfer or other conveyance of Equity Interests (other than Disqualified Stock)
in the Company (or any Capital Stock Sale Proceeds therefrom) to a Subsidiary of
the Company.
"PERMITTED LIENS" means (a) Liens in favor of the Company; (b) Liens on
property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company; provided, that
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not secure any property or assets of the Company or any of
its Subsidiaries other than the property or assets subject to the Liens prior to
such merger or consolidation; (c) liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of obligations not more than 60
days past due or are being contested in good faith and by appropriate
proceedings; (d) Liens existing on the Issuance Date; (e) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided, that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor and (f) easements, rights of way, restrictions and other
similar easements, licenses, restrictions on the use of properties or minor
imperfections of title that, in the aggregate, are not material in amount, and
do not in any case materially detract from the properties subject thereto or
interfere with the ordinary conduct of the business of the Company or its
Restricted Subsidiaries.
"PERMITTED NON-CONTROLLED ASSETS" means Equity Interests in any Person
primarily engaged, directly or indirectly, in one or more Cable Businesses if
such Equity Interests (x) were acquired by the Company or any of its Restricted
Subsidiaries in connection with any Asset Sale or any Investment otherwise
permitted under the terms of the Indenture and (y) to the extent that, after
giving pro forma effect to the acquisition thereof by the Company or any of its
Restricted Subsidiaries, Adjusted Total Controlled Assets is greater than 80% of
Adjusted Total Assets based on the most recent consolidated balance sheet of the
Company.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PREFERRED STOCK" means the 13% Senior Redeemable Exchangeable
Preferred Stock of the Company with an original aggregate liquidation preference
of $100,000,000.
"PRO FORMA EBITDA" means for any Person, for any period, the EBITDA of
such Person as determined on a consolidated basis for such Person and its
Subsidiaries in accordance with GAAP after
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<PAGE> 16
giving effect to the following: (i) if, during or after such period, such Person
or any of its Subsidiaries shall have made any Asset Sale, Pro Forma EBITDA of
such Person and its Subsidiaries for such period shall be reduced by an amount
equal to the Pro Forma EBITDA (if positive) directly attributable to the assets
which are the subject of such Asset Sale for the period or increased by an
amount equal to the Pro Forma EBITDA (if negative) directly attributable thereto
for such period and (ii) if, during or after such period, such Person or any of
its Subsidiaries completes an acquisition of any Person or business which
immediately after such acquisition is a Subsidiary of such Person or whose
assets are held directly by such Person or a Subsidiary of such Person, Pro
Forma EBITDA shall be computed so as to give pro forma effect to the acquisition
of such Person or business (without giving effect to clause (iii) of the
definition of Consolidated Net Income); and provided further that, with respect
to the Company, all of the foregoing references to "Subsidiary" or
"Subsidiaries" shall be deemed to refer only to a "Restricted Subsidiary" or
"Restricted Subsidiaries" of the Company.
"PURCHASE AGREEMENT" means the Purchase Agreement, dated as of October
30, 1998, between the Company and the Initial Purchasers.
"QUALIFIED SUBSIDIARY" means a Wholly Owned Subsidiary, or an entity
that will become a Wholly Owned Subsidiary after giving effect to the
transaction being considered, that at the time of and after giving effect to the
consummation of the transaction under consideration, (i) is a Cable Business or
holds only Cable Assets, (ii) has no Indebtedness (other than Indebtedness being
incurred to consummate such transaction) and (iii) has no encumbrances or
restrictions (other than such encumbrances or restrictions imposed or permitted
by this Indenture, the indentures governing the Old Notes or any other
instrument governing unsecured indebtedness of the Company which is pari passu
with the Notes) on its ability to pay dividends or make any other distributions
to the Company or any of its Subsidiaries.
"RATING AGENCIES" means (i) S&P, (ii) Moody's and (iii) if S&P or
Moody's or both shall not make a rating of the Notes publicly available, a
nationally recognized securities rating agency or agencies, as the case may be,
selected by the Company, which shall be substituted for S&P or Moody's or both,
as the case may be.
"RATING CATEGORY" means (i) with respect to S&P, any of the following
categories: BB, B, CCC, CC, C and D (or equivalent successor categories), (ii)
with respect to Moody's, any of the following categories: Ba, B, Caa, Ca, C and
D (or equivalent successor categories) and (iii) the equivalent of any such
category of S&P or Moody's used by another Rating Agency. In determining whether
the rating of the Notes has decreased by one or more gradations, gradations
within Rating Categories (+ and - for S&P; 1, 2 and 3 for Moody's; or the
equivalent gradations for another Rating Agency) shall be taken into account
(e.g., with respect to S&P, a decline in a rating from BB to BB-, as well as
from BB-to B+, will constitute a decrease of one gradation).
"RATING DATE" means that date which is 90 days prior to the earlier of
(x) a Change of Control and (y) public notice of the occurrence of a Change of
Control or of the intention by the Company or any Permitted Holder to effect a
Change of Control.
"RATINGS DECLINE" means the occurrence of any of the following events
on, or within six months after, the date of public notice of the occurrence of a
Change of Control or of the intention of the Company or any Person to effect a
Change of Control (which period shall be extended so long as the rating of any
of the Company's debt securities is under publicly announced consideration for
possible downgrade by any of the Rating Agencies): (a) in the event that any of
the Company's debt securities are rated by both of the Rating Agencies on the
Rating Date as Investment Grade, the rating of such
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<PAGE> 17
securities by either of the Rating Agencies shall be below Investment Grade, (b)
in the event that any of the Company's debt securities are rated by either, but
not both, of the Rating Agencies on the Rating Date as Investment Grade, the
rating of such securities by both of the Rating Agencies shall be below
Investment Grade, or (c) in the event any of the Company's debt securities are
rated below Investment Grade by both of the Rating Agencies on the Rating Date,
the rating of such securities by either Rating Agency shall be decreased by one
or more gradations (including gradations within Rating Categories as well as
between Rating Categories).
"REDEEMABLE DIVIDEND" means, for any dividend with regard to
Disqualified Stock, the quotient of the dividend divided by the difference
between one and the maximum statutory federal income tax rate (expressed as a
decimal number between 1 and 0) then applicable to the issuer of such
Disqualified Stock.
"REGISTERED EXCHANGE OFFER" has the meaning set forth in the
Registration Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
relating to the Notes, dated November 6, 1998, between the Company and the
Initial Purchasers party thereto.
"REPLACEMENT ASSETS" means (w) Cable Assets, (x) Equity Interests of
any Person engaged, directly or indirectly, primarily in a Cable Business, which
Person is or will become on the date of acquisition thereof a Restricted
Subsidiary as a result of the Company's acquiring such Equity Interests, (y)
Permitted Non-Controlled Assets or (z) any combination of the foregoing.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company which is
not a Non-Restricted Subsidiary.
"RESTRICTED SUBSIDIARY PREFERRED STOCK DIVIDEND" means, for any
dividend with regard to preferred stock of a Restricted Subsidiary, the quotient
of the dividend divided by the difference between one and the maximum statutory
federal income tax rate (expressed as a decimal number between 1 and 0) then
applicable to the issuer of such preferred stock.
"S&P" means Standard & Poor's Ratings Group and its successors.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBORDINATED DEBENTURES" means the debentures exchangeable by the
Company for the Preferred Stock in accordance with the Certificate of
Designations therefor.
"SUBSIDIARY" 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 or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
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<PAGE> 18
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (Sections)
77aaa-77bbbb) as in effect on the date of execution of this Indenture.
"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.
"TRUST OFFICER" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.
"WHOLLY OWNED SUBSIDIARY" means, at any time, a Restricted Subsidiary
all of the Capital Stock of which (except directors' qualifying shares) is at
the time owned directly or indirectly by the Company.
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
DEFINED
TERM IN SECTION
- ---- ----------
<S> <C>
"ADDITIONAL AMOUNTS".......................................... 4.14
"AFFILIATE TRANSACTION"....................................... 4.11
"AGENT MEMBER"................................................ 2.01
"ASSET SALE OFFER"............................................ 4.10
"BANKRUPTCY LAW".............................................. 6.01
"CEDEL"....................................................... 2.01
"CHANGE OF CONTROL PAYMENT"................................... 4.13
"COMMENCEMENT DATE"........................................... 3.09
"CUSTODIAN"................................................... 6.01
"DEFEASANCE".................................................. 8.02
"EUROCLEAR"................................................... 2.01
"EVENT OF DEFAULT"............................................ 6.01
"EXCESS PROCEEDS"............................................. 4.10
"GLOBAL NOTE"................................................. 2.01
"INCUR"....................................................... 4.08
"LEGAL HOLIDAY"............................................... 10.08
"OFFER AMOUNT"................................................ 3.09
"OFFICER"..................................................... 10.11
"PAYING AGENT"................................................ 2.03
"PAYMENT DEFAULT"............................................. 6.01
"PURCHASE DATE"............................................... 3.09
"PURCHASE OFFER".............................................. 4.13
"QIBS"........................................................ 2.01
"REFINANCING INDEBTEDNESS".................................... 4.08
"REGULATION S"................................................ 2.01
</TABLE>
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<PAGE> 19
<TABLE>
<CAPTION>
DEFINED
TERM IN SECTION
- ---- ----------
<S> <C>
"REGULATION S GLOBAL NOTE" ................................... 2.01
"REGISTRAR"................................................... 2.03
"RESTRICTED NOTES"............................................ 2.01
"RESTRICTED PAYMENTS"......................................... 4.09
"RULE 144A"................................................... 2.01
"RULE 144A GLOBAL NOTE"....................................... 2.01
"TENDER PERIOD"............................................... 3.09
"U.S. GOVERNMENT OBLIGATIONS"................................. 8.02
</TABLE>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder 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 or any other obligor on the
Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP consistently applied;
(c) references to "GAAP" shall mean GAAP in effect as of the
time when and for the period as to which such accounting principles are
to be applied;
(d) "OR" is not exclusive;
(e) words in the singular include the plural, and in the
plural include the singular;
(f) provisions apply to successive events and transactions;
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<PAGE> 20
(g) 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; and
(h) a reference to "$" or U.S. Dollars is to United States
dollars and a reference to "L" or pounds sterling is to British
pounds sterling.
ARTICLE II.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) General.
The Initial Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto, which is
hereby incorporated by reference and expressly made a part of this Indenture.
The Exchange Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit B hereto, which is hereby incorporated by
reference and expressly made a part of this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
The Company shall furnish any such legend not contained in Exhibit A or Exhibit
B to the Trustee in writing. 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 of the Notes set forth in Exhibit A
and Exhibit B are 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 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.
The Initial Notes are being offered and sold by the Company
pursuant to the Purchase Agreement.
Initial Notes offered and sold in reliance on Regulation S
under the Securities Act ("REGULATION S"), as provided in the Purchase
Agreement, shall be issued initially in the form of one or more permanent Global
Notes in definitive, fully registered form without interest coupons with the
Global Notes Legend and Restricted Notes Legend set forth in Exhibit A hereto
(the "REGULATION S GLOBAL NOTE"), which shall be deposited on behalf of the
purchasers of the Initial Notes represented thereby with the Trustee, at its New
York office, as custodian, for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of the Euroclear System ("EUROCLEAR") or Cedel Bank,
societe anonyme ("CEDEL"), duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount at maturity of
the Regulation S Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its nominee
as hereinafter provided.
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<PAGE> 21
Initial Notes offered and sold to Qualified Institutional
Buyers ("QIBS") in reliance on Rule 144A under the Securities Act ("RULE 144A"),
as provided in the Purchase Agreement, shall be issued initially in the form of
one or more permanent Global Notes in definitive, fully registered form without
interest coupons with the Global Notes Legend and Restricted Notes Legend set
forth in Exhibit A hereto ("RULE 144A GLOBAL NOTE"), which shall be deposited on
behalf of the purchasers of the Initial Notes represented thereby with the
Trustee, at its New York office, as custodian for the Depositary, and registered
in the name of the Depositary or a nominee of the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount at maturity of the Rule 144A Global Note may from
time to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee as hereinafter provided.
Upon consummation of the Registered Exchange Offer, the
Exchange Notes may be issued in the form of one or more permanent Global Notes
in definitive, fully registered form without interest coupons with the Global
Notes Legend but not the Restricted Notes Legend set forth in Exhibit A hereto,
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount at maturity of such Global Notes may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depositary or its nominee as hereinafter provided.
(c) Book-Entry Provisions.
This Section 2.01(c) shall apply only to the Regulation S
Global Note, the Rule 144A Global Note and the Exchange Notes issued in the form
of one or more permanent Global Notes (collectively, the "GLOBAL NOTES")
deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(c), authenticate and deliver initially one or more Global
Notes that (a) shall be registered in the name of the Depositary for such Global
Note or Global Notes or the nominee of such Depositary and (b) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions or held by the Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("AGENT
MEMBERS") shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depositary or by the Trustee as the custodian
of the Depositary or under such Global Note, and the Depositary may be treated
by the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of
an owner of a beneficial interest in any Global Note.
(d) Certificated Notes.
In addition to the provisions of Section 2.10, owners of
beneficial interests in Global Notes may, upon request to the Trustee, receive a
certificated Initial Note, which certificated Initial Note shall bear the
Restricted Notes Legend set forth in Exhibit A hereto ("RESTRICTED NOTES").
After a transfer of any Initial Notes during the period of the
effectiveness of a Shelf Registration Statement with respect to the Initial
Notes and pursuant thereto, all requirements for
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<PAGE> 22
Restricted Notes Legends on such Initial Note will cease to apply, and a
certificated Initial Note without a Restricted Notes Legend will be available to
the Holder of such Initial Notes. Upon the consummation of a Registered Exchange
Offer with respect to the Initial Notes pursuant to which Holders of Initial
Notes are offered Exchange Notes in exchange for their Initial Notes,
certificated Initial Notes with the Restricted Notes Legend set forth in Exhibit
A hereto will be available to Holders of such Initial Notes that do not exchange
their Initial Notes, and Exchange Notes in certificated form without the
Restricted Notes Legend set forth in Exhibit A hereto will be available to
Holders that exchange such Initial Notes in such Registered Exchange Offer.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time the Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of an authorized officer of the Trustee. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate (1) Initial Notes for original issue up to an aggregate
principal amount at maturity stated in paragraph 6 of the Initial Notes and (2)
Exchange Notes for issue only in a Registered Exchange Offer, pursuant to the
Registration Rights Agreement, in exchange for Initial Notes for a like
principal amount at maturity. The aggregate principal amount at maturity of
Notes outstanding at any time shall not exceed the amount set forth herein,
except as provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders, the
Company or an Affiliate.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain in the Borough of Manhattan, City of New
York, State of New York and, if and as long as the Notes are listed on the
Luxembourg Stock Exchange, in Luxembourg, (i) offices or agencies where the
Notes may be presented for registration of transfer or for exchange
("REGISTRAR") and (ii) offices or agencies where the Notes may be presented for
payment ("PAYING AGENT"). The Company initially designates the Trustee at its
corporate trust offices in the Borough of Manhattan, City of New York, State of
New York to act as principal Registrar and Paying Agent and Chase Manhattan Bank
Luxembourg S.A. to act as a Registrar and Paying Agent. The principal 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 in such other locations as it shall determine. 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 prior
notice to any Holder. The Company shall notify the Trustee of the name and
address of any Agent not a party to this Indenture. 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 Affiliates may act as Paying Agent
or Registrar.
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<PAGE> 23
SECTION 2.04. 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 payment of
principal or interest on the Notes, and will notify the Trustee of any default
by the Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee
and to account for any money disbursed by it. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or an Affiliate
of the Company) shall have no further liability for the money. If the Company or
an Affiliate of the Company 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.
SECTION 2.05. 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
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or 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 Holders.
SECTION 2.06. TRANSFER AND EXCHANGE.
Where Notes are presented to the Registrar or a co-registrar with a
request to register a transfer or to exchange them for an equal principal amount
at maturity of Notes of other denominations, the Registrar shall register the
transfer or make the exchange if its requirements for such transactions are met.
To permit registrations of transfers and exchanges, the Company shall issue and
the Trustee shall authenticate Notes at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.10, 3.06 or
9.05 hereof).
The Company shall not be required (i) to issue, register the transfer
of or exchange any Note for a period beginning at the opening of business 15
days before the day of any selection of Notes to be redeemed under Section 3.02
hereof and ending at the close of business on the day of selection, or (ii) to
register the transfer, or exchange, of any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part.
(a) Notwithstanding any provision to the contrary herein, so
long as a Global Note remains outstanding and is held by or on behalf
of the Depositary, transfers of a Global Note, in whole or in part, or
of any beneficial interest therein, shall only be made in accordance
with Section 2.01(b) and this Section 2.06(a); provided, however, that
beneficial interests in a Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in the same
Global Note in accordance with the transfer restrictions set forth in
the Restricted Notes Legend and under the heading "Transfer
Restrictions" in the Company's Offering Memorandum dated October 30,
1998.
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<PAGE> 24
(i) Except for transfers or exchanges made in accordance with
clauses (ii) through (iv) of this Section 2.06(a), transfers of a
Global Note shall be limited to transfers of such Global Note in whole,
but not in part, to nominees of the Depositary or to a successor of the
Depositary or such successor's nominee.
(ii) Rule 144A Global Note to Regulation S Global Note. If an
owner of a beneficial interest in the Rule 144A Global Note deposited
with the Depositary or the Trustee as custodian for the Depositary
wishes at any time to transfer its interest in such Rule 144A Global
Note to a Person who is required to take delivery thereof in the form
of an interest in the Regulation S Global Note, such owner may, subject
to the rules and procedures of the Depositary, exchange or cause the
exchange of such interest for an equivalent beneficial interest in the
Regulation S Global Notes. Upon receipt by the principal Registrar of
(1) instructions given in accordance with the Depositary's procedures
from an Agent Member directing the principal Registrar to credit or
cause to be credited a beneficial interest in the Regulation S Global
Note in an amount equal to the beneficial interest in the Rule 144A
Global Note to be exchanged, (2) a written order given in accordance
with the Depositary's procedures containing information regarding the
participant account of the Depositary and the Euroclear or Cedel
account to be credited with such increase and (3) a certificate in the
form of Exhibit C attached hereto given by the Holder of such
beneficial interest, then the principal Registrar shall instruct the
Depositary to reduce or cause to be reduced the principal amount at
maturity of the Rule 144A Global Note and to increase or cause to be
increased the principal amount at maturity of the Regulation S Global
Note by the aggregate principal amount at maturity of the beneficial
interest in the Rule 144A Global Note equal to the beneficial interest
in the Regulation S Global Note to be exchanged or transferred, to
credit or cause to be credited to the account of the Person specified
in such instructions a beneficial Interest in the Regulation S Global
Note equal to the reduction in the principal amount at maturity of the
Rule 144A Global Note and to debit or cause to be debited from the
account of the Person making such exchange or transfer the beneficial
interest in the Rule 144A Global Note that is being exchanged or
transferred.
(iii) Regulation S Global Note to Rule 144A Global Note. If an
owner of a beneficial interest in the Regulation S Global Note
deposited with the Depositary or with the Trustee as custodian for the
Depositary wishes at any time to transfer its interest in such
Regulation S Global Note to a Person who is required to take delivery
thereof in the form of an interest in the Rule 144A Global Note, such
Holder may, subject to the rules and procedures of Euroclear or Cedel,
as the case may be, and the Depositary, exchange or cause the exchange
of such interest for an equivalent beneficial interest in the Rule 144A
Global Note. Upon receipt by the principal Registrar of (1)
instructions from Euroclear or Cedel, if applicable, and the
Depositary, directing the principal Registrar to credit or cause to be
credited a beneficial interest in the Rule 144A Global Note equal to
the beneficial interest in the Regulation S Global Note to be exchanged
or transferred, such instructions to contain information regarding the
participant account with the Depositary to be credited with such
increase, (2) a written order given in accordance with the Depositary's
procedures containing information regarding the participant account of
the Depositary and (3) a certificate in the form of Exhibit D attached
hereto given by the owner of such beneficial interest, then Euroclear
or Cedel or the principal Registrar, as the case may be, will instruct
the Depositary to reduce or cause to be
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<PAGE> 25
reduced the Regulation S Global Note and to increase or cause to be
increased the principal amount at maturity of the Rule 144A Global Note
by the aggregate principal amount at maturity of the beneficial
interest in the Regulation S Global Note to be exchanged or
transferred, and the principal Registrar shall instruct the Depositary,
concurrently with such reduction, to credit or cause to be credited to
the account of the Person specified in such instructions a beneficial
interest in the Rule 144A Global Note equal to the reduction in the
principal amount at maturity of the Regulation S Global Note and to
debit or cause to be debited from the account of the Person making such
exchange or transfer the beneficial interest in the Regulation S Global
Note that is being exchanged or transferred.
(iv) Global Note to Restricted Note. If an owner of a
beneficial interest in a Global Note deposited with the Depositary or
with the Trustee as custodian for the Depositary wishes at any time to
transfer its interest in such Global Note to a Person who is required
to take delivery thereof in the form of a Restricted Note, such owner
may, subject to the rules and procedures of Euroclear or Cedel, if
applicable, and the Depositary, cause the exchange of such interest for
one or more Restricted Notes of any authorized denomination or
denominations and of the same aggregate principal amount at maturity.
Upon receipt by the principal Registrar of (1) instructions from
Euroclear or Cedel, if applicable, and the Depositary directing the
principal Registrar to authenticate and deliver one or more Restricted
Notes of the same aggregate principal amount at maturity as the
beneficial interest in the Global Note to be exchanged, such
instructions to contain the name or names of the designated transferee
or transferees, the authorized denomination or denominations of the
Restricted Notes to be so issued and appropriate delivery instructions,
(2) a certificate in the form of Exhibit E attached hereto given by the
owner of such beneficial interest to the effect set forth therein, (3)
a certificate in the form of Exhibit F attached hereto given by the
Person acquiring the Restricted Notes for which such interest is being
exchanged, to the effect set forth therein, and (4) such other
certifications, legal opinions or other information as the Company may
reasonably require to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, then Euroclear or
Cedel, if applicable, or the principal Registrar, as the case may be,
will instruct the Depositary to reduce or cause to be reduced such
Global Note by the aggregate principal amount at maturity of the
beneficial interest therein to be exchanged and to debit or cause to be
debited from the account of the Person making such transfer the
beneficial interest in the Global Note that is being transferred, and
concurrently with such reduction and debit the Company shall execute,
and the Trustee shall authenticate and deliver, one or more Restricted
Notes of the same aggregate principal amount at maturity in accordance
with the instructions referred to above.
(v) Restricted Note to Restricted Note. If a Holder of a
Restricted Note wishes at any time to transfer such Restricted Note to
a Person who is required to take delivery thereof in the form of a
Restricted Note, such Holder may, subject to the restrictions on
transfer set forth herein and in such Restricted Note, cause the
exchange of such Restricted Note for one or more Restricted Notes of
any authorized denomination or denominations and of the same aggregate
principal amount at maturity. Upon receipt by the principal Registrar
of (1) such Restricted Note, duly endorsed as provided herein, (2)
instructions from such Holder directing the principal Registrar to
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<PAGE> 26
authenticate and deliver one or more Restricted Notes of the same
aggregate principal amount at maturity as the Restricted Note to be
exchanged, such instructions to contain the name or authorized
denomination or denominations of the Restricted Notes to be so issued
and appropriate delivery instructions, (3) a certificate from the
Holder of the Restricted Note to be exchanged in the form of Exhibit E
attached hereto, (4) a certificate in the form of Exhibit F attached
hereto given by the Person acquiring the Restricted Notes for which
such interest is being exchanged, to the effect set forth therein, and
(5) such other certifications, legal opinions or other information as
the Company may reasonably require to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act, then
the Registrar shall cancel or cause to be canceled such Restricted Note
and concurrently therewith, the Company shall execute, and the Trustee
shall authenticate and deliver, one or more Restricted Notes of the
same aggregate principal amount at maturity, in accordance with the
instructions referred to above.
(vi) Other Exchanges. In the event that a beneficial interest
in a Global Note is exchanged for Notes in definitive registered form
pursuant to Section 2.10, prior to the effectiveness of a Shelf
Registration Statement with respect to such Notes, such Notes may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of clauses (ii) through (v) above
(including the certification requirements intended to ensure that such
transfers comply with Rule 144A, Rule 144, Regulation S or any other
available exemption from registration, as the case may be) and such
other procedures as may from time to time be adopted by the Company.
(vii) Distribution Compliance Period. Prior to the termination
of the "DISTRIBUTION COMPLIANCE PERIOD" (as defined in Regulation S)
with respect to the issuance of the Notes, transfers of interests in
the Regulation S Global Note to "U.S. PERSONS" (as defined in
Regulation S) shall be limited to transfers to QIBs made pursuant to
the provisions of Sections 2.06(a)(iii). The Company shall advise the
Trustee as to the termination of the distribution compliance period and
the Trustee may rely conclusively thereon.
(viii) Regulation S Global Note to Certificated Note. Upon
proper presentment to the Trustee of a certificate substantially in the
form of Exhibit G hereto and subject to the rules and procedures of the
Depositary or its direct or indirect participants, including Euroclear
and Cedel, an interest in a Regulation S Global Note may be exchanged
for a certificated Restricted Note. At any time following consummation
of the Exchange Offer pursuant to the Registration Rights Agreement
(provided that such consummation is after the expiration of the 40-day
distribution compliance period provided for in Rule 903 of Regulation
S), such exchange may be made without presentment of the certificate in
substantially the form of Exhibit G by any Holder who certifies to the
Trustee that such Holder would have been able to participate in such
Exchange Offer and resell Exchange Notes without delivery of a
prospectus under applicable rules and interpretations of the
Commission, and such certificated Note shall be free from any
restriction on transfer (other than such as are solely attributable to
any holder's status).
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<PAGE> 27
(b) Except in connection with a Registered Exchange Offer or a
Shelf Registration Statement contemplated by and in accordance with the
terms of the Registration Rights Agreement, if Initial Notes are issued
upon the transfer, exchange or replacement of Initial Notes bearing the
Restricted Securities Legend set forth in Exhibit A hereto, or if a
request is made to remove such Restricted Notes Legend on Initial
Notes, the Initial Notes so issued shall bear the Restricted Notes
Legend, or the Restricted Notes Legend shall not be removed, as the
case may be, unless there is delivered to the Company such satisfactory
evidence, which may include an opinion of counsel licensed to practice
law in the State of New York, as may be reasonably required by the
Company, that neither the legend nor the restrictions on transfer set
forth therein are required to ensure that transfers thereof comply with
the provisions of Rule 144A, Rule 144, Regulation S or any other
available exemption from registration under the Securities Act or, with
respect to Restricted Notes, that such Notes are not "restricted"
within the meaning of Rule 144 under the Securities Act. Upon provision
of such satisfactory evidence, the Trustee, at the direction of the
Company, shall authenticate and deliver Initial Notes that do not bear
the legend.
(c) Neither the Company nor the Trustee shall have any
responsibility for any actions taken or not taken by the Depositary and
the Company shall have no responsibility for any actions taken or not
taken by the Trustee as agent or custodian of the Depositary.
SECTION 2.07. REPLACEMENT NOTES.
If the Holder of a Note claims that the Note has been lost, destroyed
or wrongfully taken or if such Note is mutilated and is surrendered to the
Trustee, the Company shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's and the Company's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be sufficient in
the judgment of both to protect the Company, the Trustee, any Agent or any
authenticating agent from any loss which any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article III hereof, the Company in its discretion may,
instead of issuing a new Note, pay or purchase such Note, as the case may be.
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.
SECTION 2.08. 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, and those described in this Section as not outstanding.
If a Note is replaced, paid or purchased pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced, paid or purchased Note is held by a bona
fide purchaser.
If the principal amount or Accreted Value, as applicable, of any Note
is considered paid under Section 4.01 hereof, such Note ceases to be outstanding
and interest on it ceases to accrue (or, if before October 1, 2003, the Accreted
Value of such Note ceases to increase).
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Except as set forth in Section 2.09 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount at
maturity of Notes have concurred in any direction, waiver or consent, Notes
owned by the Company or an Affiliate of the Company shall be considered as
though they are 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.
SECTION 2.10. TEMPORARY NOTES; GLOBAL NOTES.
(a) Until definitive Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Company considers appropriate for
temporary Notes. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes. Holders of temporary Notes shall be entitled to all of
the benefits of this Indenture.
(b) A Global Note deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.01 shall
be transferred to the beneficial owners thereof in the form of
certificated Notes only in accordance with Section 2.01(d) or if such
transfer complies with Section 2.06 and (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for
such Global Note or if at any time such Depositary ceases to be a
"clearing agency" registered under the Exchange Act and a successor
depositary is not appointed by the Company within 90 days of such
notice, or (ii) an Event of Default has occurred and is continuing.
(c) Any Global Note that is transferable to the beneficial
owners thereof in the form of certificated Notes pursuant to Section
2.01(d) or to this Section 2.10 shall be surrendered by the Depositary
to the Trustee to be so transferred, in whole or from time to time in
part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Note, an equal
aggregate principal amount at maturity of Initial Notes of authorized
denominations in the form of certificated Notes. Any portion of a
Global Note transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such names as the
Depositary shall direct. Any Initial Note in the form of certificated
Notes delivered in exchange for an interest in the Global Notes shall,
except as otherwise provided by Section 2.06(b) bear the Restricted
Notes Legend set forth in Exhibit A hereto.
(d) The registered Holder of a Global Note may grant proxies
and otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which
a Holder is entitled to take under this Indenture or the Notes.
(e) In the event of the occurrence of either of the events
specified in Section 2.10(b), the Company will promptly make available
to the Trustee a reasonable supply of certificated Notes in definitive,
fully registered form without interest coupons.
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SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee shall promptly cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
canceled Notes as the Company directs. 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 fails to make a payment of interest on the Notes, it
shall pay such defaulted interest plus any interest payable on the defaulted
interest, in any lawful manner. It may pay such defaulted interest, plus any
such interest payable on it, to the Persons who are Holders on a subsequent
special record date. The Company shall fix any such record date and payment
date, provided that no such record date shall be less than 10 days prior to the
related payment date for such defaulted interest. At least 15 days before any
such record date, the Company shall mail to Holders a notice that states the
special record date, the related payment date and amount of such interest to be
paid.
ARTICLE III.
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of the Notes and Section 3.07 hereof or pursuant to the
Optional Tax Redemption provision of the Notes (Section 8 of the Initial Notes
and Section 7 of the Exchange Notes), it shall notify the Trustee of the
redemption date and the principal amount at maturity of Notes to be redeemed,
and in connection with an Optional Tax Redemption as provided in the Notes, such
notice shall be accompanied by an Officers' Certificate to the effect that the
conditions to such redemption contained herein have been complied with. The
Company shall give each notice provided for in this Section 3.01 at least 50
days before the redemption date (unless a shorter notice period shall be
satisfactory to the Trustee).
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, selection
of Notes shall be made by the Trustee on a pro rata basis or by lot or by method
that complies with the requirements of any exchange on which the Notes are
listed and that the Trustee considers fair and appropriate, provided that no
Notes of $1,000 or less shall be redeemed in part. The Trustee shall make the
selection not more than 60 days and not less than 30 days before the redemption
date from Notes outstanding not previously called for redemption. Notes and
portions of Notes selected shall be in amounts of $1,000 or integral multiples
of $1,000. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. The Trustee
shall notify the Company promptly of the Notes or portions of Notes to be called
for redemption.
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SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail, 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;
(c) if any Note is to be redeemed in part only, the portion of
the principal amount at maturity thereof redeemed, and that, after the
redemption date, upon surrender of such Note, a new Note in principal
amount at maturity equal to the unredeemed portion thereof shall be
issued in the name of the Holder thereof 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 plus accrued interest,
if any;
(f) that interest on Notes called for redemption ceases to
accrue on and after the redemption date (or, in the case of redemption
prior to October 1, 2003, the Accreted Value will cease to increase
after the redemption date); and
(g) the paragraph of the Notes pursuant to which the Notes
called for redemption are being redeemed.
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at its expense; provided 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 information to be stated in such notice, as provided in the preceding
paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become due and payable on the redemption
date at the price set forth in the Note. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price of
and accrued interest, if any, on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall return to the Company any money not required
for that purpose.
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SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount at maturity to the unredeemed
portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION AND OPTIONAL TAX REDEMPTION.
The Company may redeem all or any portion of the Notes, upon the terms
and at the redemption prices set forth in each of the Notes. The Company may
also redeem all of the Notes in accordance with the Optional Tax Redemption
provision of the Notes (Section 8 of the Initial Notes and Section 7 of the
Exchange Notes). Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION
The Company shall not be required to make mandatory redemption payments
with respect to the Notes.
SECTION 3.09. ASSET SALE OFFER AND PURCHASE OFFER.
(a) In the event that the Company shall commence an offer to
all Holders of the Notes to purchase Notes pursuant to Section 4.10
hereof (the "ASSET SALE OFFER") or pursuant to Section 4.13 hereof (the
"PURCHASE OFFER"), the Company shall follow the procedures in this
Section 3.09.
(b) The Asset Sale Offer or the Purchase Offer, as the case
may be, shall remain open for a period specified by the Company which
shall be no less than 30 calendar days and no more than 40 calendar
days following its commencement (the "COMMENCEMENT DATE") (as
determined in accordance with Section 4.10 or 4.13 hereof, as the case
may be), except to the extent that a longer period is required by
applicable law (the "TENDER PERIOD"). Upon the expiration of the Tender
Period (the "PURCHASE DATE"), the Company shall purchase the Accreted
Value (if prior to October 1, 2003) or principal amount (if on or after
October 1, 2003) of Notes required to be purchased pursuant to Section
4.10 or 4.13 hereof (the "OFFER AMOUNT") or, if less than the Offer
Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer or the Purchase Offer, as the case may be.
(c) If the Purchase Date is (i) on or after October 1, 2003,
(ii) on or after an interest payment record date and (iii) on or before
the related interest payment date, any accrued 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 will be
payable to Holders who tender Notes pursuant to the Asset Sale Offer or
the Purchase Offer, as the case may be.
(d) The Company shall provide the Trustee with notice of the
Asset Sale Offer or the Purchase Offer, as the case may be, at least 10
days before the Commencement Date.
(e) On or before the Commencement Date, the Company or the
Trustee (at the expense of the Company) shall send, by first class
mail, a notice to each of the Holders, which shall govern the terms of
the Asset Sale Offer or the Purchase Offer and shall state:
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(i) that the Asset Sale Offer or the Purchase Offer is being
made pursuant to this Section 3.09 and, as applicable, Section 4.10 or
4.13 hereof and the length of time the Asset Sale Offer or the Purchase
Offer will remain open;
(ii) the Offer Amount, the purchase price (as determined in
accordance with Section 4.10 or 4.13 hereof) and the Purchase Date, and
in the case of a Purchase Offer made pursuant to Section 4.13 hereof,
that all Notes tendered will be accepted for payment;
(iii) that any Note or portion thereof not tendered or
accepted for payment will continue to accrue interest (or, if
applicable, that the Accreted Value of any Note or portion thereof not
tendered or accepted for payment will continue to increase as provided
in such Notes);
(iv) that, unless the Company defaults in the payment of the
purchase price, any Note or portion thereof accepted for payment
pursuant to the Asset Sale Offer or the Purchase Offer will cease to
accrue interest after the Purchase Date (or, if applicable, the
Accreted Value of any Note or portion thereof accepted for payment
pursuant to the Asset Sale Offer or Purchase Offer will cease to
increase after the Purchase Date as provided in such Notes);
(v) that Holders electing to have a Note or portion thereof
purchased pursuant to any Asset Sale Offer or Purchase Offer will be
required to surrender the Note, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Note completed, to the
Company, a depositary, if appointed by the Company, or a Paying Agent
at the address specified in the notice prior to the close of business
on the third Business Day preceding the Purchase Date;
(vi) that Holders will be entitled to withdraw their election
if the Company, depositary or Paying Agent, as the case may be,
receives, not later than the close of business on the second Business
Day preceding the Purchase Date, or such longer period as may be
required by law, a letter or a telegram, telex or facsimile
transmission (receipt of which is confirmed and promptly followed by a
letter) setting forth the name of the Holder, the principal amount at
maturity of the Note or portion thereof the Holder delivered for
purchase and a statement that such Holder is withdrawing his election
to have the Note or portion thereof purchased;
(vii) that, in the event of an Asset Sale Offer, if the
aggregate principal amount at maturity of Notes surrendered by Holders
exceeds the Offer Amount, the Trustee will select the Notes to be
purchased pro rata or by a method that complies with the requirements
of any exchange on which the Notes are listed and that the Trustee
considers fair and appropriate 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
(viii) that Holders whose Notes were purchased only in part
will be issued new Notes equal in principal amount at maturity to the
unpurchased portion of the Notes surrendered.
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In addition, the notice shall, to the extent permitted by applicable
law, be accompanied by a copy of the information regarding the Company and its
Subsidiaries which is required to be contained in the most recent Quarterly
Report on Form 10-Q or Annual Report on Form 10-K (including any financial
statements or other information required to be included or incorporated by
reference therein) and any Reports on Form 8-K filed since the date of such
Quarterly Report or Annual Report (or would have been required to file if the
Company remained a company incorporated in the United States), as the case may
be, which the Company has filed (or would have been required to file if it
remained a company incorporated in the United States) with the SEC on or prior
to the date of the notice. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to the Asset
Sale Offer or the Purchase Offer, as the case may be.
(f) At least one Business Day prior to the Purchase Date, the
Company shall irrevocably deposit with the Trustee or a Paying Agent in
immediately available funds an amount equal to the Offer Amount to be
held for payment in accordance with the terms of this Section. On the
Purchase Date, the Company shall, to the extent lawful, (i) accept for
payment the Notes or portions thereof tendered pursuant to the Asset
Sale Offer or the Purchase Offer, (ii) deliver or cause the depositary
or Paying Agent to deliver to the Trustee Notes so accepted and (iii)
deliver to the Trustee an Officers' Certificate stating such Notes or
portions thereof have been accepted for payment by the Company in
accordance with the terms of this Section 3.09. The depositary, the
Paying Agent or the Company, as the case may be, shall promptly (but in
any case not later than ten (10) calendar 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 Trustee shall promptly authenticate and
mail or deliver to such Holders a new Note equal in principal amount at
maturity at maturity to any unpurchased portion of the Note
surrendered. Any Notes not so accepted shall be promptly mailed or
delivered by or on behalf of the Company to the Holder thereof. The
Company will publicly announce in a newspaper of general circulation
the results of the Asset Sale Offer or the Purchase Offer on the
Purchase Date.
(g) For the purposes of calculating the allocation of
available Excess Proceeds to the Notes and each issue of Other
Qualified Notes on a pro rata basis according to accreted value or
principal amount, as the case may be, the relevant principal amount or
the accreted value, as the case may be, of any Other Qualified Notes
denominated in a currency other than United States dollars will be
notionally converted into United States dollars from the currency such
Other Qualified Notes are denominated in (the "BASE CURRENCY");
(i) in the case of determining the maximum principal
amount or accreted value of Notes and Other Qualified
Notes that may be purchased out of the Excess
Proceeds, at the noon buying rate in the City of New
York as certified for customs purposes by the Federal
Reserve Bank of New York for cable transfers in the
Base Currency (the "NOON BUYING RATE") on the
Business Day which is 10 Business Days prior to the
Commencement Date; and
(ii) in the case of determining the allocation of the
remaining Excess Proceeds if the aggregate principal
amount or accreted value, as the case may be, of
Notes and Other Qualified Notes surrendered by
holders in the Asset Sale Offer exceeds the remaining
amount of Excess Proceeds, at the
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Noon Buying Rate on the second Business Day preceding
the Purchase Date.
(h) The Asset Sale Offer or the Purchase Offer shall be made
by the Company in compliance with all applicable provisions of the
Exchange Act, and all applicable tender offer rules promulgated
thereunder, and shall include all instructions and materials necessary
to enable such Holders to tender their Notes.
ARTICLE IV.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay the principal of, premium, if any, and interest
on, the Notes on the dates and in the manner provided in the Notes. Principal,
premium, if any, and interest shall be considered paid on the date due if the
Paying Agent (other than the Company or an Affiliate of the Company) holds on
that date money designated for and sufficient to pay all principal and interest
then due. To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i) the
overdue Accreted Value of the Notes, if prior to October 1, 2003, or the overdue
principal and premium, if any, if on or after October 1, 2003, at the rate borne
by the Notes, compounded semiannually; and (ii) overdue installments of interest
(without regard to any applicable grace period) at the same rate, compounded
semiannually.
SECTION 4.02. REPORTS.
Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall file with the SEC and
furnish to the Trustee and to the Holders of Notes, all quarterly and annual
financial information required to be contained in a filing with the SEC on Forms
10-Q and 10-K (or the equivalent thereof under the Exchange Act for foreign
private issuers in the event the Company becomes a corporation organized under
the laws of the United Kingdom, the Netherlands, the Netherlands Antilles,
Bermuda or the Cayman Islands), including a "Management's Discussion and
Analysis of Results of Operations and Financial Condition" and, with respect to
the annual information only, a report thereon by the Company's certified
independent accountants, in each case, in the form required by the rules and
regulations of the SEC as in effect on the Issuance Date. This Section 4.02 will
apply notwithstanding that the Company becomes a corporation organized under the
laws of the United Kingdom, the Netherlands, the Netherlands Antilles, Bermuda
or the Cayman Islands.
SECTION 4.03. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, 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, and complied with the covenants
and conditions contained in, this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of his knowledge the
Company has kept, observed, performed and fulfilled each and every covenant, and
complied with the covenants and conditions contained in this Indenture and is
not in default in the performance or observance of any of the terms, provisions
and conditions hereof (or, if a Default or Event of Default
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shall have occurred, describing all such Defaults or Events of Default of which
he may have knowledge) and that to the best of his knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal or of interest, if any, on the Notes are prohibited.
One of the Officers signing such Officers' Certificate shall be either
the Company's principal executive officer, principal financial officer or
principal accounting officer.
The Company will so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon becoming aware of any Default or Event of Default
an Officers' Certificate specifying such Default or Event of Default.
Immediately upon the occurrence of any event giving rise to the accrual
of Special Interest (as such term is defined in Exhibit A hereto) or the
cessation of such accrual, the Company shall give the Trustee notice thereof and
of the event giving rise to such accrual or cessation (such notice to be
contained in an Officers' Certificate) and prior to receipt of such Officers'
Certificate the Trustee shall be entitled to assume that no such accrual has
commenced or ceased, as the case may be.
SECTION 4.04. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 4.05. CORPORATE EXISTENCE.
Subject to Article V hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each subsidiary
of the Company in accordance with the respective organizational documents of
each subsidiary and 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 subsidiary, 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. The Company shall notify the Trustee in writing of any subsidiary which
qualifies as a Material Subsidiary and is not specified in clause (i) of the
definition thereof.
SECTION 4.06. TAXES.
The Company shall, and shall cause each of its subsidiaries to, pay
prior to delinquency all taxes, assessments and governmental levies, except as
contested in good faith and by appropriate proceedings.
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SECTION 4.07. LIMITATIONS ON LIENS.
Neither the Company nor any of its Restricted Subsidiaries may,
directly or indirectly create, incur, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired, or any income or profits therefrom or
assign or convey any right to receive income therefrom, except:
(a) Permitted Liens;
(b) Liens securing Indebtedness and related obligations to the
extent such Indebtedness and related obligations are permitted under
Sections 4.08(b)(i), (iii), (iv), (v), (viii), (ix) and (xi) hereof;
(c) Liens on the assets acquired or leased with the proceeds
of Indebtedness permitted to be incurred under Section 4.08 hereof; and
(d) Liens securing Refinancing Indebtedness permitted to be
incurred under Section 4.08 hereof; provided that the Refinancing
Indebtedness so issued and secured by such Lien shall not be secured by
any property or assets of the Company or any of its Restricted
Subsidiaries other than the property or assets subject to the Liens
securing such Indebtedness being refinanced.
SECTION 4.08. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guaranty or otherwise become directly or indirectly
liable with respect to (collectively, "INCUR") any Indebtedness
(including Acquired Debt) and the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock that is
Disqualified Stock; provided, however, that the Company may incur
Indebtedness or issue shares of Disqualified Stock and any of its
Restricted Subsidiaries may issue shares of preferred stock that is
Disqualified Stock if after giving effect to such issuance or
incurrence on a pro forma basis, the sum of (x) Indebtedness of the
Company and its Restricted Subsidiaries, on a consolidated basis, (y)
the liquidation value of outstanding preferred stock of Restricted
Subsidiaries and (z) the aggregate amount payable by the Company and
its Restricted Subsidiaries, on a consolidated basis, upon redemption
of Disqualified Stock to the extent such amount is not included in the
preceding clause (y) shall be less than the product of Annualized Pro
Forma EBITDA for the latest fiscal quarter for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock or
preferred stock is issued multiplied by 7.0, 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 Stock or preferred stock had been issued, as the case may
be, at the beginning of such quarter.
(b) The foregoing limitations in Section 4.08(a) shall not
apply to:
(i) the incurrence by the Company or any Restricted Subsidiary
of Indebtedness pursuant to the Credit Facility;
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(ii) the issuance by any Restricted Subsidiary of preferred
stock (other than Disqualified Stock) to the Company, any Restricted
Subsidiary of the Company or the holders of Equity Interests in any
Restricted Subsidiary on a pro rata basis to such holders;
(iii) the incurrence of Indebtedness or the issuance of
preferred stock by the Company or any of its Restricted Subsidiaries
the proceeds of which are (or the credit support provided by any such
Indebtedness is), in each case, used to finance the construction,
capital expenditure and working capital needs of a Cable Business
(including, without limitation, payments made pursuant to any License),
the acquisition of Cable Assets or the Capital Stock of a Qualified
Subsidiary;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount not to exceed $50 million;
(v) the incurrence by the Company or any Restricted Subsidiary
of any Permitted Acquired Debt;
(vi) the incurrence by the Company or any Subsidiary of
Indebtedness issued in exchange for, or the proceeds of which are used
to extend, refinance, renew, replace, or refund the Notes, Existing
Indebtedness or Indebtedness referred to in clauses (i), (ii), (iii),
(iv) or (v) above or Indebtedness incurred pursuant to Section 4.08(a)
hereof (the "REFINANCING INDEBTEDNESS"); provided, however, that (1)
the principal amount of, and any premium payable in respect of, such
Refinancing Indebtedness shall not exceed the principal amount of
Indebtedness so extended, refinanced, renewed, replaced or refunded
(plus the amount of reasonable expenses incurred in connection
therewith); (2) the Refinancing Indebtedness shall have (A) a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, and (B) a stated maturity no earlier than the
stated maturity of, the Indebtedness being extended, refinanced,
renewed, replaced or refunded; and (3) the Refinancing Indebtedness
shall be subordinated in right of payment to the Notes as and to the
extent of the Indebtedness being extended, refinanced, renewed,
replaced or refunded;
(vii) the issuance of the Preferred Stock in lieu of payment
of cash interest on the Subordinated Debentures or the incurrence by
the Company of Indebtedness represented by the Subordinated Debentures
upon the exchange of the Preferred Stock in accordance with the
Certificate of Designations therefor;
(viii) Indebtedness under Exchange Rate Contracts, provided
that such Exchange Rate Contracts are related to payment obligations
under Existing Indebtedness or Indebtedness incurred under Section
4.08(a) or (b) hereof that are being hedged thereby, and not for
speculation and that the aggregate notional amount under each such
Exchange Rate Contract does not exceed the aggregate payment
obligations under such Indebtedness;
(ix) Indebtedness under Interest Rate Agreements, provided
that the obligations under such agreements are related to payment
obligations on Existing Indebtedness or Indebtedness otherwise incurred
pursuant to Section 4.08(a) or (b) hereof, and not for speculation;
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(x) the incurrence of Indebtedness between the Company and any
Restricted Subsidiary, between or among Restricted Subsidiaries and
between any Restricted Subsidiary and other holders of Equity Interests
of such Restricted Subsidiary (or other Persons providing funding on
their behalf) on a pro rata basis and on substantially identical
principal financial terms; provided, however, that if any such
Restricted Subsidiary that is the payee of any such Indebtedness ceases
to be a Restricted Subsidiary or transfers such Indebtedness (other
than to the Company or a Restricted Subsidiary of the Company), such
events shall be deemed, in each case, to constitute the incurrence of
such Indebtedness by the Company or by a Restricted Subsidiary, as the
case may be, at the time of such event; and
(xi) Indebtedness of the Company and/or any Restricted
Subsidiary in respect of performance bonds of the Company or any
Subsidiary or surety bonds provided by the Company or any Restricted
Subsidiary received in the ordinary course of business in connection
with the construction or operation of a Cable Business.
(c) Any redesignation of a Non-Restricted Subsidiary as a
Restricted Subsidiary shall be deemed for purposes of this Section 4.08
to be an incurrence of Indebtedness by the Company and its Restricted
Subsidiaries of the Indebtedness of such Non-Restricted Subsidiary as
of the time of such redesignation to the extent such Indebtedness does
not already constitute Indebtedness of the Company or one of its
Restricted Subsidiaries.
SECTION 4.09. 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 dividend or make any distribution on
account of the Company's or any of its Restricted Subsidiaries' Equity
Interests (other than (x) dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or such
Restricted Subsidiary or (y) dividends or distributions payable to the
Company or any Wholly Owned Subsidiary of the Company, or (z) pro rata
dividends or pro rata distributions payable by a Restricted
Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company (other than any such Equity
Interests owned by the Company or any Wholly Owned Subsidiary of the
Company);
(iii) voluntarily purchase, redeem or otherwise acquire or
retire for value any Indebtedness that is subordinated to the Notes; or
(iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being
collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time
of such Restricted Payment:
(1) no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof; and
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(2) such Restricted Payment, together with the
aggregate of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the Issuance Date (including Restricted
Payments permitted by clauses (ii) through (ix) of Section 4.09(b)), is
less than the sum of (x) the difference between Cumulative EBITDA and
1.5 times Cumulative Interest Expense plus (y) Capital Stock Sale
Proceeds plus (z) cash received by the Company or a Restricted
Subsidiary from a Non-Restricted Subsidiary (other than cash which is
or is required to be repaid or returned to such Non-Restricted
Subsidiary); provided, however, that to the extent that any Restricted
Investment that was made after the date of this Indenture is sold for
cash or otherwise liquidated or repaid for cash, the amount credited
pursuant to this clause (z) shall be the lesser of (A) the cash
received with respect to such sale, liquidation or repayment of such
Restricted Investment (less the cost of such sale, liquidation or
repayment, if any) and (B) the initial amount of such Restricted
Investment, in each case as determined in good faith by the Company's
Board of Directors.
(b) The foregoing provisions in Section 4.09(a) shall not
prohibit:
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment
would have complied with the provisions of this Indenture;
(ii) (x) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Company or any Restricted
Subsidiary or (y) an Investment in any Person, in each case, in
exchange for, or out of the proceeds of, the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of other
Equity Interests (other than any Disqualified Stock) of the Company,
provided that the Company delivers to the Trustee:
(1) with respect to any transaction involving in
excess of $1 million, a resolution of the Board of Directors set forth
in an Officers' Certificate certifying that such transaction is
approved by a majority of the directors on the Board of Directors; and
(2) with respect to any transaction involving in
excess of $25 million, an opinion as to the fairness to the Company or
such Subsidiary from a financial point of view issued by an investment
banking firm of national standing with high yield experience, together
with an Officers' Certificate to the effect that such opinion complies
with this clause (2), provided that the amount of such proceeds from
the sale of such Equity Interests shall be excluded in each case from
Capital Stock Sale Proceeds for purposes of clause (a)(iv)(2)(y),
above;
(iii) Investments by the Company or any Restricted Subsidiary
in a Non-Controlled Subsidiary which (A) has no Indebtedness on a
consolidated basis other than Indebtedness incurred to finance the
purchase of equipment used in a Cable Business, (B) has no restrictions
(other than restrictions imposed or permitted by this Indenture or the
indentures governing the Other Qualified Notes or any other instrument
governing unsecured indebtedness of the Company which is pari passu
with the Notes) on its ability to pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries, (C)
is or will be a Cable Business and (D) uses the proceeds of
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such Investment for constructing a Cable Business or the working
capital needs of a Cable Business;
(iv) the redemption, purchase, defeasance, acquisition or
retirement of Indebtedness that is subordinated to the Notes (including
premium, if any, and accrued and unpaid interest) made by exchange for,
or out of the proceeds of the substantially concurrent sale (other than
to a Restricted Subsidiary of the Company) of (A) Equity Interests of
the Company, provided that the amount of such proceeds from the sale of
such Equity Interests shall be excluded in each case from Capital Stock
Sale Proceeds for purposes of clause (a)(iv)(2)(y) above or (B)
Refinancing Indebtedness permitted to be incurred under Section 4.08
hereof;
(v) Investments by the Company or any Restricted Subsidiary in
a Non-Controlled Subsidiary which is or will be a Cable Business in an
amount not to exceed $80 million in the aggregate plus the sum of (x)
cash received by the Company or a Restricted Subsidiary from a
Non-Restricted Subsidiary (other than cash which s or is required to be
repaid or returned to such Non-Restricted Subsidiary) and (y) Capital
Stock Sale Proceeds (excluding the aggregate net sale proceeds to be
received upon conversion of the Convertible Subordinated Notes),
provided that the amount of such proceeds from the sale of such Equity
Interests shall be excluded in each case from the Capital Stock Sale
Proceeds for purposes of clause (a)(iv)(2)(y) above;
(vi) Investments by the Company or any Restricted Subsidiary
in Permitted Non-Controlled Assets;
(vii) the extension by the Company or any Restricted
Subsidiary of trade credit to a Non-Restricted Subsidiary extended on
usual and customary terms in the ordinary course of business, provided
that the aggregate amount of such trade credit shall not exceed $25
million at any one time;
(viii) the payment of cash dividends on the Preferred Stock
accruing on or after February 15, 2004 or any mandatory redemption or
repurchase of the Preferred Stock, in each case, in accordance with the
Certificate of Designations therefor; and
(ix) the exchange of all of the outstanding shares of
Preferred Stock for Subordinated Debentures in accordance with the
Certificate of Designations for the Preferred Stock.
(c) Any Investment in a Subsidiary (other than the issuance,
transfer or other conveyance of Equity Interests of the Company (or any
Capital Stock Sale Proceeds therefrom)) that is designated by the Board
of Directors as a Non-Restricted Subsidiary shall become a Restricted
Payment made on the date of such designation in the amount of the
greater of (x) the book value of such Subsidiary on the date such
Subsidiary becomes a Non-Restricted Subsidiary and (y) the fair market
value of such Subsidiary on such date as determined (A) in good faith
by the Board of Directors of such Subsidiary if such fair market value
is determined to be less than $25 million and (B) by an investment
banking firm of national standing with high yield underwriting
expertise if such fair market value is determined to be in excess of
$25 million.
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(d) Not later than the fifth Business Day after making any
Restricted Payment (other than those referred to in sub-clause (vii) of
Section 4.09(b)), the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this
Section 4.09 were computed, which calculations may be based upon the
Company's latest available financial statements.
SECTION 4.10. ASSET SALES.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to cause, make or suffer to exist any Asset
Sale, unless:
(i) no Default exists or is continuing immediately prior to
and after giving effect to such Asset Sale;
(ii) the Company (or the Restricted Subsidiary, as the case
may be) receives consideration at the time of such Asset Sale at least
equal to the fair market value (evidenced for purposes of this Section
4.10 by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) of the assets sold or
otherwise disposed of; and
(iii) at least 80% of the consideration therefor received by
the Company or such Restricted Subsidiary is in the form of (w) Cash
Equivalents, (x) Replacement Assets, (y) publicly traded Equity
Interests of a Person who is, directly or indirectly, engaged primarily
in one or more Cable Businesses; provided, however, that the Company or
such Restricted Subsidiary shall Monetize such Equity Interests by sale
to one or more Persons (other than to the Company or a Subsidiary
thereof) at a price not less than the fair market value thereof within
180 days of the consummation of such Asset Sale, or (z) any combination
of the foregoing clauses (w) through (y); provided, however, that the
amount of (x) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet or in the notes
thereto) of the Company or any Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Notes) that are
assumed by the transferee of any such assets and (y) any notes or other
obligations received by the Company or any such Restricted Subsidiary
from such transferee that are within five Business Days converted by
the Company or such Restricted Subsidiary into cash, shall be deemed to
be Cash Equivalents (to the extent of the Cash Equivalents received in
such conversion) for purposes of this clause (iii).
(b) Within 360 days after any Asset Sale, the Company (or the
Restricted Subsidiary, as the case may be) shall cause the Net Proceeds
from such Asset Sale:
(i) to be used to permanently reduce Indebtedness of a
Restricted Subsidiary; or
(ii) to be invested or reinvested in Replacement Assets.
Pending final application of any such Net Proceeds, the
Company may temporarily reduce revolving credit borrowings or otherwise invest
such Net Proceeds in any manner that is not prohibited by this Indenture or the
indentures for the Other Qualified Notes.
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Any Net Proceeds from any Asset Sale that are not used or
reinvested as provided in the preceding sentence constitute "EXCESS PROCEEDS."
When the aggregate amount of Excess Proceeds exceeds $15 million, the Company
shall make an offer (an "ASSET SALE OFFER") to all holders of Notes and Other
Qualified Notes to purchase the maximum principal amount of Notes and Other
Qualified Notes (determined on a pro rata basis according to the accreted value
or principal amount, as the case may be, of the Notes and the Other Qualified
Notes and in accordance with Section 3.09(g)(i)) that may be purchased out of
the Excess Proceeds (x) with respect to the Other Qualified Notes, based on the
terms set forth in the indenture related to each issue of the Other Qualified
Notes and (y) with respect to the Notes, at an offer price in cash in an amount
equal to 100% of the outstanding principal amount thereof plus accrued and
unpaid interest, if any, to the date fixed for the closing of such offer (or, in
the case of repurchases of Notes prior to October 1, 2003, at a purchase price
equal to 100% of the Accreted Value thereof as of the date fixed for the closing
of such offer), in accordance with the procedures set forth in Section 3.09
hereof. To the extent that the aggregate principal amount or accreted value, as
the case may be, of Notes and Other Qualified Notes tendered pursuant to an
Asset Sale Offer is less than the Excess Proceeds, the Company may use such
deficiency for general corporate purposes. If the aggregate principal amount or
accreted value, as the case may be, of Notes and Other Qualified Notes
surrendered by holders thereof exceeds the amount of Excess Proceeds, then such
remaining Excess Proceeds shall be allocated pro rata according to accreted
value or principal amount, as the case may be, to the Notes and each issue of
the Other Qualified Notes and in accordance with Section 3.09(g)(ii), and the
Trustee shall select the Notes to be purchased from the amount allocated to the
Notes on the basis set forth in Section 3.09(e) hereof. Upon completion of such
offers to purchase each of the Notes and the Other Qualified Notes, the amount
of Excess Proceeds will be reset at zero.
(c) Notwithstanding the provisions of Sections 4.10(a) and
(b): the Company and its Subsidiaries may:
(i) sell, lease, transfer, convey or otherwise dispose of
assets or property acquired after October 14, 1993, by the Company or
any Subsidiary in a sale-and-leaseback transaction so long as the
proceeds of such sale are applied within five Business Days to
permanently reduce Indebtedness of a Restricted Subsidiary or if there
is no such Indebtedness or such proceeds exceed the amount of such
Indebtedness then such proceeds or excess proceeds are reinvested in a
Replacement Assets within 360 days after such sale, lease, transfer,
conveyance or disposition;
(ii) (x) swap or exchange assets or property with a Cable
Controlled Subsidiary or (y) issue, sell, lease, transfer, convey or
otherwise dispose of equity securities of any of the Company's
Subsidiaries to a Cable Controlled Subsidiary, in each of cases (x) and
(y) so long as (A) the ratio of Indebtedness to Annualized Pro Forma
EBITDA of the Company after such transaction is equal to or less than
the ratio of Indebtedness to Annualized Pro Forma EBITDA of the Company
immediately preceding such transaction; provided, however, that if the
ratio of Indebtedness to Annualized Pro Forma EBITDA of the Company
immediately preceding such transaction is 6:1 or less, then the ratio
of Indebtedness to Annualized Pro Forma EBITDA of the Company may be
0.5 greater than such ratio immediately preceding such transaction and
(B) either (I) the assets so contributed consist solely of a license to
operate a Cable Business and the Net Households covered by all of the
licenses to operate cable and telephone systems held by the Company and
its Restricted Subsidiaries immediately after and giving effect to such
transaction equals or exceeds the number of
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Net Households covered by all of the licenses to operate cable and
telephone systems held by the Company and its Restricted Subsidiaries
immediately prior to such transaction or (II) the assets so contributed
consist solely of Cable Assets and the value of the Capital Stock
received, immediately after and giving effect to such transaction, as
determined by an investment banking firm of recognized standing with
knowledge of the Cable Business, equals or exceeds the value of Cable
Assets exchanged for such Capital Stock; or
(iii) issue, sell, lease, transfer, convey or otherwise
dispose of Equity Interests (other than Disqualified Stock) of the
Company (or any Capital Stock Sale Proceeds therefrom) to any Person
(including Non-Restricted Subsidiaries).
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or amend any contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an "AFFILIATE
TRANSACTION"), unless:
(a) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Subsidiary than those that
could have been obtained in a comparable transaction by the Company or
such Subsidiary with an unrelated Person and
(b) the Company delivers to the Trustee:
(i) with respect to any Affiliate Transaction involving
aggregate payments in excess of $1 million or any series of Affiliate
Transactions with an Affiliate involving aggregate payments in excess
of $1 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction
complies with Section 4.11 (a) and such Affiliate Transaction is
approved by a majority of the disinterested directors on the Board of
Directors; and
(ii) with respect to any Affiliate Transaction involving
aggregate payments in excess of $25 million or any series of Affiliate
Transactions with an Affiliate involving aggregate payments in excess
of $25 million, an opinion as to the fairness to the Company or such
Subsidiary from a financial point of view issued by an investment
banking firm of national standing with high yield experience together
with an Officers' Certificate to the effect that such opinion complies
with this clause (ii); provided, however, that notwithstanding the
foregoing provisions, the following shall not be deemed to be Affiliate
Transactions:
(1) any employment agreement entered into by the
Company or any of its Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or its predecessor
or such Subsidiary;
(2) transactions between or among the Company and/or
its Restricted Subsidiaries;
(3) transactions permitted by the provisions of
Section 4.09 hereof;
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(4) Liens permitted under Section 4.07 hereof which
are granted by the Company or any of its Subsidiaries to an unrelated
Person for the benefit of the Company or any other Subsidiary of the
Company;
(5) any transaction pursuant to an agreement in
effect on the Issuance Date;
(6) the incurrence of Indebtedness by a Restricted
Subsidiary where such Indebtedness is owed to the holders of the Equity
Interests of such Restricted Subsidiary on a pro rata basis and on
substantially identical principal financial terms;
(7) management, operating, service or interconnect
agreements entered into in the ordinary course of business with any
Cable Business in which the Company or any Restricted Subsidiary has an
Investment and which is not a Cable Controlled Subsidiary (and of which
no Affiliate of the Company is an Affiliate other than as a result of
such Investment); and
(8) any tax sharing agreement.
SECTION 4.12. DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(a) (i) pay dividends or make any other distributions to the
Company or any of its Subsidiaries (A) on its Capital Stock or (B) with
respect to any other interest or participation in, or measured by, its
profits, or (ii) pay any indebtedness owed to the Company or any of its
Subsidiaries, or
(b) make loans or advances to the Company or any of its
Subsidiaries, or
(c) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of:
(i) Existing Indebtedness as in effect on the Issuance Date;
(ii) this Indenture and the Notes;
(iii) any agreement covering or relating to Indebtedness
permitted to be incurred under Section 4.08(b)(i), (ii), (iii), (iv),
(v), (viii) or (ix) hereof (but only, in the case of Section
4.08(b)(viii) or (ix), to the extent contemplated by the then-existing
Credit Facility), provided that the provisions of such agreement permit
any action referred to in clause (a) above in aggregate amounts
sufficient to enable the payment of interest and principal and
mandatory repurchases pursuant to the terms of this Indenture and the
Notes, but provided further that: (x) any such agreement may
nevertheless encumber, prohibit or restrict any action referred to in
clause (a) above if an event of default under such agreement has
occurred and is continuing or would occur as a result of any such
action; and (y) any such agreement may nevertheless contain (I)
restrictions
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limiting the payment of dividends or the making of any other
distributions to all or a portion of excess cash-flow (or any similar
formulation thereof) and (II) subordination provisions governing
Indebtedness owed to the Company or any Restricted Subsidiary;
(iv) applicable law;
(v) any instrument governing Indebtedness or Capital Stock of
a Person acquired by the Company or any of its Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that the EBITDA
of such Person is not taken into account in determining whether such
acquisition was permitted by the terms of this Indenture;
(vi) customary nonassignment provisions in leases entered into
in the ordinary course of business and consistent with past practices;
(vii) provisions of joint venture or stockholder agreements,
so long as such provisions are determined by a resolution of the Board
of Directors to be, at the time of such determination, customary for
such agreements;
(viii) with respect to clause (c) above, purchase money
obligations for property acquired in the ordinary course of business or
the provisions of any agreement with respect to any Asset Sale (or
transaction which, but for its size, would be an Asset Sale), solely
with respect to the assets being sold; or
(ix) permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Refinancing
Indebtedness are determined by a resolution of the Board of Directors
to be no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced.
SECTION 4.13. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control Triggering
Event, 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 described in
Section 3.09 hereof (the "PURCHASE OFFER") at a purchase price equal to
101% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of purchase (or, in the case of
repurchases of Notes prior to October 1, 2003, at a purchase price
equal to 101% of the Accreted Value thereof as of the date fixed for
purchase) (the "CHANGE OF CONTROL PAYMENT").
(b) Within 40 days following any Change of Control Triggering
Event, the Company shall mail to each Holder the notice provided by
Section 3.09(e).
SECTION 4.14. PAYMENT OF ADDITIONAL AMOUNTS.
At least 10 days prior to the first date on which payment of principal
and any premium or interest on the Notes is to be made, and at least 10 days
prior to any subsequent such date if there has been any change with respect to
the matters set forth in the Officers' Certificate described in this Section
4.14, the
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Company shall furnish the Trustee and the Paying Agent, if other than the
Trustee, with an Officers' Certificate instructing the Trustee and the Paying
Agent whether the Company is obligated to pay Additional Amounts (as defined in
Section 3 of the Initial Notes or Section 2 of the Exchange Notes) with respect
to such payment of principal, or of any premium or interest on the Notes. If the
Company will be obligated to pay Additional Amounts with respect to such
payment, then such Officers' Certificate shall specify by country the amount, if
any, required to be withheld on such payments to such Holders and the Company
will pay to the Trustee or the Paying Agent such Additional Amounts. The Company
shall indemnify the Trustee and the Paying Agent for, and hold them harmless
against, any loss, liability or expense reasonably incurred without negligence
or bad faith on their part arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officers' Certificate furnished to
them pursuant to this Section 4.14.
Whenever in this Indenture there is mentioned, in any context, the
payment of principal (and premium, if any), Offer Amount, interest or any other
amount payable under or with respect to any Note such mention shall be deemed to
include mention of the payment of Additional Amounts provided for in this
Section 4.14 and Section 3 of the Initial Notes (or Section 2 of the Exchange
Notes) to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to the provisions of this Section
4.14 and Section 3 of the Initial Notes (or Section 2 of the Exchange Notes) and
express mention of the payment of Additional Amounts (if applicable) in any
provisions hereof shall not be construed as excluding Additional Amounts in
those provisions hereof where such express mention is not made (if applicable).
ARTICLE V.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company may not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, another corporation, Person or
entity unless:
(a) the Company is the surviving corporation or the entity or
the Person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United Kingdom,
the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands or of the United States, any state thereof or the District of
Columbia;
(b) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or
Person to which such sale, assignment, transfer, lease, conveyance or
other disposition will have been made assumes all the Obligations
(including the due and punctual payment of Additional Amounts if the
surviving corporation is a corporation organized or existing under the
laws of the United Kingdom, the Netherlands, the Netherlands Antilles,
Bermuda or the Cayman Islands) of the Company, pursuant to a
supplemental indenture in a form reasonably satisfactory to the
Trustee, under the Notes and this Indenture;
(c) immediately after such transaction no Default or Event of
Default exists;
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(d) the Company or any entity or Person formed by or surviving
any such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been made
will have a ratio of Indebtedness to Annualized Pro Forma EBITDA equal
to or less than the ratio of Indebtedness to Annualized Pro Forma
EBITDA of the Company immediately preceding the transaction; provided,
however, that if the ratio of Indebtedness to Annualized Pro Forma
EBITDA of the Company immediately preceding such transaction is 6:1 or
less, then the ratio of Indebtedness to Annualized Pro Forma EBITDA of
the Company may be 0.5 greater than such ratio immediately preceding
such transaction; and
(e) such transaction would not result in the loss of any
material authorization or Material License of the Company or its
Subsidiaries.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person has been named as the Company herein; provided, however, that
the predecessor Company in the case of a sale, assignment, transfer, lease,
conveyance or other disposition shall not be released from the obligation to pay
the principal of and interest on the Notes.
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if:
(a) the Company defaults in the payment of interest (and
Additional Amounts, if applicable) on any Note when the same becomes
due and payable and the Default continues for a period of 30 days after
the date due and payable;
(b) the Company defaults in the payment of the principal of
any Note when the same becomes due and payable at maturity, upon
redemption or otherwise;
(c) the Company fails to observe or perform any covenant or
agreement contained in Section 4.08, 4.09, or 4.13 hereof;
(d) the Company fails to observe or perform any other covenant
or agreement contained in this Indenture or the Notes, required by any
of them to be performed and the Default continues for a period of 60
days after notice from the Trustee to the Company or from the Holders
of 25% in aggregate principal amount at maturity of the then
outstanding Notes to the Company and the Trustee stating that such
notice is a "Notice of Default";
(e) 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
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the Company or any Restricted Subsidiary (or the payment of which is
guaranteed by the Company or any Restricted Subsidiary), whether such
Indebtedness or guarantee now exists or is created after the Issuance
Date, which default:
(i) is caused by a failure to pay when due principal of or
interest on such Indebtedness within the grace period provided for in
such Indebtedness (which failure continues beyond any applicable grace
period) (a "PAYMENT DEFAULT"); or
(ii) results in the acceleration of such Indebtedness prior to
its express maturity
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there is a
Payment Default or the maturity of which has been so accelerated, aggregates $10
million or more;
(f) a final judgment or final judgments (other than any
judgment as to which a reputable insurance company has accepted full
liability) for the payment of money are entered by a court or courts of
competent jurisdiction against the Company or any Restricted Subsidiary
of the Company which remains undischarged for a period (during which
execution shall not be effectively stayed) of 60 days, provided that
the aggregate of all such judgments exceeds $5 million;
(g) the Company or any Material Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it
in an involuntary case in which it is the debtor;
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property;
(iv) makes a general assignment for the benefit of its
creditors; or
(v) generally is unable to pay its debts as the same become
due;
(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Material
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any Material
Subsidiary or for all or substantially all of its property; or
(iii) orders the liquidation of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for
60 days; and
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(i) the revocation of a Material License.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors or the protection of creditors.
The term "CUSTODIAN" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clauses (g) and (h) of Section 6.01 hereof) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount at maturity of the then outstanding Notes by notice to the Company and
the Trustee, may declare all the Notes to be due and payable. Upon such
declaration, the principal (or the Accreted Value, if prior to October 1, 2003)
of, premium, if any, and interest (if on or after October 1, 2003) on, the Notes
shall be due and payable immediately. If an Event of Default specified in clause
(g) or (h) of Section 6.01 hereof occurs, such an amount shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder. The Holders of a majority in principal amount
at maturity of the then outstanding Notes by notice to the Trustee may rescind
an acceleration and its consequences if the rescission would not conflict with
any judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration. In the case of any Event of Default pursuant to the
provisions of Section 6.01 occurring by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding payment of the premium that the Company would have had to pay if the
Company then had elected to redeem the Notes pursuant to Section 7 of the
Initial Notes (Section 6 in the case of the Exchange Notes), an equivalent
premium shall, upon demand of the Holders of at least 25% in principal amount at
maturity of the then outstanding Notes delivered to the Company and the Trustee,
also become and be immediately due and payable to the extent permitted by law,
anything in this Indenture or in the Notes contained to the contrary
notwithstanding. If an Event of Default occurs prior to October 1, 2003, by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Company with the intention of avoiding the prohibition on redemption of
the Notes prior to October 1, 2003, pursuant to Section 7 of the Initial Notes
(Section 6 in the case of the Exchange Notes), then the premium payable for
purposes of this paragraph for each of the years beginning on October 1 of the
years (November 6 in the case of 1998) set forth below shall, subject to the
foregoing demand, be as set forth in the following table expressed as a
percentage of the amount that would otherwise be due pursuant to this Section
6.02 hereof but for the provisions of this sentence.
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C> <C>
1998.......................................... 116.501%
1999.......................................... 114.438%
2000.......................................... 112.376%
2001.......................................... 110.313%
2002.......................................... 108.251%
</TABLE>
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal or interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
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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 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 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount at maturity of the then
outstanding Notes by notice to the Trustee may waive an existing Default or
Event of Default and its consequences except a continuing Default or Event of
Default in the payment of the principal or Accreted Value of, or interest on any
Note. When a Default or Event of Default is waived, it is cured and ceases; but
no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of a majority in principal amount at maturity of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, is unduly prejudicial to the rights
of other Holders, or would involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Holder gives to the Trustee notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount at
maturity of the then outstanding Notes make a request to the Trustee to
pursue the remedy;
(c) such Holder or Holders offer 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 of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount at maturity of the then outstanding Notes do not give
the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal and interest on the Note, on or
after the respective due dates expressed in
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the Note, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
the Holder made pursuant to this Section.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid on the Notes and interest on overdue principal and
interest and such further amount as shall be sufficient to cover the costs and,
to the extent lawful, expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
the Holders allowed in any judicial proceedings relative to the Company, its
creditors or its property. Nothing contained herein 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 thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07 hereof;
Second: to Holders for amounts due and unpaid on the Notes for
principal and interest (and Additional Amounts, if applicable), ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal and interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders made pursuant to this Section.
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 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount at maturity of the then outstanding Notes.
ARTICLE VII.
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TRUSTEE
SECTION 7.01. 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 their
exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default: (i)
the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others and (ii) in the absence of bad
faith on its part, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee
shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture and to confirm the
correctness of all mathematical computations.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that: (i) this paragraph does not limit the effect
of paragraph (b) of this Section 7.01; (ii) the Trustee shall not be
liable for any error of judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts and (iii) the Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.05 hereof.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against
any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care.
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(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers.
(e) The Trustee shall not be charged with knowledge of any
Event of Default under subsection (c), (d), (e), (f) or (i) (and
subsection (a) or (b) if the Trustee does not act as Paying Agent) of
Section 6.01 or of the identity of any Material Subsidiary referred to
in clause (ii) of the definition thereof unless either (1) a Trust
Officer of the Trustee assigned to its Corporate Trustee Administration
Department shall have actual knowledge thereof, or (2) the Trustee
shall have received notice thereof in accordance with Section 10.02
hereof from the Company or any Holder.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee 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, and it shall not be responsible for any
statement of the Company in the Indenture or any statement in the Notes other
than its authentication or for compliance by the Company with the Registration
Rights Agreement.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders 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 on any Note, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Holders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after the reporting date stated in Section 10.11, the
Trustee shall mail to Holders a brief report dated as of such reporting date
that complies with TIA (Section) 313(a) if and to the extent required by such
(Section) 313(a). 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 Holders shall be
filed with the SEC and each stock exchange on which the Notes are listed. The
Company shall notify the Trustee when the Notes are listed on any stock
exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable
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disbursements, expenses and advances incurred or made by it. Such disbursements
and expenses may include the reasonable disbursements, compensation and expenses
of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity. 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, disbursements and expenses of such counsel. The Company need not pay for
any settlement made without its consent, which consent shall not be unreasonably
withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
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 money or property held in trust to pay
principal and interest on particular Notes.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
All amounts owing to the Trustee under this Section shall be payable by
the Company in United States dollars.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount at maturity of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof,
unless the Trustee's duty to resign is stayed as provided in TIA
(Section) 310(b);
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount at maturity of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
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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 at least 10% in principal amount at maturity of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA (Section) 310(b), any
Holder who has been a bona fide Holder of a Note for at least six months 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. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to
this Section 7.08 hereof, the Company's obligations under Section 7.07 hereof
shall continue for the benefit of the retiring trustee with respect to expenses
and liabilities incurred by it prior to such replacement.
SECTION 7.09. 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.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (Section) 310(a)(1) and (5). The Trustee shall always have a
combined capital and surplus as stated in Section 10.11 hereof. The Trustee is
subject to TIA (Section) 310(b). The following indentures shall be deemed to be
specifically described herein for the purposes of clause (i) of the first
proviso contained in TIA (Section) 310(b): (a) indenture, dated as of April 20,
1995, between the Company and The Chase Manhattan Bank, as trustee, relating to
the 12-3/4% Notes, as amended, (b) indenture, dated as of January 30, 1996,
between the Company and The Chase Manhattan Bank, as trustee, relating to the
11-1/2% Deferred Coupon Notes, as amended, (c) indenture, dated as February 12,
1997, between the Company and The Chase Manhattan Bank, as trustee, relating to
the 10% Notes, as amended, (d) indenture dated as of March 13, 1998, between the
Company and The Chase Manhattan Bank, as trustee, relating to the Company's
9-1/2% Notes, (e) indenture, dated as of March 13, 1998, between the Company and
The Chase Manhattan Bank, as trustee, relating to the Company's 10-3/4% Notes,
(f) indenture, dated as of March 13, 1998, between the Company and The Chase
Manhattan Bank, as trustee, relating to Company's the 9-3/4% Notes and (g)
indenture, dated as of November 2, 1998, between the Company and The Chase
Manhattan Bank, as Trustee, relating to the Company's 11-1/2% Notes.
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.
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ARTICLE VIII.
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS.
This Indenture shall cease to be of further effect (except that the
Company's obligations under Sections 7.07 and 8.03 hereof shall survive) when
all outstanding Notes theretofore authenticated and issued have been delivered
to the Trustee for cancellation and the Company has paid all sums payable
hereunder.
SECTION 8.02. OPTION TO EFFECT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
this Section 8.02 be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Section. Upon the Company's election to have
this Section 8.02 apply to all the outstanding Notes, the Company shall, subject
to the satisfaction of the conditions set forth in the next paragraph, be deemed
to have been discharged from its obligations with respect to all outstanding
Notes on the date such conditions are satisfied (hereinafter, "DEFEASANCE"). For
this purpose, Defeasance means that the Company shall be deemed to have paid and
discharged the entire Obligations represented by the outstanding Notes, which
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.03 hereof and the other Sections of this Indenture referred to in clauses (a)
and (b) below, and to have satisfied all its other obligations under such Notes
and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in the following paragraph, payments in
respect of the principal of (or, if applicable, all amounts payable in respect
of Accreted Value) and interest on such Notes when such payments are due; (ii)
the Company's obligations with respect to such Notes under Article II hereof;
(iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and the Company's obligations in connection therewith; and (iv) this Article
VIII.
In order to exercise Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, pursuant to an irrevocable trust
and security agreement in form satisfactory to the Trustee, money in
U.S. dollars sufficient or U.S. Government Obligations the principal of
and interest on which will be sufficient or a combination thereof
sufficient in the opinion of a nationally recognized firm of
independent public accountants, expressed in a written certification
thereof (in form satisfactory to the Trustee) to pay the principal of
(or, if applicable, payments in respect of Accreted Value), premium, if
any, and interest, if any, on the outstanding Notes on the stated date
for payment thereof or on the applicable redemption date, as the case
may be, of such principal or installment of principal of (or, if
applicable, payments in respect of Accreted Value), premium, if any,
and interest, if any, on the outstanding Notes;
(b) the Company shall have delivered to the Trustee, an
Opinion of Counsel (which counsel may be an employee of the Company)
reasonably acceptable to the Trustee confirming that: (A) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the Issuance Date, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall
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<PAGE> 57
confirm that, the Holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of
such 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 Defeasance had not occurred;
(c) no Event of Default shall have occurred and be continuing
on the date of such Defeasance (other than an Event of Default
resulting from or related to the incurrence of Indebtedness, the
proceeds of which are to be applied to such deposit) or, insofar as
Sections 6.01(g) and (h) hereof are concerned, at any time in the
period ending on the 91st day after the date of deposit (or greater
period of time in which any such deposit of trust funds may remain
subject to the effect of any Bankruptcy Law insofar as those apply to
the deposit by the Company);
(d) such Defeasance shall not result in a breach or violation
of, or constitute a default under, any material agreement or instrument
(other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(e) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that after the 91st day following the deposit
(or such greater period referred to in (c) above), the trust funds will
not be subject to the effect of any applicable Bankruptcy Law;
(f) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Notes over any
other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others;
(g) the deposit shall not result in the Company, the Trustee
or the trust fund established pursuant to (a) above being subject to
regulation under the Investment Company Act of 1940, as amended;
(h) Holders of the Notes will have a valid, perfected and
unavoidable (under applicable Bankruptcy Law), subject to the passage
of time referred to clause (e) above, first priority security interest
in the trust funds; and
(i) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel (subject to customary
exceptions), each stating that all conditions precedent provided for or
relating to the Defeasance have been complied with.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged. In order to have money available on a
payment date to pay principal or interest (including Additional Amounts, if
applicable) on the Notes, the U.S. Government Obligations shall be payable as to
principal or interest on or before such payment date in such amounts as will
provide the necessary money. U.S. Government Obligations shall not be callable
at the issuer's option.
SECTION 8.03. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.02 hereof. It shall apply the deposited
money and the money from U.S. Government
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Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal and interest, if any, on the Notes.
SECTION 8.04. REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal (or, if applicable, payments
in respect of Accreted Value) or interest that remains unclaimed for two years
after the date upon which such payment shall have become due; provided, however,
that the Company shall have first caused notice of such payment to the Company
to be mailed to each Holder entitled thereto no less than 30 days prior to such
payment. After payment to the Company, the Trustee and the Paying Agent shall
have no further liability with respect to such money and Holders entitled to the
money must look to the Company for payment as general creditors unless any
applicable abandoned property law designates another Person.
SECTION 8.05. REINSTATEMENT.
If (i) the Trustee or Paying Agent is unable to apply any money in
accordance with Section 8.03 hereof by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application and (ii) the Holders of at least a majority in principal amount
at maturity of the then outstanding Notes so request by written notice to the
Trustee, the Company's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
8.02 hereof until such time as the Trustee or Paying Agent is permitted to apply
all such money in accordance with Section 8.03 hereof or such request is revoked
by such Holders; provided, however, that if the Company makes any payment of
interest on or principal (or, if applicable, payments in respect of Accreted
Value) of any Note following 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 held by the Trustee or Paying Agent.
ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Notes without the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Section 5.01 hereof;
(c) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(d) to make any change that does not adversely affect the
interests hereunder of any Holder; or
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(e) to qualify the Indenture under the TIA or to comply with
the requirements of the SEC in order to maintain the qualification of
the Indenture under the TIA.
SECTION 9.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.07 hereof, the Company and the Trustee may amend
or supplement this Indenture or the Notes with the written consent of the
Holders of at least a majority in principal amount at maturity of the then
outstanding Notes. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in principal amount at maturity of the Notes then outstanding may also
waive compliance in a particular instance by the Company with any provision of
this Indenture or the Notes. However, without the consent of each Holder
affected, an amendment, supplement or waiver under this Section may not:
(a) reduce the amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter the provisions of Sections 7 and 8 of the Initial
Note and Sections 6 and 7 of the Exchange Note (other than provisions
relating to the covenants described under Sections 4.10 and 4.13);
(c) alter the manner of calculating the Accreted Value of any
Note or reduce the rate of or change the time for payment of interest
on any Note;
(d) waive a default in the payment of the principal of (or, if
applicable, payments in respect of Accreted Value), or interest, if
any, on, any Note (except a rescission of acceleration of the Notes by
the Holders of at least a majority in aggregate principal amount at
maturity of the Notes and a waiver of the payment default that resulted
from such acceleration);
(e) except as contemplated by Section 10.07(e), make any Note
payable in money other than that stated in the Note;
(f) make any change in Section 6.04 or 6.07 hereof;
(g) waive a redemption payment with respect to any Note; or
(h) make any change in the foregoing amendment and waiver
provisions of this Article 9.
To secure a consent of the Holders under this Section 9.02, it shall
not be necessary for the Holders to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to Holders a notice briefly describing the
amendment or waiver.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
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SECTION 9.04. 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 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 or subsequent Holder may revoke the consent as to
his Note or portion of a Note if the Trustee receives the notice of revocation
before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount at maturity of
Notes have consented to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders after such record date. No consent shall be valid or effective for
more than 90 days after such record date unless consents from Holders of the
principal amount at maturity of Notes required hereunder for such amendment or
waiver to be effective shall have also been given and not revoked within such
90-day period.
After an amendment, supplement or waiver becomes effective it shall
bind every Holder, unless it is of the type described in any of clauses (a)
through (h) of Section 9.02 hereof. In such case, the amendment or waiver shall
bind each Holder who has consented to it and every subsequent Holder that
evidences the same debt as the consenting Holder's Note.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment or
waiver on any Note thereafter authenticated. The Company in exchange for all
Notes may issue and the Trustee shall authenticate new Notes that reflect the
amendment or waiver.
Failure to make such notation on a Note or to issue a new Note as
aforesaid shall not affect the validity and effect of such amendment or waiver.
SECTION 9.06. TRUSTEE PROTECTED.
The Trustee shall sign all supplemental indentures, except that the
Trustee may, but need not, sign any supplemental indenture that adversely
affects its rights.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS.
This Indenture is subject to the provisions of the TIA that are
required to be incorporated into this Indenture (or, prior to the registration
of the Notes pursuant to the Registration Rights Agreement, would be required to
be incorporated into this Indenture if it were qualified under the TIA), and
shall, to the extent applicable, be governed by such provisions. If any
provision of this Indenture limits, qualifies,
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or conflicts with another provision which is required (or would be so required)
to be incorporated in this Indenture by the TIA, the incorporated provision
shall control.
SECTION 10.02. 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 to the other's address stated in Section 10.10 hereof. The Company or the
Trustee by notice to the other may designate additional or different addresses
for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by first class
mail to his address shown on the register kept by the Registrar. 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.
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.
All other notices or communications shall be in writing.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by the Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
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 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.05. 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 pursuant to Section 4.03)
shall include:
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(a) a statement that the Person signing such certificate or
rendering such 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, such
Person has made such examination or investigation as is necessary to
enable such Person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 10.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by, or a meeting of,
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 10.07. LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions in the State of New York are not required to be open. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If any other operative date for purposes of
this Indenture shall occur on a Legal Holiday then for all purposes the next
succeeding day that is not a Legal Holiday shall be such operative date.
SECTION 10.08. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, 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. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
SECTION 10.09. COUNTERPARTS AND FACSIMILE SIGNATURES.
This Indenture may be executed by manual or facsimile signature in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 10.10. VARIABLE PROVISIONS.
"OFFICER" means the Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
The first certificate pursuant to Section 4.03 hereof shall be for the
fiscal year ended on December 31, 1998.
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The reporting date for Section 7.06 hereof is March 15, of each year.
The first reporting date is March 15, 1999.
The Trustee shall always have a combined capital and surplus of at
least $100,000,000 as set forth in its most recent published annual report of
condition.
The Company's address is:
NTL Incorporated
110 East 59th Street, 26th Floor
New York, New York 10022
Attention: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
The Trustee's address is:
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trustee
Administration Department
SECTION 10.11. GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE
AND THE NOTES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
SECTION 10.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or an Affiliate. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 10.13. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 10.14. 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.
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SECTION 10.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
NTL INCORPORATED, as Company
By: /s/ Richard J. Lubasch
-------------------------------------
Name: Richard J. Lubasch
Title: Senior Vice President and
General Counsel
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ Andrew M. Deck
-------------------------------------
Name: Andrew M. Deck
Title: Vice President
<PAGE> 66
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE
144(k) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE), AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF LESS THAN $100,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFF-SHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM
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<PAGE> 67
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFF-SHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
[Original Issue Discount Legend]
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR PURPOSES OF APPLYING
THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT RULES TO THIS NOTE.
THE ISSUE DATE OF THIS NOTE IS NOVEMBER 6, 1998. THE ISSUE PRICE OF THIS NOTE IS
$555.05 PER $1000.00 OF INITIAL PRINCIPAL AMOUNT AT MATURITY. THIS NOTE IS
ISSUED WITH $444.95 OF ORIGINAL ISSUE DISCOUNT PER $1000.00 OF INITIAL PRINCIPAL
AMOUNT AT MATURITY. THE YIELD TO MATURITY OF THIS NOTE IS 12.375%.
A-2
<PAGE> 68
No. ________
$_______
CUSIP No. [ ]/CINS No. [ ]
12-3/8% SENIOR DEFERRED COUPON NOTE DUE 2008
NTL Incorporated, a Delaware corporation (the "COMPANY"), promises to
pay to __________________________ or registered assigns, the principal sum of
____________________ $[____________] [,or such other amount as is indicated on
Schedule A hereof*,] on October 1, 2008, subject to the further provisions of
this Note set forth on the reverse hereof which further provisions shall for all
purposes have the same effect as if set forth at this place.
<TABLE>
<CAPTION>
<S> <C>
Interest Payment Dates: April 1 and October 1, commencing April 1, 2004
Record Dates: March 15 and September 15
</TABLE>
IN WITNESS WHEREOF, NTL Incorporated has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated:
-----------------------------------
NTL INCORPORATED
by:
--------------------------------------
by:
--------------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 12-3/8% Senior
Deferred Coupon Notes due 2008 described in
the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By:
------------------------------------
Authorized Officer
- --------
* Applicable to Global Notes Only
A-3
<PAGE> 69
[FORM OF REVERSE OF INITIAL NOTE]
NTL INCORPORATED
12-3/8% Senior Deferred Coupon Note due 2008
1. Interest. NTL INCORPORATED, a Delaware corporation (the "COMPANY"),
is the issuer of 12-3/8% Senior Deferred Coupon Notes due 2008 (the "NOTES").
The Notes are being issued at a discount from their principal amount and will
accrete (in accordance with the definition of Accreted Value contained in the
Indenture) at a rate of 12-3/8%, compounded semiannually, to an aggregate
principal amount of $450,000,000 by October 1, 2003. The Company promises to pay
interest on the Notes in cash semiannually on each April 1 and October 1,
commencing on April 1, 2004, to Holders of record on the immediately preceding
March 15 and September 15, respectively, at the rate of 12-3/8% per annum.
Interest on the Notes will accrue from the most recent date to which interest
has been paid on the Notes, or if no interest has been paid, from October 1,
2003. Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue principal and premium, if any,
or overdue Accreted Value at the interest or accretion rate borne by the Notes,
compounded semiannually, and it shall pay interest on overdue installments of
interest (without regard to any applicable grace period) at the same interest
rate compounded semiannually. Any interest paid on this Note shall be increased
to the extent necessary to pay Additional Amounts as set forth in this Note.
2. Special Interest. The Holder of this Note is entitled to the
benefits of the Registration Rights Agreement relating to the Notes, dated as of
November 6, 1998, between the Company and the Initial Purchasers party thereto
(the "REGISTRATION RIGHTS AGREEMENT").
In the event that either (a) the Exchange Offer Registration Statement
(as such term is defined in the Registration Rights Agreement) is not filed with
the SEC on or prior to the 90th day following the date of original issuance of
the Notes, (b) the Exchange Offer Registration Statement is not declared
effective prior to the 180th day following the date of original issuance of the
Notes (as such period may be extended in accordance with the SEC review delay
provisions of the Registration Rights Agreement) or (c) the Registered Exchange
Offer (as such term is defined in the Registration Rights Agreement) is not
consummated or a Shelf Registration Statement (as such term is defined in the
Registration Rights Agreement) is not declared effective on or prior to the
220th day following the date of original issuance of the Notes (as such period
may be extended in accordance with the SEC review delay provisions of the
Registration Rights Agreement) (each such event referred to in clauses (a)
through (c) above, a "REGISTRATION DEFAULT"), interest will accrue (in addition
to the stated interest on the Notes) from and including the next day following
each of (i) such 90-day period in the case of clause (a) above and (ii) such
180-day period in the case of clause (b) above and (iii) such 220-day period in
the case of clause (c) above (in each of cases (b) and (c) as such period is
extended, if applicable, in the manner aforesaid) (each such period referred to
in clauses (i)-(iii) above an "ACCRUAL PERIOD"), at a rate per annum equal to
0.50% of the Accreted Value of the Notes (determined daily). The amount of such
additional interest (the "SPECIAL INTEREST") will increase by an additional
0.50% of the Accreted Value with respect to each subsequent applicable Accrual
Period until all Registration Defaults have been cured, up to a maximum amount
of Special Interest of 1.50% per annum of the Accreted Value (determined daily).
In each case such additional interest will be payable in cash semiannually in
arrears on each April 1 and October 1, commencing April 1, 1999, to Holders of
record on the immediately preceding March 15 and September 15, respectively. In
the event that a Shelf Registration Statement is declared effective pursuant to
the terms of the Registration Rights Agreement, if the Company fails to keep
such Registration Statement continuously effective for the period required by
the Registration Rights Agreement, then from such time as the Shelf Registration
Statement is no longer effective until the earlier of (i) the date that the
Shelf
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<PAGE> 70
Registration Statement is again deemed effective, (ii) the date that is the
second anniversary of the original issuance of the Notes or (iii) the date as of
which all of the Notes are sold pursuant to the Shelf Registration Statement,
Special Interest shall accrue at a rate per annum equal to 0.50% of the Accreted
Value of the Notes (1.00% thereof if the Shelf Registration Statement is no
longer effective for 30 days or more) and shall be payable in cash semiannually
in arrears on each April 1 and October 1, commencing April 1, 1999, to the
Holders of record on the immediately preceding March 15 and September 15,
respectively.
3. Additional Amounts. This Section 3 shall apply only in the event
that the Company becomes, or a successor to the Company is, a corporation
organized or existing under the laws of the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands. All payments made by the
Company on this Note shall be made without deduction for or on account of, any
and all present or future taxes, duties, assessments, or governmental charges of
whatever nature unless the deduction or withholding of such taxes, duties,
assessments or governmental charges is then required by law. If any deduction or
withholding for or on account of any present or future taxes, assessments or
other governmental charges of the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands (or any political
subdivision or taxing authority thereof or therein) shall at any time be
required in respect of any amounts to be paid by the Company under this Note,
the Company shall pay or cause to be paid such additional amounts ("ADDITIONAL
AMOUNTS") as may be necessary in order that the net amounts received by a Holder
of this Note after such deduction or withholding shall be not less than the
amounts specified in this Note to which the Holder of this Note is entitled;
provided, however, that the Company shall not be required to make any payment of
Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge to
the extent such tax, assessment or other governmental charge would not
have been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or possessor of a power over,
such Holder, if such Holder is an estate, nominee, trust, partnership
or corporation), other than the holding of this Note or the receipt of
amounts payable in respect of this Note, and the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands
(or any political subdivision or taxing authority thereof or therein)
including, without limitation, such Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a
citizen or resident thereof or being or having been present or engaged
in trade or business therein or having or having had a permanent
establishment therein or (ii) the presentation of this Note (where
presentation is required) for payment on a date more than 30 days after
the date on which such payment became due and payable or the date on
which payment thereof is duly provided for, whichever occurs later,
except to the extent that the Holder would have been entitled to
Additional Amounts had this Note been presented on the last day of such
period of 30 days;
(b) any tax, assessment or other governmental charge
that is imposed or withheld by reason of the failure to comply by the
Holder of this Note or, if different, the beneficial owner of the
interest payable on this Note, with a timely request of the Company
addressed to such Holder or beneficial owner to provide information,
documents or other evidence concerning the nationality, residence,
identity or connection with the taxing jurisdiction of such Holder or
beneficial owner which is required or imposed by a statute, regulation
or administrative practice of the taxing jurisdiction as a precondition
to exemption from all or part of such tax, assessment or governmental
charge;
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<PAGE> 71
(c) any estate, inheritance, gift, sales, transfer,
personal property or similar tax, assessment or other governmental
charge;
(d) any tax, assessment or other governmental charge
which is collectible otherwise than by withholding from payments of
principal amount, redemption amount, Change of Control Payment or
interest with respect to a Note or withholding from the proceeds of a
sale or exchange of a Note;
(e) any tax, assessment or other governmental charge
required to be withheld by any Paying Agent from any payment of
principal amount, redemption amount, Change of Control Payment or
interest with respect to a Note, if such payment can be made, and is in
fact made, without such withholding by any other Paying Agent located
inside the United States;
(f) any tax, assessment or other governmental charge
imposed on a Holder that is not the beneficial owner of a Note to the
extent that the beneficial owner would not have been entitled to the
payment of any such Additional Amounts had the beneficial owner
directly held the Note;
(g) any combination of items (a), (b), (c), (d), (e)
and (f) above;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any interest on, this Note to any Holder who is a fiduciary or
partnership or other than the sole beneficial owner of such payment to the
extent that a beneficiary or settlor would not have been entitled to any
Additional Amounts had such beneficiary or settlor been the Holder of this Note.
All references to principal amount or interest on the Notes in the Indenture or
the Notes shall include any Additional Amounts payable to the Company pursuant
to this Section 3.
4. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date for the next interest payment date
even though Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Notes to a Paying Agent to collect
principal and premium payments (or, if applicable, payments with respect to
Accreted Value). The Company will pay principal (or, if applicable, payments
with respect to Accreted Value), premium, if any, and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal, premium, (or, if
applicable, payments with respect to Accreted Value) if any, and interest by
check payable in such money. It may mail an interest check to a holder's
registered address. If a Holder so requests, principal (or, if applicable,
payments with respect to Accreted Value), premium, if any, and interest may be
paid by wire transfer of immediately available funds to an account previously
specified in writing by such Holder to the Company and the Trustee.
5. Paying Agent and Registrar. The Trustee will act as Paying Agent and
Registrar in the City of New York, New York. Chase Manhattan Bank Luxembourg
S.A. will act as Paying Agent and Registrar in Luxembourg if and as long as the
Notes are listed on the Luxembourg Stock Exchange. The Company may change any
Paying Agent or Registrar without prior notice. The Company or any of its
Affiliates may act in any such capacity.
6. Indenture. The Company issued the Notes under an Indenture, dated as
of November 6, 1998 (the "INDENTURE"), between the Company and The Chase
Manhattan Bank, as Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by the Trust Indenture
A-6
<PAGE> 72
Act of 1939 (15 U.S. Code (Section)(Section) 77aaa-77bbbb) as in effect on the
date of the Indenture. The Notes are subject to, and qualifiEd by, all such
terms, certain of which are summarized hereon, and Holders are referred to the
Indenture and such Act for a statement of such terms. The Notes are unsecured
general obligations of the Company limited to $450,000,000 in aggregate
principal amount at maturity.
7. Optional Redemption. Except as provided in Section 8 hereof, the
Notes are not redeemable at the Company's option prior to October 1, 2003.
Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount )
set forth below plus accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on October
1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C> <C>
2003..................................... 106.188%
2004..................................... 104.125%
2005..................................... 102.063%
2006 and thereafter...................... 100.000%
</TABLE>
8. Optional Tax Redemption. (a) The Notes may be redeemed at the option
of the Company, in whole but not in part, upon not less than 30 nor more than 60
days notice, at any time at a redemption price equal to the principal amount
thereof plus accrued and unpaid interest to the date fixed for redemption (or,
in the case of redemption of the Notes prior to October 1, 2003, at a redemption
price equal to 100% of the Accreted Value thereof as of the date of redemption)
if after the date on which Section 3 of this Note becomes applicable (the
"RELEVANT DATE") there has occurred any change in or amendment to the laws (or
any regulations or official rulings promulgated thereunder) of the United
Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands (or any political subdivision or taxing authority thereof or therein),
or any change in or amendment to the official application or interpretation of
such laws, regulation or rulings (a "CHANGE IN TAX LAW") which becomes effective
after the Relevant Date, as a result of which the Company is or would be so
required on the next succeeding Interest Payment Date to pay Additional Amounts
with respect to the Notes as described under Section 3 hereof with respect to
withholding taxes imposed by the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands (or any political
subdivision or taxing authority thereof or therein) (a "WITHHOLDING TAX") and
such Withholding Tax is imposed at a rate that exceeds the rate (if any) at
which Withholding Tax was imposed on the Relevant Date, provided, however, that
(i) this paragraph shall not apply to the extent that, at the Relevant Date it
was known or would have been known had professional advice of a nationally
recognized accounting firm in the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands, as the case may be, been
sought, that a Change in Tax Law in the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands was to occur after the
Relevant Date, (ii) no such notice of redemption may be given earlier than 90
days prior to the earliest date on which the Company would be obliged to pay
such Additional Amounts were a payment in respect of the Notes then due, (iii)
at the time such notice of redemption is given, such obligation to pay such
Additional Amount remains in effect and (iv) the payment of such Additional
Amounts cannot be avoided by the use of any reasonable measures available to the
Company.
The Notes may also be redeemed, in whole but not in part, at any time
at a redemption price equal to the principal amount thereof plus accrued and
unpaid interest to the date fixed for redemption
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<PAGE> 73
(or, in the case of redemption of the Notes prior to October 1, 2003, at a
redemption price equal to 100% of the Accreted Value thereof as of the date
fixed for redemption) if the Person formed after the Relevant Date by a
consolidation, amalgamation, reorganization or reconstruction (or other similar
arrangement) of the Company or the Person into which the Company is merged after
the Relevant Date or to which the Company conveys, transfers or leases its
properties and assets after the Relevant Date substantially as an entirety
(collectively, a "SUBSEQUENT CONSOLIDATION") is required, as a consequence of
such Subsequent Consolidation and as a consequence of a Change in Tax Law in the
United Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands occurring after the date of such Subsequent Consolidation to pay
Additional Amounts with respect to Notes with respect to Withholding Tax as
described under Section 3 hereof and such Withholding Tax is imposed at a rate
that exceeds the rate (if any) at which Withholding Tax was or would have been
imposed on the date of such Subsequent Consolidation, provided, however, that
this paragraph shall not apply to the extent that, at the date of such
Subsequent Consolidation it was known or would have been known had professional
advice of a nationally recognized accounting firm in the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands, as the
case may be, been sought, that a Change in Tax Law in the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands was to
occur after such date.
The Company will also pay, or make available for payment, to Holders on
the Redemption Date any Additional Amounts (as described, but subject to the
exceptions referred to, in Section 3 hereof) resulting from the payment of such
Redemption Price.
9. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder of
the Notes to be redeemed at his address of record. The Notes in denominations
larger than $1,000 may be redeemed in part but only in integral multiples of
$1,000. In the event of a redemption of less than all of the Notes, the Notes
will be chosen for redemption by the Trustee in accordance with the Indenture.
On and after the redemption date, interest ceases to accrue on the Notes or
portions of them called for redemption (and, if applicable, the Accreted Value
of the Notes called for redemption will cease to increase)
If this Note is redeemed subsequent to a record date with respect to
any interest payment date specified above and on or prior to such interest
payment date, then any accrued interest will be paid to the Person in whose name
this Note is registered at the close of business on such record date.
10. Mandatory Redemption. The Company will not be required to make
mandatory redemption or repurchase payments with respect to the Notes. There are
no sinking fund payments with respect to the Notes.
11. Repurchase at Option of Holder. (a) If there is a Change of Control
Triggering Event, the Company shall be required to offer to purchase on the
Purchase Date all outstanding Notes at a purchase price equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest to the
Purchase Date (or, in the case of repurchases of Notes prior to October 1, 2003,
at a purchase price equal to 100% of the Accreted Value thereof as of the
Purchase Date), Holders of Notes that are subject to an offer to purchase will
receive a Change of Control offer from the Company prior to any related Purchase
Date and may elect to have such Notes or portions thereof in authorized
denominations purchased by completing the form entitled "Option of Holder to
Elect Purchase" appearing below.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, and when the aggregate amount of Excess Proceeds from such Asset Sales
exceeds $15 million, the Company shall be
A-8
<PAGE> 74
required to make an offer (an "ASSET SALE OFFER") to all holders of the Notes
and Other Qualified Notes to purchase the maximum principal amount of Notes and
Other Qualified Notes (determined on a pro rata basis according to the principal
amount or accreted value, as the case may be, of the Notes and the Other
Qualified Notes) that may be purchased out of the Excess Proceeds, with respect
to the Notes, at an offer price in cash in an amount equal to 100% of the
outstanding principal amount thereof plus accrued and unpaid interest, if any,
to the date fixed for the closing of such offer (or, in the case of repurchases
of Notes prior to October 1, 2003, at a purchase price equal to 100% of the
Accreted Value thereof as of the date fixed for the closing of such offer). To
the extent that the aggregate principal amount or accreted value, as the case
may be, of Notes and Other Qualified Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use such deficiency for
general corporate purposes. If the aggregate principal amount or accreted value,
as the case may be, of Notes and Other Qualified Notes surrendered by holders
thereof exceeds the amount of Excess Proceeds, then such remaining Excess
Proceeds will be allocated pro rata according to principal amount or accreted
value, as the case may be, to the Notes and each issue of the Other Qualified
Notes and, the Trustee will select the Notes to be purchased in accordance with
Section 3.09(e) of the Indenture. Upon completion of such offer to purchase, the
amount of Excess Proceeds will be reset at zero.
12. 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, as
provided in the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption (except the unredeemed portion of any Note being
redeemed in part). Also, it need not exchange or register the transfer of any
Note for a period of 15 days before a selection of Notes to be redeemed.
13. Persons Deemed Owners. Except as provided in paragraph 4 of this
Note, the registered Holder of a Note may be treated as its owner for all
purposes.
14. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, Holders of Notes
entitled to the money must look to the Company for payment unless an abandoned
property law designates another Person and all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
15. Defaults and Remedies. The Notes shall have the Events of Default
set forth in Section 6.01 of the Indenture. Subject to certain limitations in
the Indenture, if an Event of Default occurs and is continuing, the Trustee by
notice to the Company or the Holders of at least 25% in aggregate principal
amount at maturity of the then outstanding Notes by notice to the Company and
the Trustee may declare all the Notes to be due and payable immediately, except
that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all unpaid principal and interest accrued on the Notes
(or, if applicable, the Accreted Value thereof) shall become due and payable
immediately without further action or notice. The Holders of a majority in
principal amount at
A-9
<PAGE> 75
maturity of the Notes then outstanding by written notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest (or, if
applicable, the Accreted Value) that has become due solely because of the
acceleration. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount at maturity of the then outstanding Notes issued under the
Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates to the Trustee. The above
description of Events of Default and remedies is qualified by reference, and
subject in its entirety, to the more complete description thereof contained in
the Indenture.
16. Amendments, Supplements and Waivers. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount at maturity of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for Notes), and any existing default may be waived with the
consent of the Holders of a majority in principal amount at maturity of the then
outstanding Notes. Without the consent of any Holder, the Indenture or the Notes
may be amended among other things, to cure any ambiguity, defect or
inconsistency, to provide for assumption of the Company's obligations to
Holders, to make any change that does not adversely affect the rights of any
Holder or to qualify the Indenture under the TIA or to comply with the
requirements of the SEC in order to maintain the qualification of the Indenture
under the TIA.
17. Restrictive Covenants. The Indenture imposes certain limitations on
the ability of the Company and its Subsidiaries to, among other things, engage
in certain transactions with Affiliates, incur additional indebtedness and make
payments in respect of Capital Stock. The limitations are subject to a number of
important qualifications and exceptions.
18. Trustee Dealings with the Company. The Trustee, in its individual
or any other capacity may become the owner or pledgee of the Notes and may
otherwise deal with the Company or an Affiliate with the same rights it would
have, as if it were not Trustee, subject to certain limitations provided for in
the Indenture and in the TIA. Any Agent may do the same with like rights.
19. No Recourse Against Others. A director, officer, employee or
stockholder, 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. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the Notes.
20. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THE NOTES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
21. Authentication. The Notes shall not be valid until authenticated by
the manual signature of an authorized officer of the Trustee or an
authenticating agent.
22. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (- Custodian), and UGMA (= Uniform Gifts to
Minors Act).
The Company will furnish to any Holder of the Notes upon written
request and without charge a copy of the Indenture. Request may be made to:
NTL Incorporated
110 East 59th Street, 26th Floor
A-10
<PAGE> 76
New York, New York 10022
Attention of: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
A-11
<PAGE> 77
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
------------------------------------------
(Insert assignee's social security or tax I.D. no.)
------------------------------------------
------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Your Signature:_______________________________________________________
(Sign exactly as your name appears on the other side of
this Note)
Date: __________________
Signature Guarantee: * ____________________________________________
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Notes and the last date,
if any, on which such Notes were owned by the Company or any Affiliate
of the Company, the undersigned confirms that such Notes are being
transferred:
CHECK ONE BOX BELOW
(1) / / to the Company or any subsidiary thereof,
(2) / / to a qualified institutional buyer in compliance with Rule
144A,
(3) / / inside the United States to an Institutional Accredited
Investor that, prior to such transfer, furnishes to the Trustee a
signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Notes (the form of
which letter can be obtained from the Trustee) and, if such transfer is
in respect of an aggregate principal amount at maturity of Notes of
less than $100,000, an opinion of counsel acceptable to the Company
that such transfer is in compliance with the Securities Act,
(4) / / outside the United States in compliance with Rule 904 under the
Securities Act,
(5) / /pursuant to the exemption from registration provided by Rule 144
under the Securities Act (if available) or
(6) / /pursuant to an effective registration statement under the
Securities Act.
- ------------------------
* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange
A-12
<PAGE> 78
--------------------------
Signature
Signature Guarantee*
- --------------------------
Signature must be guaranteed
- ------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Date:
---------------------
- --------------------------
* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
NOTICE: To be executed by an executive officer
A-13
<PAGE> 79
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note or a portion thereof
repurchased by the Company pursuant to Section 3.09, 4.10 or 4.13 of the
Indenture, check the box: [ ]
If the purchase is in part, indicate the portion (in
denominations of $1,000 or any integral multiple thereof) to be purchased:
______________________
Your Signature:_______________________________________________________
(Sign exactly as your name appears on the other side of
this Note)
Date: ________________________
Signature Guarantee:**/
- ----------------------------
**/ Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
A-14
<PAGE> 80
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount of this Global Note shall be
$__________________. The following increases or decreases in the principal
amount at maturity of this Global Note have been made:
<TABLE>
<CAPTION>
======================================================================================================================
Amount of decrease in Amount of increase Principal amount at Signature of Date of exchange
principal amount at in principal amount maturity of this authorized officer following such
maturity of this Global at maturity of this Global Note of Trustee or Notes decrease or increase
Note Global Note Custodian
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
======================================================================================================================
</TABLE>
A-15
<PAGE> 81
EXHIBIT B
[FORM OF FACE OF EXCHANGE NOTE]
[Global Notes Legend, if applicable]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Original Issue Discount Legend]
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR PURPOSES OF APPLYING
THE UNITED STATES FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT RULES TO THIS NOTE.
THE ISSUE DATE OF THIS NOTE IS NOVEMBER 6, 1998. THE ISSUE PRICE OF THIS NOTE IS
$555.05 PER $1000.00 OF INITIAL PRINCIPAL AMOUNT AT MATURITY. THIS NOTE IS
ISSUED WITH $444.95 OF ORIGINAL ISSUE DISCOUNT PER $1000.00 OF INITIAL PRINCIPAL
AMOUNT AT MATURITY. THE YIELD TO MATURITY OF THIS NOTE IS 12.375%.
B-1
<PAGE> 82
No. ___________ $__________
CUSIP No. [ ]CINS No. [ ]
12-3/8% SERIES B SENIOR DEFERRED COUPON NOTE DUE 2008
NTL Incorporated, a Delaware corporation (the "COMPANY") promises to
pay to _________________________ or registered assigns, the principal sum of [ ]
$[ ] [or such other amount as is indicated on Schedule A hereof]**** on October
1, 2008, subject to the further provisions of this Note set forth on the reverse
hereof which further provisions shall for all purposes have the same effect as
if set forth at this place.
Interest Payment Dates: April 1 and October 1, commencing April 1, 2004
Record Dates: March 15 and September 15
IN WITNESS WHEREOF, NTL Incorporated has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated: ________________
NTL INCORPORATED,
by:____________________________________
by:____________________________________
**** Applicable to Global Notes only.
B-2
<PAGE> 83
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 12-3/8% Series B Senior Deferred Coupon Notes due 2008
described in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By: _____________________________________
Authorized Officer
B-3
<PAGE> 84
(FORM OF REVERSE OF EXCHANGE NOTE)
NTL INCORPORATED
12-3/8% Series B Senior Deferred Coupon Note due 2008
1. Interest. NTL INCORPORATED, a Delaware corporation (the "COMPANY"),
is the issuer of 12-3/8% Series B Senior Deferred Coupon Notes due 2008 (the
"NOTES"). The Notes are being issued at a discount from their principal amount
and will accrete (in accordance with the definition of Accreted Value contained
in the Indenture) at a rate of 12-3/8%, compounded semiannually, to an aggregate
principal amount of $450,000,000 by October 1, 2003. The Company promises to pay
interest on the Notes in cash semiannually on each April 1 and October 1,
commencing on April 1, 2004, to Holders of record on the immediately preceding
March 15 and September 15, respectively, at the rate of 12-3/8% per annum.
Interest on the Notes will accrue from the most recent date to which interest
has been paid on the Notes, or if no interest has been paid, from October 1,
2003. Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue principal and premium, if any,
or overdue Accreted Value at the interest or accretion rate borne by the Notes,
compounded semiannually, and it shall pay interest on overdue installments of
interest (without regard to any applicable grace period) at the same interest
rate compounded semiannually. Any interest paid on this Note shall be increased
to the extent necessary to pay Additional Amounts as set forth in this Note.
2. Additional Amounts. This Section 2 shall apply only in the event
that the Company becomes, or a successor to the Company is, a corporation
organized or existing under the laws of the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands. All payments made by the
Company on this Note shall be made without deduction for or on account of, any
and all present or future taxes, duties, assessments, or governmental charges of
whatever nature unless the deduction of such taxes, duties, assessments or
governmental charges is then required by law. If any deduction or withholding
for or on account of any present or future taxes, assessments or other
governmental charges of the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands (or any political subdivision or taxing
authority thereof or taxing authority thereof or therein) shall at any time be
required in respect of any amounts to be paid by the Company under this Note,
the Company shall pay or cause to be paid such additional amounts ("ADDITIONAL
AMOUNTS") as may be necessary in order that the net amounts received by a Holder
of this Note after such deduction or withholding shall be not less than the
amounts specified in this Note to which the Holder of this Note is entitled;
provided, however, that the Company shall not be required to make any payment of
Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge to the
extent such tax, assessment or other governmental charge would not have
been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or possessor of a power over,
such Holder, if such Holder is an estate, nominee, trust, partnership
or corporation), other than the holding of this Note or the receipt of
amounts payable in respect of this Note, the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands or
any political subdivision or taxing authority thereof or therein,
including, without limitation, such Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a
citizen or resident thereof or being or having been present or engaged
in trade or business therein or having or having had a permanent
establishment therein or (ii) the presentation of this Note (where
presentation is required) for payment on a date more than 30 days after
the date on which such payment became
B-4
<PAGE> 85
due and payable or the date on which payment thereof is duly provided
for, whichever occurs later, except to the extent that the Holder would
have been entitled to Additional Amounts had this Note been presented
on the last day of such period of 30 days;
(b) any tax, assessment or other governmental charge that is
imposed or withheld by reason of the failure to comply by the Holder of
this Note or, if different, the beneficial owner of the interest
payable on this Note, with a timely request of the Company addressed to
such Holder or beneficial owner to provide information, documents or
other evidence concerning the nationality, residence, identity or
connection with the taxing jurisdiction of such Holder or beneficial
owner which is required or imposed by a statute, regulation or
administrative practice of the taxing jurisdiction as a precondition to
exemption from all or part of such tax, assessment or governmental
charge;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or other governmental charge;
(d) any tax, assessment or other governmental charge which is
collectible otherwise than by withholding from payments of principal
amount, redemption amount, Change of Control Payment or interest with
respect to a Note or withholding from the proceeds of a sale or
exchange of a Note;
(e) any tax, assessment or other governmental charge required
to be withheld by any Paying Agent from any payment of principal
amount, redemption amount, Change of Control Payment or interest with
respect to a Note, if such payment can be made, and is in fact made,
without such withholding by any other Paying Agent located inside the
United States;
(f) any tax, assessment or other governmental charge imposed
on a Holder that is not the beneficial owner of a Note to the extent
that the beneficial owner would not have been entitled to the payment
of any such Additional Amounts had the beneficial owner directly held
the Note;
(g) any combination of items (a), (b), (c), (d), (e) and (f)
above;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any interest on, this Note to any Holder who is a fiduciary or
partnership or other than the sole beneficial owner of such payment to the
extent that a beneficiary or settlor would not have been entitled to any
Additional Amounts had such beneficiary or settlor been the Holder of this Note.
All references to principal amount or interest on the Notes in the Indenture or
the Notes shall include any Additional Amounts payable to the Company pursuant
to this Section 2.
3. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date for the next interest payment date
even though Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Notes to a Paying Agent to collect
principal and premium payments (or, if applicable, payments with respect to
Accreted Value). The Company will pay principal (or, if applicable, payments
with respect to Accreted Value), premium, if any, and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal (or, if applicable,
payments with respect to Accreted Value), premium, if any, and interest by check
payable in such money. It may mail an interest check to a
B-5
<PAGE> 86
holder's registered address. If a Holder so requests, principal (or, if
applicable, payments with respect to Accreted Value), premium, if any, and
interest may be paid by wire transfer of immediately available funds to an
account previously specified in writing by such Holder to the Company and the
Trustee.
4. Paying Agent and Registrar. The Trustee will act as Paying Agent and
Registrar in the City of New York. Chase Manhattan Bank Luxembourg S.A. will act
as Paying Agent and Registrar in Luxembourg if and as long as the Notes are
listed on the Luxembourg Stock Exchange. The Company may change any Paying Agent
or Registrar without prior notice. The Company or any of its Affiliates may act
in any such capacity.
5. Indenture. The Company issued the Notes under an indenture, dated as
of November 6, 1998 (the "INDENTURE"), between the Company and The Chase
Manhattan Bank, as Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by the Trust Indenture Act of
1939 (15 U.S. Code (Section)(Section) 77aaa-77bbbb) as in effect on the date of
the Indenture. The Notes are subject to, and qualified by, all such terms,
certain of which are summarized hereon, and Holders are referred to the
Indenture and such Act for a statement of such terms. The Notes are unsecured
general obligations of the Company limited to $450,000,000 in aggregate
principal amount at maturity.
6. Optional Redemption. Except as provided in Section 7 herein, the
Notes are not redeemable at the Company's option prior to October 1, 2003.
Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on October
1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2003 ......................................... 106.188%
2004.......................................... 104.125%
2005.......................................... 102.063%
2006 and thereafter........................... 100.000%
</TABLE>
7. Optional Tax Redemption. (a) The Notes may be redeemed at the option
of the Company, in whole but not in part, upon not less than 30 nor more than 60
days notice, at any time at a redemption price equal to the principal amount
thereof plus accrued and unpaid interest to the date fixed for redemption (or,
in the case of redemption of the Notes prior to October 1, 2003, at a redemption
price equal to 100% of the Accreted Value thereof as of the date of redemption)
if after the date on which Section 2 of this Note becomes applicable (the
"RELEVANT DATE") there has occurred any change in or amendment to the laws (or
any regulations or official rulings promulgated thereunder) of the United
Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands (or any political subdivision or taxing authority thereof or therein),
or any change in or amendment to the official application or interpretation of
such laws, regulations or rulings (a "CHANGE IN TAX LAW") which becomes
effective after the Relevant Date, as a result of which the Company is or would
be so required on the next succeeding Interest Payment Date to pay Additional
Amounts with respect to the Notes as described under Section 2 hereof with
respect to withholding taxes imposed by the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands (or any political
subdivision or taxing authority thereof or therein) (a "WITHHOLDING TAX') and
such Withholding Tax is imposed at a rate that exceeds the rate (if any) at
which Withholding Tax was imposed on the Relevant Date, provided, however, that
(i) this paragraph shall not apply to the extent that, at the Relevant Date it
was known or
B-6
<PAGE> 87
would have been known had professional advice of a nationally recognized
accounting firm in the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands, as the case may be, been sought, that a
change in Tax Law in the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands was to occur after the Relevant Date,
(ii) no such notice of redemption may be given earlier than 90 days prior to the
earliest date on which the Company would be obliged to pay such Additional
Amounts were a payment in respect of the Notes then due, (iii) at the time such
notice of redemption is given, such obligation to pay such Additional Amount
remains in effect and (iv) the payment of such Additional Amounts cannot be
avoided by the use of any reasonable measures available to the Company.
(b) The Notes may also be redeemed, in whole but not in part, at any
time at a redemption price equal to the principal amount thereof plus accrued
and unpaid interest to the date fixed for redemption (or, in the case of
redemption of the Notes prior to October 1, 2003, at a redemption price equal to
100% of the Accreted Value thereof as of the date fixed for redemption) if the
Person formed after the Relevant Date by a consolidation, amalgamation,
reorganization or reconstruction (or other similar arrangement) of the Company
or the Person into which the Company is merged after the Relevant Date or to
which the Company conveys, transfers or leases its properties and assets after
the Relevant Date substantially as an entirety (collectively, a "SUBSEQUENT
CONSOLIDATION") is required, as a consequence of such Subsequent Consolidation
and as a consequence of a Change in Tax Law in the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands occurring
after the date of such Subsequent Consolidation to pay Additional Amounts with
respect to Notes with respect to Withholding Tax as described under Section 2
hereof and such Withholding Tax is imposed at a rate that exceeds the rate (if
any) at which Withholding Tax was or would have been imposed on the date of such
Subsequent Consolidation, provided, however, that this paragraph shall not apply
to the extent that, at the date of such Subsequent Consolidation it was known or
would have been known had professional advice of a nationally recognized
accounting firm in the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands, as the case may be, been sought, that a
Change in Tax Law in the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands was to occur after such date.
The Company will also pay, or make available for payment, to Holders on
the Redemption Date any Additional Amounts (as described, but subject to the
exceptions referred to, in Section 2 hereof) resulting from the payment of such
Redemption Price.
8. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder of
the Notes to be redeemed at his address of record. The Notes in denominations
larger than $1,000 may be redeemed in part but only in integral multiples of
$1,000. In the event of a redemption of less than all of the Notes, the Notes
will be chosen for redemption by the Trustee in accordance with the Indenture.
On and after the redemption date, interest ceases to accrue on the Notes or
portions of them called for redemption. If this Note is redeemed subsequent to a
record date with respect to any interest payment date specified above and on or
prior to such interest payment date, then any accrued interest will be paid to
the Person in whose name this Note is registered at the close of business on
such record date (and, if applicable, the Accreted Value of the Notes called for
redemption will cease to increase).
9. Mandatory Redemption. The Company will not be required to make
mandatory redemption or repurchase payments with respect to the Notes. There are
no sinking fund payments with respect to the Notes.
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<PAGE> 88
10. Repurchase at Option of Holder. (a) If there is a Change of Control
Triggering Event, the Company shall be required to offer to purchase on the
Purchase Date all outstanding Notes at a purchase price equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest to the
Purchase Date (or, in the case of repurchases of Notes prior to October 1, 2003,
at a purchase price equal to 100% of the Accreted Value thereof as of the
Purchase Date) . Holders of Notes that are subject to an offer to purchase will
receive a Change of Control offer from the Company prior to any related Purchase
Date and may elect to have such Notes or portions thereof in authorized
denominations purchased by completing the form entitled "Option of Holder to
Elect Purchase" appearing below.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, and when the aggregate amount of Excess Proceeds from such Asset Sales
exceeds $15 million, the Company shall be required to make an offer (an "ASSET
SALE OFFER") to all holders of the Notes and Other Qualified Notes to purchase
the maximum principal amount of Notes and other Qualified Notes (determined on a
pro rata basis according to the principal amount or accreted value, as the case
may be, of the Notes and the Other Qualified Notes) that may be purchased out of
the Excess Proceeds with respect to the Notes, at an offer price in cash in an
amount equal to 100% of the outstanding principal amount thereof plus accrued
and unpaid interest, if any, to the date fixed for the closing of such offer
(or, in the case of repurchases of Notes prior to October 1, 2003, at a purchase
price equal to 100% of the Accreted Value thereof as of the date fixed for the
closing of such offer). To the extent that the aggregate principal amount or
accreted value, as the case may be, of Notes and Other Qualified Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
may use such deficiency for general corporate purposes. If the aggregate
principal amount or accreted value, as the case may be, of Notes and Other
Qualified Notes surrendered by holders thereof exceeds the amount of Excess
Proceeds then any remaining Excess Proceeds will be allocated pro rata according
to principal amount or accreted value, as the case may be, to the Notes and each
issue of the Other Qualified Notes and, the Trustee will select the Notes to be
purchased in accordance with Section 3.09(e) of the Indenture. Upon completion
of such offer to purchase, the amount of Excess Proceeds will be reset at zero.
11. 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, as
provided in the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption (except the unredeemed portion of any Note being
redeemed in part). Also, it need not exchange or register the transfer of any
Note for a period of 15 days before a selection of Notes to be redeemed.
12. Persons Deemed Owners. Except as provided in paragraph 3 of this
Note, the registered Holder of a Note may be treated as its owner for all
purposes.
13. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, Holders of Notes
entitled to the money must look to the Company for payment unless an abandoned
property law designates another Person and all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
14. Defaults and Remedies. The Notes shall have the Events of Default
as set forth in Section 6.01 of the Indenture. Subject to certain limitations in
the Indenture, if an Event of Default occurs and is continuing, the Trustee by
notice to the Company or the Holders of at least 25% in aggregate principal
B-8
<PAGE> 89
amount at maturity of the then outstanding Notes by notice to the Company and
the Trustee may declare all the Notes to be due and payable immediately, except
that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all unpaid principal and interest accrued on the Notes
(or, if applicable, the Accreted Value thereof) shall become due and payable
immediately without further action or notice. The Holders of a majority in
principal amount at maturity of the Notes then outstanding by written notice to
the Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
(or, if applicable, the Accreted Value) that has become due solely because of
the acceleration. Holders may not enforce the Indenture or the Notes as provided
in the Indenture. Subject to certain limitations, Holders of a majority in
principal amount at maturity of the then outstanding Notes issued under the
Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates to the Trustee. The above
description of Events of Default and remedies is qualified by reference, and
subject in its entirety, to the more complete description thereof contained in
the Indenture.
15. Amendments, Supplements and Waivers. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount at maturity of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for Notes), and any existing default may be waived with the
consent of the Holders of a majority in principal amount at maturity of the then
outstanding Notes. Without the consent of any Holder, the Indenture or the Notes
may be amended among other things, to cure any ambiguity, defect or
inconsistency, to provide for assumption of the Company's obligations to
Holders, to make any change that does not adversely affect the rights of any
Holder or to qualify the Indenture under the TIA or to comply with the
requirements of the SEC in order to maintain the qualification of the Indenture
under the TIA.
16. Restrictive Covenants. The Indenture imposes certain limitations on
the ability of the Company and its Subsidiaries to, among other things, engage
in certain transactions with Affiliates, incur additional Indebtedness and make
payments in respect of Capital Stock. The limitations are subject to a number of
important qualifications and exceptions.
17. Trustee Dealings with the Company. The Trustee, in its individual
or any other capacity may become the owner or pledgee of the Notes and may
otherwise deal with the Company or an Affiliate with the same rights it would
have, as if it were not Trustee, subject to certain limitations provided for in
the Indenture and in the TIA. Any Agent may do the same with like rights.
18. No Recourse Against Others. A director, officer, employee or
stockholder, 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. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the Notes.
19. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THE NOTES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
20. Authentication. The Notes shall not be valid until authenticated by
the manual signature of an authorized officer of the Trustee or an
authenticating agent.
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<PAGE> 90
21. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and UGMA (= Uniform Gifts to
Minors Act).
The Company will furnish to any Holder of the Notes upon written
request and without charge a copy of the Indenture. Request may be made to:
NTL Incorporated
110 East 59th Street, 26th Floor
New York, New York 10022
Attention of: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
B-10
<PAGE> 91
ASSIGNMENT FORM
To assign this Note, fill in the form below:
_____________________________________________________
(I) or (we) assign and transfer this Note to
_____________________________________________________
(Insert assignee's social security or tax I.D. no.)
_____________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Your Signature:________________________________________________________
(Sign exactly as your name appears on the other side of
this Note)
Date: __________________
Signature Guarantee: **/ ______________________________
**/ Signature must be guaranteed by a commercial Bank, trust company or
member of the New York Stock Exchange.
B-11
<PAGE> 92
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note or a portion thereof repurchased
by the Company pursuant to Section 3.09, 4.10 or 4.13 of the Indenture, check
the box: [ ]
If the purchase is in part, indicate the portion (in denominations of
$1,000 or any integral multiple thereof) to be purchased: _____________________
Your Signature:________________________________________________________
(Sign exactly as your name appears on the other side of
this Note)
Date: __________________
Signature Guarantee: *** ______________________________
*** Signature must be guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange.
B-12
<PAGE> 93
SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount of this Global Note shall be
$__________________. The following increases or decreases in the principal
amount at maturity of this Global Note have been made:
<TABLE>
<CAPTION>
______________________________________________________________________________________________________________________
Amount of decrease in Amount of increase Principal amount at Signature of Date of exchange
principal amount at in principal amount maturity of this authorized officer following such
maturity of this Global at maturity of this Global Note of Trustee or Notes decrease or increase
Note Global Note Custodian
<S> <C> <C> <C> <C>
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
</TABLE>
B-13
<PAGE> 94
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM RULE 144A GLOBAL NOTE
TO REGULATION S GLOBAL NOTE
(Transfers pursuant to (Section) 2.06(a)(ii)
of the Indenture)
The Chase Manhattan Bank, as Trustee
450 West 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
Re: NTL Incorporated 12-3/8% Senior Deferred Coupon Notes due 2008
(the "NOTES")
Reference is hereby made to the Indenture, dated as of
November 6, 1998 (the "INDENTURE"), between NTL Incorporated, as Issuer, and The
Chase Manhattan Bank, as Trustee.
This letter relates to $[ ] aggregate principal amount at
maturity of Notes which are held in the form of the [Rule 144A Global Note
(CUSIP No. )] with the Depositary in the name of [name of transferor] (the
"TRANSFEROR") to effect the transfer of the Notes in exchange for an equivalent
beneficial interest in the Regulation S Global Notes.
In connection with such request, the Transferor does hereby
certify that such transfer has been effected in accordance with the transfer
restrictions set forth in the Notes and (i) with respect to transfers made in
reliance on Regulation S, does hereby certify that:
(1) the offer of the Notes was not made to a Person in the
United States;
(2) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither the
Transferor nor any Person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the United States Securities Act of
1933, as amended (the "SECURITIES ACT");
and (ii) with respect to transfers made in reliance on Rule 144 does hereby
certify that the Notes are being transferred in a transaction permitted by Rule
144 under the Securities Act; and (iii) with respect to transfers made in
reliance on Rule 144A, does hereby certify that such Notes are being transferred
in accordance with Rule 144A under the Securities Act to a transferee that the
Transferor reasonably believes is purchasing the Notes for its own account or an
account with respect to which the transferee exercises sole investment
discretion and the transferee and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in a transaction meeting the
requirements of Rule 144A and in accordance with applicable securities laws of
any state of the United States or any other jurisdiction.
C-1
<PAGE> 95
In addition, if the sale is made during a distribution
compliance period and the provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1)
of Regulation S are applicable thereto, we confirm that such sale has been made
in accordance with the applicable provisions of Rule 903(c)(2) or (3) or Rule
904(c)(1), as the case may be.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Capitalized terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S.
[Name of Transferor]
By:___________________________
Name:
Title:
Dated:
cc: NTL Incorporated
110 East 59th Street
New York, New York 10022
Attn: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
C-2
<PAGE> 96
EXHIBIT D
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM REGULATION S GLOBAL NOTE
TO RULE 144A GLOBAL NOTE
(Transfers pursuant to (Section) 2.06(a)(iii)
of the Indenture)
The Chase Manhattan Bank, as Trustee
450 West 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
Re: NTL Incorporated 12-3/8% Senior Deferred Coupon Notes due 2008
(the "NOTES")
Reference is hereby made to the Indenture, dated as of
November 6, 1998 (the "INDENTURE"), between NTL Incorporated, as Issuer, and The
Chase Manhattan Bank, as Trustee. Capitalized terms used but not defined herein
shall have the respective meanings given them in the Indenture.
This letter relates to $[ ] aggregate principal amount at
maturity of Notes which are held in the form of the Regulation S Global Note
(CINS No. [ ]) with the Depositary in the name of [name of transferor] (the
"TRANSFEROR") to effect the transfer of the Notes in exchange for an equivalent
beneficial interest in the Rule 144A Global Note.
In connection with such request, and in respect of such Notes
the Transferor does hereby certify that such Notes are being transferred in
accordance with (i) the transfer restrictions set forth in the Notes and (ii)
Rule 144A under the United States Securities Act of 1933, as amended, to a
transferee that the Transferor reasonably believes is purchasing the Notes for
its own account or an account with respect to which the transferee exercises
sole investment discretion and the transferee and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
[Name of Transferor],
By:___________________________
Name:
Title:
Dated:
cc: NTL Incorporated
110 East 59th Street
New York, New York 10022
Attn: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
D-1
<PAGE> 97
EXHIBIT E
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM GLOBAL NOTE OR RESTRICTED
NOTE TO RESTRICTED NOTE
(Transfers pursuant to (Section) 2.06(a)(iv)
or (Section) 2.06(a)(v) of the Indenture)
The Chase Manhattan Bank, as Trustee
450 West 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
Re: NTL Incorporated 12-3/8% Senior Deferred Coupon Notes due 2008
(the "NOTES")
Reference is hereby made to the Indenture, dated as of November 6, 1998
(the "INDENTURE"), between NTL Incorporated, as Issuer, and The Chase Manhattan
Bank, as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given them in the Indenture.
This letter relates to $[ ] aggregate principal amount at maturity of
Notes which are held [in the form of the [Rule 144A/Regulation S] [Global]
[Restricted] Note (CUSIP No. [ ] CINS No. [ ]) with the Depositary in the name
of [name of transferor] (the "TRANSFEROR") to effect the transfer of the Notes.
In connection with such request, and in respect of such Notes, the
Transferor does hereby certify that such Notes are being transferred (i) in
accordance with the transfer restrictions set forth in the Notes and (ii) in
accordance with applicable securities laws of any state of the United States or
any other jurisdiction.
*Insert, if appropriate.
[Name of Transferor],
By:___________________________
Name:
Title:
Dated:
cc: NTL Incorporated
110 East 59th Street
New York, New York 10022
Attn: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
E-1
<PAGE> 98
EXHIBIT F
FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE
The Chase Manhattan Bank, as Trustee
450 West 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
Re: NTL Incorporated 12-3/8% Senior Deferred Coupon Notes due 2008
(the "NOTES")
Reference is hereby made to the Indenture, dated as of November 6, 1998
(the "INDENTURE), between NTL Incorporated, as Issuer, and The Chase Manhattan
Bank, as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given them in the Indenture.
This letter relates to $[ ] aggregate principal amount at maturity of
Notes which are held [in the form of the [Rule 144/Regulation S] [Restricted]
[Global] Note (CUSIP No. [ ] CINS No. [ ]) with the Depositary * * in the name
of [name of transferor] (the "TRANSFEROR") to effect the transfer of the Notes
to the undersigned.
In connection with such request, and in respect of such Notes we
confirm that:
1. We understand that the Notes were originally offered in a
transaction not involving any public offering in the United States within the
meaning of the United States Securities Act of 1933, as amended (the "SECURITIES
ACT"), that the Notes have not been registered under the Securities Act and that
(A) the Notes may be offered, resold, pledged or otherwise transferred only (i)
to a Person who the seller reasonably believes is a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in a transaction
meeting the requirements of Rule 144A, in a transaction meeting the requirements
of Rule 144 under the Securities Act, to a Person who the seller reasonably
believes is an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act), outside
the United States in a transaction meeting the requirements of Rule 903 or 904
of Regulation S under the Securities Act or in accordance with another exemption
from the registration requirements of the Securities Act (and based upon an
opinion of counsel if the Company so requests), (ii) to the Company, (iii)
pursuant to any other available exemption from registration or (iv) pursuant to
an effective registration statement, and, in each case, in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction and (B) the purchaser will, and each subsequent Holder
is required to, notify any subsequent purchaser from it of the resale
restrictions set forth in (A) above.
2. We are a corporation, partnership or other entity having such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Notes, and we are (or
any account for which we are purchasing under paragraph 4 below is) an
* Insert and modify if appropriate
F-1
<PAGE> 99
institutional "accredited investor" as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act, able to bear the economic risk of our proposed
investment in the Notes.
3. We are acquiring the Notes for our own account (or for accounts as
to which we exercise sole investment discretion and have authority to make, and
do make, the statements contained in this letter) and not with a view to any
distribution of the Notes, subject, nevertheless, to the understanding that the
disposition of our property shall at all times be and remain within our control.
4. We are, and each account (if any) for which we are purchasing Notes
is, purchasing Notes having an aggregate principal amount at maturity of not
less than $100,000 and, if such transfer is in respect of an aggregate principal
amount at maturity of Notes of less than $100,000, we are providing an opinion
of counsel acceptable to the Company that such transfer is in compliance with
the Securities Act.
5. We understand that (a) the Notes will be delivered to us in
registered form only and that the certificate delivered to us in respect of the
Notes will bear a legend substantially to the following effect:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE
144(k) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE), AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF LESS THAN $100,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFF-SHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE)
OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
F-2
<PAGE> 100
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFF-SHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.
and (b) such certificates will be reissued without the foregoing legend
only in accordance with the terms of the Indenture.
6. We agree that in the event that at some future time we wish to
dispose of any of the Notes, we will not do so unless:
(a) the Notes are sold to the Company;
(b) the Notes are sold to a qualified institutional buyer
in compliance with Rule 144A under the Securities Act;
(c) the Notes are sold outside the United States in
compliance with Rule 903 or Rule 904 under the Securities Act;
(d) the Notes are sold pursuant to an effective
registration statement under the Securities Act; or
(e) the Notes are sold pursuant to any other available
exemption from registration, subject to the requirements of
the legend set forth above.
Very truly yours,
[PURCHASER]
By:______________________________
Name:
Title:
Dated:
cc: NTL Incorporated
110 East 59th Street
New York, New York 10022
Attn: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
F-3
<PAGE> 101
EXHIBIT G
FORM OF CERTIFICATE FOR TRANSFERS OF
REGULATION S GLOBAL NOTE FOR
RESTRICTED NOTES
(Transfers pursuant to (Section) 2.06(a)(viii))
(Transferor)
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
Re: NTL Incorporated 12-3/8% Senior Deferred Coupon Notes due 2008
(the "NOTES")
Reference is hereby made to the Indenture, dated as of November 6, 1998
(the "INDENTURE"), between NTL Incorporated, as Issuer, and The Chase Manhattan
Bank, as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given them in the Indenture.
This certificate relates to $[ ] aggregate principal amount at maturity
of Notes which are held in the form of the Regulation S Global Note (CINS No.
[ ]) with the Depositary in the name of [name of transferor] (the "TRANSFEROR")
to effect the transfer of the beneficial interest in such Regulation S Global
Note for a beneficial interest in an equivalent aggregate principal amount of
Restricted Securities.
In connection with such request, and in respect of such Notes, we
confirm that:
We are either not a U.S. Person (as defined below) or we have purchased
our beneficial interest in the above referenced Regulation S Global
Note in a transaction that is exempt from the registration requirements
under the Securities Act.
We are delivering this certificate in connection with obtaining a
beneficial interest in Restricted Securities in exchange for our
beneficial interest in the Regulation S Global Note.
For purposes of this certificate, "U.S. PERSON" means (i) any individual
resident in the United States, (ii) any partnership or corporation organized or
incorporated under the laws of the United States, (iii) any estate of which an
executor or administrator is a U.S. Person (other than an estate governed by
foreign law and of which at least one executor or administrator is a non-U.S.
Person who has sole or shared investment discretion with respect to its assets),
(iv) any trust of which any trustee is a U.S. Person (other than a trust of
which at least one trustee is a non-U.S. Person who has sole or shared
investment discretion with respect to its assets and no beneficiary of the trust
(and no settlor if the trust is revocable) is a U.S. Person), (v) any agency or
branch of a foreign entity located in the United States, (vi) any non-
discretionary or similar account (other than an estate or trust) held by a
dealer or other fiduciary for the benefit or account of a U.S. Person, (vii) any
discretionary or similar account (other than an estate or trust) held by a
dealer or other fiduciary organized, incorporated or (if an individual) resident
in the United States (other than such an account held for the benefit or account
of a non-U.S. Person), (viii) any partnership or corporation organized or
incorporated under the laws of a foreign jurisdiction and formed by a U.S.
Person principally for the purpose of investing in securities not registered
under the
G-1
<PAGE> 102
Securities Act (unless it is organized or incorporated, and owned, by
accredited investors within the meaning of Rule 501(a) under the Securities Act
who are not natural Persons, estates or trusts); provided, however, that the
term "U.S. PERSON" shall not include (A) a branch or agency of a U.S. Person
that is located and operating outside the United States for valid business
purposes as a locally regulated branch or agency engaged in the banking or
insurance business, (B) any employee benefit plan established and administered
in accordance with the law, customary practices and documentation of a foreign
country and (C) the international organizations set forth in Section 902(o)(7)
of Regulation S under the Securities Act and any other similar international
organizations, and their agencies, affiliates and pension plans.
We irrevocably authorize you to produce this certificate or a copy
hereof to any interested party in any administrative or other proceedings with
respect to the matters covered by this certificate.
Very truly yours,
[TRANSFEROR]
By:_______________________________________
Name:
Title:
Dated:
To be completed by the account Holder as,
or as agent for, the beneficial owner(s)
of the Notes to which this certificate
relates.
cc: NTL Incorporated
110 East 59th Street
New York, New York 10022
Attn: Richard J. Lubasch, Esq.
Senior Vice President and General Counsel
G-2
<PAGE> 1
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TEL: (212) 735-3000
FAX: (212) 735-2000
July 22, 1999
NTL Communications Corp.
110 East 59th Street
New York, NY 10022
Re: NTL Communications Corp.
Registration Statement on form S-4
Ladies and Gentlemen:
We have acted as special counsel to NTL Communications Corp., a Delaware
corporation (the "Company"), in connection with the public offering of
L330,000,000 aggregate principal amount at maturity of the Company's 9 3/4%
Series B Senior Deferred Coupon Notes Due 2009 (the "New Notes"). The New Notes
are to be issued pursuant to an exchange offer (the "Exchange Offer"), for a
like principal amount of the issued and outstanding 9 3/4% Senior Deferred
Coupon Notes Due 2009 of the Company (the "Old Notes"), and the New Notes and
the Old Notes being referred to herein collectively as the "Notes"), under the
Indenture, dated as of April 14, 1999 (the "Indenture"), by and among the
Company and The Chase Manhattan Bank, as Trustee (the "Trustee"). The Exchange
Offer is contemplated by the Exchange and Registration Rights Agreements, dated
April 14, 1999, between the Company and Goldman Sachs International.
<PAGE> 2
This opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Act").
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement on Form S-4 (Registration No. 333-78405), as filed by the Company
with the Securities and Exchange Commission (the "Commission") on May 13, 1999
under the Act and Amendment No. 1 thereto filed with the Commission on July
19, 1999 (such Registration Statement, as so amended, being hereinafter
referred to as the "Registration Statement"); (ii) an executed copy of the
Exchange and Registration Rights Agreement; (iii) an executed copy of the
Indenture; (iv) the Restated Certificate of Incorporation of the Company, as
amended to date; (v) the By-Laws of the Company, as amended to date; (vi)
certain resolutions adopted by the Board of Directors of the Company and a
pricing committee of the Board of Directors of the Company relating to the
Exchange Offer, the issuance of the Old Notes and the New Notes, the Indenture
and related matters; (vii) the Form T-1 of the Trustee filed as an exhibit to
the Registration Statement; and (viii) the form of the New Notes. We have
also examined originals or copies, certified or otherwise identified to our
satisfaction, of such records of the Company and such agreements, certificates
of public officials, certificates of officers or other representatives of the
Company and others, and such other documents, certificates and records as we
have deemed necessary or appropriate as a basis for the opinions set forth
herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed or to be executed, we have assumed that the
parties thereto, other than the Company, had or
<PAGE> 3
will have the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity and binding effect thereof on such
parties. As to any facts material to the opinions expressed herein which we
have not independently established or verified, we have relied upon statements
and representations of officers and other representatives of the Company and
others.
Our opinions set forth herein are limited to Delaware corporate law and
the laws of the State of New York which are normally applicable to transactions
of the type contemplated by the Exchange Offer and to the extent that judicial
or regulatory orders or decrees or consents, approvals, licenses,
authorizations, validations, filings, recordings or registrations with
governmental authorities are relevant, to those required under such laws (all
of the foregoing being referred to as "Opined on Law"). We do not express any
opinion with respect to the law of any jurisdiction other than Opined on Law or
as to the effect of any such non opined law on the opinions herein stated.
Based upon and subject to the foregoing and the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that when the New Notes have been duly executed and authenticated in
accordance with the terms of the Indenture and have been delivered upon
consummation of the Exchange Offer against receipt of Old Notes surrendered in
exchange therefor in accordance with the terms of the Exchange Offer, the New
Notes will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or
in equity). With respect to the
<PAGE> 4
enforceability of all obligations under the New Notes payable in pounds
sterling, we note that a United States federal court would award a judgment only
in United States dollars and that a judgment of a court in the State of New York
rendered in pounds sterling would be converted into United States dollars at the
rate of exchange prevailing on the date of entry of such judgment.
In rendering the opinions set forth above, we have assumed that the choice
of the pounds sterling as the currency in which the New Notes are denominated
does not contravene any exchange controls or other laws of the United Kingdom,
and we have also assumed that the execution, authentication and delivery by the
Company of the Indenture and the New Notes do not and will not violate, conflict
with or constitute a default under any agreement or instrument to which the
Company or its properties is subject, except for those agreements and
instruments which have been identified to us by the Company as being material to
it and which are listed in Part 2 of the Company's Annual Report on Form 10-K
for the year ended 1998.
In addition, in relation to the opinion set forth above insofar as it
relates to the New Notes, we bring to your attention title 16 of the New York
General Obligations Law (the "GOL"). Title 16 of the GOL provides, among other
things, that on the implementation from time to time of Economic and Monetary
Union in the Member States of the European Union in accordance with the Treaty
on European Union by the adoption of participating Member States of a single
currency (the "Euro"), if the subject or medium of payment of a contract,
security or instrument is a currency that has been substituted or replaced by
the Euro, the Euro will be a commercially reasonable and substantial equivalent
that may be either (a) used in determining the value of such currency or (b)
tendered in accordance with the regulations adopted by the Council of the
European Union. In addition, Title 16 of the GOL provides that none of (a) the
introduction of the Euro, (b) the tendering of Euros in con-
<PAGE> 5
nection with any obligation in accordance with clauses (a) or (b) of the
immediately preceding sentence, (c) the determining of the value of any
obligation in accordance with clauses (a) or (b) of the immediately preceding
sentence or (d) the calculating or determining of the subject or medium of
payment of a contract, security or instrument with reference to interest rate or
other basis has been substituted and replaced due to the introduction of the
Euro and that is a commercially reasonable substitute and substantial
equivalent, shall have either the effect of discharging or excusing performance
under any contract, security or instrument or give a party the right to
unilaterally alter or terminate any contract, security or instrument. Title 16
of the GOL further provides that its provisions shall not alter or impair and
shall be subject to any agreements concerning the Euro between the parties. We
note, however, that to the best of our knowledge, there has been no judicial
consideration of Title 16 of the GOL by a New York court and in the absence of
any judicial authority, we are unable to express a view as to the interpretation
or application a New York court may give to Title 16 of the GOL.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to Amendment No. 1 to the Registration Statement. We also consent to the
reference to our firm under the caption "Legal Matters" in Amendment No. 1 of
the Registration Statement. In giving this consent, we do not thereby admit that
we are included in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission.
Very truly yours,
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Skadden, Arps, Slate, Meagher & Flom LLp
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement (Form S-4) and related Prospectus of NTL
Communications Corp. for the registration of its 9 3/4% Senior Deferred Coupon
Notes due 2009 and to the incorporation by reference therein of our report dated
March 26, 1999, with respect to the consolidated financial statements and
schedules of NTL Communications Corp. (formerly known as NTL incorporated)
included in its Annual Report (Form 10-K) for the year ended December 31, 1998,
filed with Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
July 20, 1999
New York, New York
<PAGE> 1
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
NTL Communications Corp. on Form S-4 of our report dated February 27, 1998, on
the consolidated financial statements as of December 31, 1997 and 1996 and for
each of the three years in the period ended December 31, 1997 of Comcast UK
Cable Partners Limited and subsidiaries.
We also consent to the reference to us under the headings "Experts" in the
Prospectus, which is part of such Registration Statement.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
May 12, 1999
<PAGE> 1
Exhibit 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
NTL Communications Corp. on Form S-4 of our report dated February 27, 1998
(March 16, 1998 as to Note 3), on the consolidated financial statements as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997 of Birmingham Cable Corporation Limited and subsidiaries.
We also consent to the reference to us under the headings "Experts" in such
Prospectus, which is part of such Registration Statement.
/s/ Deloitte & Touche
Birmingham, England
May 12, 1999
<PAGE> 1
Exhibit 23.4
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
NTL Communications Corp. on Form S-4 of our report dated February 27, 1998 on
the consolidated financial statements as of December 31, 1997 and 1996 and for
each of the three years in the period ended December 31, 1997 of Cable London
PLC and subsidiaries.
We also consent to the reference to us under the headings "Experts" in the
Prospectus, which is part of such Registration Statement.
/s/ Deloitte & Touche
Deloitte & Touche
London, England
May 12, 1999
<PAGE> 1
Exhibit 23.5
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated June 5, 1998 (except Note 10 as to which the date is
July 16, 1998) with respect to the financial statements of ComTel UK Finance
B.V., and of our report dated June 5, 1998 (except Note 9 as to which the date
is July 16, 1998) with respect to the combined financial statements of
Telecential Communications (Canada) Limited and Telecential Communications (UK)
Limited, incorporated by reference in Amendment number 1 to the Registration
Statement on Form S-4 to be filed by NTL Communications Corp. relating to the
exchange of new 9 3/4% Series B Senior Deferred Coupon Notes due 2009 for old
9 3/4% Senior Deferred Coupon Notes due 2009.
/s/ Deloitte & Touche
- ---------------------
Deloitte & Touche
Chartered Accountants
Brocknell, England
July 21, 1999
<PAGE> 1
Exhibit 23.6
[COOPERS & LYBRAND LETTERHEAD]
12 May 1999
We hereby consent to the incorporation by reference in the Registration
Statement of NTL Communications Corp. on Form S-4 of our report, dated 5 June
1998, except for Note 10 as to which the date is 16 July 1998, on our audit of
the Combined Financial Information of ComTel UK Finance B.V. as of and for the
year ended 31 December 1996. We also consent to the references to our firm
under the caption "Experts".
/s/ Coopers & Lybrand
Coopers & Lybrand
Chartered Accountants
London, United Kingdom
<PAGE> 1
Exhibit 23.7
CONSENT OF INDEPENDENT AUDITORS
To the shareholders
Diamond Cable Communications Plc:
We consent to the use of our report dated March 30, 1999 with respect to
Diamond Cable Communications Plc incorporated by reference herein and to the
references to our firm under the heading "Experts" in the Registration
Statement on Form S-4 of NTL Communications Corp.
/s/ KPMG
KPMG
Nottingham, England
May 12, 1999
<PAGE> 1
LETTER OF TRANSMITTAL
NTL COMMUNICATIONS CORP.
OFFER FOR ALL OUTSTANDING
9 3/4% SENIOR DEFERRED COUPON NOTES DUE 2009
IN EXCHANGE FOR
9 3/4% SERIES B SENIOR DEFERRED COUPON NOTES DUE 2009
PURSUANT TO THE PROSPECTUS, DATED JULY 22, 1999
THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. LONDON TIME, AUGUST 20, 1999,
UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00
P.M., LONDON TIME, ON THE EXPIRATION DATE.
Delivery To:
THE CHASE MANHATTAN BANK, AS EXCHANGE AGENT
In London
<TABLE>
<S> <C> <C>
By Facsimile: By Mail, By Hand and Overnight Courier: Confirm by Telephone:
44 171 777 2373 The Chase Manhattan Bank Matthew Pinnock:
Attn: Operations Manager 44 171 777 2520
Trinity Tower
9 Thomas More Street
London E1 9YT
In Luxembourg
By Facsimile: By Mail, By Hand and Overnight Courier: Confirm by Telephone:
(352) 46 26 85380 Chase Manhattan Bank Luxembourg S.A. Veronique Cridel:
5 Rue Plaetis (352) 46 26 85236
L-2338, Luxembourg
</TABLE>
Delivery of this instrument to an address other than as set forth above, or
transmission of this Letter of Transmittal via facsimile other than as set forth
above, will not constitute a valid delivery of this Letter of Transmittal.
The undersigned acknowledges that he or she has received and reviewed the
prospectus dated July 22, 1999 (the "Prospectus") of NTL Communications Corp., a
Delaware corporation (the "Company"), and this letter of transmittal (the
"Letter"), which together constitute the Company's offer (the "Exchange Offer")
to exchange an aggregate principal amount of up to L330,000,000 of 9 3/4% Series
B Senior Deferred Coupon Notes due 2009 (the "New Notes") of the Company for a
like principal amount of the issued and outstanding 9 3/4% Senior Notes due 2009
(the "Old Notes"). Capitalized terms used but not defined herein have the
meanings given to them in the Prospectus.
For each Old Note accepted for exchange and not validly withdrawn, the
holder of such Old Note will receive a New Note having, a principal amount equal
to that of the surrendered Old Notes. If the Exchange Offer is not consummated
by November 26, 1999 with respect to the Old Notes, interest will accrue (in
addition to the stated interest on the Old Notes). Such additional interest (the
"Special Interest"), if any, will be payable in cash semiannually in arrears
each April 1 and October 1, to holders of record on the immediately preceding
March 15 and September 15, respectively, at a rate per annum equal to 0.50% of
the principal amount of the Old Notes. The aggregate amount of Special Interest
payable pursuant to the above provisions will in no event exceed 1.50% per annum
of the principal amount of the Old Notes. Upon the consummation of the Exchange
Offer after November 26, 1999, the Special Interest payable on the Old Notes
from the date of such consummation will cease to accrue. Following the
consummation of the Exchange Offer, the interest terms shall revert to the
original terms set forth in the Notes. Except as otherwise provided in the
Prospectus, Holders of Old Notes accepted for exchange will be deemed to have
waived the right to receive any other payments or accrued interest, if any, on
the Old Notes. The Company reserves the right, at any time or from time to time
to extend the Exchange Offer at its discretion, in which event the term
"Expiration Date" shall mean the latest time and date to which the Exchange
Offer is extended. The Company shall notify the holders of the Old Notes of any
extension by means of a
<PAGE> 2
press release or other public announcement prior to 9:00 a.m., London time, on
the next business day after the previously scheduled Expiration Date.
THE COMPANY WILL NOT EXTEND THE EXCHANGE OFFER UNLESS IT IS REQUIRED TO DO
SO BY LAW.
This Letter is to be completed by a holder of Old Notes either if
certificates for such Old Notes are to be forwarded herewith or if a tender is
to be made by book-entry transfer to the account maintained by the Exchange
Agent at Euroclear System or Cedelbank (each a "Book-Entry Transfer Facility")
pursuant to the procedures set forth in the Prospectus under "The Exchange
Offer -- Book-Entry Transfer" and an Agent's Message is not delivered. Tenders
by book-entry transfer may also be made by delivering an Agent's Message in lieu
of this Letter. The term "Agent's Message" means a message, transmitted by the
Book-Entry Transfer Facility to and received by the Exchange Agent and forming a
part of a Book-Entry Confirmation (as defined below), which states that the
Book-Entry Transfer Facility has received an express acknowledgment from the
tendering Participant, which acknowledgment states that such Participant has
received and agrees to be bound by, and makes each of the representations and
warranties contained in, this Letter and that the Company may enforce this
Letter against such Participant. Holders of Old Notes whose certificates are not
immediately available, or who are unable to deliver their certificates or
confirmation of the book-entry tender of their Old Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility (a "Book-Entry
Confirmation") and all other documents required by this Letter to the Exchange
Agent on or prior to the Expiration Date, must tender their Old Notes according
to the guaranteed delivery procedures set forth in the Prospectus under "The
Exchange Offer -- Guaranteed Delivery Procedures." See Instruction 1. Delivery
of documents to the Book-Entry Transfer Facility does not constitute delivery to
the Exchange Agent.
The undersigned has completed the appropriate boxes below and signed this
Letter to indicate the action the undersigned desires to take with respect to
the Exchange Offer.
2
<PAGE> 3
List and check the appropriate box below the Old Notes to which this Letter
relates. If the space provided below is inadequate, the certificate numbers and
principal amount at maturity of Old Notes should be listed on a separate signed
schedule affixed hereto.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES 1 2 3
- ----------------------------------------------------------------------------------------------------------------------
AGGREGATE
PRINCIPAL PRINCIPAL
AMOUNT AT AMOUNT
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE MATURITY OF AT MATURITY
(PLEASE FILL IN, IF BLANK) NUMBER(S)* OLD NOTE(S) TENDERED**
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
TOTAL
- ----------------------------------------------------------------------------------------------------------------------
* Need not be completed if Old Notes are being tendered by book-entry transfer.
** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the Old Notes
represented by the Old Notes indicated in column 2. See Instruction 2. Old Notes tendered hereby must be in
denominations of principal amount at maturity of L1,000 and any integral multiple thereof. See Instruction 1.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
Account Number
------------------------------- Transaction Code Number
-------------------------------
By crediting the Old Notes to the Exchange Agent's account at the
Book-Entry Transfer Facility and by transmitting to the Exchange Agent a
computer-generated message (an "Agent's Message") in which the holder of the Old
Notes acknowledges and agrees to be bound by the terms of, and makes the
representations and warranties contained in, this Letter, the participant in the
Book-Entry Transfer Facility confirms on behalf of itself and the beneficial
owners of such Old Notes all provisions of this Letter (including any
representations and warranties) applicable to it and such beneficial owner as
fully as if it had completed the information required herein and executed and
transmitted this Letter to the Exchange Agent.
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s)
Window Ticket Number (if any)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution which guaranteed delivery
IF DELIVERY BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
Account Number Transaction Code Number
Name of Tendering Institution
3
<PAGE> 4
[ ] CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.
[ ] 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:
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 at
maturity 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 hereby irrevocably constitutes and appoints the Exchange Agent its
agent and attorney-in-fact with full power of substitution, for purposes of
delivering this Letter and the Old Notes to the Company. The Power of Attorney
granted in this paragraph shall be deemed irrevocable from and after the
Expiration Date and coupled with an interest. The undersigned hereby further
represents that any New Notes acquired in exchange for Old Notes tendered hereby
will have been acquired in the ordinary course of business of the person
receiving such New Notes, whether or not such person is the undersigned, that
neither the holder of such Old Notes nor any such other person is engaged in, or
intends to engage in, or has an arrangement or understanding with any person to
participate in, the distribution (within the meaning of the Securities Act of
1933, as amended (the "Securities Act")) of such New Notes and that neither the
holder of such Old Notes nor any such other person is an "affiliate," as defined
in Rule 405 under the Securities Act, of the Company.
The undersigned also acknowledges that this Exchange Offer is being made by
the Company in reliance on an interpretation by the staff of the Securities and
Exchange Commission (the "SEC"), as set forth in no-action letters issued to
third parties, that the New 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 any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such holders' business and such holders have no
arrangement with any person to participate in the distribution (within the
meaning of the Securities Act) of such New Notes. If the undersigned is not a
broker-dealer, the undersigned represents that it is not engaged in, and does
not intend to engage in, and has no arrangement or understanding with any person
to participate in, a distribution (within the meaning of the Securities Act) of
New Notes. If the undersigned is a broker-dealer that will receive New 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 acknowledges that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New 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. The undersigned
acknowledges that in reliance on an interpretation by the staff of the SEC, a
broker-dealer may fulfill his prospectus delivery requirements with respect to
the New Notes (other than a resale of an unsold allotment from the original sale
of the Old Notes) with the Prospectus which constitutes part of this Exchange
Offer.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Old Notes tendered hereby. All authority
4
<PAGE> 5
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. The tender may be withdrawn only in accordance
with the procedures set forth in "The Exchange Offer -- Withdrawal Rights"
section of the Prospectus.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please issue the New Notes (and, if applicable, substitute
certificates representing Old Notes for any Old Notes not exchanged) in the name
of the undersigned or, in the case of a book-entry delivery of Old Notes, please
credit the account indicated above maintained at the Book-Entry Transfer
Facility. Similarly, unless otherwise indicated under the box entitled "Special
Delivery Instructions" below, please send the New 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 UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD NOTES"
ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD NOTES AS
SET FORTH IN SUCH BOX ABOVE.
5
<PAGE> 6
------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Old Notes not exchanged
and/or New Notes are to be issued in the name of someone other than the
person or persons whose signature(s) appear(s) on the Letter below, or if
Old Notes delivered by book-entry transfer which are not accepted for
exchange are to be returned by credit to an account maintained at the
Book-Entry Transfer Facility other than the account indicated above.
Issue: New Notes and/or Old Notes to:
Name(s)
-------------------------------------------------
(PLEASE TYPE OR PRINT)
------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(ZIP CODE)
(COMPLETE SUBSTITUTE FORM W-9)
[ ] Credit unexchanged Old Notes delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below.
------------------------------------------------------------
(BOOK-ENTRY TRANSFER FACILITY
ACCOUNT NUMBER, IF APPLICABLE)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Old Notes not exchanged
and/or New Notes are to be sent to someone other than the person or
persons whose signature(s) appear(s) on this Letter below 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: New Notes and/or Old Notes to:
Name(s)
-------------------------------------------------
(PLEASE TYPE OR PRINT)
------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(ZIP CODE)
------------------------------------------------------------
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF OR AN AGENT'S MESSAGE IN LIEU
THEREOF (TOGETHER WITH THE CERTIFICATES FOR OLD NOTES OR A BOOK-ENTRY
CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED
DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., LONDON
TIME, ON THE EXPIRATION DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
6
<PAGE> 7
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9 ON REVERSE SIDE)
Dated:
<TABLE>
<S> <C>
x , 1999
x , 1999
SIGNATURE(S) OF OWNER DATE
</TABLE>
Area Code and Telephone Number
- ---------------------------------------------------------------------
This Letter must be signed by the registered holder(s) as the name(s)
appear(s) on the certificate(s) for the Old Notes hereby tendered or on a
security position listing 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.
Name(s):
- --------------------------------------------------------------------------------
------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Capacity:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
------------------------------------------------------------------------
(INCLUDING ZIP CODE)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution:
- --------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
- --------------------------------------------------------------------------------
(TITLE)
- --------------------------------------------------------------------------------
(NAME AND FIRM)
Dated:
7
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER FOR THE
9 3/4% SENIOR DEFERRED COUPON NOTES DUE 2009
IN EXCHANGE FOR THE
9 3/4% SERIES B SENIOR DEFERRED COUPON NOTES DUE 2009
OF NTL COMMUNICATIONS CORP.
1. DELIVERY OF THIS LETTER AND NOTES; GUARANTEED DELIVERY PROCEDURES.
This Letter is to be completed by holders (which term, for purposes of the
Exchange Offer, includes any participant in the book-entry transfer Facility
system whose name appears on a security position listing as the holder of such
Old Notes) either if certificates are to be forwarded herewith or if tenders are
to be made pursuant to the procedures for delivery by book-entry transfer set
forth in the Prospectus under "The Exchange Offer -- book-entry transfer" and an
Agent's Message is not delivered. Tenders by book-entry transfer may also be
made by delivering an Agent's Message in lieu of this Letter. The term "Agent's
Message" means a message, transmitted by the Book-Entry Transfer Facility to and
received by the Exchange Agent and forming a part of a Book-Entry Confirmation,
which states that the Book-Entry Transfer Facility has received an express
acknowledgment from the tendering Participant, which acknowledgment states that
such Participant has received and agrees to be bound by, and makes the
representations and warranties contained in, this Letter and that the Company
may enforce this Letter against such Participant. Certificates for all
physically tendered Old Notes, or Book-Entry Confirmation, as the case may be,
as well as a properly completed and duly executed Letter (or facsimile hereof or
Agent's Message in lieu thereof) and any other documents required by this
Letter, must be received by the Exchange Agent at the address set forth herein
on or prior to the Expiration Date, or the tendering holder must comply with the
guaranteed delivery procedures set forth below. Old Notes tendered hereby must
be in denominations of principal amount at maturity of L1,000 and any integral
multiple thereof.
Holders whose certificates for Old Notes are not immediately available or
who cannot deliver their certificates and all other required documents to the
Exchange Agent on or prior to the Expiration Date, or who cannot complete the
procedure for book-entry transfer on a timely basis, may tender their Old Notes
pursuant to the guaranteed delivery procedures set forth in the Prospectus under
"The Exchange Offer -- Guaranteed Delivery Procedures." Pursuant to such
procedures, (i) such tender must be made through an Eligible Institution, (ii)
prior to the Expiration Date, the Exchange Agent must receive from such Eligible
Institution a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Company (by telegram, telex,
facsimile transmission, mail or hand delivery), setting forth the name and
address of the holder of Old Notes and the amount of Old Notes tendered, stating
that the tender is being made thereby and guaranteeing that within five London
Stock Exchange trading days after the date of execution of the Notice of
Guaranteed Delivery, the certificates for all physically tendered Old Notes, or
a Book-Entry Confirmation, together with a properly completed and duly executed
Letter (or facsimile thereof or Agent's Message in lieu thereof) with any
required signature guarantees and any other documents required by the Letter
will be deposited by the Eligible Institution with the Exchange Agent, and (iii)
the certificates for all physically tendered Old Notes, in the proper form for
transfer, or Book-Entry Confirmation, as the case may be, together with a
properly completed and duly executed Letter (or facsimile thereof or Agent's
Message in lieu thereof) with any required signature guarantees and all other
documents required by this Letter, are received by the Exchange Agent within
five London Stock Exchange trading days after the date of execution of the
Notice of Guaranteed Delivery.
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 Old Notes are sent by mail, it is suggested that the mailing be made
sufficiently in advance of the Expiration Date to permit delivery to the
Exchange Agent prior to 5:00 p.m., London time, on the Expiration Date.
See the Prospectus under "The Exchange Offer."
2. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER).
If less than all of the Old Notes evidenced by a submitted certificate are
to be tendered, the tendering holder(s) should fill in the aggregate principal
amount of Old Notes to be tendered in the box above entitled "Description of Old
8
<PAGE> 9
Notes -- Principal Amount Tendered." A reissued certificate representing the
balance of nontendered Old Notes will be sent to such tendering holder, unless
otherwise provided in the appropriate box on this letter, promptly after the
Expiration Date. ALL OF THE OLD NOTES DELIVERED TO THE EXCHANGE AGENT WILL BE
DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF
SIGNATURES.
If this Letter is signed by the Holder of the Old Notes tendered hereby,
the signature must correspond exactly with the name as written on the face of
the certificates or on the Book-Entry Transfer Facility's security position
listing as the holder of such Old Notes without any change whatsoever.
If any tendered Old Notes are owned of record by two or more joint owners,
all of such owners must sign this Letter.
If any tendered Old Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter as there are different registrations of certificates.
When this Letter is signed by the registered holder or holders of the Old
Notes specified herein and tendered hereby, no endorsements of certificates or
separate bond powers are required. If, however, the New Notes are to be issued,
or any untendered Old Notes are to be reissued, to a person other than the
registered holder, then endorsements of any certificates transmitted hereby or
separate bond powers are required. Signatures on such certificate(s) or bond
powers must be guaranteed by a participant in a securities transfer association
recognized signature program.
If this Letter is signed by a person other than the registered holder or
holders of any certificate(s) specified herein, such certificate(s) must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name or names of the registered holder or holders appear(s) on
the certificate(s) and signatures on such certificate(s) or bond powers must be
guaranteed by an Eligible Institution.
If this Letter or any certificates 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, and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must be
submitted.
ENDORSEMENTS ON CERTIFICATES FOR OLD NOTES OR SIGNATURES ON BOND POWERS
REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM WHICH IS A MEMBER OF
A REGISTERED NATIONAL SECURITIES EXCHANGE OR A MEMBER OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A COMMERCIAL BANK OR TRUST COMPANY
HAVING AN OFFICE OR CORRESPONDENT IN THE UNITED STATES (AN "ELIGIBLE
INSTITUTION").
SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE
INSTITUTION, PROVIDED THE OLD NOTES ARE TENDERED: (I) BY A REGISTERED HOLDER OF
OLD NOTES WHO HAS NOT COMPLETED THE BOX ENTITLED "SPECIAL ISSUANCE INSTRUCTIONS"
OR "SPECIAL DELIVERY INSTRUCTIONS" ON THIS LETTER OR (II) FOR THE ACCOUNT OF AN
ELIGIBLE INSTITUTION.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTION.
Tendering holders of Old Notes should indicate in the applicable box the
name and address to which New Notes issued pursuant to the Exchange Offer and/or
substitute certificates evidencing Old Notes not exchanged 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. Holders
tendering Old Notes by book-entry transfer may request that Old Notes not
exchanged be credited to such account maintained at the Book-Entry Transfer
Facility as such holder may designate hereon. If no such instructions are given,
such Old Notes not exchanged will be returned to the name or address of the
person signing this Letter.
5. TAX IDENTIFICATION NUMBER.
Federal income tax law generally requires that a tendering holder whose Old
Notes are accepted for exchange must provide the Company (as payor) with such
holder's correct Taxpayer Identification Number ("TIN") on Substitute Form W-9
below, which in the case of a tendering holder who is an individual, is his or
her social security number. If the Company is not provided with the current TIN
or an adequate basis for an exemption, such tendering holder may be
9
<PAGE> 10
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
delivery to such tendering holder of New Notes may be subject to backup
withholding in an amount equal to 31% of all reportable payments made after the
exchange. If withholding results in an overpayment for taxes, a refund may be
obtained.
Exempt holders of Old Notes (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. See the enclosed Guidelines of Certification of Taxpayer
Identification Number on Substitute Form W-9 (the "W-9 Guidelines") for
additional instructions.
To prevent backup withholding, each tendering holder of Old Notes must
provide its correct TIN by completing the "Substitute Form W-9" set forth below,
certifying that the TIN provided is correct (or that such holder is awaiting a
TIN) and that (i) the holder is exempt from backup withholding, (ii) the holder
has not been notified by the Internal Revenue Service that such holder is
subject to a backup withholding as a result of a failure to report all interest
or dividends or (iii) the Internal Revenue Service has notified the holder that
such holder is no longer subject to backup withholding. If the tendering holder
of Old Notes is a nonresident alien or foreign entity not subject to backup
withholding, such holder must give the Company a completed Form W-8, Certificate
of Foreign Status. These forms may be obtained from the Exchange Agent. If the
Old Notes are in more than one name or are not in the name of the actual owner,
such holder should consult the W-9 Guidelines for information on which the TIN
to report. If such holder does not have a TIN, such holder should consult the
W-9 Guidelines for instructions on applying for a TIN, check the box in Part 2
of the Substitute Form W-9 and write "applied for" in lieu of its TIN. Note:
Checking this box and writing "applied for" on the form means that such holder
has already applied for a TIN or that such holder intends to apply for one in
the near future. If such holder does not provide its TIN to the Company within
60 days, backup withholding will begin and continue until such holder furnishes
its TIN to the Company.
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, New
Notes and/or substitute Old Notes not exchanged 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 person)
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.
7. WAIVER OF CONDITIONS.
The Company reserves the absolute right to waive satisfaction of any or all
conditions enumerated in the Prospectus.
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 or an
Agent's Message in lieu thereof, shall waive any right to receive notice of the
acceptance of their Old Notes for exchange.
Neither the Company, the Exchange Agent nor any other person is obligated
to give notice of any defect or irregularity with respect to any tender of Old
Notes nor shall any of them incur any liability for failure to give any such
notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES.
Any holder whose Old Notes have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the addresses indicated above for further
instructions.
10. 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 the
Exchange Agent, at the addresses and telephone numbers indicated above.
10
<PAGE> 11
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: NTL INCORPORATED
- --------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND
FORMW-9 CERTIFY BY SIGNING AND DATING BELOW.
TIN: --------------------------
(Social Security Number or
Employer Identification Number)
-------------------------------------------------------------------------------------------
PART 2 -- TIN APPLIED FOR [ ]
-------------------------------------------------------------------------------------------
Department of the PAYOR'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFICATION
Treasury Internal CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT
Revenue Service
(1) the number shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued to me).
(2) I am not subject to backup withholding either because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified me that I am no longer subject to
backup withholding, and
(3) any other information provided on this form is true and correct.
SIGNATURE --------------------------------------------- DATE---------------------
- --------------------------------------------------------------------------------------------------------------------------
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 and you have not been notified
by the IRS that you are no longer subject to backup withholding.
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administrative Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a Taxpayer Identification Number by the time of the exchange, 31 percent
of all reportable payments made to me thereafter will be withheld until I
provide a number.
- ---------------------------------------------------
- ---------------------------------------------------
Signature Date
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY FOR
NTL COMMUNICATIONS CORP.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of NTL Communications Corp. (the "Company") made pursuant to a
prospectus dated July 22, 1999 (the "Prospectus"), if certificates for Old Notes
of the Company are not immediately available or if the procedure for book-entry
transfer cannot be completed on a timely basis or time will not permit all
required documents to reach the Company prior to 5:00 p.m., London time, on the
Expiration Date of the Exchange Offer. Such form may be delivered or transmitted
by telegram, telex, facsimile transmission, mail or hand delivery to The Chase
Manhattan Bank (the "Exchange Agent") as set forth below. Capitalized terms not
defined herein are defined in the Prospectus.
<TABLE>
<S> <C>
The Exchange Agent is:
In New York
By Mail, By Hand and Overnight Courier: By Facsimile:
The Chase Manhattan Bank 44 171 777 2373
Attn: Operations Manager
Trinity Tower Confirm by Telephone:
9 Thomas More Street
London E1 9YT Matthew Pinnock: 44 171 77 2520
In Luxembourg
By Facsimile:
By Mail, By Hand and Overnight Courier: (352) 46 26 85380
Chase Manhattan Bank Luxembourg S.A. Confirm by Telephone:
5 Rue Plaetis
L-2338, Luxembourg Veronique Cridel: (352) 46 26 85236
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF THIS INSTRUMENT VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE,
WILL NOT CONSTITUTE A VALID DELIVERY.
<PAGE> 2
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus, the undersigned
hereby tenders to the Company the principal amount of Old Notes set forth below,
pursuant to the guaranteed delivery procedure described in the Prospectus under
"The Exchange Offer -- Guaranteed Delivery Procedures."
Principal Amount at Maturity of Old Notes
Tendered:*
L
- ---------------------------------------------------
Certificates Nos. (if available):
- ------------------------------------------------------
Total Principal Amount at Maturity
Represented by Old Notes Certificate(s):
L
- ----------------------------------------------------
If Old Notes will be delivered by book-entry transfer to Euroclear System or
Cedelbank, provide account number.
Account Number
- ----------------------------------
* Must be in denominations of principal amount at maturity of L1,000 and any
integral multiple thereof. See Instruction 1 in the Letter of Transmittal.
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE
DEATH OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS OF THE UNDERSIGNED.
2
<PAGE> 3
PLEASE SIGN HERE
<TABLE>
<S> <C>
X
---------------------------------------------------------- ------------------------------
X
---------------------------------------------------------- ------------------------------
SIGNATURE(S) OF OWNER(S) OR AUTHORIZED SIGNATORY DATE
Telephone Number (including area code):
----------------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the holder(s) of Old
Notes as their name(s) appear(s) on certificates for Old Notes or on a security
position listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
- --------------------------------------------------------------------------------
------------------------------------------------------------------------
Capacity:
- --------------------------------------------------------------------------------
Address(es):
- --------------------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
GUARANTEE
The undersigned, 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 or correspondent in the United
States, hereby guarantees that the certificates representing the principal
amount of Old Notes tendered hereby in proper form for transfer, or timely
confirmation of the book-entry transfer of such Old Notes into the Exchange
Agent's account at either book entry transfer facility, Euroclear or Cedelbank
pursuant to the procedures set forth in the Prospectus under "The Exchange
Offer -- Guaranteed Delivery Procedures," together with one or more properly
completed and duly executed Letters of Transmittal (or facsimile thereof or
Agent's Message in lieu thereof) and any other documents required by the Letter
of Transmittal in respect of the Old Notes, will be received by the Exchange
Agent at the address set forth above, no later than five London Stock Exchange
trading days after the date of execution hereof.
<TABLE>
<S> <C>
- --------------------------------------------------- ---------------------------------------------------
Name of Firm Authorized Signature
- --------------------------------------------------- ---------------------------------------------------
Address Title
- --------------------------------------------------- Name:
Zip Code -------------------------------------------
(Please Type or Print)
Area Code and Tel. No. Dated:
----------------------- -------------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES
FOR OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE> 1
NTL COMMUNICATIONS CORP.
OFFER FOR ALL OUTSTANDING
9 3/4% SENIOR DEFERRED COUPON NOTES DUE 2009
IN EXCHANGE FOR
9 3/4% SERIES B SENIOR DEFERRED COUPON NOTES DUE 2009
To Our Clients:
Enclosed for your consideration is amendment No. 1 of a prospectus dated
May 6, 1999 (the "Prospectus"), and the related letter of transmittal (the
"Letter of Transmittal"), relating to the offer (the "Exchange Offer") of NTL
Communications Corp. (the "Company") to exchange an aggregate principal amount
of up to L330,000,000 of its 9 3/4% Series B Senior Deferred Coupon Notes due
2009 (the "New Notes") for a like principal amount of its issued and outstanding
9 3/4% Senior Notes due 2009 (the "Old Notes") upon the terms and subject to the
conditions described in the Prospectus. The Exchange Offer is being made in
order to satisfy certain obligations of the Company contained in the
registration rights agreement in respect of the Old Notes by and among the
Company and the initial purchasers referred to therein.
This material is being forwarded to you as the beneficial owner of the Old
Notes carried by us in your account but not registered in your name. A tender of
such Old Notes may only be made by us as the holder of record and pursuant to
your instructions.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Old Notes held by us for your account, pursuant to the terms and
conditions set forth in the enclosed Prospectus and Letter of Transmittal.
Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Old Notes on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m.,
London time, on August 20, 1999, unless extended by the Company (the "Expiration
Date"). Any Old Notes tendered pursuant to the Exchange Offer may be withdrawn
at any time before the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Old Notes.
2. The Exchange Offer is subject to certain conditions set forth in
the Prospectus in the section captioned "The Exchange Offer -- Certain
Conditions of the Exchange Offer."
3. Any transfer taxes incident to the transfer of Old Notes from the
holder to the Company will be paid by the Company, except as otherwise
provided in the Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at 5:00 p.m., London time, on August 20,
1999, unless extended by the Company.
5. THE COMPANY WILL NOT EXTEND THE EXCHANGE OFFER, UNLESS IT IS
REQUIRED TO DO SO BY LAW.
If you wish to have us tender your Old Notes, please so instruct us by
completing, executing and returning to us the instruction form on the back of
this letter. The Letter of Transmittal is furnished to you for information only
and may not be used directly by you to tender Old Notes.
<PAGE> 2
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by NTL
Communications Corp. with respect to its Old Notes.
This will instruct you to tender the Old Notes held by you for the account
of the undersigned, upon and subject to the terms and conditions set forth in
the Prospectus and the related Letter of Transmittal.
Please tender the Old Notes held by you for my account as indicated below:
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF OLD NOTES TENDERED
------------------------------------------------------------
<S> <C>
9 3/4% Senior Deferred Coupon Notes due 2009 -----------------------------------------------------
[ ] Please do not tender any Old Notes held by
you for my account. -----------------------------------------------------
Dated: -------------------------, 1999 -----------------------------------------------------
SIGNATURE(S)
-----------------------------------------------------
-----------------------------------------------------
PLEASE PRINT NAME(S) HERE
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
ADDRESS(ES)
-----------------------------------------------------
AREA CODE AND TELEPHONE NUMBER
-----------------------------------------------------
TAX IDENTIFICATION OR SOCIAL SECURITY NO(S).
</TABLE>
None of the Old Notes held by us for your account will be tendered unless
we receive written instructions from you to do so. Unless a specific contrary
instruction is given in the space provided, your signature(s) hereon shall
constitute an instruction to us to tender all the Old Notes held by us for your
account.
2
<PAGE> 1
NTL COMMUNICATIONS CORP.
OFFER FOR ALL OUTSTANDING
9 3/4% SENIOR DEFERRED COUPON NOTES DUE 2009
IN EXCHANGE FOR
9 3/4% SERIES B SENIOR DEFERRED COUPON NOTES DUE 2009
To: Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
NTL Communications Corp. ("Company") is offering, upon and subject to the
terms and conditions set forth in the prospectus dated July 22, 1999 (the
"Prospectus"), and the enclosed letter of transmittal (the "Letter of
Transmittal"), to exchange (the "Exchange Offer") an aggregate principal amount
of up to L330,000,000 of its 9 3/4% Series B Senior Deferred Coupon Notes due
2009 for a like principal amount of its issued and outstanding 9 3/4% Senior
Deferred Coupon Notes due 2009 (the "Old Notes"). The Exchange Offer is being
made in order to satisfy certain obligations of the Company contained in the
registration rights agreement in respect of the Old Notes each by and among the
Company and the initial purchasers referred to therein.
We are requesting that you contact your clients for whom you hold Old Notes
regarding the Exchange Offer. For your information and for forwarding to your
clients for whom you hold Old Notes registered in your name or in the name of
your nominee, or who hold Old Notes registered in their own names, we are
enclosing the following documents:
1. Prospectus dated July 22, 1999;
2. The Letter of Transmittal for your use and for the information (or
the use, where relevant) of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange
Offer if certificates for Old Notes are not immediately available or time
will not permit all required documents to reach the Exchange Agent prior to
the Expiration Date (as defined below) or if the procedure for book-entry
transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose
account you hold Old Notes registered in your name or the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to The Chase Manhattan Bank, the
Exchange Agent for Old Notes.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., LONDON TIME, ON [ ], 1999, UNLESS EXTENDED BY THE COMPANY
(THE "EXPIRATION DATE"). THE COMPANY WILL NOT EXTEND THE EXCHANGE OFFER, UNLESS
IT IS REQUIRED TO DO SO BY LAW. THE OLD NOTES TENDERED PURSUANT TO THE EXCHANGE
OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
To participate in the Exchange Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu
thereof), with any required signature guarantees and any other required
documents, should be sent to the Exchange Agent and certificates representing
the Old Notes should be delivered to the Exchange Agent, all in accordance with
the instructions set forth in the Letter of Transmittal and the Prospectus.
If holders of Old Notes wish to tender, but it is impracticable for them to
forward their certificates for Old Notes prior to the expiration of the Exchange
Offer or to comply with the book-entry transfer procedures on a timely basis, a
tender may be effected by following the guaranteed delivery procedures described
in the Prospectus under "The Exchange Offer -- guaranteed delivery procedures."
The Company will, upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable and necessary costs and expenses
incurred by them in forwarding the Prospectus and the related documents to the
beneficial owners of Old Notes held by them as nominee or in a fiduciary
capacity. The Company will pay or cause to be paid all stock transfer taxes
applicable to the exchange of Old Notes pursuant to the Exchange Offer, except
as set forth in Instruction 6 of the Letter of Transmittal.
<PAGE> 2
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to The Chase
Manhattan Bank, the Exchange Agent for the Old Notes, at its addresses and
telephone numbers set forth on the front of the Letter of Transmittal.
Very truly yours,
NTL COMMUNICATIONS CORP.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF
THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN
THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
2
<PAGE> 1
Exhibit 99.5
July 22, 1999
Exchange Agent Agreement
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10001
Attention:
Ladies and Gentlemen:
NTL Communications Corp. (the "Company") proposes to make an offer
(the "Exchange Offer") to exchange an aggregate principal amount of up to Pound
Sterling 330,000,000 of its 9 3/4% Series B Senior Deferred Coupon Notes Due
2009 (the "New Notes"), which have been registered under the Securities Act of
1933, as amended, for a like principal amount of the Company's outstanding 9
3/4% Senior Deferred Coupon Notes Due 2009 (the "Old Notes"). The terms and
conditions of the Exchange Offer as currently contemplated are set forth in a
prospectus dated July 22, 1999 (the "Prospectus"), proposed to be distributed to
all record holders of the Old Notes as of July 26, 1999. The Old Notes and the
New Notes are collectively referred to herein as the "Notes".
The Company hereby appoints The Chase Manhattan Bank to act as
exchange agent (the "Exchange Agent") in connection with the Exchange Offer.
References hereinafter to "you" shall refer to The Chase Manhattan Bank.
The Exchange Offer is expected to be commenced by the Company on or
about July 23, 1999. The Letter of Transmittal accompanying the Prospectus is
to be used by the holders of the Old Notes to accept the Exchange Offer, and
contains instructions with respect to the delivery of certificates for Old
Notes tendered.
The Exchange Offer shall expire at 5:00 P.M., London time, on August
20, 1999, or on such later date or time to which the Company may extend the
Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set
forth in the Prospectus, the Company expressly reserves the right to extend the
Exchange Offer from time to time and may extend the Exchange Offer by giving
oral (promptly confirmed in
<PAGE> 2
writing) or written notice to you before 9:00 A.M., London time, on the business
day following the previously scheduled Expiration Date.
The Company expressly reserves the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Old Notes not theretofore accepted for
exchange, upon the occurrence of any of the events specified in the Prospectus
under the caption "The Exchange Offer -- Conditions to the Exchange Offer" The
Company will give oral (promptly confirmed in writing) or written notice of any
amendment, termination or nonacceptance to you as promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in accordance
with the following instructions:
1. You will perform such duties and only such duties as are specifically
set forth in the section of the Prospectus entitled "The Exchange Offer" and as
specifically set forth herein and such duties which are necessarily incidental
thereto.
2. You will establish an account with respect to the Old Notes at either
Euroclear or Cedel Bank (each a "Book-Entry Transfer Facility") for purposes of
the Exchange Offer within two business days after the date of the Prospectus,
or, if you already have established an account with the Book-Entry Transfer
Facility suitable for the Exchange Offer, you will identify such pre-existing
account to be used in the Exchange Offer, and any financial institution that is
a participant in the Book-Entry Transfer Facility's systems may make book-entry
delivery of the Old Notes by causing the Book-Entry Transfer Facility to
transfer such Old Notes into your account in accordance with the Book-Entry
Transfer Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and certificates
for Old Notes (or confirmation of book-entry transfer into your account at the
Book-Entry Transfer Facility) and any other documents delivered or mailed to you
by or for holders of the Old Notes to ascertain whether: (I) the Letters of
Transmittal and any such other documents are duly executed and properly
completed in accordance with instructions set forth therein and (ii) the Old
Notes have otherwise been properly tendered. In each case where the Letter of
Transmittal or any other document has been improperly completed or executed or
any of the certificates for Old Notes are not in proper form for transfer or
some other irregularity in connection with the acceptance of the Exchange Offer
exists, you will endeavor to inform the presenters of the need (I) for
fulfillment of all requirements and (ii) to take any other action as may be
necessary or advisable to cause such irregularity to be corrected.
2
<PAGE> 3
4. With the approval of the Chairman of the Board, President or any Vice
President of the Company (such approval, if given orally, to be promptly
confirmed in writing) or any other party designated by such an officer in
writing, you are authorized to waive any defects, irregularities or conditions
of tender in connection with any tender of Old Notes pursuant to the Exchange
Offer.
5. Tenders of Old Notes may be made only as set forth in the Letter of
Transmittal and in the section of the Prospectus captioned "Procedures for
Tendering Old Notes," and Old Notes shall be considered properly tendered to you
only when tendered in accordance with the procedures set forth therein.
Notwithstanding the provisions of this paragraph 5 Old Notes which the
Chairman of the Board, President or any Vice President of the Company or any
other party designated by such officer in writing shall approve as having been
properly tendered shall by considered to be properly tendered (such approval, if
given orally, shall be promptly confirmed in writing).
6. You shall advise the Company with respect to any Old Notes delivered
subsequent to the Expiration Date and accept its instructions with respect to
disposition of such Old Notes.
7. You shall accept Tenders:
(a) in case where the Old Notes are registered in two or more names only if
signed by all named holders,
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity only
when proper evidence of his or her authority so to act is submitted;
and
(c) from persons other than the registered holder of Old Notes provided
that customary transfer requirements, including any applicable transfer
taxes, are fulfilled.
You shall accept partial tenders of Old Notes where so indicated and as
permitted in the Letter of Transmittal and deliver certificates for Old Notes to
the transfer agent for split-up and return any untendered Old Notes to the
holder (or such other person as may be designated in the Letter of Transmittal)
as promptly as practicable after expiration or termination of the Exchange
Offer.
3
<PAGE> 4
8. Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, the Company will notify you (such notice, if given orally, to be promptly
confirmed in writing) of its acceptance, promptly after the Expiration Date, of
all Old Notes properly tendered and you, on behalf of the Company, will exchange
such Old Notes for New Notes and cause such Old Notes to be canceled. Delivery
of New Notes will be made on behalf of the Company by you at the rate of pound
sterling 1,000 principal amount of New Notes for each pound sterling 1,000
principal amount of Old Notes tendered promptly after notice (such notice, if
given orally, to be promptly confirmed in writing) of acceptance of such Old
Notes by the Company; provided, however, that in all cases, Old Notes tendered
pursuant to the Exchange Offer will be exchanged only after timely receipt by
you of certificates for such Old Notes (on confirmation of book-entry transfer
into your account at the Book-Entry Transfer Facility), a properly completed and
duly executed Letter of Transmittal (or facsimile thereof or an Agent's Message
(as defined in the Prospectus) in lieu thereof) with any required signature
guarantees and any other required document. You shall issue New Notes only in
denominations of pound sterling 1,000 or any integral multiple thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and upon the conditions set forth in the Prospectus and the
Letter of Transmittal, Old Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time prior to the Expiration Date.
10. The Company shall not be required to exchange any Old Notes tendered if
any of the conditions set forth in the Exchange Offer are not met. Notice of any
decision by the Company not to exchange any Old Notes tendered shall be given
(such notice, if given orally, shall be promptly confirmed in writing) by the
Company to you.
11. If, pursuant to the Exchange Offer, the Company does not accept for
exchange all or part of the Old Notes tendered because of an invalid tender, the
occurrence of certain other events set forth in the Prospectus under the caption
"The Exchange Offer -- Conditions to the Exchange" or otherwise, you shall as
soon as practicable after the expiration or termination of the Exchange Offer
return those certificates for unaccepted Old Notes (or effect appropriate
book-entry transfer), together with any related required documents and the
Letters of Transmittal relating thereto that are in your possession, to the
persons who deposited them.
12. All certificates for reissued Old Notes, unaccepted Old Notes or for
New Notes shall be forwarded by (a) first-class mail, postage prepaid under a
blanket
4
<PAGE> 5
surety bond protecting you and the Company from loss or liability arising out
of the nonreceipt or nondelivery of such certificates or (b) by registered mail
insured separately for the replacement value of each of such certificates.
13. You are not 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.
14. As Exchange Agent hereunder you:
(a) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of any
of the certificates or the Old Notes represented thereby deposited with you
pursuant to the Exchange Offer, and will not be required to and will make no
representation as to the validity, value or genuineness of the Exchange Offer;
(b) shall not be obligated to take any action hereunder which might in
your reasonable judgment involve any expense or liability, unless you shall
have been furnished with reasonable indemnity;
(c) shall not be liable to the Company for any action taken or omitted by
you, or any action suffered by you to be taken or omitted, without negligence,
wilful misconduct or bad faith on your part, by reason of or as a result of the
administration of your duties hereunder in accordance with the terms and
conditions of this Agreement or by reason of your compliance with the
instructions set forth herein or with any written or oral instructions
delivered to you pursuant hereto, and may rely on and shall be protected in
acting in good faith in reliance upon any certificate, instrument, opinion,
notice, letter, facsimile or other document or security delivered to you and
reasonably believed by you to be genuine and to have been signed by the proper
party or parties;
(d) may act upon any tender, statement, request, comment, agreement or
other instrument whatsoever not only as to its due execution and validity and
effectiveness of its provisions, but also as to the truth and accuracy of any
information contained therein, which you in good faith reasonably believe to be
genuine or to have been signed or represented by a proper person or persons;
(e) may rely on and shall be protected in acting upon written or oral
instructions from any officer of the Company with respect to the Exchange Offer.
5
<PAGE> 6
(f) shall not advise any person tendering Old Notes pursuant to the
Exchange Offer as to the wisdom of making such tender or as to the market value
or decline or appreciation in market value of any Old Notes; and
(g) may consult with your counsel and the written opinion of such counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by you hereunder in good faith and in accordance with
such written opinion of such counsel.
15. You shall take such action as may from time to time be requested
by the Company or its counsel (and such other action as you may reasonably deem
necessary) to furnish copies of the Prospectus, the Letter of Transmittal and
the Notice of Guaranteed Delivery, as defined in the Prospectus, or such other
forms as may be approved from time to time by the Company, to all persons
requesting such documents and to accept and comply with telephone requests for
information relating to the Exchange Offer, provided that such information shall
relate only to the procedures for accepting (or withdrawing from) the Exchange
Offer. The Company will furnish you with copies of such documents as you may
request. All other requests for information relating to the Exchange Offer shall
be directed to the Company, Attention: Richard J. Lubasch.
16. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to Richard J. Lubasch, General Counsel of
the Company, Adrian Deitz, Esq. of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel for the Company, and such other person or persons as the Company may
request, daily on each business day, and more frequently if reasonably
requested, up to and including the Expiration Date, as to the number of Old
Notes which have been tendered pursuant to the Exchange Offer and the items
received by you pursuant to this Agreement, separately reporting and giving
cumulative totals as to items properly received and items improperly received;
provided, however, that if, on a particular business day, no additional Old
Notes have been tendered, no additional items have been received by you and such
totals have not changed since you last provided such information as required
above, you need not provide the information referred to above in this paragraph
16 on such day. In addition, you will also confirm, and cooperate in making
available to, the Company or any such other person or persons as the Company
requests from time to time prior to the Expiration Date of such other
information as it or he or she reasonably requests. Such cooperation shall
include, without limitation, the granting by you to the Company and such person
as the Company may request of access to those persons on your staff who are
responsible for receiving lenders, in order to ensure that immediately
6
<PAGE> 7
prior to the Expiration Date the Company shall have received information in
sufficient detail to enable it to decide whether to extend the Exchange Offer.
You shall prepare a final list of all persons whose tenders were accepted, the
aggregate principal amount of Old Notes tendered, the aggregate principal amount
of Old Notes accepted and deliver said list to the Company.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt and shall, except as
provided in paragraph 11, be preserved by you for a period of time at least
equal to the period of time you preserve other records pertaining to the
transfer of securities (or, if earlier, until such time as such documents are
delivered to the Company upon termination of this Agreement, pursuant to
paragraph 29).
18. You hereby expressly waive any lien, encumbrance or right of set-off
whatsoever that you may have with respect to funds deposited with you for the
payment of transfer taxes by reason of amounts, if any, borrowed by the Company,
or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder, you shall be
entitled to compensation of $ and you shall be entitled to reimbursement of
your reasonable out-of-pocket expenses (including reasonable attorneys' fees and
expenses of your counsel, which fees are expected under normal circumstances to
be not in excess of $5,000) incurred in connection with your services hereunder.
20. You hereby acknowledge receipt of the Prospectus, the Letter of
Transmittal and the other documents associated with the Exchange Offer attached
hereto and further acknowledge that you have examined each of them to the extent
necessary to perform your duties hereunder. Any inconsistency between this
Agreement, on the one hand, and the Prospectus and the Letter of Transmittal (as
they may be amended from time to time), on the other hand, shall be resolved in
favor of the latter two documents, except with respect to the duties,
liabilities and indemnification of you as Exchange Agent which shall be
controlled by this Agreement.
21. The Company agrees to indemnify and hold harmless you, in your
capacity as Exchange Agent hereunder, and your officers, employees and agents,
against any liability, cost or expense, including reasonable attorneys' fees,
arising out of or in connection with any act, omission, delay or refusal made by
you in reliance upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or
7
<PAGE> 8
other instrument or document believed by you in good faith to be valid and
genuine and in accepting any tender or effecting any transfer of Old Notes
believed by you in good faith to be authorized, and in delaying or refusing in
good faith to accept any tenders or effect any transfer of Old Notes or
otherwise arising out of or in connection with your acting as Exchange Agent
hereunder, provided, however, that the Company shall not be liable for
indemnification or otherwise for any loss, liability, cost or expense to the
extent arising out of your negligence, wilful misconduct or bad faith. In no
case shall the Company be liable under this indemnity with respect to any claim
against you unless the Company shall be notified by you, by letter or cable or
by facsimile confirmed by letter, of the written assertion of a claim against
you or of any other action commenced against you, promptly after you shall have
received any such written assertion or written notice of the commencement of
any such action. The Company shall be entitled to participate at its own
expense in the defense of any such claim or other action, and, if the Company
so elects, the Company shall assume the defense of any suit brought to enforce
any such claim. In the event that the Company shall assume the defense of any
such suit, the Company shall not be liable for the fees and expenses of any
additional counsel thereafter retained by you so long as the Company shall
retain counsel reasonably satisfactory to you to defend such suit.
22. You shall arrange to comply with all requirements under the tax laws
of the United States, including those relating to missing Tax Identification
Numbers, and shall file any appropriate reports with the Internal Revenue
Service.
23. You shall deliver or cause to be delivered, in a timely manner to
each governmental authority to which any transfer taxes are payable in respect
of the exchange of Old Notes, your check in the amount of all transfer taxes so
payable, and the Company shall reimburse you for the amount of any and all
transfer taxes payable in respect of the exchange of Old Notes; provided,
however, that, subject to such reimbursement by the Company, you shall
reimburse the Company for amounts refunded to you in respect of your payment
of any such transfer taxes, at such time as such refund is received by you.
24. This Agreement and your appointment as Exchange Agent hereunder shall
be construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such state,
and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto.
8
<PAGE> 9
25. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
26. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be effected or impaired thereby.
27. This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part, except by
a written instrument signed by a duly authorized representative of the party to
be charged. This Agreement may not be modified orally.
28. Unless otherwise provided herein, all notices, requests and
other communications to any party hereunder shall be in writing (including
facsimile) and shall be given to such party, addressed to it, at its address or
telecopy number set forth below:
If to the Company:
NTL Communications Corp.
110 East 59th Street
New York, New York 10022
Attention: Richard J. Lubasch
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Facsimile: 212-735-2000
Attention: Thomas H. Kennedy
If to the Exchange Agent:
The Chase Manhattan Bank
450 West 33rd Street (15th Floor)
New York, New York 10001
Attention: Richard Lasker
9
<PAGE> 10
29. Unless terminated earlier by the parties hereto, this
Agreement shall terminate 90 days following the Expiration Date. Notwithstanding
the foregoing, Paragraphs 14(c), 18, 19, 21 and 23 shall survive the termination
of this Agreement. Upon any termination of this Agreement, you shall promptly
deliver to the Company any certificates for Notes, funds or property (including,
without limitation, Letters of Transmittal and any other documents relating to
the Exchange Offer) then held by you as Exchange Agent under this Agreement.
30. This Agreement shall be binding and effective as of the date
hereof.
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
NTL COMMUNICATIONS CORP.
By:
---------------------------
Name:
Title:
Accepted as of the date
first above written.
THE CHASE MANHATTAN BANK
By:
------------------------
Name:
Title:
10
